ETSU Solar Array. Suggestions for a potential solar array on campus. Scott Finney

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1 ETSU Solar Array Suggestions for a potential solar array on campus Scott Finney May 11 th, 2014

2 Background: East Tennessee State University has an extremely active department of sustainability. This department is responsible for encouraging and promoting the development and implementation of sustainable practices, policies, and educational opportunities for all members of the university. The University also dedicates money every year to a Campus Sustainability Fee, or "green fee" that is student funded through tuition. The Green Fee provides funding for various sustainability-related projects. It is through these initiatives that a university panel decided to dedicate $90,000 to the installation and implementation of a fixed solar array on ETSU's main campus. The goal of this report is to help aid the university in deciding which route will best benefit its members. Benefits: Installing a solar electric system will allow you to offset your electrical energy usage and allow you to produce energy at a fixed cost. The current commercial electric base rate for most businesses is approximately 10.5 cents per kilowatt hour (kwh). The system will also help hedge any rising energy costs, as the commercial electric base rate is expected to rise to approximately 16 cents per kwh in ten years. Solar energy is also good for the electric grid, as it provides extremely clean energy through the inverter via its tightly regulated hertz and voltage production. Installing a solar grid on state owned property that has a high volume of traffic can help the community to realize the availability, feasibility, and functionality of a solar energy system. A university is an ideal location to provide a public outreach to the community. Installing some sort of kiosk with the array could help to amplify this outreach and help to inform the public on a technology that has a strong footing in our future. Locations: Possible locations for the array include the parking garage, the library, the university center, and governors hall. During discussions with Green Earth Solar, I made sure to bring all the locations to the attention of the estimators. The parking garage was The Universities first choice, as it would provide an extremely visible location, helping to alert anyone on campus to the usage of solar. Sadly, the feasibility of such an array isn't very promising. In order to install an array on the garage, specifically a cantilever style awning as would prove most beneficial, the structure s foundations would need to be reinforced. This would raise project costs approximately 50% overall. Because of this fact, the garage is not recommended for installation. Governors hall has the space and the proper type of roof for the recommended installation, however there are many objects that could prove intrusive to a solar array. If this building is preferred by The University, a more accurate solar site analysis would need to be completed. Both the Sherrod Library and the Culp University Center have ideal south/southwest facing roofs for installation of a solar array. Both buildings have a flat, black, membrane roof with few obstructions. Both buildings have ample space for an array of the size that has been suggested for the budget. Because of these facts, it is suggested that The University pursue one of these two locations for the installation of a solar array.

3 Findings: Working with Green Earth Solar, LLC, based out of Knoxville, I have been able to secure a sample proposal tailored to the universities specifications. In order to best utilize The Universities investment, G.E.S. made sure to keep the estimate as close to the original $90,000 that has been set aside for this project. It was important for The University to keep costs below $100,000 to avoid seeking TN Board of Regents approval on the project. It was also important to provide an estimate that can be utilized in the best location on campus. With that in mind, an estimate was created for a ballasted roof system to be installed on a flat membrane roof. The pre-design and engineering estimate sample proposal provides a solar photovoltaic system rated at 43.2kW for a total cost of $96,790. This system should generate a yearly output of 55,092 kwh. Utilizing TVA's 2014 Green Power Providers Program, the base electric rate is $0.105 per kwh with a premium of $0.04 per kwh that the system generates. This system should produce a base rate of $ per year with an additional $ in revenue from the premium. This will net a total yearly revenue of approximately $ Payback on this system will occur early in the 12 th year of ownership. The sample estimate has been attached to this report for viewing. There is a strong probability that TVA's 2015 Green Power Providers Program will pay a lower premium of approximately $0.02 per kwh. Payback and revenue will change in this case. If The University decides to install the system behind the meter, only the volume rate that the university actually pays (between 7-8 cents per kwh) will be seen as revenue. The total yearly revenue of the same system installed behind the meter is $ Payback on this system will occur in the 24th year. Because of the slow rate of return, it is recommended that The University avoid installing an array behind the meter. Waiting until the 2015 TVA Green Power Provider Program has been released should provide an acceptable return. In years past, TVA has re-opened its lottery system in October in order to fill the system's capacity once any projects that were initially approved have fallen through for any number of reasons. This year, TVA accepted 30% more than the actual program capacity. The extra applications are moved to a wait list and as projects fall through, the capacity is filled from the wait list. Because of this, The University will not be able to join the Green Power Provider Program until I have also worked with Green Earth Solar to come up with a sample estimate for a third party ownership option. With this option, G.E.S. will own the array for a set number of years. During this time, they will rent the roof space from The University for a fixed cost, most likely on a yearly basis. After the pre-determined number of years has come to a close, G.E.S. will then sign over ownership rights to The University. At that point, the university will own the system and will reap all benefits thereof. The benefits to this system are that there is a possibility to install a larger system than The University has budgeted for, that G.E.S. can utilize tax credits that are readily available to the private sector (many of these credits are not available for state owned institutions), and that the maintenance will be covered for the period that G.E.S. owns the system. The estimate for this option will not be available until TVA's 2015 Green Power Provider Program details have been released. Typically, these details are released in late October. When the details are released, G.E.S. will be in contact to provide the adjusted estimate in order to accurately allow The University to make the best decision with the most accurate information.

4 Proposal "Professionally Designed and Installed Solar Energy Systems" DATE: April 10, 2014 Submitted To: Roof Sample DESCRIPTION Provide & Install Solar Photovoltaic System 43.2 kw to include the following: 1. Feasibility study with system design & engineering 2. Complete & submit grant applications & interconnection applications 3. All system components 4. Complete installation and grid connection 5. System commissioning & startup System Components: Modules: Watt Panels - 25 year power Warranty Inverters: Commerical Inverters 10 Year Warranty Racking: Custom Designed Racking System 10 Year Warranty $ AMOUNT 96,790 System Overview: Cost Per Installed Watt $ 2.24 Mounting Type: Roof Mount System Name Plate Rating: Estimated Yearly Output in kwh Year 1 System Production is Guaranteed by GES 55,092 TOTAL $ 96,790 *This is a pre-design and engineering estimate. Final cost determined after design and engineering is complete. Quote valid for 30 days. We are proud to be known by the company we keep and our 100% customer satisfaction! Knoxville Convention Vanderbilt University Toyota Corporation Harrison Dairy Rockcastle Hospital Other clients include ORNL, Y12, University of Tennessee, US Park Service, EPRI, Copper Cellar, Town of Farragut & many more! THANK YOU FOR THE OPPORTUNITY - FOR MORE INFORMATION CHECK US OUT AT:

5 System Cost & Incentive Review For 43.2 kw System Total Cost $ 96,790 Estimated System Cost after Grants & Tax Credit $ 96,790 Federal Tax Depreciation Basis $ 96,790 Year 1 Deprecation Year 1 Depreciation Cash Value Tax Bracket Assumption Grant Tax Year One Revenue 5,785 Year one Depreciation Year One Cost after Tax Credit, Depreciation, Revenue $ 91,005 Expected Yearly Power Production kwh 55,092 Utility Rate 0.105

6 System Income and Cash Flow Review for 43.2 kw System Yearly System Production 55,092 kwh Return on Investment: 6.20% Base Electrical Rate Per KWh Capital Returns in: 14 years Additional Incentive Per KWh Year 1 Starting Rate Per KWh Year 1 EOY Capital 91,005 *See System Cost Review Adjusted Dep Value System Total Yrly Cumulative Cumulative Key Financial Milestones Year Cost w/credit After Tax Income Cash Impact Cash Impact Cashflow 1 $ 96,790 $ $ 5,785 $ 5,785 $ 5,785 $ (91,005) 2 $ 96,790 $ 6,045 $ 6,045 $ 11,830 $ (84,960) 3 $ 96,790 $ 6,317 $ 6,317 $ 18,147 $ (78,643) 4 $ 96,790 $ 6,601 $ 6,601 $ 24,748 $ (72,042) 5 $ 96,790 $ 6,898 $ 6,898 $ 31,646 $ (65,144) 6 $ 96,790 $ 7,209 $ 7,209 $ 38,855 $ (57,935) 7 $ 96,790 $ $ 7,533 $ 7,533 $ 46,388 $ (50,402) 8 $ 96,790 $ 7,872 $ 7,872 $ 54,260 $ (42,530) 9 $ 96,790 $ 8,226 $ 8,226 $ 62,487 $ (34,303) 10 $ 96,790 $ 8,597 $ 8,597 $ 71,083 $ (25,707) 11 $ 96,790 $ 8,081 $ 8,081 $ 79,164 $ (17,626) 12 $ 96,790 $ 8,436 $ 8,436 $ 87,600 $ (9,190) 13 $ 96,790 $ 8,808 $ 8,808 $ 96,408 $ (382) 14 $ 96,790 $ 9,195 $ 9,195 $ 105,603 $ 8, $ 96,790 $ 9,600 $ 9,600 $ 115,202 $ 18, $ 96,790 $ 10,022 $ 10,022 $ 125,224 $ 28, $ 96,790 $ 10,463 $ 10,463 $ 135,687 $ 38, $ 96,790 $ 10,923 $ 10,923 $ 146,611 $ 49, $ 96,790 $ 11,404 $ 11,404 $ 158,015 $ 61, $ 96,790 $ 11,906 $ 11,906 $ 169,920 $ 73, $ 96,790 $ 12,430 $ 12,430 $ 182,350 $ 85, $ 96,790 $ 12,977 $ 12,977 $ 195,327 $ 98, $ 96,790 $ 13,547 $ 13,547 $ 208,874 $ 112, $ 96,790 $ 14,144 $ 14,144 $ 223,018 $ 126, $ 96,790 $ 14,766 $ 14,766 $ 237,783 $ 140,993 ROI Per Year at 25 Years= 6.20% Projection Assumptions 1. Annual increase in base rate of 4.5% (TVA 10 Year Historical 5.01%) 2. System cost is after grant is taken into consideration 3. ROI assumes renewal of 50% bonus depreciation Year 1 kwh production is guaranteed by GES 5. Projections assume full utilization of tax credits and depreciation 6. ROI is calculated based on capital outstanding at end of year 1 after tax credit, depreciation & revenue 7. System production reduced in 10th year for degradation

7 25 Year System Cost and Cashflow Review For 43.2 kw System 250, ,000.0 x 150, ,000.0 Adj System Cost Financial Impact 50, R[ 1]C* Typical Payment, Design & Installation Schedule System Price Before Grants & Tax Incentives $ 96,790 Submit Grant (if Necessary) Pre Construction Approval (if Necessary) Payment No Payment Due Balance 1st Construction Contract Signed 40% 38,716 $ 58,074 Final design complete & Equipment Ordered 2nd Arrive on Site for Installation 30% 29,037 $ 29,037 Usually 30 days from Signed agreement 3rd Construction Completed 30% 29,037 $ System operational Inspection and Grid Connection System Commissioning * Above information is estimate only with final to be determined during design