Commercial Solar Opportunities Kevin Moore Koch
WHY SOLAR? Environmental Reduce Carbon Footprint Financial Fixed utility costs Good ROI Strategic Showcase environmental leadership Reliable/Low Maintenance Proven technology 30+ yr design life
Tucson Energy Use and Impacts Coal 4,817,000 tons/year CO2 10,598,000 tons/year Water 10,558,250 gallons/day (40%)
20 KW System - Environmental Coal 2,900 pounds/month CO2 3.2 tons/month Water 1,700 gallons/month Equivalent to 7000 miles not driven (21MPG)
Solar Incentives Utility Rebate Commercial $2.5/watt UFI <20kw $0.14/kwh PBI >20kw Residential $3/watt Federal Tax Credit 30% gross 30% net State Tax Credit 10% capped at $25K 25% capped at $1K Depreciation basis 80% of net cost None Utility offset $0.11 $0.09-$0.102
20KW Financial Analysis HIGHLIGHTS 135,000 Initial Cost 40,500 Federal Rebate 13,500 State Rebate 50,000 Up-front Energy Provider Incentives 31,000 Initial Outlay 14,805 Later Costs 0 Energy Provider Incentives over time 19,720 Depreciation (5-year asset) 26,085 Net Cost, excluding impact of reduced energy bills 326 First year ave monthly electricty savings 3.5 Simple payback (years) 33,254 NPV at 8.0% discount rate 23.7% IRR
20KW Financial Analysis Cumulative Cash Flows 120.0 100.0 80.0 60.0 $000s 40.0 20.0 0.0-20.0-40.0 2010 2014 2018 2022 2026 2030 2034 2.0% Standard Inflation 2.00% Annual Energy Cost Inflation 34% Tax Rate (for Depreciation savings) 0.5% Annual Rate of Decay in Solar Production $14,805 Later Costs
80KW Financial Analysis HIGHLIGHTS 500,000 Initial Cost 150,000 Federal Rebate 25,000 State Rebate 0 Up-front Energy Provider Incentives 325,000 Initial Outlay 59,159 Later Costs 185,311 Energy Provider Incentives over time 140,250 Depreciation (5-year asset) 58,598 Net Cost, excluding impact of reduced energy bills 1,415 First year ave monthly electricity savings 6.2 Simple payback (years) 98,949 NPV at 8.0% discount rate 13.5% IRR
80KW Financial Analysis Cumulative Cash Flows 500.0 400.0 300.0 200.0 $000s 100.0 0.0-100.0-200.0-300.0 2010 2014 2018 2022 2026 2030 2034 2.0% Standard Inflation 2.00% Annual Energy Cost Inflation 34% Tax Rate (for Depreciation savings) 0.5% Annual Rate of Decay in Solar Production $59,159 Later Costs
Financing Options Small <26 kw Cash, loans, capital lease UFI Medium 26 100 kw Above plus operating lease w/ good credit history Large >100 kw Above plus third party ownership (Power Purchase Agreements) PBI PBI For Profit Non Profit Public Loan, lease, PPA PPA PPA, CREBS, Stimulus Funding
Common Challenges/Considerations Tax Liability 30% of system cost Utility Rate GS-10 I-13 ($0.06/kwh) Treasury Grant may be available for some businesses Non Profit >100 kw PPA with good credit history >$2,000/mo electric bills Roof Mounting Power Density Tracking Ballasted no penetration Low angle, high capacity/sq ft Higher system output Standard racking Roof access Higher angle Higher rebate and production/kw Maintenance for moving parts, higher cost
Haley & Aldrich 51.6 kw 5 Yr Operating Lease to capture Tax Credit 8,971 KWH produced May 09 ($1,094) 85% of Building Energy Use
Brooklyn Pizza Company Dedication Event with Mayor Walkup Print and TV exposure Used in Advertizing and promotion
Canyon Ranch, Tucson Discretely visible by guests 34KW system first major private commercial system in Tucson Over $11K in electricity savings since Jan 08
Questions? Kevin Moore Koch 520-740-0736 www.tfssolar.com kevin@tfssolar.com
PV Module Types Schott SAPC 170W Schott SAPC 175W Schott ASE 270W Sanyo HIT Double 190W SunPower 215W SunPower 230W
How it works 1. Solar modules convert sunlight into DC power. 2. The power is sent to an inverter which converts the DC power to AC power synchronized with the utility grid. 3. AC Power travels from the inverter to the electric service panel, where it is distributed to electrical loads. 4. Excess power flows into the utility grid and registers a credit with the utility company.
80 KW Cash Flow by Year Reduction Energy Installation State / Fed in Energy Provider Year Cumulative Annual Costs Rebates Bill Incentives Depreciation 2010-227.4-227.4 500.0 175.0 15.7 11.9 70.1 2011-180.0 47.4 0.0 0.0 17.1 12.7 17.5 2012-132.3 47.6 0.0 0.0 17.4 12.7 17.5 2013-84.5 47.8 0.0 0.0 17.7 12.6 17.5 2014-36.5 48.0 0.0 0.0 17.9 12.5 17.5 2015-5.9 30.7 0.0 0.0 18.2 12.5 0.0 2016 25.0 30.9 0.0 0.0 18.5 12.4 0.0 2017 56.1 31.1 0.0 0.0 18.7 12.4 0.0 2018 87.4 31.3 0.0 0.0 19.0 12.3 0.0 2019 119.0 31.5 0.0 0.0 19.3 12.2 0.0 2020 150.7 31.8 0.0 0.0 19.6 12.2 0.0 2021 182.7 32.0 0.0 0.0 19.9 12.1 0.0 2022 214.9 32.2 0.0 0.0 20.2 12.0 0.0 2023 247.4 32.5 0.0 0.0 20.5 12.0 0.0 2024 280.1 32.7 0.0 0.0 20.8 11.9 0.0 2025 242.9-37.2 59.2 0.0 21.1 0.9 0.0 2026 264.3 21.4 0.0 0.0 21.4 0.0 0.0 2027 286.1 21.7 0.0 0.0 21.7 0.0 0.0 2028 308.1 22.1 0.0 0.0 22.1 0.0 0.0 2029 330.5 22.4 0.0 0.0 22.4 0.0 0.0 2030 353.2 22.7 0.0 0.0 22.7 0.0 0.0 2031 376.2 23.1 0.0 0.0 23.1 0.0 0.0 2032 399.6 23.4 0.0 0.0 23.4 0.0 0.0 2033 423.4 23.7 0.0 0.0 23.7 0.0 0.0 2034 447.5 24.1 0.0 0.0 24.1 0.0 0.0
Resources TEP Rebate and Net Metering www.greenwatts.com Federal, State and Local Incentives www.dsireusa.org Solar Energy Industry Association www.seia.com
TEP Energy Sales By Sector Energy Use 2007 34% 42% Residential Commercial Industrial 24%