Courtney: Hello everyone and welcome to the DOE Technical Assistance Program webinar, Procuring and Implementing Solar Projects on Public Buildings. Today's presenters are Sarah Truitt, Kim Owens, and Craig Schultz. Before we jump into today's presentation I'd like to take a few moments to describe the DOE Technical Assistance Program a little further.
TAP is managed by a team in DOE's weatherization and intergovernmental program, Office of Energy Efficiency and Renewable Energy. The DOE's Technical Assistance Program provides state, local, and tribal officials the tools and resources needed to implement successful and sustainable clean energy programs.
This effort is aimed at accelerating the improvement of Recovery Act projects and programs, improving their performance, increasing their return on and sustainability of Recovery Act investments, and building protracted clean energy capacity at the state, local, and tribal levels. From one-on-one assistance to an extensive online resource library, to facilitation of pure exchange of best practices and lessons learned, TAP offers a wide range of resources to serve the needs of state, local, tribal officials and their staffs.
These technical assistance providers can provide short-term, unbiased expertise in energy efficiency and renewable energy technology, program design and implementation, financing, performance contracting, state and local capacity building. And in addition to providing one-on-one assistance we're available to work with grantees at no cost to facilitate peer-to-peer matching, workshops and training.
We encourage everyone to utilize the TAP blog. It's a platform that allows states, cities, counties and tribes to connect with technical and program experts and share best practices. The blog is frequently updated with energy efficiency or renewable energy related posts. We encourage you to utilize the blog, to ask questions of our topical experts, share your success stories, best practices or lessons learned, and interact with your peers.
Requests for direct technical assistance can be submitted online via the Technical Assistance Center, or by calling 1-877-EERE, TAP. Once your request has been submitted it will be evaluated to determine the level and type of assistance TAP will provide.
And a short bio about all of our hosts. Craig Shultz is from ICF International and has worked with several municipal agencies on solar procurement and implementation questions, as part of ICF's contractor support of DOE's Technical Assistance Program. He's also advised agencies and other large institutions in depth through the solar RFP and negotiation process.
Kim Owens is also a consultant with ICF International where she supports EPA's Solar Water Heating effort and the DOE's Technical Assistance Program. Prior to joining ICF, Miss Owens gained experience with the solar thermal industry in her former role as a renewable energy program manager at the Jacksonville Electric Authority where she managed the solar set of programs and was involved in evaluating barriers for solar hot water penetration.
Sarah Truitt is a senior project leader at the National Renewable Energy Laboratory and works on the Solar America Communities Initiative with the U.S. Department of Energy and the Solar America Communities outreach team. Prior to joining NREL, Sarah worked as a contractor supporting the Solar America Cities program at DOE and developed Solar Power in Your Community â€" A Guide for Local Government.
Andrea Luecke is the acting executive director of the Solar Foundation where she is responsible for developing and implementing educational initiatives and research that promotes the widespread adoption of solar energy. The Solar Foundation is a partner on the U.S. Department of Energy Solar America Community Outreach team that provides expertise in creating solar programs and policies to local governments across the country. Prior to joining the foundation, Andrea led the City of Milwaukee's Solar America City program, and in addition to spearheading the Milwaukee Metro Solar Hot Water Business Council, has direct experience with municipal solar installations, inflation RFPs.
Craig: Thank you, Courtney. In this webinar we're going to provide an overview of the RFP process for solar projects on public buildings, assuming you already have the funding for the project.
The starting point of the webinar is an agency that is yet to conduct a solar RFP. The guidance we provide should also be relevant if you've already gone several steps down the path to solar deployment, if you've completed solar projects but are looking for ways to check whether they're being implemented effectively, or if you're considering ways to structure or manage your future solar projects.
After covering good practices for solar RFPs, we'll then describe five common pitfalls that agencies face in procuring and implementing their solar photo photovoltaic and their solar water heating projects. We'll provide some anecdotes and tips for avoiding the pitfalls. We'll describe the Solar America Cities, Solar America Communities program from the DOE and some other helpful and free resources available to support your solar projects. We'll talk briefly about the solar Public Interest Waiver related to the Buy American provisions of ERA, the Recovery Act. And Andrea, who is involved with Milwaukee's solar procurement, will talk through that experience and how the city countered and surmounted their pitfalls. We're going to include an open audience Q&A session so you can type in questions at any point during the presentation and we will address them at the conclusion.
My first and probably my most important suggestion is to structure your solar RFP process with the end in mind, the end of the tunnel in mind. At the end you'll need to select the most qualified vendor and system. You'll need to have buy in and support from your various internal stakeholders and departments. And you'll need to have an effective way to monitor your system and to maintain it over its 20-year or longer useful life. Solar systems typically the panels will be warrantied for 20 or 25 years, and typically will be useful for even longer than that.
The easiest way to get to these ends, to get to the end of the tunnel intelligently, is to spec out those needs explicitly in your RFP. The National Renewable Energy Lab, NREL, has a very useful publication called Solar Power in Your Community--A Guide for Local Governments, that is direction for developing and managing solar RFPs. The website where you can access that publication and several other useful materials from NREL, DOE, and some other national and international sources will be covered later in the presentation, but I'm going to pick up several points from the NRL Solar Guide for Local Governments and some from our work with other EECBG and SEP grantees and talk you through a solar RFP now.
Going down the list of steps here to start the RFP process, first, involve the necessary internal stakeholders or departments inspecting the project. You want to weight the various bid factors according to your agency's priorities. Make sure you don't do anything that can damage your building, its roof, or your insurance and warranty protections. I'll cover some of these in greater detail in a minute. Try to get a large number of qualified bidders that understand or are interested in your project.
Do your site homework. That's important in terms of starting the process. Having the photos and diagrams of the various installation sites, structural and electrical information available, provide information on any planned updates or renovations to the sites being considered, and information on sunlight impediments like trees that could affect the site you're proposing to be used.
Basically, you want to give bidders a roadmap for success, with success being a productive solar installation fitting your needs at the best value. From experience I can say, and Andrea is going to cover some of this later in her case study, it won't naturally happen that way, you really need to manage the process pretty vigorously, especially if your agency's fairly new to solar projects. Ultimately, having the clear roadmap, having thought through how to get through the tunnel, should make scoring and identifying the best bidder clear and easy.
Going to the next slide, once you've issued the RFP, there are a few good practices for the management of the RFP and the file negotiation process that bear special mention. It's critical and it's frequently very difficult to make apples-to-apples comparisons among your various bidders, and that's due to the newness of the industry and the range of choices solar firms have. Even if you allow a decent degree of flexibility in your bidder's approach to your project, for example, you give flexibility to bidders on how they'll design your system and equipment they'll use, you'll still want to have a standardized apples-to-apples way of preparing things like system output, how much electricity is going to come out of your system, the value of the system, and it's not as simple as the installation cost, you want to look at economic value over a slide, particularly bidder experience and other factors.
What I've found is it's particularly helpful to mandate that bidders fill in specific boxes or even agency provided spreadsheets on the key questions, and that they list the data and the sources for each question. And also that you require bidders to follow a certain order of organization in their responses.
This seems fairly elementary or could be considered heavy-handed, but I've seen a number of agencies go wrong when they assume that bidders understand the RFP in a uniform way, and that's often not the case. So it is really helpful to mandate that. And when I talk about providing specific spreadsheets, that's just listing the outputs, listing the equipment, things like that, so the bidder would have a predetermined line in its responses for annual output; for performance degradation; for the type of solar module, which is another word for panel, with the performance factor for those; would specify the inverter; would specify how many commercial agency installations that it's done in the past, both overall and in your jurisdiction, in your county or state or city.
If you don't do this, and I've seen this happen all the time, you'll get let's say six proposals for your project, all with totally different organizations, and you also get a bunch of equipment spec sheets and diagrams attached, and you'll have to search through them, and there could be 60, 70, 100 pages of material, to find the piece of information you need to make the relevant comparison. So a lot of the information they provide may not be germane to your decision-making process to find the best bidder and bid structure.
And even if you can find the information searching through their materials, you may not even be sure if what you're looking at in bidder 1's materials is comparable with what you're getting in bidder 2, 3 and 4's materials. So it's critical to be fairly heavy-handed and ask bidders to line up the material that you're going to make your decision upon at the end of your process in advance.
I'll speak in a minute about the choice you have on the degree of flexibility to give vendors. But even if you're allowing for flexible approaches, I would encourage you to be very rigid about the organization of the materials.
As you may know, it's typical and good practice to have solar firms have responsibility, and this is point 7 on the slide, have responsibility for all the permits, the interconnection agreements with electric utility, that they comply with building electrical codes, they provide warranties on their work and on the equipment and on some level of system output or performance, some minimum performance standards. Make sure that these factors are included in your agreement with the winning bidder, your agreement meaning the contract you'll end up signing. A good way to do this is to ask for bidders to provide their contract documents early in the RFP process so your negotiations can go more smoothly at the end, since you will have an opportunity to review the contracts.
Since many government agencies are using EECBG and SEP grants as their first renewable investments, the procurement and implementation process can serve as a very useful learning experience and precedent for your future solar projects. You're really setting a template for both internally how you're going to go through a solar procurement implementation, and you're also setting a precedent in the community of contractors in your area. If you're new to this, this is another reason for erring on the side of including more internal staff and stakeholders in your project decisions earlier and laying the groundwork for the precedents later in your agency wide renewable program.
Perhaps not surprising I'm going to amplify a couple of the points I talked about in terms of good practice. It's very important to involve all relevant internal stakeholders or departments before you issue an RFP, or as early as possible if you've already issued your RFP. While this is generic advice, involve stakeholders in decisions early, it's relevant here maybe more than even in other areas of your work because solar installations tend to be new, your staff probably won't have extensive experience with them, and they tend to touch on a lot of areas of agencies even if they're relatively small and purchase a lease project. So it could be $50,000 or $100,000 project, but it may touch your agency in much broader ways than other $50,000 or $100,000 projects.
Beyond obviously involving facilities, engineering and procurement staff, solar PV and solar water heating projects also involve finance, accounts payable, usually on an ongoing basis since they affect utility bills. Also on the financial side, decisions will have to be made on how to handle the environmental benefits that come with solar output. So that could be things like renewable energy credits which are marketable financial assets that can be retired by your agency, that can be retired by your utility, or they can be sold into the market. So that's a financial decision you'll want to get your group involved in earlier rather than later. Some states with mandatory renewable portfolio standards will tend to have more, it will be a larger financial issue for those states, but it's an issue in almost all areas of the country.
Also solar projects can have contracts that are unusual and since it's a 20-plus-year investment it's important to get legal involved. They can have effects on environmental programming so that part of your agency will tend to be involved. And they tend to have more interest with the media and the general public than a lot of other construction projects.
Best practice is to involve the stakeholders up front as well as ongoing in the review and decisions on bids. Frankly, this imposes some time costs on staff, but my experience paves the way for a much smoother and more rapid implementation of the projects. It's a case of pay me now or pay me later, with the bill usually being larger if it's deferred.
When stakeholders aren't involved early, their questions are often not addressed and the project that you thought was almost ready to build or operate can be delayed by months. I've seen them delayed by over a year, when those questions finally get raised. Andrea will talk about specific experiences with the city in this regard. When stakeholders aren't involved earlier, the project tends to get stuck in what I'll call cul-de-sacs around issues like roof treatment, it's not violating any roof integrity, or around the sale of renewable energy credits as a financial matter, also about what you can say about your project if you actually sell those credits, what does that imply in terms of how much green energy you're purchasing. Aesthetics can be an issue that can delay projects. Selecting location from a portfolio of sites you might have within your state or county or tribe or state, and also counter party and contract concerns.
Moving from important people in the RFP process to important things, my experience with solar projects is that sooner or later in the process, roof issues, which is figuring out which roofs are appropriate for solar installations, based on available space and sunlight, characteristics, based on the construction of the building, the access to electrical gear, the age of the roof and its condition and its warranty, end up holding sway, and in essence are deal breakers. They're critical to address. It's better this occurs sooner rather than later.
One of the greatest risks of a solar project is that it's not considered essentially a roof project, and the roof gets damaged or the roof warranty is voided. Did you know the roof is often more expensive than the solar installation itself? And damaging it can affect the overall building structure and its contents. If the roof warranty issues in particular are not addressed by getting the solar company to work with the roof warranty issue or to formally integrate solar installation into warranty, you can face a situation which solar firms tell me happens with some regularity in which each side blames the other for any further leaks or problems with the roof.
So a leak occurs down the road and your roofer says its due to the solar installation, because there were no leaks before you had solar, and the solar firm says it's a pure roof issue and you're caught in the middle. Making sure any solar vendor can and has worked effectively with roofing contractors and roof warranty issues are often a good explicit requirement to put in your RFP. So state that up front, have discussions with your bidders up front about that issue. Obviously you'll want to involve your insurer and your insurance policy in that issue.
Just as an aside, my experience is that a lot of agencies associate their ___ portfolio sites, overestimate the number of roofs on their buildings that are good candidates for solar installations. I've worked with agencies that have 200 or more roofs and think, hey, it's no problem having a dozen or 20 or more, they're going to be excellent sites that they can deploy solar on. And I've had agencies, multiple ones with 200 or more roofs that end up with only 3 to 5 that are considered excellent candidates right off the bat for solar. That's not always the case for an agency, but it does occur, and it's because for a roof to be ideal for a solar candidate it should have 20-plus years left before a replacement on the roof so you don't have to remove and reinstall the roof installation; it should be south or nearly south facing; be clear of significant shading; be able to support the weight of a solar installation; have enough available space to support good project economics, there are economies of scale solar; not have any aesthetic or construction roadblocks; and have relatively easy access from the roof to an electrical room that can accommodate solar output.
Depending on your agency, you may have a number of sites you're considering, may check all those boxes, but you can see there's over half a dozen significant hurdles to having an actual solar site. So that's just something to consider. NREL's coming out with an excellent solar roof optimization tool soon that will take all these factors and more into consideration so you can figure out what the optimal place to put your solar installations are and where they're going to be viable.
Going on to the next slide, one of the more important components of a solar RFP is getting the allocation of points, how are you going to weigh the various bids right. There are several categories to consider and the pie chart on the slide shows some of these categories as pie pieces. I purposely didn't put any percentages on the pie pieces. The allocation I show is just illustrative it's not prescriptive. There's no one right way to allocate points, but however your agency decides to weigh the bids will strongly affect, also the type of system you get and even whoever wins the bid. So if you weigh it differently you could get a different winner.
I've seen agencies allocate more than 50 percent or as little as 20 percent to system price. Obviously if they allocate 50 or 60 percent to price you're going to probably get the low cost, the bidder will win, and that may or may not be the right choice for your agency. Some allocate significant points to local content having in-state or in-county installation and ONM labor. Some just use that as a tiebreaker. So there's a range of choices available to you. And the key is to kind of put these categories down on the table and figure out the percentage that works well for you.
Successful solar RFP weights are based on, one, proactively determining how much weight you want to give to each section of the pie. Two, getting input from the entire stakeholder group. So depending on where you sit will determine where you stand and how many points should be allocated each way. And also developing a well-defined score card for each factor. So that means defining what does each of these factors really mean? What does financial strength mean? Is that balance sheet of the bidders? Is that the number of solar projects they've done? Is it some type of other warranty or guarantee? So not just having the categories, but define what they mean in terms of your scoring up front.
Moving on to the next side we're going to talk now about five different pitfalls. They're very common. These are things that we get in calls from EECBG and SEP grantees as part of the DOE program, they are things we just encounter day to day in looking at the solar marketplace. So we're going to go through five of them that are fairly common.
The first one is that either the RFP specs are too restrictive or too unstructured. So you can see at the bottom there's a continuum or a spectrum from RFPs that are very specific or restrictive on the left where every last detail is thought out in the issuing documents, to one to the right that are very creative and unstructured. Maybe that RFP, other than the kind of normal procurement documents in terms of substance of the RFP maybe you're just asking for 20 kw of solar array on the court building at so and so location, and that would be considered very unstructured without a lot of other guidance for what the solar firm would provide.
It's easy to see how the issue arises. On the restrictive side the city or county or state or tribe may have somewhat in-house or an advisor who knows a lot about solar and decides to lay out all that knowledge in the RFP down to we want exactly this much capacity from the sun power, 235-watt panel manufactured in Milpitas, California, we want to use this inverter, we want the array exactly at this location, and we want 75 percent in-state content apart from the module. That would be very, very specific.
On the other side, very loose or unstructured RFPs often result, especially in areas where there's not a lot of solar activity to date in the market, from either a lack of familiarity with the solar market, sometimes it will result from misplaced expectation that the entire solar installation is really a commodity, it's a real standardized thing, when it's not. Because solar panels themselves are somewhat commoditized, but there's a lot of other components to a solar installation, a lot of choices in terms of design and location. Or simply unstructured RFPs, very unstructured ones can result from deadline pressure.
On the next slide we'll talk about overcoming the pitfall â€" well, there's a value to setting project direction and preferences in the RFP, over-specified, so this is what can kind of go wrong. It can drive up costs, sometimes substantially, by preventing the solar contractors from figuring out the best solution, the best design and equipment to meet your costs and contracted environmental goals.
You also have to remember that solar is an immature industry, especially outside of a few states like California, New Jersey, and some others, and it's a rapidly growing and changing industry. There tends to be a wider range of industry norms and ways of solving problems than maybe in more established equipment and construction industries.
The other drawback of overly specific RFPs is that they can scare off otherwise qualified bidders who either can't meet your detailed specs or believe that doing so will confound normal solar economics. So your specs could lead to an $8 a watt cost, where maybe the norm in your area is $5.50 a watt and you have bidders who won't even propose because they can't do your project at their normal cost structure.
Going to the other end of the spectrum, overly creative or open-ended RFPs are quicker to issue, but you may get a big variety of responses and have a hurting calf experience midway through your bid process that absorbs considerable time with your staff and impedes your ability to make apples-to-apples comparisons to arrive at the best bid package. It can also lead to lower quality systems, especially if price is a major differentiating factor. So if you have an unstructured bid and you're _____ in price, you may get a low-cost, low-quality solution.
Overly-structured and overly-unstructured RFPs, the poles of the spectrum, tend to cause the longest and most complicated bidding process. Obviously most agencies want to be somewhere between the poles. There's no one right place to be on the spectrum. I can't say everyone should be right in the middle or it's better to be two-thirds of the way towards structure, but really, you should base that decision specifically to your agency on your general comfort level of being structured or creative in your procurements broadly.
The degree of expertise you have in-house and understand the solar market, and whether you want to invest more stakeholder time up front, which would mean you could go through the specification process up front and get a restrictive one, or later in the bid evaluation process. What I say to agencies is practically place yourself where you want to be on the spectrum, and do the work, or restrain yourself to get yourself to that right place in terms of the level of structure of your RFP.
Now we'll go on to the second pitfall. I'm going to speak about the solar photovoltaic side of the equation and I'm going to hand off the presentation to my colleague Kim Owens to talk about solar water heating.
So on the PV side, the second pitfall is really, what's the best measure of system efficiency for your installation? The measure you choose ultimately can affect the environmental impact of your installation and even the vendor that wins your business. Different equipment and system configurations work better across different measures of output. Many agencies can go a little bit wrong by asking for let's say a 40 kW installation and not evaluating the performance of that installation thoroughly.
As a starting point, we recommend focusing on system output, which is AC kilowatt-hours per PV, or thermal kilowatts for solar water heating, rather than on system input. So you're looking at the output coming into your heating system or into your electrical system rather than inputs.
Different systems have different losses from panels use, and different output over the course of a standard year and different rates of degradation or efficiency losses over time.
It's essential that you require bidders to utilize and recognize industry data source, like NREL's PV Watts or SAM to develop your output numbers. Beyond that we recommend you look at 20-year performance rather than just look at performance over let's say the first year. It's a better measure of what you'll be investing in from an environmental and financial perspective.
Some solar systems performance degrades at one percent a year, while others degrade at as little as a quarter of a percent a year, so that makes a major difference over 20 years. You can gauge whether some of the other items listed here â€" output per square foot or output in total is more important to you depending on how dear your roof space is. If it's very dear, obviously the square footage measure is going to be very important. But whatever measurement you're going to use, whatever is the right measurement in terms of output, build that explicitly into your RFC process and build accountability into your vendor contract around that performance standard.
I'm now going to turn the program over to Kim Owens who's going to talk a little bit about solar water heating. Thanks.
Kim: Thank you very much, Craig, and hello everyone. I'm going to continue talking about some of the measurements of efficiency on the solar water heating side. Solar water heating systems use BTUs, or British Thermal Units, to measure the heat output or the thermal output of their hot water solar panels. The solar hot water panels are rated in terms of BTUs generated per day, and the data can also be expressed in BTUs generated per square foot of collector area.
Another industry term that's used is the solar fraction, which is used to describe the proportion of total hot water load that will be provided using solar versus your backup heat. For example, for solar systems that carry the Energy Star label, a solar hot water system might have a solar fraction of 0.5, which is 50 percent of the load.
It's essential that you understand the solar rating of the panel or system that you choose. The most recognized certification organization in the United States is the SRCC or the Solar Rating and Certification Corporation. The SRCC is a non-profit organization whose primary purpose is the development of rating standards and certification of solar energy equipment. Now note this is a voluntary standard, so the development, to make sure when you're doing your proposals that the panels that you have received have received some type of certification.
The SRCC ratings provide a way to compare the relative performance of different solar water heating collectors similar to miles per gallon ratings on a car. These ratings from SRCC are based on BTUs generated per day.
As with solar photovoltaics, it's essential that you utilize a recognized industry data source to forecast your annual energy production. One of these common tools is called RETScreen solar water heating model which can evaluate the energy production and savings, cost, emission reductions, financial viability and risks for a variety of solar water heating projects, and we provide that reference later on in the presentation.
In RETScreen and in all models you should be evaluating your cost performance over the system's 20-year or 25-year performance period rather than just over the first year.
Finally, determine what performance matrix you will use to evaluate your solar water heating project and make sure you request the bidders to provide the performance and cost data based on these matrix.
Next slide please.
Moving on to the third pitfall, we will discuss finding enough qualified solar contractors. Obviously for your agency to get the best project you want strong participation from qualified contractors. This can be challenging, especially in markets without a history of commercial solar projects. You want to avoid launching an RFP and only getting one or two contractors that you can be happy with. And you want to make sure you send the RFP to a broad audience and give bidders sufficient time to prepare and submit their documents.
A solar RFP for a commercial system with turnaround times as brief of two weeks from issue to due date won't likely lead to quality responses. You should invite prospective bidders to tour your location, especially on your roof, and look at your electrical and hot water systems before submitting their bids. If possible, provide site mechanical and electrical drawings. Providing information about these current systems will reduce uncertainty about the proposed system and allow you to reduce overall project costs.
To attract this large pool of bidders you can release the RFP to your local SEIA chapter, which is the Solar Energy Industries Association, and the local chapter contacts are listed on the DOE website. Also check with your state or local electrical, plumbing and mechanical trade associations, because these eight associations are increasingly interested in solar projects.
Another idea is to find contractors who have performed similar projects. There are several useful databases of case studies where solar PV referred to the California Solar Statistics Database of the California Solar Initiative Program, which has logged more than 73,000 solar PV projects.
Another website, the NREL's Open PV project is a collaborative effort to create a database of solar PV projects across the United States. This database can be searched by state, zip code, project size and contributor. For solar thermal, the Utility Solar Water Heating Initiative, also known as USH2O, has started to compile a list of commercial solar thermal projects, and this is available on DOE's EERE website.
Finally, make sure you use well-qualified contractors and understand the solar licensing requirements in your state. Most states require solar PV or thermal systems to be installed using a licensed electrical or plumbing contractor. However, some states off a separate solar contracting license that in most cases is a specialty classification under the general electric or plumbing license. A contractor may also choose to have a specialty certification, and certification differs from licensing in that certification is a voluntary standard typically that allows contractors to differentiate themselves.
One of these certification programs is NABCEP, the North American Board of Certified Energy Practitioners. NABCEP provides a certification program for PV and thermal installers and is so well recognized that several state incentive programs require that the system be installed by a contractor that is NABCEP-certified in order to receive a rebate.
On our next slide the DSIRESOLAR website has a listing of all the states which have specialty solar contracting requirement. I would also note that some cities such as Madison, Wisconsin and Austin, Texas, have adopted their own solar contracting requirements. If you use the techniques that I discussed in these two slides, it should attract the largest pool of qualified contractors.
Next slide please.
Another important consideration and a pitfall to avoid is to establish an effective operation and maintenance program for the system, and develop it before the system is installed. Solar panels are virtually maintenance-free, but this doesn't mean they can be ignored. First, evaluate and compare the warranties that are provided in your proposals, or require minimum warranties in your bid requirement. You want to make sure that the warranties are linked to rated performance output, and an example of this, for example, is to require that all solar collectors have a minimum of ten year manufacturer's performance warranty to protect against a 15 percent degradation of the system output versus its original rated output.
In order that all personnel who work with the system understand how to operate and maintain it long after the contractor has installed it, require the contractor to provide a detailed operation and maintenance manual. You could also require the contractor to provide onsite training on the system operation to your staff after commissioning, and the contractor should also provide several sets of as-built drawings.
As I stated earlier, solar PV and thermal systems require minimal maintenance and they may be too easily ignored, especially since the bulk of the system is on the roof. If comprehensive metering has not been installed with your system, it could possibly fail silently and system owners may not be aware that it's not operating properly since backup power and hot water are often still available. So to avoid this, consider asking the bidder to add an option for an annual maintenance service contract, or better yet, consider a monitoring program like I discuss in the next slide.
The final pitfall is to consider a monitoring program. Monitoring a solar system is such an important feature, but it's not a standard component of every solar system. In its most basic form, monitoring systems simply provide the system owner with information on whether the system is operating or not. For solar PV, this could be as simple as the kilowatt-hour display on the inverter, and for solar thermal it could be an addition of a flow meter and two thermal couples to measure the BTU output of the system.
A more sophisticated monitoring system will monitor, analyze, and report on ongoing system performance. This monitoring system will provide you with data that shows actual performance output and savings versus estimated and will tell you how your system is performing over time. These systems collect data every 15 minutes which allows you to analyze the performance of the system over the course of the day and compare your solar peak periods to the utilities peak periods or even your building's peak periods. The system should allow for remote data collection and should be capable of storing data for at least five years.
With these real-time monitoring systems installers may be able to offer maintenance plans based on actual system performance such as cleaning the panels when they see the performance drop. They may also be able to increase system warranties like we discussed earlier, because the installer and owner now have a clear picture of what's going on with the system.
A final perk of monitoring your solar system is that you can set up a public kiosk or website that'll show the public the green benefits of the solar installation. And this will draw attention to a system that may not otherwise be seen because it's located on the roof of your building.
Solar systems that have been installed on schools usually have these types of monitoring systems so that the students can monitor performance and compare different schools. Examples of how this data is displayed can be found on the californiasolarschools.org website.
Performance monitoring is essential to determine whether systems are operating properly and performing at optimal levels, and it is highly suggested to be included in your RFP process.
I will now turn the program over to Sarah Truitt with the National Renewable Energy Lab to talk about DOE's Solar America Communities Program. Thank you.
Sarah: Thanks, Kim, this is Sarah Truitt from NREL and I've been working on Solar America Cities program for the past few years, and that program is currently extending into the Solar America Communities program. So I will give a brief overview of that today. I'll also point you to some resources, touch quickly on the Buy American provision, before handing the microphone over to Andrea Luecke who will be talking about her experiences with Solar America's City of Milwaukee.
The Solar America Cities program started in 2007 and between 2007 and 2008 DOE selected 25 partner cities across the country. These cities have population centers over 100,000 people. They are geographically diverse, as you can see on the slide, and they come from a range of solar backgrounds and experiences. DOE designed the program this way intentionally so that we could show that all climates could support solar installations. And just as a side note, Germany, which has the largest solar program in the world, has the same solar resource as Alaska. So it's definitely doable everywhere in the U.S.
The range of experience is important so we can help cities starting at the beginning like Knoxville and Pittsburgh to leapfrog over some of the common pitfalls, and we could also be involved with some of the cities on the cutting edge like the California cities you see here. So the goal is to develop a comprehensive citywide approach to increasing solar installations in our nation's electricity load centers.
In 2010 the Solar America Cities competed for $10 million of Recovery Act funding, and I won't go through all of these projects here, but just wanted to give you an idea of some of the things the cities are working on now. So all these projects are underway.
Also in 2010, DOE is expanding the program so that the lessons learned from Solar America Cities can be available to thousands of local governments throughout the country.
And this program is called Solar America Communities and the effort is being led by two national outreach organizations, ICMA, which is the International City-County Management Association, and ICLEI-Local Governments for Sustainability. These two teams are backed by nationally renowned solar experts, and you can see all the logos on the right hand side of the slide here. These activities will be launching early in 2011, so you can watch the solaramericacommunities.energy.gov website for listings for regional workshops and webinars, as well as the ICLEI and ICMA websites for that information.
So this team will be creating a bunch of resources available to all local governments, but there are some available now. One that was mentioned earlier is Solar Powering Your Community: A Guide for Local Government. This is in the process of being updated and the updated version should be on the web at solaramericacommunities.energy.gov by the end of the year. And this is a 100-page guide that's really soup to nuts, what you need to do to organize your communities for increasing solar installations. So it starts with "Who Do You Need in the Room", starts the discussion, and the last chapter is about selecting the appropriate finance mechanism for municipal procurement. There are also over 100 examples of what local governments have been doing, both Solar America Cities and non-Solar America cities around the country, so it's a really good resource to check out.
Some other resources on the Solar America Communities website are reports about interconnecting to network grids. Those are utility grids that are typically found in downtown areas. There's a report about impact of utility rate structures and a review of various web-based solar mapping tools.
Some upcoming reports that should be up in the next couple of months are a status on PACE program, that's Property Assessed Clean Energy financing that you may have heard about. Also a stats report on Community Solar, and that guide is actually up now. That was put up just this week.
You should also watch for streamlining the permitting process through standardizing structural design, and ways to attract solar businesses to your city that's built on the manufacturing side and the installer side. And in addition, the tool that helps you determine the mixture of PV and solar water heating for your specific situation called SoLux, should also be coming out in the next few months.
In addition to Solar America Communities website there are great free resources out there on other organizations' websites, and I just want to note that this is just a reference list of potentially helpful sources. This is not an endorsement by DOE in any way.
SolarTech is an organization in the San Francisco Bay area that has a lot of great resources for members and also some resources that are available for free. This Project Finance Template and Guideline publication is available for free download.
NREL has some information that will help you with the RFP process such as a power purchase agreement checklist, and In My Backyard, which is a tool that allows you to look at your specific roof and draw the area of a PV array on your roof and then calculate the associated output.
RETScreen was mentioned earlier, so I have the URL here for you to note.
There are also some resources with sample RFPs. Vote Solar as municipal solar RFPs for you to look at. The National Association of State Energy Offices has Recovery Act RFP library, has both state and local examples there. And NACO has RFP library specific to EECBG grants.
Because most of you on the phone are likely EECBG grant recipients, we wanted to touch on the Buy American provision and the Solar Public Interest Waiver.
So the federal government has allowed some flexibility on Buy American when it comes to solar panels, and the panels, also called modules, are made up of a bunch of solar cells. So a bunch of solar cells are assembled in two solar modules and the government has come out with this waiver that says either the assembly of the module or the production of the cells has to happen in the U.S. But if both of those activities don't happen in the U.S., that's okay. One of those could happen overseas.
As far as the associated equipment, the only equipment associated with the system other than the modules that we just talked about that need to be sourced in the U.S. are the inverters and the batteries, and that is because they are the larger ticket items that have a lot of intellectual property associated with them so we want to make sure that those are American made.
So it's a good idea to include the Solar Public Interest Waiver in your RFP. And if you have any specific questions about that you can email Buy American at EE.DOE.gov.
And with that, I will take questions after Andrea is done with her presentation, but I'd like to hand it over to you, Andrea Luecke.
Andrea: Thanks, Sarah, hi everybody. Thanks for tuning in. As mentioned, I was the project manager of the City of Milwaukee Solar America Cities Solar Program, Milwaukee Shines, for the last two years. As of August of this year, however, I took a new position with the Solar Foundation in Washington D.C. where we promote National Solar Research and Education. The Solar Foundation is also a partner on the DOE Solar America Communities outreach grant, and even though I'm no longer with the City Solar program I played a role in creating the solar-friendly infrastructure that currently exists in Milwaukee, and can certainly attest to some of the hiccups we experienced when we tried to issue one of our first solar RFPs.
As you can see from the title of my presentation, "Third Time's a Charm," the reason I decided to call it that is because it literally took three rewrites and three RFP issuances over three years to get it right. Some of the delay, I think, was because we were new to the RFP process, new to solar, and we didn't know about many of the awesome resources that Sarah just mentioned. And some of it was also because of changing financial conditions and goals.
Just a little bit of context before I get started. Milwaukee is the largest city in Wisconsin, has a mayor that's committed to greenhouse gas reduction and sustainability, as well as a utility and state public benefits fund that provides financial incentives for solar installations. As a result of all this commitment to solar, Milwaukee was designated by the DOE as a Solar America City in 2008.
However, there's always a catch. Milwaukee faces multiple barriers in making solar widely accepted and used. For one, energy costs are relatively low, making the solar economics far less convincing. Milwaukee also has older housing stock, often necessitating structural reinforcement and energy efficiency measures, thereby increasing costs. Shading also tends to be a problem due to high tree canopies. Permitting and codes, well, they're not always very clear. There is, or was, I should say, a lack of qualified installers. The process of applying for incentives or rebates takes time and it is often confusing. And there's just a general sense that solar doesn't work, or perhaps shouldn't work in northern latitudes.
Now, I don't think that these barriers are unique to Milwaukee, so I hope that our experience resonates with some of you and you can learn from some of our mistakes.
So, yes, 3 RFPs for Solar Hot Water systems on city firehouses over the course of three years. I know it sounds ridiculous, and if I didn't have a sense of humor about myself or wasn't vested in helping other cities increase their capacity, I wouldn't be so honest, but yes, it did take a very long time for us to get even one solar hot water installation up, let alone the nine systems that we originally proposed in late 2007. So, yes, indeed, there was quite a bit of frustration as you can imagine.
So the City of Milwaukee, we had limited experience contracting for solar, and what we encountered is that individual departments use different procurement processes, that there was no standard template for us to use and that the level of detail written into the RFP varied across departments. We learned all of this the hard way.
In November of 2007, before I actually came on board, the former director of the city's office of environmental sustainability worked with the city's Department of Public Works to release the first of three RFPs for 9 solar hot water installations on municipal firehouses. Of course as you all know, firehouses are a great application for solar hot water because there's year round demand and consistent hot water load. Milwaukee's firehouses are also part of the city, which due to the long life span of solar hot water systems ends up saving the city and its constituents, which is of course always important, ends up saving the city money over the long term in offset natural gas. But, when the bids came in, they were actually double what the city had budgeted, thus the city was unable to contract with an installer and the project was put on hold.
The primary lesson learned was that this particular project was overdesigned, which, as you just learned, is pitfall number one, that the RFP was too specific, making it difficult for local thermal installers to respond in a cost effective way. Our 40-page RFP contained super prescriptive technical and equipment specifications. In an effort to ensure that only quality parts were used, the RFP contained minute details about equipment and hardware instead of specifying desired hot water production. This of course made it very difficult for the solar industry to leverage suppliers that they are comfortable and familiar with or respond with innovative design. And as these firehouses were not built with solar in mind, innovative designs were definitely needed to site the case close enough to the collectors in order to maintain high efficiency.
Trying to move to the next slide.
Here we go. So when I came on board we looked at where our first RFP went wrong and decided to rewrite the RFP to be more flexible and outcome-based. The new RFP specified production requirements, which were critical for claiming state energy office rebates. It also specified locations, which depended on the roof age, replacement cycle, and the hot water load. But, we left much of the design and equipment details up to the bidders.
Designing the RFP this way did bring in more regional price quotes and we were able to award a contract to one of them based on their price and level of experience. But then we encountered pitfall number one again. Really, at this point I couldn't believe it. We were really close to cancelling the project altogether.
This time the pitfall was an increase in cost due to necessary structural reinforcements. It turns out all of the firehouses that we specified required structural reinforcements upwards to $10,000 each in order for permits to be issued. And since of course this was a city project paid with taxpayer money, safety was a big concern. So following the proper permitting protocol was essential. But the question remained, how could we afford this additional cost? $10,000 per location, which essentially doubled what we had budgeted for.
Then, if that wasn't enough, another pitfall became apparent. Pitfall number 4. We assumed that the fire department would be absorbing the operations and maintenance cost, but that turned out to be wrong. Although the fire department wanted the free system, they really didn't want to be responsible for the cost or staff time necessary for any ongoing upkeep. So after a lot of negotiation, it was decided that the fire department maintenance staff would be responsible for the costs, but in exchange they would be trained on how to maintain the systems themselves, how to change the antifreeze, how to check to make sure that the valves are working properly etc.
So we took a big step back. Like I said, we almost even forfeited the project altogether because our budget would not allow for an additional $10,000 per site in structural reinforcement. But then one of the engineers at the Department of Public Works suggested that perhaps the reason the reinforcements are costing so much is because the roof and trusses of the different firehouses are made out of metal and not wood, and he suggested that we install solar only on firehouses that have wood trusses. Good idea.
So back to the drawing board. We figured out which firehouses had wood trusses, also which firehouses had roofs that were in good shape, a constant year-round load, and an appropriate area or mechanical room to house the tanks. Then we had to have site assessments done on all those newly determined firehouses. And then in November of 2009 we were notified that we won DOE's solar America special cities project grant. Whoohoo! So we were pretty happy about that. And as part of our partner match, Caleffi, a local solar hot water manufacturer, generously committed to donating $200,000 worth of solar hot water systems to the city for the firehouse project. So we were pretty happy about that.
But now we still had to go back and redo the RFP for the third time, indicating that the equipment to be used were a Caleffi system and that the installer should be familiar with it. Also, since Caleffi was part of our RF funded special projects match, we had to go through the NEPA review and also make sure that we complied with Davis Bacon.
We also decided that we wanted to use these installations as a training opportunity for installer apprentices, which meant that the installer that ultimately wins the bid should also be able to teach a hands-on installation class. Of course the city doesn't have experience with this, so we partnered with the Midwest Renewable Energy Association to make this happen, as the MREA is really famous for their quality installation classes and their Train the Trader model. But, this idea presented to us with another pitfall.
Pitfall number three: Finding enough qualified contractors to install Caleffi brand solar hot water systems, and teach a class at the same time. How were we ever going to find somebody who could do all that? Well, we actually got very lucky. A few bids did come in, and one, just one, Milwaukee Solar, was a licensed plumbing contractor and was qualified to do everything that we needed them to do. So we contracted with them and fortunately this pitfall number 3 did not cause our project to be delayed further.
So in the end, the third time was a charm, but it was in a sense a comedy of errors and circumstance. A project that was initiated in November 2007 for nine firehouses took until October 2010 to come to fruition on only two firehouses, but with several others in the pipeline for a new roof and ultimately a solar installation. So even if the process sounds ridiculous, it really did bring together a team, and it increased our capacity to install solar. No, it certainly wasn't the smoothest of experiences, but we did learn a lot.
Now we know what to look for in spec'ing the RFP and citing installations, plus installer apprentices now have some experience under their belts. We were also able to find a way for a private manufacturing firm to get involved and leverage our resources, and finally we helped the fire department understand the value of solar as an energy reduction solution, even providing them with training on how to maintain the systems, which I think will make them more savvy whenever they're on the roof fighting a fire and encounter a roof mounted system in the future.
Well, that's really all I have. I hope that my story resonates with some of you, and of course if any of you have questions, feel free to contact me at the Solar Foundation or contact the City of Milwaukee, Milwaukee Shines program. I'd like to now turn it back over to Courtney.
Courtney: Okay, thank you very much everyone for presenting. We will now take questions from all the attendees, so if you have a question you can type it into the question box on your left. And I also want to let everyone know two things.
First, we have an upcoming webinar on December 16th, and we'll also have more webinars scheduled in January, so we encourage everyone to attend. The materials for all these webinars, including the presentation materials and the webinar recording will be on the DOE Solution Center within three to five business days after the webinar.
So we'll take our first question, and this is from Bob Lekkar, and Bob asks: Since public entities do not use tax credits, can presenters discuss issues that public sector organizations need to clarify if they enter into a lease purchase kind of arrangement where a private entity would own and install a system to gain advantage of tax credits and potentially transfer ownership to the public entity.
Craig: Sure, I'll take that one, Courtney. It's a great question. Before I jump into it, the question is, how about third party ownership of solar projects because there's tax benefits, so wouldn't they have a lower cost if they did it that way as a common structure. Before going any deeper into the question, I'll mention that if it was an EECBG or SEP funded project, it would still need to abide by the various Recovery Act requirements such as Buy American, Davis Bacon and all. And I'm not going to go into detail about how that may or may not work with a longer term lease arrangement in terms of the payout of the funds, but I'll talk broadly, because a lot of agenciesâ€¦ Some agencies, for example, are using EECBG funds as part of their specification work to go to a PPA. And then others pursue third party ownership transactions outside of the Recovery Act.
It's a common structure. I think over half of large commercial installations are third party owned. The benefits of it are to get access to tax benefits, which are substantial. 30 percent of the cost basis for a solar project can be credited back to a federal investment tax credit, and there's also an accelerated depreciation provision. So that can slice a large portion of the cost off and make the sources much more economical.
The second reason that the third party model is popular is that somebody outside the agency puts up the capital so there's no need to find the capital in the agency's budget. The way these are often structured, there are some that are structured as leases with lease payments. Another common structure is what's called a power purchase agreement, a PPA, where your agency would have a certain price. Let's say it might start at 10 cents a kilowatt-hour going up by three percent a year over 20 years. The price varies widely based on the size of the system and also based on what state and local incentives there are to support the program.
But I want to mention three things in response to the question, three factors to consider. With a lease or PPA, they're a little different from if the agency just owns the system outright. The first is the contract is obviously critical because the contract is going to guide the relationship over 20 years or more. Typically there are two actual contract documents. One, called a power purchase agreement, and one's an easement or license agreement giving the owner rights to place their property on your land, your roof land, your parking lot, your flat land.
So the legal aspect in terms of getting your counsel involved is much more substantial than on a purchase because it's not just governing installation but it's governing an ongoing relationship over 20 years. When you're looking at a vendor, you want to consider how they're going to be as a partner over 20 years, because they're going to have their property on your land and you're going to need to integrate insurance and things like that, so the relationship is different and more long-lasting than on a purchase often.
Another thing to think about is what you can say about buying versus hosting the power. A lot of PPAs are structured where the owner will sell the renewable energy credits into the market to lower the price to you. In some areas like New Jersey, Delaware, Maryland, DC, just to name a few states, renewable energy credits are substantial drivers. It's a major driver of that ___ economics can drive over half the overall economics of the project. So in some cases the owner will sell those and in essence share the cost savings with the agency, but that does affect what you can say about buying green energy because somebody else on the other end is buying those green attributes from your system. On the other hand, you could buy them or retain them and retire them. But that's just another issue to think about any time you use third party PPAs.
NREL has a couple of excellent documents on PPAs for municipal buildings, which we can provide in an email batch. I'll turn it back to Courtney for the next question.
Courtney: So our next question is: What efforts can the DOE use to help ensure stakeholders have and know the best available technology?
Sarah: This is Sara. Can you repeat the question? I think you said, "What methods can the DOE use to ensure that folks know what the best technologies are?"
Courtney: Well, the question is, what efforts? Discussing either of those would be beneficial.
Sarah: Certainly the www.solaramericacommunities.energy.gov website will include information not only about technologies but about policies and financing. We'll be working over the next year to build that website up and make it very robust. So that's one place to check.
NREL's website has a lot of information, it just depends on how much you want to read, I think, and how in depth you want to get. But if you have a specific question I'd be happy to take it off line. I'm at firstname.lastname@example.org. I'd be happy to talk specifics.
Courtney: Okay, great. The next question is from Rusty Hanes, and he asks: How does the open PV project address and overcome privacy issues related to system ownership?
Sarah: This is Sarah, I can try to address that one too for Rusty. It's voluntarily inputted into the system, so folks are inputting their own information. So in that way, people know that the information is going into the system, and Rusty, I'm also happy to talk with you offline if you have more specific questions about that.
Courtney: Okay, thank you Sarah. So our next question is from Brett, and he asks: Will direct purchase of solar products via manufacturer relationship through the Solar Cities program run afoul of any EECBG grant requirements?
Sarah: This is Sarah again. So I'm not positive I understand that question because there are no sort of manufacturer relationships through the Solar America Cities program, and any project or purchase that a Solar America city or anyone else is doing with EECBG funds definitely has to comply with all the requirements. And again, if that doesn't answer your question, please email email@example.com.
Courtney: Okay, the next one is: Are there good samples or master templates for solar RFPs and/or for PPA agreements for public entities that demonstrate specific language in these kinds of documents that protect and are favorable to public energy without being too prescriptive nor too open-ended that you could provide links too.
Craig: Sure. On Sarah's slides and the slides which will be posted within a week on the DOE website, she listed a couple of National Association of Counties as well as the National Association of State Energy Offices has some lists of sample RFPs. If you're at an agency you can also submit a TAP request and we can provide more detailed specific RFPs that would fit your specific needs, but those two lists of sample RFPs are really good places to start.
Andrea: This is Andrea, can I also add something? The Solar America Cities program was designed to help not only increase their own capacity with solar but also to help other communities replicate some of their programs. So I don't think it would be a problem if you were to contact your closest or most comparable Solar America City to ask if you can borrow some of their language and RFPs and templates. I know that the City of Milwaukee has shared our resources with a number of different communities in the past.
Courtney: Okay, great. The next question is: Due to the cost to install solar panels and the ROI is long term, what incentives are there to invest money in the project unless there is subsidies from governments?
Craig: This is Craig, I'll take that one, and any other speakers can add after. It's a good question. There are federal subsidies because in a number of areas to improve the economic return on investment. There are also a wide range of state and utility level incentives. The level of solar deployment in the United States is somewhat dependent upon those subsidies at this point. The subsidies are helpful in improving project economics. The other issue is when investing in solar, beyond the environmental benefits, a number of organizations invest in them because they have non-pecuniary benefits, the other major factor to consider is what your assumption is about future electrical rates in your area which has a major impact on the ROI. So any of the ROI calculations you'll see are very levered on, this is a 20, 25-year investment, what you assume. If you assume electric rates are going to go up five or six percent a year versus 2 or 3 percent, that really changes the attractiveness of the ROI.
Female: I'll add something else there. As conventional electricity prices are likely going up, the cost for installing and manufacturing solar technologies is coming down. So at some point in the future those two lines will cross, and communities that invest and build local markets now will be well positioned to really take advantage of that tipping point. And others who are not, might be scrambling to keep up and to grab hold of a very promising long-term industry.
Courtney: Okay, great. Our next question is: How could you describe how to utilize clean renewable energy bonds for these projects?
Sarah: I can try to take that one, this is Sarah, or if somebody else wants to they can feel free.
Female: All I was going to say is that I can't help you with that other than to say that I think that program has been full subscribed and is no longer available. Is that correct Sarah?
Sarah: I believe that is correct. And I would just say that's just a way of financing projects so I'm not entirely sure that I understand the question.
Courtney: Okay, we'll go on to the next question: Are there lightweight SWH modules that may eliminate the need for structural reinforcement?
Female: No, I don't think so. I wish. Because solar hot water modules collectors, they contain liquid, they're heavy by nature. I don't know, I'm not aware of any types of collectors that would be less weight on the roof. Anyone else have any thoughts on that?
Kim: This is Kim Owens. I don't have anything else to add on that, just because of the nature of how solar hot water systems work by circulating fluid, and that has a weight associated with it.
Courtney: Okay, our next question is: Does the Buy America Waiver apply to solar and thermal also or only solar PV?
Sarah: This is Sarah, I can take that one. The waiver does not apply to solar thermal and that is because typically all of the components that go into solar water heating systems can be found through American manufacturers. So the waiver does not apply. Buy American does apply.
Courtney: Okay, the next question is: What is the status of PACE funding?
Female: I can try to take this one. The status of PACE funding is that it is on hold for residential markets because the FHA, the Federal Housing Authority, is uncomfortable with having a senior lien on the mortgage. So it is on hold for now and I believe there's some litigation going on and we're just all waiting to see how that will shake out.
Kim: I have a comment, this is Kim Owens. Since two of the questions dealt with financing and clean energy bonds and PACE financing, I'll put a plug in for the DSIRESOLAR website which is excellent at keeping us all up to date on the status of all of these different financial incentives, and you can reach that through: desireusa.org. It's an excellent resource for everyone.
Courtney: Okay, our next question is: Is there guidance available for the installation o solar panels along with the replacement of a roof on an existing building?
Craig: This is Craig, I'll start this one. The first guidance is not to put solar panels on a roof that's going to be replaced during the lifetime of the solar installation or certainly during the first 10 to 15 years of it. Other good guidance is, a lot of agencies will integrate their roof planning schedules, those that are especially aggressive on solar, integrate their roof planning schedule with their solar installation schedule. And that allows solar panels on very new roofs so they get as much life out of the solar panels without having to move them around which adds to their cost.
Other issues, if you're considering solar on a roof and a replacement, talk to not only the roofer but the roof warranty issue and make sure that you have a warranty insurer that's comfortable with solar, to integrate solar, because ultimately you want your warranty for your roof to explicitly integrate the solar installation, for example, as an amendment. If you're doing a PPA you can include the roof replacement costs in the PPA, but none of the solar grants can be counted against it. So you could lease it, in essence, you pay for it over time, but you cannot apply solar energy incentives to a roof replacement cost funded under PPA unless the roof is integral to increase solar production, and then there's the range of kind of higher risk documents on that point, but that's fairly far off field.
But the short answer is: put the solar on newer roofs that have a lot of life and can support the solar into the warranty.
Courtney: Okay, our next question is in reference to Craig's slide comparing apples to apples and it asks: Can we specify, for example, that the contractor must use a standard 230-w polycrystalline panel, or is this too strict?
Craig: In my opinion, I think that's a little too strict. For example, there are good suppliers for the 235-watt out there and you don't want somebody toâ€¦ To be honest, they would ask that question in the big conference, whether you'd accept that. But I think a way to get at that point is if you're interested in polycrystalline, ask for one of the market-leading panels. I think that's not being too specific. But if you want to give flexibility, because some vendors may have a supply relationship with one or two major solar module manufacturers, and you don't want to exclude them by specifying a lot size that their supplier doesn't stock, but stocks something very comparable. But I think specifying an industry leading or large share panel could be helpful in terms of specification.
Courtney: Okay, the next question is: Is there a list of PV manufacturers that meet the Buy America certification criteria that can be shared publicly?
Female: There is not. I asked about that specifically and I was given an email address: firstname.lastname@example.org, because no such list exists. So if you have a specific question, please email email@example.com.
Courtney: Okay, next question is: Do you have any advice on how to respond to public concerns regarding the long payback period for solar PV systems?
Sarah: Again, this is Sarah. As the technology develops those costs will come down, so I think that's one way to speak about it. Another is about sort of the long-term view of the local economy and what sort of industries you want to attract to your area. And the long-term view of what you think will happen with conventional electricity rates.
Craig: This is Craig. I want to add, you'd be surprised the number of markets â€" the payback period is very attractive now. I think everything Sarah says makes sense and Andrea commented on this earlier in terms of it is a longer-term investment, but you'd be surprised. Install prices have come down even within the last year, so if you run a good competitive procurement, and as to that question, the payback period is better than I think a lot of agencies go in thinking it might be, especially in states with a fairly high level of support.
Female: And one other thing to mention is that in states that allow third parties to own and operate the system and sell either the electricity or lease the system to folks, you can be cash flow positive pretty quick. There are a handful of states that don't allow third party ownership, but most do.
Craig: That's a great point. If you're doing a PPA even outside of the Recovery Act, in a number of states the starting price of the third party arrangements, especially of the installation of fairly high scale 500 kw or above let's say, a lot of times the starting power price is well below the conventional utility price, so the payback period is, Andrea's point, can be even instant.
Courtney: Okay, our next question is: Could you further elaborate on the do no harm roof pitfall, and more specifically how contractors deal with the issue of wind load rating?
Craig: I can start to address that. The wind load rate is an important factor. Part of how they deal with it is they're going to look at wind-shed data on where your locations are. The tilt angle of the rack. Solar panels can be mounted flush, they can be put at different angles. Higher angles might lead to more output but higher angles might also increase the wind resistance of them. So they have a range of different options in terms of the tilt angle, in terms of how they're going to anchor the system, whether it's going to be penetrating your roof or ballasted. So it's a range of choices, and there's different equipment they can use depending on the wind characteristics where you are.
So really it's really through the equipment specification process they'll do that. Obviously the height of the building is going to be a factor. The other way it comes in is if you have a choice of sites, the wind issues on one tall building in the middle of a field may be different from a smaller building in ____. So it's really through the site and equipment specification process they deal with it, but they handle this issue. This is a day-to-day issue for the industry.
Courtney: Okay. Our next question is: Are there future EECBG fundings in the federal pipeline for local municipalities who have not previously purchased ___ into EECBG or SEP. And the follow up is, is any of the new stimulus money the president highlighted as part of the negotiations in the tax break continuance likely to end up in EECBG type funds?
Sarah: This is Sarah and I'll just say I can't really speculate on any of that. I'm not sure anyone can answer that question.
Courtney: Okay, so right now I think we are out of time so that will be the conclusion of the webinar. I want to thank everyone for attending the webinar, and thank all the presenters for doing a great job of sharing their information, and we hope everyone will attend the webinars in the future. So thank you very much. Bye-bye.