ninth avenue terminal solar proposal

Ninth Avenue Terminal (NAT)Solar Photovoltaic (PV) Feasibility Study

MSE/ER C226 – Photovoltaic Materials: Students

Sebastien Lounis

Florent Martin

Eric Zielke

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

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.

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

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.

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.

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

Existing and Future Incentive Alternatives

Criteria Evaluated1. Economics2. Public Relations3. Branding4. Potential Power5. Ease of Implementation

Initial Screening – Project Elimination

• Initial Capital Cost/Investment• Bidding Process (i.e. large-scale)

Existing and Future Incentive Alternatives

Existing Incentive Alternative 1: CSI (Tax Equity Investor)

Utilized Roof Space: ~15,000 Sq. Ft.

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

Existing and Future Incentive Alternatives

Existing Incentive Alternative 2: FIT (Tax Equity Investor)

Utilized Roof Space: ~90,000 Sq. Ft.

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

Existing and Future Incentive Alternatives

Existing Incentive Alternative 3: CSI with PPA

Utilized Roof Space: ~15,000 Sq. Ft.

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– Higher present rate for electricity than

grid-bought bower– Additional Administrative Costs

Existing and Future Incentive Alternatives

Future Incentive Alternative 1: 0.35$/kWh FIT (Tax Equity Investor)

Utilized Roof Space: ~90,000 Sq. Ft.

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

Existing and Future Incentive Alternatives

Future Incentive Alternative 2: 0.60$/kWh FIT (Tax Equity Investor)

Utilized Roof Space: ~90,000 Sq. Ft.

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

Existing and Future Incentive Alternatives

Future Incentive Alternative 3: PG&E Lease Agreement

Utilized Roof Space: ~90,000 Sq. Ft.

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 costs

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:

• PPA and Lease-agreement excluded due to lack of economic data.

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)

Specifications of Recommended Solutions

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.

250 kW system, net metering alternative

$6.2/Wp installation costSunPower 305 solar panels

0.22$/kWh for 5 years under CSI

Specifications of Recommended Solutions

1.5 MW system, Feed-In-Tariff Alternative

With a 60c/kWh FIT and a 10% interest rate, the payback period is 11 years.

$5.8/Wp installation cost

SunPower 305 solar panels

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