Military Sees Green

Bill Opalka | Oct 27, 2011

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That the U.S. military is taking a major role in renewables deployment isn’t news that much anymore. Still, a recent announcement shows how big that commitment is.

Project SolarStrong is a multi-year project worth more than $1 billion under which developer SolarCity will install, own, and operate rooftop solar systems on up to 160,000 privatized military residences on as many as 124 military bases across 33 states. The project would double the current number of residential rooftop solar systems in the U.S.

There’s another component of the project that’s worth noting – a large infusion of private capital in a renewable energy project that enjoys government aid through a federal loan guarantee. But the financing is entirely from private sources.

That’s the kind of news that gets lost in the current climate of budget austerity and allegations of waste when a project goes bad.

US Renewables Group (USRG) said it will provide $344 million in financing for the project.

"This will be the first time that long term debt has been successfully deployed to finance a residential distributed generation project at such a large scale, resulting in a lowered cost of capital for the project that will enable an unprecedented expansion of U.S. residential solar power," said Ed Feo, managing partner of US Renewable Finance.

The U.S. Department of Energy’s Loan Guarantee Office had offered a conditional commitment for a partial loan guarantee to USRG Renewable Finance for the project, which would have covered up to 80 percent of a loan provided to a qualifying renewable energy project. However, in the aftermath of the Solyndra bankruptcy, a request for additonal documentation could not be processed before the loan program's September 30 deadline.

The project  instead will have to be financed entirely by private capital.

It calls for installing a total of 371 megawatts of solar PV systems on military housing. SolarCity, which currently employs more than 1,200 people in 11 states, will create new jobs and help jumpstart the renewable energy industry in up to 22 additional states, some of which have very little solar generation capacity today.

SolarCity said it will seek out veterans to hire and train or family members of active duty military service members to install and maintain the solar systems.

The SolarStrong Project will have the added benefit of helping the Department of Defense (DOD), the single-largest energy consumer in the U.S., secure its energy needs from domestic renewable sources that are independent from the utility grid, at no additional cost to taxpayers. DOD has a stated goal that 25 percent of all energy consumed by 2025 shall be supplied from renewable sources.

The project will be rolled out over five years, starting with a four megawatt installation at Hickam Air Force base in Hawaii, with construction currently underway. SolarStrong is expected to sell electricity produced from the projects through long-term electricity sales agreements or lease solar systems through long-term lease contracts.

The SolarStrong projects will likely include installing solar on other privatized buildings on military bases, such as community centers, administrative offices, maintenance buildings and storage warehouses.

Some interesting news at a time when public-private energy partnerships have gotten a bad name.

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Comments

The Military and Clean Energy

On October 12 I attended a seminar at Emerson College in Boston on the pursuit of clean energy by the U.S. military. This event, in collaboration with the Pew Charitable Trusts and KEMA, Inc., highlighted the release of Pew’s new report From Barracks to the Battlefield: Clean Energy Innovation and America’s Armed Forces. This report finds that,” DoD clean energy investments increased 300 percent between 2006 and 2009, from $400 million to $1.2 billion, and are projected to eclipse $10 billion annually by 2030. The Pew report documents how DoD is helping to accelerate the development and deployment of clean energy technologies in three key areas: vehicle efficiency, advanced biofuels and energy efficiency and renewable energy at bases.”

Dr. Jeffrey Everson; www.jheversonconsulting.com

Economics of solar improving

I wonder when the previous commenter had the solar contractor give him/her and estimate on his/her home.  The cost of solar has come down dramatically over the past few years.  The subsidies and incentives in Germany, Spain, Italy, Greece, Japan, Korea, and the United States have helped the industry to gain early adoption and drive down costs through greater scale along with better practices and cutting edge research.

In 2008 the cost of a residential system could be north of $10,000 per kilowatt.  Today, there are residential systems going in for $5,000 per kilowatt in the United States and likely we will see this decline further.  At the larger, utility-scale, solar projects are now being installed for $2,500 per kilowatt.  The DOE has a goal of bringing this number down to $1,000 per kilowatt.

One reason for the big difference between larger utility-scale projects and rooftop projects is scale.  In this case, by doing a large group of projects as a package, SolarCity should be saving a ton of money on one-off soft costs (e.g. permitting, negotiation with client, travel to site, etc.).   Permitting and other soft costs can easily add $1,500 per kilowatt to a small residential project.  Hopefully, because SolarCity is working with the military and installing on a large group of homes and not just doing a one-off sale, they should be able to cut these costs down dramatically.

The contract details would be interesting to know

When I looked into putting solar panels on my home on the Gulf Coast of Texas, which is a relatively sunny place most of the time, the projected energy production was so low it would have taken almost 20 years to pay out even with the tax credit considered.  It would be interesting to know what DoD will be paying SolarCity if this is an all private venture backed up by a taxpayer funded loan guarantee.  Since the present administration and its appointees seem to have zero business acumen and a propensity for spending taxpayer dollars to further their agenda, I have a feeling the net result is the American taxpayer is funding another boondoggle.

Sorry, but after seeing the shennanigans surrounding the Solyndra deal, this looks to have the potential of another shady deal.

 I wonder when the previous

 

I wonder when the previous commenter had the solar contractor give him/her and estimate on his/her home.  The cost of solar has come down dramatically over the past few years.  The subsidies and incentives in Germany, Spain, Italy, Greece, Japan, Korea, and the United States have helped the industry to gain early adoption and drive down costs through greater scale along with better practices and cutting edge research.

In 2008 the cost of a residential system could be north of $10,000 per kilowatt.  Today, there are residential systems going in for $5,000 per kilowatt in the United States and likely we will see this decline further.  At the larger, utility-scale, solar projects are now being installed for $2,500 per kilowatt.  The DOE has a goal of bringing this number down to $1,000 per kilowatt.

One reason for the big difference between larger utility-scale projects and rooftop projects is scale.  In this case, by doing a large group of projects as a package, SolarCity should be saving a ton of money on one-off soft costs (e.g. permitting, negotiation with client, travel to site, etc.).   Permitting and other soft costs can easily add $1,500 per kilowatt to a small residential project.  Hopefully, because SolarCity is working with the military and installing on a large group of homes and not just doing a one-off sale, they should be able to cut these costs down dramatically.