Alameda Power

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Alameda Power Telecom The Economics of
Solar Photovoltaics in Alameda
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Solar Economic Analysis

• Goals
• Individual customer economics
• Impact of Senate Bill 1 (SB1) Million Solar
  Roofs

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Alameda Power Telecom Information

• Winter-peaking utility
• More than 80 renewable generation (including
  hydro)
• Rates 10 lower than PGEs
• No existing customer-owned solar PV systems in
  Alameda
• Two solar PV systems built by Alameda PT 1 kW,
  4 kW

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Alameda Power Telecom Information (continued)

• Net metering rate available
• No solar PV buy-down program because
• Solar PVs do not match load requirements
• Solar PVs are expensive
• Supply portfolio is more than 80 renewable
• Analysis of renewable distributed generation
  indicates solar PVs offer limited system
  benefits and fails benefit/cost tests
• Public Benefits Fund is overspent by 1.5 million

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Customer Economics of Solar PVs in Alameda

• Assumptions
• 2.5 kW DC average size
• Annual production 3,910 kWh/yr
• Installed cost 9/watt
• Financing (mortgage) 30 year, 6 interest, 20
  down
• Federal Tax Rate 25
• Based on actual data from our 4 kW solar PV
  system
• Based on CEC data and local solar PV installers

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Customer Economics of Solar PVs in Alameda

• Assumptions
• Tax Credit Solar and Wind Energy System Credit
  (SB17x2)
• Utility rate 0.1305/kWh (includes taxes),
  escalated at 2.5 per year
• Average annual residential energy use
• 4,608 kWh/yr
• 601/yr (in 2005)
• Inflation rate 2.5 annually

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2.5 kW Solar PV System Costs/Benefits
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2.5 kW Solar PV System Costs/Benefits
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2.5 kW Solar PV System Benefits

• Net present value is -3,629
• Simple payback is 27 years (without interest
  considerations)

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Potential Impact of Million Solar Roofs (MSR)

• SB1 requirement for Alameda 113 new solar PV
  systems built annually
• By 2017, there would be 1,360 new solar PV
  systems in Alameda
• 1,360 solar PV systems 3.7 MW

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Solar PV MSR Costs/Benefits
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Solar PV Capacity and Energy
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Funding Implications

• Rebates Lost Revenue - Avoided Cost
• Net impact to Alameda PT 14.6 Million
• A 3/watt buy-down would require a 2.5 rate
  increase to all customers
• For a 10 year pay-back, a 4.5 rate increase for
  all customers would be necessary
• Reduced funds for energy efficiency programs and
  other public benefits programs such as low
  income, new investments in renewables other
  than solar PV

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Generation Costs Comparison

• Source Calculated from NCPA member utility,
  Residential Solar Economic Analyses, 25 year life
  assumed
• Source SMUD Public Benefit Report August 2004.
  Does not include utility revenue loss

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Summary

• More than 80 or Alameda PTs power is renewable
  (geothermal, hydroelectric, wind) that provide
  benefits
• Competitively priced keeps rates reasonable
• Generation matches load requirements
• MSR will significantly impact existing Public
  Benefits programs
• Alameda PTs annual budget 47 Million
• Annual cost of MSR 1.2 Million
• Annual required Public Benefits expenditures
  1.3 Million
• A solar PV system (3/watt buy-down) could add
  1,008/yr to a mortgage, while saving only
  655/yr (tax and electricity bill)

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Questions for Legislature

• Why subsidize only one particular type of
  renewable generation?
• Considering the economic climate in California,
  as well as global warming, why not charge a
  penalty on fossil-fueled generation, instead of
  creating a subsidy for only one type of renewable
  generation?
• Is there a socioeconomic imbalance of cost and
  benefits? (All customers including renters and
  those who may not be able to afford the
  installation of a solar PV system - bear the cost
  of MSR.)