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Ninth Avenue Terminal Solar Proposal

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1. Ninth Avenue Terminal (NAT) Solar Photovoltaic (PV) Feasibility Study MSE/ER C226 – Photovoltaic Materials: Students Sebastien Lounis Florent Martin Eric Zielke 2.…
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  • 1. Ninth Avenue Terminal (NAT) Solar Photovoltaic (PV) Feasibility Study MSE/ER C226 – Photovoltaic Materials: Students Sebastien Lounis Florent Martin Eric Zielke
  • 2. Presentation Outline 1. Project Background - Ninth Avenue Terminal Specifications - Existing and Proposed Solar PV Incentives 2. Existing and Future Incentive Alternatives - Criteria Involved - Advantages and Disadvantages - Decision Analysis 3. Specifications of Recommended Solutions - Economic Analysis 4. Conclusions and Final Recommendations
  • 3. Project Objective Evaluate the economic feasibility of installing solar panels atop the proposed vintner's hall at the Ninth Avenue Terminal (NAT) in Oakland, CA by utilizing existing and/or future-based PV incentive programs. Provide a final recommendation to Ninth Avenue Terminal (NAT) Partners, LLC on how to proceed with the proposed PV installation.
  • 4. Project Background • Our report was produced for the benefit of NAT Partners, LLC • Our Collaborators: – Ramsey Wright, NAT Partners – Chrissy Tsai, NAT Partners – Dustin Jolley, URS Corporation
  • 5. Project Background • Built in 1929, the NAT is a “bulk-break warehouse that served as an important shipping HUB for several decades. • Today, it is used as for cotton storage. • The NAT faced almost complete demolition under the “Oak to 9th” redevelopment project.
  • 6. Project Background • NAT Partners, LLC has proposed reusing the historic shipping warehouse as a vintner’s hall. • As part of their proposal, NAT Partners expressed interest in using the 90,000 square feet of mostly un-shaded roof space for PV. • The project will be seeking final approval from the Oakland City Council in January.
  • 7. Project Background Presently Available Incentives for the Project: – Net Energy Metering provided by PG&E – The California Solar Initiative (CSI) Performance Based Incentive – The California Feed-in-Tariff (FIT) of ~ 0.135 $/kWh – The Federal Investment Tax Credit (ITC) for renewable energy investors – Renewable Energy Credits (RECs) Potential Future Policy Measures Also Considered: – Increase in FIT to 0.35 $/kWh – Increase in FIT to 0.60 $/kWh – PG&E rooftop leasing
  • 8. Existing and Future Incentive Alternatives Criteria Evaluated 1. Economics 2. Public Relations 3. Branding 4. Potential Power 5. Ease of Implementation Initial Screening – Project Elimination • Initial Capital Cost/Investment • Bidding Process (i.e. large-scale)
  • 9. Existing and Future Incentive Alternatives Existing Incentive Alternative 1: CSI (Tax Equity Investor) Advantages: – Grid-bought power virtually entirely displaced – Keep RECs – Take advantage of CSI Rebate and Net Metering – Open to scale-up Disadvantages: – No sellback to grid. – Loan interest rate of 5.2% needed for grid-parity over 25 year lifetime Utilized Roof Space: ~15,000 Sq. Ft.
  • 10. Existing and Future Incentive Alternatives Existing Incentive Alternative 2: FIT (Tax Equity Investor) Advantages: – Net Producing - Sellback to Grid – Use of entire roof space – Keep RECs Disadvantages: – Disqualified from all other state incentive programs – Very high capital cost – Net loss over lifetime of system Utilized Roof Space: ~90,000 Sq. Ft.
  • 11. Existing and Future Incentive Alternatives Existing Incentive Alternative 3: CSI with PPA Advantages: – No capital cost – Fixed rate for electricity – Potential for system buyback after fixed time – Keep RECs – Take advantage of net metering – No O&M costs Disadvantages: – No sellback – Contract restrictions to building alterations – Limited flexibility in event of short term policy changes Utilized Roof Space: ~15,000 Sq. Ft. – Higher present rate for electricity than grid-bought bower – Additional Administrative Costs
  • 12. Existing and Future Incentive Alternatives Future Incentive Alternative 1: 0.35$/kWh FIT (Tax Equity Investor) Advantages: – Net Producing - Sellback to Grid – Use of entire roof space Disadvantages: – Disqualified from all other state incentive programs – Very high capital cost – Feasibility depend – RECs owned by PG&E Utilized Roof Space: ~90,000 Sq. Ft.
  • 13. Existing and Future Incentive Alternatives Future Incentive Alternative 2: 0.60$/kWh FIT (Tax Equity Investor) Advantages: – Net Producing - Sellback to Grid – Use of entire roof space Disadvantages: – Disqualified from all other state incentive programs – Very high capital cost – Feasibility depend – RECs owned by PG&E Utilized Roof Space: ~90,000 Sq. Ft.
  • 14. Existing and Future Incentive Alternatives Future Incentive Alternative 3: PG&E Lease Agreement Advantages: – Revenue from renting of roof space – No capital cost – No O&M cost Disadvantages: – Do not own power produced – no sellback – Contract restrictions on building alterations – Additional administrative Utilized Roof Space: ~90,000 Sq. Ft. costs
  • 15. Existing and Future Incentive Alternatives Delphi Method • We used a Delphi method based on our criteria to rank the 4 alternatives with available economic data (2 existing, 2 future) • Each criterion was given a weighting factor based on input from our group and our collaborators. • Each alternative was ranked according to each criterion. • The product of the weight and ranking gives the results: Alternative: Delphi Score CSI (Tax Equity Investor) – present 38.5 (present winner) FIT (Tax Equity Investor) – present 23.5 0.35 $/kWh FIT – future 26.5 0.60 $/kWh FIT – future 32.5 (future winner) • PPA and Lease-agreement excluded due to lack of economic data.
  • 16. Specifications of Recommended Solutions 250 kW system, net metering alternative $6.2/Wp installation cost SunPower 305 solar panels 0.22$/kWh for 5 years under CSI The system pays back in 25 years assuming a 5.2% interest rate and an escalation rate of the cost of electricity equal to 6%. NB: The calculated price of electricity is corrected for inflation . Real rates were used for calculations instead of nominal rates.
  • 17. Specifications of Recommended Solutions 1.5 MW system, Feed-In-Tariff Alternative $5.8/Wp installation cost SunPower 305 solar panels With a 60c/kWh FIT and a 10% interest rate, the payback period is 11 years.
  • 18. Conclusions and Final Recommendations System Recommendation: Load-Matching 250 kW array Financing: (1) Loan from Independent Tax Equity Investor or (2) PPA through a Solar Service Provider. Advantages: – Potential for parity with grid-bought power – Ownership of RECs – Flexibility to adapt with future policy measures Caveat: Feasibility/ Profitability very Dependent on Negotiated Rates
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