Governments Collaborate To Go Solar
A Case Study
In 2010, The Metropolitan Washington Council of Governments (COG) and its local government members, working with the US Environmental Protection Agency (EPA) Green Power Partnership, began to explore opportunities for collaborative procurement of solar photovoltaic (PV) systems.
COG and EPA used as a model the Silicon Valley Collaborative Renewable Energy Procurement (SV-REP), which resulted in 70 solar installations, representing 14 MW of generating capacity, across more than 40 locations. The project aimed to reduce up-front costs for public agencies by bundling a number of solar projects into a streamlined group procurement.
Through the partnership with EPA, public agencies in the metro DC area received technical assistance from consulting firm Optony Inc., which performed on-site solar feasibility assessments for 170 sites across the region. Optony found that 75 sites were technically feasible, but only 40 sites - representing 15 MW of potential solar capacity - were economically viable given existing policies and market conditions.
These assessments served as a springboard for additional research and evaluation by Montgomery County, the District of Columbia, the Washington Metropolitan Area Transit Authority (Metro), and others. So far, this has led to solicitations for more than 55.4 MW of new solar PV in the region.
- Montgomery County: 14 MW
- City of Bowie: 4 MW
- District of Columbia: 11.4 MW
- Washington Metro. Area Transit Authority: 26 MW
Public-Sector Solar Projects
In 2014, Montgomery County issued a request for energy proposals (RFEP) for a third party to develop solar on County facilities through a Power Purchase Agreement (PPA). The County awarded SolarCity a contract to install more than 5 MW of solar PV across 14 sites, including rooftop, ground mount and solar carport systems.
Montgomery County issued an RFEP for solar at additional sites in 2015. Several other municipalities in the area, including Garrett County and the Cities of Bowie, Greenbelt, Frederick, and Rockville, are planning to ride Montgomery County’s contracts to facilitate solar installations in their own communities.
Also in 2014, the District of Columbia issued a solicitation for solar installations at 50 municipal facilities, including 37 schools. The installations will include both rooftop and solar carport systems. In November 2015, the DC Council approved an on-site power purchase agreement with Nextility for 11.4 MW. The DC Department of General Services is evaluating additional opportunities for solar, including at publicly owned housing.
In the fall of 2015, Washington Metropolitan Area Transit Authority (Metro) released a solicitation for Phase I of its solar procurement project. The agency is seeking a PPA for around 13 MW of solar PV at nine Metro locations. One location is a green field site, and eight are parking lots, where solar carports will provide the additional benefits of improved lighting and shelter from the elements for transit customers.
Metro plans to release an RFP for Phase II of the project in the summer of 2016, which will amount to roughly another 13 MW. Metro expects that these solar investments will reduce operating costs, and therefore save taxpayers money, starting on day one.
Solar power provides numerous financial and environmental benefits for public agencies. The price of solar power dropped about 70 percent between 2009 and 2016, and in many areas of the country it is now cost-competitive with, or cheaper than, fossil-fuel powered electricity.
Performance-based power contracts, like power purchase agreements (PPAs) and many solar leases, can be especially advantageous, because they:
- Require little or no upfront capital;
Provide a hedge against rising fuel prices by locking in an electricity rate for the contract term, usually 10-20 years;
Offer protection against technology malfunction (the customer only pays for electricity produced);
Include operations and maintenance performed by the solar company; and
Often yield savings on day one, thus improving your balance sheet.
For these reasons, governments and public entities in the metro DC area are moving toward using solar PPAs and leases instead of owning all their solar installations themselves.
Performance contracts also provide an advantage over green power tariffs, or renewable energy credits (RECs). RECs entail a premium on top of the electricity rate, while PPAs often come in below the current rate. Metro and the local government agencies that have recently closed PPAs have all received prices below their current electricity rate.