Financial Considerations are Starting Point for Solar Power

By Loren Snyder  
OTHER PARTS OF THIS ARTICLEPt. 1: As Photovoltaic Costs Fall, Demand for Solar Power RisesPt. 2: This Page

For facility managers interested in solar, the starting point, as it is in most situations, is economics. Facility managers should ask the following questions:

  • What does the facility's load profile look like?
  • What photovoltaic equipment is needed and what will it cost?
  • What electric tariffs apply?
  • Are local or federal incentives available that reduce the up-front costs?

Facility managers can choose between owning the photovoltaic system and signing a power purchase agreement (PPA) under which a third party installs and owns the system, then sells power to the facility. Even though many PPAs specify the third-party is responsible for maintenance and upkeep, the solar arrays still sit on property that's the responsibility of facility managers, so they should carefully weigh considerations that affect their buildings.

Facility managers should also take a close look at the credentials of the company they plan to work with.

"The best advice I can give facility managers is to diligently check references," says Shively. "If you are considering entering into a 10-, 15- or 20-year agreement, what assurance are developers or installers giving you they will still be around for the duration of the agreement?"

Shively says he expects that PPAs will begin to shift to other companies to pick up the energy sale agreements and maintenance as many of the solar startups disappear over the next five years.

Assuming, however, that facility managers do their homework, have realistic expectations, conduct their due diligence, and get the engineering go-ahead (both for the structures and the electrical load), solar arrays seem to satisfy.

"All of the work is before the installation," says Toimil, who spent more than six months doing research and talking with contractors to narrow down what system they wanted and who they were going to award the contract to. All of this work behind him, Toimil is happy with his choice. "I check production every morning when I get in," he says. "It's enough 'juice' to potentially offset the facility's entire energy needs."

Loren Snyder, a contributing editor for Building Operating Management, is a writer who specializes in facility issues. He was formerly managing editor of Building Operating Management.

Solar Success Stories

In December 2008, the Atlantic City Convention Center installed 13,486 modules projected to have a combined generating capacity of 2.36 MW. Today, the system is generating more electricity than originally estimated, according to Janet Mitrocsak, regional director of operations.

The San Diego School District has had a decade-long relationship with solar. With an average 267 sunny days per year and relatively high electricity costs, San Diego is a logical location for solar arrays. Generating output is now being boosted to 5.2 MW, according to Cynthia Reed-Porter, communications manager for the district's facilities planning and construction department.

"The district is installing 23,000 panels on 80 rooftops across the organization," she says.

— Loren Snyder

Continue Reading:

As Photovoltaic Costs Fall, Demand for Solar Power Rises

Financial Considerations are Starting Point for Solar Power

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  posted on 12/5/2011   Article Use Policy

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