Grid-Tied , Photovoltaic System to Reduce Lift Station O&M Costs Pueblo of Zia , New Mexico

1. Grid-Tied, Photovoltaic System to Reduce Lift Station O&M CostsPueblo of Zia, New Mexico LCDR Leigh Hubbard III, PE, MS Albuquerque Service Unit - Albuquerque Area US Indian Health Service

2. Disclaimer • This presentation summarizes the preliminary results and conclusions of an Indian Health Service (IHS) photovoltaic project in the Pueblo of Zia, NM. • The cost and economic feasibility information presented is particular to the regulatory, electrical utility, and solar vendor market conditions in the Albuquerque, New Mexico area. Conditions will vary nationally and with time. • The conclusions and recommendations indicated are specific to the IHS Albuquerque Service Unit and reflect the mission of the Indian Health Service Sanitation Facilities Construction program.

3. Introduction – Zia Photovoltaic System • This presentation will cover the following topics: • Photovoltaic Lift Station Project Introduction • Local PV System Comparison • Basic Electrical Terminology • Basic PV System Configurations • PV System Cost Incentives • PV System Cost Savings • PV System Benefit Analysis – IHS Albuquerque Area

4. Introduction – Zia Photovoltaic System 2010 ARRA Project to Replace a Failing Lift Station

5. Introduction – Zia Photovoltaic System 2010 ARRA Project to Replace a Failing Lift Station

6. Introduction – Zia Photovoltaic System • Solar Installation Goals: • Reduce Facility Electrical Costs • Engineer Familiarization with Technology for Use in Future Projects • Evaluate Level of Operation and Maintenance Required

7. Local PV System Comparison

8. Local PV System Comparison • Comparison of the Zia project with other local solar project s in terms of: • Performance • Cost • System Payback

9. Local PV System Comparison

10. Local PV System Comparison

11. Basic Electrical Terminology

12. Basic Electrical Terminology 100-Watt Light Bulb

13. Basic Electrical Terminology 10 X 100 Watt Light Bulbs = 1,000 Watts 1,000 Watts = 1 Kilowatt or kW

14. Basic Electrical Terminology 1 Kilowatt x 1 Hour = Kilowatt-hour or kWh Kilowatts x hours x (rate-per-kilowatt-hour) = Cost-to-Run

15. Basic Electrical Terminology Solar Energy (in the form of photons) knock elections free from a silicon semiconductor material . Electrons are collected and directed toward a load as DC current. DC current is converted into AC current by an Inverter. AC current is the form of energy typically supplied to electrical utility customers.

16. Basic PV System Configuration

17. Basic PV System Configurations • Three Installation Types. • Standard Electrical Installation • PhotovoltaicGrid-Tied Installation • Photovoltaic Off-Grid Installation

18. Basic PV System Configurations Standard Electrical Installation GRID Load Center Pump

19. Basic PV System Configurations Photovoltaic Grid-Tied Installation Solar PV GRID Load Center Pump

20. Basic PV System Configurations Photovoltaic Off-Grid Installation Solar PV Load Center Pump

21. Basic PV System Configurations Fixed Array 1-Axis Tracking Array 2-Axis Tracking Array

22. PV System Cost Incentives

23. PV System Cost Incentives • 30% Federal Tax Credit • 10% State Tax Credit (New Mexico up to $9,000 max) • Net Metering (Electricity from PVs Return to Grid) • Renewable Energy Certificates – RECs (Mandated Payment from Electrical Utility)

24. PV System Tax Credits • 30% Federal Tax Credit • 10% State Tax Credit (New Mexico up to $9,000 max) • Residential and Commercial Installations Only

25. Net Metering • If pull more electricity from grid than generated by PV system, you are billed for the net energy supplied. • If PV system generates more electricity than pulled from grid, net kWh generated are credited on the next bill. Unused credits are carried forward from month to month. • When the value of the unused credits exceeds $50, payment is made to the customer the following month.

26. Renewable Energy Certificates - RECs Thirty-three States and DC have established Renewable Portfolio Standards (RPS) that create market demand for renewable and clean energy supplies. RPS requirements mandate that 4% to 30% of electricity be generated from renewable sources. RECs are one method to comply with RPS. http://www.epa.gov/chp/state-policy/renewable_fs.html

27. State Incentive Summary • States offer a variety of financial incentives that can include: • Corporate Tax Credits • Performance-based incentives • Personal tax credits • Property tax incentives • Sales tax incentives • State bond programs • State loan programs • Utility rebate programs • http://www.dsireusa.org/incentives/index.cfm?getRE=1?re=undefined&ee=1&spv=0&st=0&srp=1&state=NM

28. PV System Cost Savings

29. PV System Cost Savings

30. PV System Cost Savings

31. PV System Cost Savings

32. Electrical Utility • Electrical Utilities : • May not participate in renewable energy programs. • May be contracted to purchase from power generators. • May have a later deadline to purchase RECs. • May satisfy RPS targets early and no longer purchase RECs. • May not agree to purchase excess net energy from PV systems.

33. Production Capacity • Large electrical demands require a utility to maintain capacity within the system. • Utility re-coup expense with minimum rate-per-kilowatt-hour. • GW Well - existing rate $0.14 / kWh. Savings strategy to install a grid-tied system to off-set overall kWh used. • But, utility charges a minimum capacity rate of $0.09 / kWh. • Actual savings is only $0.05 /kWh.

34. Owner • Residential and Commercial system owners receive federal and state tax credits. • Residential and Commercial system owners are eligible to receive net-metering and RECs. • Federal projects do not receive tax credits. • Federal agencies do not receive REC payments. • Tribal Governments do not pay taxes and do not benefit from tax credits.

35. Purchase Date • States have different Renewable Portfolio Standard (RPS) targets (% of electricity sales) . The NM target is 20% for Investor Owned Utilities and 10% for Rural Utilities. • States have different implementation deadlines. NM target date is 2020. • Utility payment rates to owners are organized into tiers. • As a tier is filled, the next available tier offers a lower REC payment rate. • Once all ties are filled, the Utility stops purchasing RECs. • Contracts for REC payments terminate after the deadline. • The first systems to be commissioned receive the highest return for a longer time period.

36. Geographic Location http://www.nrel.gov/gis/solar.html

37. PV System Cost Savings • System cost and savings depend on many factors, many of which are time and location dependent. In our experience the easiest method to calculate the system cost was to contact local commercial vendors. • Benefits: • Familiar with local markets and product manufacturers. • Capable of calculating system size to best benefit from market conditions. • Capable of calculating construction cost and applicable incentives, credits, and rebates. • Usually have in-house construction capability. • May have GSA contracts that facilitate the federal procurement process.

38. PV System Benefit Analysis

39. PV System Benefit Analysis

40. PV System Benefit Analysis Unit Cost - $4.00/watt to $18.75/watt Payback Period - 13 to 33 years

41. PV System Benefit Analysis Upfront Owner System Expense and Payback Period are Eliminated Payback is Immediate $16,407 Capital Cost is 3.5% of Project Funding

42. PV System Benefit Analysis • Sustainability • “To promote and assist in the establishment of an effective and economical mechanism for the operation and maintenance of tribal water, sewage, and solid waste systems.” • IHS Operation and Maintenance Guideline for the SFC program, Working Draft, January 2009

43. PV System Benefit Analysis • Sudan war mirrors region's oil conflicts • The brewing war between Sudan and South Sudan is a battle for oil and there are other such potential conflicts in the Middle East and Africa. • http://www.upi.com/Business_News/Energy-Resources/2012/04/18/Sudan-war-mirrors-regions-oil-conflicts/UPI-68621334766985/#ixzz1xiyeA8vS • South China Sea Oil Rush Risks Clashes as U.S. Emboldens Vietnam on Claims • Vietnam and the Philippines are pushing forward oil and gas exploration projects in areas of the South China Sea claimed by China, sparking a fresh clash in one of the world’s busiest shipping corridors. • http://www.bloomberg.com/news/2011-05-26/s-china-sea-oil-rush-risks-clashes-as-u-s-emboldens-vietnam.html • Egypt Cancels the Delivery of Gas to Israel • Egypt’s state-owned natural gas company said Sunday that it was ending a deal to ship gas to Israel because of a payment dispute. • http://www.nytimes.com/2012/04/23/world/middleeast/egypt-cancels-delivery-of-natural-gas-to-israel.html?_r=1

44. PV System Benefit Analysis • Argentina Seizes Repsol's Assets In Worrying Signal To Exploration Firms • The government’s seizure of Spanish giant Repsol’s assets in Argentina could slow foreign investments in the country’s shale reserves. • http://www.upi.com/Business_News/Energy-Resources/2012/04/18/Sudan-war-mirrors-regions-oil-conflicts/UPI-68621334766985/#ixzz1xiyeA8vS • Argentina reignites conflict over Falklands oil • Argentina's demand for direct control of shipping from the South American mainland to the Falkland Islands has raised fears about conflict over energy resources in the south Atlantic.http://www.azcentral.com/news/articles/2010/02/18/20100218falklands0218.html#ixzz1xj23KsZX. • U.S. Sends Top Iranian Leader a Warning on Strait Threat • Senior Obama administration officials have said publicly that Iran would cross a “red line” if it made good on recent threats to close the strait, a strategically crucial waterway connecting the Persian Gulf to the Gulf of Oman, where 16 million barrels of oil — about a fifth of the world’s daily oil trade — flow through every day • http://www.nytimes.com/2012/01/13/world/middleeast/us-warns-top-iran-leader-not-to-shut-strait-of-hormuz.html?pagewanted=all

45. PV System Benefit Analysis Estimated 20-Year Cost Savings = $10,077 @ $0.135 kWh

46. PV System Benefit Analysis Estimated 20-Year Cost Savings = $18,350 @ $0.27 kWh Estimated 20-Year Cost Savings = $34,895 @ $0.54 kWh

47. PV System Benefit Analysis Lower Unit Costs - Reduce Upfront Costs Lower Unit Costs - Reduce Payback Period

48. PV System Benefit Analysis • Cons: • High Initial Cost • Long Pay Back Period • Complicated Technology • Incentive Programs REC Payment Process are Confusing • Paying for Prime Contractor Markup on Sub-Contractor Work

49. PV System Benefit Analysis • Pros: • Lower Unit Costs Available with a Potential for GSA Pricing • Offsets Power Used – Owner Will Not Feel Future Rate Increases • Improves Tribal System Sustainability – Frees Funds For Other Uses • Lowers Carbon Footprint of Tribal System and Reduces Pollution • Fixed PV Arrays Are Stand-Alone and Low Maintenance • Vendors Offer Comprehensive Range of Services and PV Packages

50. PV System Benefit Analysis • Result: • Albuquerque Service Unit will be attempting to incorporate PV grid-tied systems in future sanitation facility projects. • The long term goal will be to overtime offset the daily power consumption of tribal sanitation facilities below a threshold power demand to be determined. • Eventually, all facilities will be converted and the funds expended on power consumption can be dedicated to other beneficial uses.