LCDR Leigh Hubbard III, PE, MS
Albuquerque Service Unit - Albuquerque Area
US Indian Health Service
Disclaimer
This presentation summarizes the preliminary results and conclusions of an
Indian Health Service (IHS) photovoltaic project in the Pueblo of Zia, NM.
The cost and economic feasibility information presented is particular to the
regulatory, electrical utility, and solar vendor market conditions in the
Albuquerque, New Mexico area. Conditions will vary nationally and with
time.
The conclusions and recommendations indicated are specific to the IHS
Albuquerque Service Unit and reflect the mission of the Indian Health
Service Sanitation Facilities Construction program.
Introduction – Zia Photovoltaic System
This presentation will cover the following topics:
• Photovoltaic Lift Station Project Introduction
• Local PV System Comparison
• Basic Electrical Terminology
• Basic PV System Configurations
• PV System Cost Incentives
• PV System Cost Savings
• PV System Benefit Analysis – IHS Albuquerque Area
Introduction – Zia Photovoltaic System
2010 ARRA Project to Replace a Failing Lift Station
Introduction – Zia Photovoltaic System
2010 ARRA Project to Replace a Failing Lift Station
Introduction – Zia Photovoltaic System
Solar Installation Goals:
1. Reduce Facility Electrical Costs
2. Engineer Familiarization with Technology for Use in
Future Projects
3. Evaluate Level of Operation and Maintenance Required
Local PV System Comparison
Local PV System Comparison
Comparison of the Zia project with other local solar
project s in terms of:
1. Performance
2. Cost
3. System Payback
Local PV System Comparison
Owner Units
Installation Type
PV System Size kWatt
Capital Cost
Unit Cost
$
$/watt
IHS
Fixed
1.8
NM NG
1-Axis
11.2
NM NG
2-Axis
72.0
UNM
Fixed
180.0
$16,704 $210,000 $776,000 $850,000 $20,000,000
$9.28
$18.75
$10.78
Approx. Specific Production kWh/kW/yr 2,110
$4.72
$6.45
1,700
Est Annual Power Cost Savings
$
$414
Est Annual REC Credit Payment
$
$190
Years
28
33
19
Est Cost Savings as of 2020
$
$5,734
$285,000.0
$436,050
Est 20-Year Cost Savings
$
$10,077
$600,000
$436,050
Est Payback Period
NM VA
Fixed
3,100.0
$30,000
$0
System Not
Reporting
Yet
$45,900
Local PV System Comparison
Basic Electrical Terminology
Basic Electrical Terminology
100-Watt Light Bulb
Basic Electrical Terminology
10 X 100 Watt Light Bulbs = 1,000 Watts
1,000 Watts = 1 Kilowatt or kW
Basic Electrical Terminology
1 Kilowatt x 1 Hour = Kilowatt-hour or kWh
Kilowatts x hours x (rate-per-kilowatt-hour) = Cost-to-Run
Basic Electrical Terminology
Solar Energy (in the form of photons) knock
elections free from a silicon semiconductor
material . Electrons are collected and
directed toward a load as DC current.
DC current is converted into AC current by an
Inverter.
AC current is the form of energy typically
supplied to electrical utility customers.
Basic PV System Configuration
Basic PV System Configurations
Three Installation Types.
1. Standard Electrical Installation
2. Photovoltaic Grid-Tied Installation
3. Photovoltaic Off-Grid Installation
Basic PV System Configurations
Standard Electrical Installation
Load
Center
Pump
GRID
Basic PV System Configurations
Photovoltaic Grid-Tied Installation
Solar PV
Load
Center
Pump
GRID
Basic PV System Configurations
Photovoltaic Off-Grid Installation
Solar PV
Load
Center
Pump
Basic PV System Configurations
Fixed Array
1-Axis Tracking Array
2-Axis Tracking Array
PV System Cost Incentives
PV System Cost Incentives
• 30% Federal Tax Credit
• 10% State Tax Credit (New Mexico up to $9,000 max)
• Net Metering (Electricity from PVs Return to Grid)
• Renewable Energy Certificates – RECs (Mandated
Payment from Electrical Utility)
PV System Tax Credits
• 30% Federal Tax Credit
• 10% State Tax Credit (New Mexico up to $9,000 max)
• Residential and Commercial Installations Only
Net Metering
• If pull more electricity from grid than generated by PV system, you are
billed for the net energy supplied.
• If PV system generates more electricity than pulled from grid, net kWh
generated are credited on the next bill. Unused credits are carried
forward from month to month.
• When the value of the unused credits exceeds $50, payment is made to
the customer the following month.
Renewable Energy Certificates - RECs
Thirty-three States and DC have established Renewable Portfolio Standards (RPS)
that create market demand for renewable and clean energy supplies. RPS
requirements mandate that 4% to 30% of electricity be generated from renewable
sources. RECs are one method to comply with RPS.
http://www.epa.gov/chp/state-policy/renewable_fs.html
State Incentive Summary
States offer a variety of financial incentives that can include:
• Corporate Tax Credits
• Performance-based incentives
• Personal tax credits
• Property tax incentives
• Sales tax incentives
• State bond programs
• State loan programs
• Utility rebate programs
http://www.dsireusa.org/incentives/index.cfm?getRE=1?re=undefined&ee=1&spv=0&st=0&srp=1&state=NM
PV System Cost Savings
PV System Cost Savings
PV System Cost Savings
PV System Cost Savings
Electrical
Utility
Production
Capacity
Facility
Cost
Savings
Owner
Geographic
Location
Purchase
Date
Electrical Utility
Electrical Utilities :
• May not participate in renewable energy programs.
• May be contracted to purchase from power generators.
• May have a later deadline to purchase RECs.
• May satisfy RPS targets early and no longer purchase RECs.
• May not agree to purchase excess net energy from PV systems.
Production Capacity
• Large electrical demands require a utility to maintain capacity within the
system.
• Utility re-coup expense with minimum rate-per-kilowatt-hour.
• GW Well - existing rate $0.14 / kWh. Savings strategy to install a grid-tied
system to off-set overall kWh used.
• But, utility charges a minimum capacity rate of $0.09 / kWh.
• Actual savings is only $0.05 /kWh.
Owner
• Residential and Commercial system owners receive federal and state tax
credits.
• Residential and Commercial system owners are eligible to receive netmetering and RECs.
• Federal projects do not receive tax credits.
• Federal agencies do not receive REC payments.
• Tribal Governments do not pay taxes and do not benefit from tax credits.
Purchase Date
• States have different Renewable Portfolio Standard (RPS) targets (% of
electricity sales) . The NM target is 20% for Investor Owned Utilities and
10% for Rural Utilities.
• States have different implementation deadlines. NM target date is 2020.
• Utility payment rates to owners are organized into tiers.
• As a tier is filled, the next available tier offers a lower REC payment rate.
• Once all ties are filled, the Utility stops purchasing RECs.
• Contracts for REC payments terminate after the deadline.
• The first systems to be commissioned receive the highest return for a
longer time period.
Geographic Location
http://www.nrel.gov/gis/solar.html
PV System Cost Savings
System cost and savings depend on many factors, many of which are time
and location dependent. In our experience the easiest method to calculate
the system cost was to contact local commercial vendors.
Benefits:
• Familiar with local markets and product manufacturers.
• Capable of calculating system size to best benefit from market
conditions.
• Capable of calculating construction cost and applicable incentives,
credits, and rebates.
• Usually have in-house construction capability.
• May have GSA contracts that facilitate the federal procurement process.
PV System Benefit Analysis
PV System Benefit Analysis
Owner Units
Installation Type
PV System Size
Capital Cost
Unit Cost
Approx. Specific Production
Est Annual Power Cost Savings
Est Annual REC Credit Payment
kWatt
$
IHS
Fixed
NM NG
1-Axis
NM NG
2-Axis
UNM
Fixed
NM VA
Fixed
1.8
11.2
72.0
180.0
3,100.0
1.6
2.35
2.0
$776,000
$850,000
$20,000,000
$8,855
$11,162
$16,000
$10.78
$4.72
$6.45
$5.50
$4.75
$8-10
$6-8
1,411
1,776
1,850
1,850
$431
$623
$400
$800
$114
$209
$185
$370
$16,704 $210,000
$/watt
$9.28
kWh/kW/yr
2,110
$
$414
$18.75
1,700
$30,000
$0
Vendor 2
Fixed
Fixed
4.0
Vendor 3
Fixed
Fixed
1.8
4.0
$24,000 $9,900 $16,000
$
$190
Years
28
33
19
16
13
27
21
Est Cost Savings as of 2020
$
$5,734
$285,000.0
$436,050
$5,178
$7,904
$5,558
$11,115
Est 20-Year Cost Savings
$
$10,077
$600,000
$436,050
$9,707
$14,449
$9,758
$19,515
Est Payback Period
$45,900
System Not
Reporting Yet
Vendor 1
Fixed
Fixed
$5.50
$4.00
PV System Benefit Analysis
Owner Units
Installation Type
PV System Size
Capital Cost
Unit Cost
Approx. Specific Production
Est Annual Power Cost Savings
Est Annual REC Credit Payment
kWatt
$
IHS
Fixed
NM NG
1-Axis
NM NG
2-Axis
UNM
Fixed
NM VA
Fixed
1.8
11.2
72.0
180.0
3,100.0
1.6
2.35
2.0
$776,000
$850,000
$20,000,000
$8,855
$11,162
$16,000
$10.78
$4.72
$6.45
$5.50
$4.75
$8-10
$6-8
1,411
1,776
1,850
1,850
$431
$623
$400
$800
$114
$209
$185
$370
$16,704 $210,000
$/watt
$9.28
kWh/kW/yr
2,110
$
$414
$18.75
1,700
$30,000
$0
Vendor 2
Fixed
Fixed
4.0
$
$190
28
33
19
16
13
27
21
Est Cost Savings as of 2020
$
$5,734
$285,000.0
$436,050
$5,178
$7,904
$5,558
$11,115
Est 20-Year Cost Savings
$
$10,077
$600,000
$436,050
$9,707
$14,449
$9,758
$19,515
Unit Cost - $4.00/watt to $18.75/watt
Payback Period - 13 to 33 years
Vendor 3
Fixed
Fixed
1.8
4.0
$24,000 $9,900 $16,000
Years
Est Payback Period
$45,900
System Not
Reporting Yet
Vendor 1
Fixed
Fixed
$5.50
$4.00
PV System Benefit Analysis
Owner Units
Installation Type
PV System Size
Capital Cost
Unit Cost
Approx. Specific Production
Est Annual Power Cost Savings
Est Annual REC Credit Payment
kWatt
$
IHS
Fixed
NM NG
1-Axis
NM NG
2-Axis
UNM
Fixed
NM VA
Fixed
1.8
11.2
72.0
180.0
3,100.0
1.6
2.35
2.0
$776,000
$850,000
$20,000,000
$8,855
$11,162
$16,000
$10.78
$4.72
$6.45
$5.50
$4.75
$8-10
$6-8
1,411
1,776
1,850
1,850
$431
$623
$400
$800
$114
$209
$185
$370
$16,704 $210,000
$/watt
$9.28
kWh/kW/yr
2,110
$
$414
$18.75
Vendor 1
Fixed
Fixed
1,700
$30,000
$0
4.0
Vendor 3
Fixed
Fixed
1.8
$
$190
28
33
19
16
13
27
21
Est Cost Savings as of 2020
$
$5,734
$285,000.0
$436,050
$5,178
$7,904
$5,558
$11,115
Est 20-Year Cost Savings
$
$10,077
$600,000
$436,050
$9,707
$14,449
$9,758
$19,515
$5.50
Upfront Owner System Expense and Payback Period are Eliminated
Payback is Immediate
$16,407 Capital Cost is 3.5% of Project Funding
4.0
$24,000 $9,900 $16,000
Years
Est Payback Period
$45,900
System Not
Reporting Yet
Vendor 2
Fixed
Fixed
$4.00
PV System Benefit Analysis
Sustainability
“To promote and assist in the establishment of an effective and economical
mechanism for the operation and maintenance of tribal water, sewage, and
solid waste systems.”
IHS Operation and Maintenance Guideline for
the SFC program, Working Draft, January 2009
PV System Benefit Analysis
Sudan war mirrors region's oil conflicts
The brewing war between Sudan and South Sudan is a battle for oil and there are other such potential
conflicts in the Middle East and Africa.
http://www.upi.com/Business_News/Energy-Resources/2012/04/18/Sudan-war-mirrors-regions-oil-conflicts/UPI-68621334766985/#ixzz1xiyeA8vS
South China Sea Oil Rush Risks Clashes as U.S. Emboldens Vietnam on Claims
Vietnam and the Philippines are pushing forward oil and gas exploration projects in areas of the South
China Sea claimed by China, sparking a fresh clash in one of the world’s busiest shipping corridors.
http://www.bloomberg.com/news/2011-05-26/s-china-sea-oil-rush-risks-clashes-as-u-s-emboldens-vietnam.html
Egypt Cancels the Delivery of Gas to Israel
Egypt’s state-owned natural gas company said Sunday that it was ending a deal to ship gas to Israel
because of a payment dispute.
http://www.nytimes.com/2012/04/23/world/middleeast/egypt-cancels-delivery-of-natural-gas-to-israel.html?_r=1
PV System Benefit Analysis
Argentina Seizes Repsol's Assets In Worrying Signal To Exploration Firms
The government’s seizure of Spanish giant Repsol’s assets in Argentina could slow foreign investments in the country’s
shale reserves.
http://www.upi.com/Business_News/Energy-Resources/2012/04/18/Sudan-war-mirrors-regions-oil-conflicts/UPI-68621334766985/#ixzz1xiyeA8vS
Argentina reignites conflict over Falklands oil
Argentina's demand for direct control of shipping from the South American mainland to the Falkland
Islands has raised fears about conflict over energy resources in the south Atlantic.
http://www.azcentral.com/news/articles/2010/02/18/20100218falklands0218.html#ixzz1xj23KsZX .
U.S. Sends Top Iranian Leader a Warning on Strait Threat
Senior Obama administration officials have said publicly that Iran would cross a “red line” if it
made good on recent threats to close the strait, a strategically crucial waterway connecting the
Persian Gulf to the Gulf of Oman, where 16 million barrels of oil — about a fifth of the world’s
daily oil trade — flow through every day
http://www.nytimes.com/2012/01/13/world/middleeast/us-warns-top-iran-leader-not-to-shut-strait-of-hormuz.html?pagewanted=all
PV System Benefit Analysis
Owner Units
Installation Type
PV System Size
Capital Cost
Unit Cost
Approx. Specific Production
Est Annual Power Cost Savings
Est Annual REC Credit Payment
kWatt
$
IHS
Fixed
NM NG
1-Axis
NM NG
2-Axis
UNM
Fixed
NM VA
Fixed
1.8
11.2
72.0
180.0
3,100.0
1.6
2.35
2.0
$776,000
$850,000
$20,000,000
$8,855
$11,162
$16,000
$10.78
$4.72
$6.45
$5.50
$4.75
$8-10
$6-8
1,411
1,776
1,850
1,850
$431
$623
$400
$800
$114
$209
$185
$370
$16,704 $210,000
$/watt
$9.28
kWh/kW/yr
2,110
$
$414
$18.75
1,700
$30,000
$0
Vendor 2
Fixed
Fixed
4.0
Vendor 3
Fixed
Fixed
1.8
4.0
$24,000 $9,900 $16,000
$
$190
Years
28
33
19
16
13
27
21
Est Cost Savings as of 2020
$
$5,734
$285,000.0
$436,050
$5,178
$7,904
$5,558
$11,115
Est 20-Year Cost Savings
$
$10,077
$600,000
$436,050
$9,707
$14,449
$9,758
$19,515
Est Payback Period
$45,900
System Not
Reporting Yet
Vendor 1
Fixed
Fixed
$5.50
Estimated 20-Year Cost Savings = $10,077 @ $0.135 kWh
$4.00
PV System Benefit Analysis
Owner Units
Installation Type
PV System Size
Capital Cost
Unit Cost
Approx. Specific Production
Est Annual Power Cost Savings
Est Annual REC Credit Payment
kWatt
$
IHS
Fixed
NM NG
1-Axis
NM NG
2-Axis
UNM
Fixed
NM VA
Fixed
1.8
11.2
72.0
180.0
3,100.0
1.6
2.35
2.0
$776,000
$850,000
$20,000,000
$8,855
$11,162
$16,000
$10.78
$4.72
$6.45
$5.50
$4.75
$8-10
$6-8
1,411
1,776
1,850
1,850
$431
$623
$400
$800
$114
$209
$185
$370
$16,704 $210,000
$/watt
$9.28
kWh/kW/yr
2,110
$
$414
$18.75
1,700
$30,000
$0
Vendor 2
Fixed
Fixed
Vendor 3
Fixed
Fixed
4.0
1.8
4.0
$24,000 $9,900 $16,000
$
$190
Years
28
33
19
16
13
27
21
Est Cost Savings as of 2020
$
$5,734
$285,000.0
$436,050
$5,178
$7,904
$5,558
$11,115
Est 20-Year Cost Savings
$
$10,077
$600,000
$436,050
$9,707
$14,449
$9,758
$19,515
Est Payback Period
$45,900
System Not
Reporting Yet
Vendor 1
Fixed
Fixed
$5.50
Estimated 20-Year Cost Savings = $18,350 @ $0.27 kWh
Estimated 20-Year Cost Savings = $34,895 @ $0.54 kWh
$4.00
PV System Benefit Analysis
Owner Units
Installation Type
PV System Size
Capital Cost
Unit Cost
Approx. Specific Production
Est Annual Power Cost Savings
Est Annual REC Credit Payment
kWatt
$
IHS
Fixed
NM NG
1-Axis
NM NG
2-Axis
UNM
Fixed
NM VA
Fixed
1.8
11.2
72.0
180.0
3,100.0
1.6
2.35
2.0
$776,000
$850,000
$20,000,000
$8,855
$11,162
$16,000
$10.78
$4.72
$6.45
$5.50
$4.75
$8-10
$6-8
1,411
1,776
1,850
1,850
$431
$623
$400
$800
$114
$209
$185
$370
$16,704 $210,000
$/watt
$9.28
kWh/kW/yr
2,110
$
$414
$18.75
1,700
$30,000
$0
Vendor 2
Fixed
Fixed
4.0
$
$190
28
33
19
16
13
27
21
Est Cost Savings as of 2020
$
$5,734
$285,000.0
$436,050
$5,178
$7,904
$5,558
$11,115
Est 20-Year Cost Savings
$
$10,077
$600,000
$436,050
$9,707
$14,449
$9,758
$19,515
Lower Unit Costs - Reduce Upfront Costs
Lower Unit Costs - Reduce Payback Period
Vendor 3
Fixed
Fixed
1.8
4.0
$24,000 $9,900 $16,000
Years
Est Payback Period
$45,900
System Not
Reporting Yet
Vendor 1
Fixed
Fixed
$5.50
$4.00
PV System Benefit Analysis
Cons:
• High Initial Cost
• Long Pay Back Period
• Complicated Technology
• Incentive Programs REC Payment Process are Confusing
• Paying for Prime Contractor Markup on Sub-Contractor Work
PV System Benefit Analysis
Pros:
• Lower Unit Costs Available with a Potential for GSA Pricing
• Offsets Power Used – Owner Will Not Feel Future Rate Increases
• Improves Tribal System Sustainability – Frees Funds For Other Uses
• Lowers Carbon Footprint of Tribal System and Reduces Pollution
• Fixed PV Arrays Are Stand-Alone and Low Maintenance
• Vendors Offer Comprehensive Range of Services and PV Packages
PV System Benefit Analysis
Result:
• Albuquerque Service Unit will be attempting to incorporate PV grid-tied
systems in future sanitation facility projects.
• The long term goal will be to overtime offset the daily power
consumption of tribal sanitation facilities below a threshold power
demand to be determined.
• Eventually, all facilities will be converted and the funds expended on
power consumption can be dedicated to other beneficial uses.
Questions?