Tag Archives: salt river project

Solar Panels - AZRE Magazine July/August 2011

Solar Panels And Installations Make Good Financial Sense

Figuring out the bottom line return on investment figures for installing solar panels on commercial buildings is a bit like hitting a moving target. Incentives from utilities are apt to change and sow uncertainty in the market, thus access to capital can be iffy in these challenging economic times.

But some business owners who have installed systems in the past year agree: The right incentive package from Arizona Public Service or Salt River Project, combined with federal and state tax incentives, makes solar a good financial — as well as environmental — bet.

Here is a snapshot of two businesses that managed to put the right ingredients together.

Cowley Companies and APS

Cowley Companies, a Phoenix real estate investment firm, placed one of the largest commercial rooftop solar arrays in the country on one of its warehouses near 25th Avenue and Buckeye Road.

The project cost $11.5M and includes 7,872 panels, which generate about 2.4 megawatts of power. According to CEO Mike Cowley, the solar array is producing half of the electricity needed in the 850,000 SF building, which includes tenants with industrial refrigeration requirements. His annual bill had been running about $1M.

Cowley says he had to sign a non-disclosure agreement with APS and cannot reveal what the utility company is paying him per kilowatt hour, but the agreement obligates APS to pay incentives until 60% of the project costs — the amount he borrowed to finance the project — is paid off. The incentive payments cover the loan payments. Cowley estimates that will take about 12 years.

He’ll recoup 30% of the cost through a federal tax credit. Additionally, tenants now reimburse him for power used. With that mix of incentives and payments, he calculated his self-financed portion of the project, about 10%, will be paid off in about six years.

With a 25-year warranty on the panels, the decision to erect the array made good financial sense, Cowley says.

In 2009, APS established a reverse-auction system that requires commercial entities to bid for an incentive package. Spokesman Steven Gotfried says APS scores each application and awards the bid to those who produce the most electricity for the lowest incentives.

APS’ calculator takes into account the system size, the amount of energy it is expected to produce, the incentive requested and years of payment. The lower the score, the smaller the incentive per kilowatt hour requested. Incentives are then awarded starting with the lowest score. This continues until all the funds are allotted. It’s a competitive, market-driven process designed to lower incentives.

Lower incentives, Cowley says, would have made his deal less feasible.

“People are not going to get excited about a 20-year payback,” he says. Businesses may even “be waiting for SRP and APS to bring the rate back up to where solar makes sense again.”

Gotfried says APS is trying to find the right balance between offering too few and too many incentives, with a finite pool or resources.

“The goal at the end of the day is to drive down the cost of solar,” he says. “The incentives weren’t meant to go on forever, they were meant to get things started.”

The price of solar panels has dropped 50% in the past three years, says Lee Feliciano, president of the Arizona Solar Energy Industries Association and a solar developer with CarbonFree Technology.

There may come a time, he says, when the industry no longer offers incentives for the panels, but that day is not yet on the horizon.

“The incentives are there to position the industry,” Feliciano says. “A lot of the biggest industries in the country would not be here without incentives.”

Even with incentive amounts dropping, installing solar panels on a commercial building can still be a good deal, says Gary Held, sales and marketing manager with Harmon Solar, which worked on the Av-Air project.

With incentive rates running around 10 cents to 12 cents per kilowatt hour, someone with access to capital can have a system paid off in about eight years. With a 20-year production-based incentive, that still makes financial sense, he says.

An owner who leases a system can see the end of lease payments in about 12 years and have eight years of incentives.

“We shout from the rooftops: If you are a commercial business owner with cash or access to capital with good credit, putting solar on your rooftop is a sound investment,” Held says.

Av-Air and SRP

“I am extremely satisfied with the way it is turning out for us,” says Bob Ellis, president of Reason’s Aviation, the parent company of Av-Air, a Chandler-based company that offers aftermarket parts and services to the airline industry.

Harmon Solar of Phoenix installed a 151,800-watt photovoltaic system made up of 550 solar panels on Av-Air’s rooftop, which is equivalent to about 20 residential-sized systems.

Ellis says the total cost of the project was $808,000. About 30% of the cost was covered by a federal grant and $25,000 will come back to him as a state tax credit, which is available to companies whose solar systems are operational this year.

The solar array covers 100% of his energy needs and SRP, he says, is paying him an incentive of 21.4 cents per kilowatt hour for 10 years, which comes out to $6,000 a month. Add that to the approximate $4,000 a month his tenants pay him for solar generated electricity and the fact that he’s no longer paying an electric bill, and the decision to go solar was “a no-brainer.” Ellis says it will take him about four years to pay back his $560,000 in up-front, out-of-pocket expenses.

The only downside to the process occurred when none of the four or five banks he does business with would lend him money for the out-of-pocket expenses, saying they were too unfamiliar with the incentive process.

Ellis also concedes it may be difficult for companies today to replicate Av-Air’s circumstances because SRP’s incentives are much less generous than they were in 2009.

“It was a really good deal and I got in on it just at the right time,” he says.

Both SRP and APS have production based incentive (PBI) programs for medium- and large-sized commercial customers. PBIs pay a customer over time based on the amount of energy produced, as opposed to the up-front incentives given to homeowners or small-business owners.

SRP now offers a PBI of 12 cents per kilowatt hour for 20 years for the first two megawatts of power applied for, but lowers the funding to 11 cents and then 10 cents respectively for each successive two megawatts. Its annual pool is for six megawatts.

Lori Singleton, SRP manager for sustainable initiatives and technology, says the utility simply has a finite set of resources and is trying not to over-subsidize an emerging industry.

“As the cost of solar decreases and demand increases, we have restructured our solar incentives to reflect that,” Singleton says. “It has been our intent from the beginning to reduce the rates as prices come down, so one day the industry can stand on its own without incentives.”

Reducing incentives also allows SRP to provide them to more customers, she says.

For more information about solar panels and incentive programs, visit srpnet.com or aps.com.

AZRE Magazine July/August 2011

SRP and Banner Strive for Energy Efficiency, 2011

SRP and Banner Strive for Energy Efficiency

Banner Estrella Medical Center and Salt River Project (SRP) are teaming up to save money, conserve energy and promote sustainability. Banner was the first recipient of the SRP PowerWise Retrocommissioning Solutions Program.

Instead of purchasing new equipment, Banner has received a tune-up on its existing systems, includes heating, ventilation, air conditioning, central plants, lighting systems and (HVAC) components. It expects a payback in less than six months, estimating energy savings of more than $100,000 in the first year.

So far, Banner has lowered its natural gas usage and improved its water consumption in the cooling tower due to the tune-up it received.

Being able to save money and energy is a big step for companies in this economic day and age. Some smaller companies are not able to purchase new equipment to be “green” or sustainable; Banner has opened the door for them. Retrocommissioning is an option being provided by SRP to use what you have to gain what you need.

The not-for-profit medical center opened six years ago and has been consistently looking for ways to reduce cost, reduce waste streams and energy. In 2009, Banner saved nearly $1 million by installing reverse osmosis water systems and eliminating bottled water, according to its website.

Salt River Project is the third-largest public power utility in the country and serves more than 945,000 electric customers. It is the largest supplier of water in the Phoenix, providing resources for consumers and businesses.

Working together, the two companies are a guiding force for sustainability.

BIG Green Expo & Conference 2011

Speaker: Lori Singleton ~ BIG Green Expo & Conference 2011

Lori Singleton, Salt River Project (SRP)

Lori Singleton, SRP

Lori Singleton is the manager of sustainability initiatives and technologies at Salt River Project. She is a 29-year employee of SRP and 40-year resident of Arizona. She is responsible for design and implementation of SRP’s environmental outreach programs with special focus on renewable energy.

Lori’s responsibilities at SRP include development and implementation of renewable energy projects to meet SRP’s sustainable resource goals. Singleton oversees research and development projects to support company-wide initiatives for SRP including gasoline lawn mower recycling, tree planting, clean school bus initiative, travel reduction and other internal environmental programs.

She works on development and implementation of the “green” energy pricing program, solar incentive program for residential and commercial customers and renewable energy education programs for implementation in middle school and high school curricula.

In addition, she does promotion and public relations for all new renewable energy projects and purchases (solar, wind, geothermal, landfill gas, low head hydro, fuel cells) while serving as the environmental issues media spokesperson for SRP and being a constant representative of SRP on numerous environmental committees, boards and commissions.

She was appointed by Governor Janet Napolitano to serve on the Solar Energy Advisory Council and also has several other current affiliations including: Valley Forward Association, Board of Directors; Audubon Society, chair, Board of Directors; Maricopa County Regional Travel Reduction Task Force, chair; Association for Commuter Transportation, Valley of the Sun, President & National Board Director; Southwest Center for Education; and the Natural Environment (ASU), Board of Directors.

Current Affiliations

Solar Energy Advisory Council, appointment by Governor Janet Napolitano
Valley Forward Association, Board of Directors
Audubon Society, Chair, Board of Directors
Maricopa County Regional Travel Reduction Task Force, Chair
Association for Commuter Transportation, Valley of the Sun, President &
National Board Director
Southwest Center for Education and the Natural Environment (ASU), Board of
Directors

Affiliations (Past)

Valley Forward Association, Chair, Board of Directors
Maricopa County Regional Travel Reduction Task Force
City of Phoenix, Environmental Quality Commission
Valley Metro, Clean Air Advisory Committee
Tempe Chamber of Commerce, Environmental Committee
Valley of the Sun United Way Loaned Executive


Topic: How people & organizations can get involved in the green movement from an energy perspective.

Conference Speaker
Friday, April 15, 2011
1:45 p.m. – 2:45 p.m.
Room 157

BIG Green Conference 2011


 

BIG Green Expo
Friday & Saturday
April 15th & 16th 2011
9 a.m. – 4 p.m.

 



 

Land Swap between Gilbert Charter School and SRP

First Of Its Kind Land Swap Ends Battle Between Gilbert Charter School And SRP

Phoenix (December 10, 2010) – Who says that you can’t beat city hall? An effective group of Gilbert elementary school parents and residents took on that challenge…and won, with the cooperation of SRP.

Salt River Project logoSRP had plans to install the Finley Substation, a two-bay substation with 69-kilo volt power lines, on a vacant lot located on the northwest corner of Baseline Road and Monterey Street in Gilbert. The lot is located immediately north of the playgrounds for Edu-Prize School, Arizona’s first charter school.  The result of an 18-month long battle between school parents, the City of Gilbert and SRP is a land exchange deal with the utility that affords SRP the opportunity to construct the facility farther away from the school.

Edu-Prize SchoolEdu-Prize School parents and school administrators have been actively crusading against the substation with a Facebook campaign, meeting with state legislators and circulating petitions that they presented to the Gilbert Town Council with about 1,000 signatures. Their concerns with the proposed substation stem from fear of health risks from exposure to electromagnetic forces upon the 1,200 kindergartners through eighth-graders that attend Ed-Prize and enjoy the playgrounds that are located in close proximity to the initial substation site.  Before co-founding the Gilbert charter school, Superintendent Lynn Robershotte taught for eight years at Frost Elementary School. It was located near high-tension wires, which Robershotte blamed for a handful of cases of childhood leukemia, brain cancer and neurological problems.

The issue of these concerns is one on which the two sides agree to disagree. Despite the school community’s concerns, SRP has always maintained that its substations are safe and pose no harmful effects. SRP has nearly 200 substations throughout the Valley and many are located near schools, day care centers, churches and homes.  SRP often encounters neighborhood opposition to proposed substations for a variety of reasons. This case presented a unique opportunity for negotiation, making it easier for the utility to work with the school on an alternative solution.

Edu-Prize School Parent NewsletterEdu-Prize was in negotiation to expand and essentially bought another parcel of land upon which SRP could build its substation. The company that owns the school’s building bought a nearby lot for $420,000 and swapped it for the proposed substation site. SRP can now build the substation farther away from the school about one-half mile west, on the northeast corner of Merrill Avenue and Marvin Street.  The 1.3-acre vacant lot is still in the same four-square-mile area where SRP said it needs a new substation to meet increased power needs by nearby businesses and homes. This exchange could very well be the first of its kind for SRP.

Read more at Livability Law

Southwest Build-it-Green Expo & Conference

Speaking Opportunities At The Annual Southwest Build-It-Green Conference

Don’t miss out! The annual Southwest Build-It-Green Expo & Conference is scheduled for April 15-16, 2011 and speaking opportunities are still available! Fill out your speaker form (PDF) today.

As the largest sustainability expo in Arizona, this is one event you won’t want to miss. Last year’s expo attracted more than 200 exhibitors and 10,000 attendees, with topics ranging from green awareness, to solar power, LEED certification, water filtration, and many more.

BIG also features guest speakers of local, national and international prominence. Among some of the speakers last year were Anthony Floyd, AIA, LEED-AP Green Building Manager for the City of Scottsdale; Dr. Tom Rogers, professor and Chair of Construction Management at Northern Arizona University; Diane Brossart, president of Valley Forward; James Brew from the Rocky Mountain Institute; Lori Singleton, manager of Sustainability Initiatives and Technologies at Salt River Project and many more.

In addition to the conference, the exhibits showcase products such as eco-friendly appliances and environmentally conscious landscaping techniques that aim to reduce Arizona’s carbon footprint. There are a wide variety of topics and something for everyone – homeowners and businesses alike.

For more information visit www.builditgreenexpo.com.