Looking at Solar Benefits from the Perspective of a Commercial Real Estate Owner

“We’ve found that the solar energy system not only helps with retaining clients, but also in attracting new ones.”

For this month’s edition of NEREJ, we spoke with commercial real estate owner Emerson White and his decision to install solar energy on his multiple properties.

Can you tell us a little about your commercial property investments?
We have six buildings representing about 75,000 s/f over ten acres. The buildings range from a converted airplane hangar built in the 1950s to our most recent buildings constructed in 2005. We have 25 tenants ranging from offices, to a race car engine manufacturing shop, to a Crossfit facility.

What prompted you to initially explore solar for your property? And what ultimately was the deciding factor(s) to pursue solar?
Years ago, we had a business distributing Swedish Chainsaws. That company was very environmentally conscious and it got us thinking about our own operations and environmental footprint. We considered wind energy but quickly decided solar made a lot more sense. As we looked at solar more closely, we began to realize there was the potential for significant energy cost reduction. Our solar provider, Solect Energy, sat down with us and walked us through all the options and from there we developed our plan. We installed our first [solar] system in 2012 and then another in 2013. And now under the SMART program we’re installing solar to our three remaining suitable buildings.

What impact has solar had on your property, your tenants? 
We have installed meters for most of our tenants which allows us to see how much energy they use. Although as the building owner we pay the utility directly, we know how much each tenant would be spending and can bill our tenants for the energy they consume. I made the decision to pass the savings created from the solar system on to my tenants and I currently offer them a 10% discount of what they would normally be paying. Our tenants really appreciate the energy savings but they also like the sustainability attributes. We’ve found that the solar energy system not only helps with retaining clients but also in attracting new ones.

What advice would you give to other commercial property owners that are considering solar energy?
With the new simplified solar incentive program in Massachusetts (SMART program), solar is a no-brainer. If you have the space, you need to install a solar energy system! I would also advise people to seek out a solar provider that specializes in commercial scale systems. You need someone who understands how business works and will sit down with you to clearly explain your options.

Any last thoughts?
Solar has served as the foundation for our sustainability efforts. We have made many upgrades to our heating and lighting systems, implemented recycling programs and many other environmental investments. However many of these efforts, although good for the environment, don’t offer the pay back for us the same way solar does.

Real Estate Owners Have More Options Than Ever Before for Solar Energy

Five Simple Guidelines for Making the Best Choice

The good news for property owners and real estate developers is that when it comes to solar energy, there are now more options and incentives than ever before. The challenge is that assessing these options and finding a solar partner who fits your unique requirements can be a bit daunting. To help you think about how to best approach your solar energy strategy we have outlined 5 simple guidelines to help you through the process.

Consider the Goldilocks Factor:

Essentially there are three size groups for solar energy systems, with some overlap. The smallest is residential and is typically less than 10kW, but often gets categorized under 25kW; next is commercial scale, that is typically within the 25-500kW range (but can be as large as 1000-2000kW), and is usually installed on the roof (or as a solar canopy) for commercial and industrial buildings; and lastly, utility scale projects are usually counted in several megawatts (MW) and are generally ground mount installations. Each category requires a different set of skills, knowledge and experience from your provider, so it is a good idea to look for a company that specializes in your type of project. For the vast majority of commercial real estate owners that would be a commercial scale provider.

Find the Best Financing Model for your Specific Business:

There are now a myriad of ways to finance and operate a solar energy system. They can range from a behind-the-meter system that is owned by the customer and provides on-site power which lowers or eliminates energy bills, to simply leasing your unused roof-space to a solar developer who will finance, build and operate the system and sell the power to the local utility. Amongst these options, there are certain advantages and disadvantages depending on the specifics of the site, the building, the on-site energy load and the nature of the business. A good solar partner will work with you to analyze your unique circumstances and business needs, and  present all the different investment options so that you can make the best choice for your specific goals.

Look for More than Just Electricity:

A good solar energy system delivers more than just electrons, it can also tell you a lot about your energy load; i.e., how much power you use, and when and where you are using it. Today many solar energy systems are paired with remote sensing monitors that can gather data and assemble it into a user friendly dashboard. This gives energy consumers transparency into how much their system produces, how much they are buying from the utility and where the major load centers are located. In turn, this gives building and/or business owners the insights required to identify utility billing discrepancies, energy efficiency investment opportunities and even the ability to bill tenants individually. Look for a provider who has experience with different energy monitoring data systems and who can also provide solutions to improve your overall energy profile.

Don’t Forget about O&M:

Although solar energy systems are very reliable, a good operations and maintenance (O&M) program will more than pay for itself by proactively monitoring the system and making sure it is continually operating at peak efficiency and maximizing your ROI. In addition, a good service provider will ensure that if issues arise, the system is fixed quickly with minimal disruption. Obviously for O&M, you want a local provider who has a track record in your community and can show you examples of other customers in your area where they are providing O&M services. Many solar providers only offer installation services, however if you have a system without an O&M plan, it’s advisable to look for a local solar company that can offer full O&M capabilities.

Think about Augmenting or Expanding your Existing System:

If you already have a solar energy system, you may still want to consider some other options that could further reduce costs, build resiliency and provide additional financial benefits. Energy storage is becoming an increasingly popular option for building owners as it can reduce expensive demand charges and also provide emergency power during power outages. There are many new incentives that make energy storage a very attractive investment option. You may also look to increase the value of your system by expanding it. An experienced commercial solar partner can help you look at your options for rooftop expansion, adding a ground mount system or even a solar canopy. Canopies are great options that provide additional benefits by offering protected parking and also receive added incentives in some states.

Whether you are just considering solar or looking for ways to enhance your existing system, there are many compelling opportunities.  A qualified, reputable solar partner will work with you to understand your business needs, develop a set of options and help you decide the best course of action. Make sure they have experience in the areas that are relevant to you, and feel free to check their references with existing customers. If you follow these guidelines, you should feel confident that you are making the best long-term decision for your business.

 

Original article published in NEREJ

A Closer Look at the Changing Landscape for Solar Energy: Key Trends to Watch in 2019

 

 

 

 

 

 

 

 

As real estate developers and property owners across the state fine tune their forecasts for existing buildings and new projects for 2019, its worthwhile to take a closer look at the changing landscape for solar energy. Massachusetts has been a regional leader for solar friendly policies and the deployment of solar energy. For 2019, the Commonwealth is making a number of significant changes to its incentive programs that are particularly helpful for commercial real estate owners and may serve as an example for other states. In addition, new technologies and approaches are continuing to drive down costs and enhance returns through innovative O&M practices. We take a look at three trends, (revised solar incentives, energy storage and new O&M opportunities) that should drive the market in the next year.

Attractive Incentives/Predictable Financing Under SMART (Solar Massachusetts Renewable Target). The new solar incentive program from the Massachusetts Department of Energy Resources which is rolling out the end of 2018 offers many attractive benefits for building owners.

• Project cash flows are more predictable under SMART because the tariff rate is locked in at the start of the project and paid monthly, so revenue streams are predictable for 20 years (as opposed to ongoing monthly aggregations and yearly auctions under the current SREC program).

• Predetermined rates simplify forecasting: Building owners earn a predetermined rate for the energy they produce. In addition, they will get paid directly from the utility every month as opposed to quarterly with no predetermined value for SRECs. All of this will make it much easier to predict revenue and energy cost savings.

• SMART has attractive “adders:” Essentially additional incentives that are designed to encourage specific types of projects. These are in addition to the base tariff rate for projects providing additional benefits to the community; such as low-income housing, building mounted, public, or a project sited on a landfill.

• Lease Your Roof and Maybe Finance a New One: This deserves a closer look. Would you like to add a new revenue stream to your building and benefit from a new roof at the same time? A key provision in SMART is the ability to more easily create “stand-alone” solar projects, meaning that they are no longer behind the meter. Now building owners can install projects and sell the energy directly to their utility, and at a predetermined monthly price for 20 years. Owners aren’t burdened with finding/engaging tenants or other off-takers (energy consumers). Also, since the “customer” for the power is your utility, owners benefit from an investment grade credit entity. This combination of fixed monthly payments and an investment grade credit allows solar developers to structure deals that can include the costs of roof upgrades and even new roofs as part of the solar project.

Solar + Storage: There is a lot of excitement in the state, and across the country, about energy storage and its potential in the commercial and industrial (C&I) sector.

• Storage Reduces Peak Demand Costs and Builds Resiliency: Working in tandem with a rooftop solar PV system, an energy storage system allows a facility to generate its own power, store it and use it when needed. Building owners benefit by reducing expensive demand charges, avoiding time-of-use rates, providing power quality assurance, and in some cases enabling back-up power when needed. We expect 2019 to be the year that truly launches energy storage with a spate of new incentives, including a storage “adder” in the SMART program, as well as new incentives for “active demand management” being developed through the State’s energy efficiency programs and expected to start next year. Massachusetts will also be developing rules for a “clean peak standard,” which will be another revenue opportunity for owners of solar and storage systems, though this program will be a bit further out with a scheduled start date of Jan. 1, 2020.

Cost Effective O&M Services:   New technology and more sophisticated software offer unprecedented insight into ensuring that a solar system operates at peak capacity.

• New data acquisition systems (DAS): Make it possible to remotely and constantly monitor a solar energy system. Your service providers will know if your system is working at maximum efficiency and will be alerted immediately should your array experience a loss in production. These tools can also be used to track a building’s overall energy use, providing helpful information that can give property managers and owners insights into where they might implement additional energy reduction measures.

• Drones have emerged as a cutting-edge tool in the O&M toolkit: Equipping drones with infrared cameras allows a solar service provider to identify specific panels or other pieces of equipment that are not performing properly–in a fraction of the time it might take manually. This reduction in man-hours is highly cost effective. By speeding up the time of issue identification, diagnostics and correction can be more addressed immediately ensuring an array can quickly get back up and operating at peak efficiency.

• New user-friendly interfaces and reports: Show how much energy the system has produced and track SREC (or other incentive) payments. This makes it easier to understand how a system is contributing to your bottom line, making fiscal planning easier. It will also give you a clearer picture of how much energy you are generating versus how much you are still buying from the utility. An added bonus is that these systems provide the data necessary to identify any discrepancies on your utility bill.

As you plan your budgets for 2019, it is worth calculating the benefits of solar energy, and how it can shine a brighter light on your bottom line.

 

 

SMART Solar Application Checklist

Finally the time has come, with the SMART solar program officially kicking off on Monday! The initial application period will last from Monday November, 26 until 11:59 PM ET on November 30, 2018. All applications submitted between opening day and midnight November 30, 2018 will be considered to have been submitted at the same time for the purposes of establishing a queue to process applications for placement into Capacity Blocks. All applications received on/after December 1, 2018 will be reviewed on a first come, first served, basis. This means that unless your project is already built, now is the time to get started!

Time is of the essence for the SMART program, due to the declining blocks for the incentive values, so it’s imperative to move quickly with application items. Accordingly, we thought it would be helpful to share a checklist of items needed in order to submit your commercial solar project to be included in the program. While the list looks daunting, remember, if you are working with a full-service solar provider they will ensure all items are completed, properly filed, and organized every step of the way. All you need to do is make the commitment to solar!

  1. The Application Fee is self explanatory, and one of the easiest pieces of the puzzle. This is taken care of by some providers, like Solect.
  2. A counter signed Interconnection Service Agreement (ISA) represents your approved agreement with the utility to connect your array to the grid.
  3. Evidence of site control is represented with either a fully-executed LOI, contract, PPA or Lease Agreement, which demonstrates the ownership of the real estate where the array is situated, and the ownership structure for the array itself.
  4. Online Certification Form – signing off on terms and conditions as you submit your application online is as simple as it gets!
  5. Submission of a one line diagram and site plan of the solar array is standard operating procedure for solar installation, and having an engineer stamped proof is all part of the process.
  6. A recent copy of the utility bill if solar is being installed behind-the-meter (BTM)

 

The following requirements are only necessary for certain project types, but will apply to many projects waiting to be accepted to the program.

  1. The documentation for incentive “adders” is needed on a case by case basis, based on how your array is being constructed and what adders you are applying for.
  2. In the event your array is over 1 MW, evidence of your filing for FERC Qualified Facility (QF) status is required to properly classify your array.
  3. For solar ground mounts and canopies, all non-ministerial permits need to be obtained to ensure your array is zoned properly and in accordance with all the applicable rules and regulations. Building large ground mounted projects often entails more rigorous zoning requirements, and may need supplemental evidence of proper approval that goes beyond the ministerial proof required for smaller arrays.

Ultimately, the SMART Application Checklist is a culmination of all the paperwork, design, and contracts that need to come together to build your array and ensure you can receive the SMART incentives. In order to be accepted into the program quickly, and be able to take advantage of higher-value incentives it’s imperative to make the commitment to solar sooner than later and partner with a provider you can trust to take care of you every step of the way.

The SMART Program is Coming

The long anticipated Solar Massachusetts Renewable Target (SMART) program finally has a formal launch date and will be going into effect on November 26th, 2018.

Under SMART timing is imperative. The program is structured as a declining block model where incentive payments will decline over time as each of the eight 200 MW “blocks” fill up with registered arrays. The initial window from Nov 26th – Nov 30th will allow for projects already being planned to be seeded based on the date of their Interconnection Application (IA) approval. After this initial period, projects will be accepted into each block on a first come first serve basis.

The previous SREC-II program had been wildly successful for its extended run in the Bay State, but all good things must come to an end, and SMART brings some new and exciting opportunities.. There are several primary differences to keep in mind as we transition to SMART:

 

Payments are more predictable and timely.

SMART is a feed-in-tariff (FIT) based model where projects will be compensated monthly via a fixed rate payment for their kwh production. This new model provides better stability, more consistent payments, and a simpler model vs. its SREC predecessor where SRECs were minted and sold quarterly on a spot market, making it difficult to predict incentive values..

Your eligibility to install solar is no longer dependent on your demand for electricity.

The SMART program eliminates the need to consume the energy on-site.With the new standalone system model, array owners now have the option to send all solar production straight to the grid while receiving a fixed monthly payment for 20 years.

“Adders” will enable you to earn more for your arrays production by meeting specific criteria set by the DOER.

Not all solar arrays are created equal. In an effort to ensure a wide variety of stakeholders receive the benefits of solar energy and to promote best practices, and emerging technologies the DOER has designed incentive “adders” available for certain types of solar applications based on installation and consumer type. These adders  will increase the compensation rate for your array’s production For example, there are adders for solar that provides energy for low-incoming housing, or for projects that pair solar and storage technologies.

Timing is key.

We can’t stress this enough. If you want to maximize the return on your solar investment – now is the time. The declining block model of the program is structured to reward the early adopters. With the layover between the SREC-II program and SMART there are a plethora of projects waiting in the eaves for the program to open. The earliest and most profitable blocks of the program will fill up fast. In addition, the 30% federal investment tax credit (ITC) value starts to drop after 2019, so investments in solar in 2019 will yield the best returns.

 

Whether you’re interested in installing your first array, or have already installed solar and want to make the most of your remaining roof space, action in the next few months is imperative. The SMART program has big shoes to fill, but has already been recognized as having the potential to serve as a template for incentive programs across the country. We’re thrilled to finally get to see it in action, and hope you will join us!

Solect Service Advisories

managing demand

What is Demand Monitoring?

Energy Demand monitoring provides customers with direct, real-time insight into their building’s electrical usage, which highlight’s opportunities to adjust energy usage to reduce expensive demand charges on your bill.  Customers have found demand monitoring a simple way to confirm the usage found on their utility bills to ensure accurate charges. With this data, you will also have the information you need to make investment decisions on future energy management technologies.

Demand monitoring is made up of an integrated data logger and one or multiple sensors throughout your building which captures your electricity usage and provides you access through the cloud to view on your favorite device.

Demand Monitoring and Solar

The above chart shows a prime example of a solar array that despite producing most or all of the building’s mid-day consumption, may not be reducing monthly peak demand charges. Peak demand charges are what the utility charges based on the peak power demand from your building at a moment in time, which are in addition to the energy you consume over each month on most commercial rates. This building in the chart would be a perfect fit for a solar plus storage solution, so that it could store the extra energy produced during the day for use during peak periods. The new SMART solar program in Massachusetts has incentives for installing new solar paired with storage, which make the economics very attractive in many cases.

In our efforts to go beyond simply installing solar, demand monitoring is now a standard upgrade offering for every solar system that Solect Energy is currently designing and building.

Our goal is to help our customers effectively manage their energy costs and demand monitoring is a key component of achieving that goal.

KEEPING DRAINS CLEAR

With the storms that have come through New England recently as well as leaves falling from trees, now is the time to check your roof drains to ensure they are not clogged. Debris left on the roof can result in standing water and possible roof leaks that can damage your building.

Below is an example of what can happen when regular drain maintenance is not performed:

clogged roof drain-1

If solar components are submerged or exposed to standing water it could result in a system failure. Furthermore, clogged drains lead to ice damming come winter, and the potential for bigger, structural issues. Conducting regular debris inspections and removal from the roof, and checking to make sure all drains are free-flowing is a straightforward procedure, however, it is critical to ensure the long-term health of your roof and solar array.

Internet Connectivity

Solect is monitoring your solar system every day. The internet connection is critical to ensure we always have visibility to the performance of your system.  Please keep in mind as well that your solar inverters are communicating specific alerts to Solect that help us determine a specific issue with your system. Our most frequent service call is related to internet connectivity issues that could be prevented with you performing the following troubleshooting steps.

 

 

To properly reset your modem and your WiFi router:

  1. Unplug the power cord from the back of the modem and remove any batteries.
  2. Unplug the power cord from the WiFi router.
  3. Wait 30 seconds, and then reinsert any batteries and reconnect power to the modem.
  4. Allow at least 2 minutes to ensure that the reset is complete.

There are several other steps that can be taken to help prevent unnecessary truck rolls and costly expenses to fix these issues. We advise that you label your cords to ensure that a critical cord is not unplugged accidently (see image). Keeping the WiFi Cabinet clear of unnecessary debris and clean of dust will improve equipment performance.

Keep in mind that power outages from severe storms can impact internet connections. Making sure that internet connections are fully functional is critical to maintaining monitoring and reporting functions. If a problem does arise, with a fully functional internet connection, your maintenance provider will respond quickly to optimize production.

If internet connectivity continues to be an issue, a modem upgrade may be required.

Inverter Care

Inverters are designed for outdoor use, however additional measures can be taken to ensure both the longevity and performance of your inverter.  Here are tips from two of the most common inverters we support, string inverters and central inverters.

String Inverters:  Inverter manufacturers have recently recommended shade covers be sold with all of their string inverters to avoid overheating. Excessive sun on the inverters have been known to reduce the overall performance of the inverters and in some cases damage the displays on the inverter making it difficult to read and support.   

 

 

Central Inverters:For central inverters that are installed outside next to a building, we recommend our customers protect these systems from direct sun as well.  The inverter cover featured here not only protects the inverter from the sun, but also from falling ice. It also has built-in bollards that protect the inverters from ground oriented threats such as car traffic. 

 

 

 

Inverters are one of the most important components of your Solar system. As the industry evolves, best practices are emerging that help extend the life and performance of this crucial hardware. Solect is here to be your solar asset partner helping you achieve the highest possible return on your Investment by keeping you up-to-date on the latest best practices in solar maintenance.

EEAC Releases Final Proposal for Massachusetts Energy Efficiency Program

The EEAC recently released the latest updated proposal for the state’s 3-year energy efficiency plan, set to run from 2019-2021. Prior to the release of the EEAC’s final proposal, Solect Energy’s VP of Energy Solutions, John Mosher, wrote an article featured in the BBJ, outlining what he thought the most impactful initiatives would be in the interest of preserving Massachusetts’ status as a nationwide leader in energy efficiency measures.

While the rulings for the projected $2.65 billion dollar program don’t quite align with what we were hoping to see, they do include some important opportunities for the advancement of the Bay State’s energy profile. The most glaring difference between Mosher’s proposed changes and the EEAC’s final ruling, is the absence of a rebate program for storage deployment of any kind.

Instead, the EEAC presented a “technology agnostic” incentive program that will reward organizations for achieving peak demand reductions, regardless of how they are accomplished. The key here is the timing and risk associated for any organization looking to pursue a demand-reduction project, such as battery storage as a way of addressing their demand charges. For instance, while battery storage effectiveness is well documented, the EEAC has opted to put the impetus on the consumer to install a solution and achieve the demand reduction before rewarding them for pursuing a battery installation. This concept works in the sense that they will be rewarding for results, rather than action. However, it leaves business owners to shoulder the costs of the installation up front, while waiting to receive any assistance until after the the project has been proven successful. This does little to remove the primary barrier to entry, substantial upfront costs, in an emerging technology like energy storage. Perhaps once the parameters for “proving demand reduction” are outlined more clearly we will be able to forecast the programs efficacy more accurately, but for now very much is still left uncertain.

The structure of the program essentially revolves around customers responding to an “event call targeting condition” issued by “curtailment service providers” (CSPs). The benefit in this approach is that it allows a customer who installs battery storage to also implement other actions, such as powering down operating equipment, to further reduce their demand when the call is made. Overall, the best aspect of the EEAC’s updated plan, is that it encourages business owners to become more involved  with their energy profile, and invites them to be part of the solution for their communities’ energy demands. However, the ad hoc approach, undefined regulations, and frequency of “event calls” currently leave very much up for interpretation, and we are eager to see just how the program evolves leading up to its implementation.

Staying on Top of your Energy Consumption with Demand Monitoring

Gain insight into your energy use and manage your expenses with Demand Monitoring solutions

 

If you’re like me, I’m sure you have had those moments when your energy bill arrives and you find yourself saying “can that be right?” With all of the stifling heat this summer and HVAC systems working overtime to keep up, many building owners or their tenants are probably thinking the same thing. Well, it’s not a crazy question to ask.  Although usage accuracy is important for utilities, meters and other systems can malfunction and occasionally may result in over-billing.

So if you find yourself questioning a bill, there is now a way you can check to see if it really is accurate. Demand monitoring is an approach that has been gaining traction with many building owners. A demand monitoring system allows you to measure your building’s energy consumption. It can be customized based on your needs and building parameters, for example,  allowing building owners to measure the energy consumption for each tenant.

Another advantage applies to solar energy systems. A demand monitoring system can show you exactly what the solar energy system is producing and how much power you, or your tenants are using. In Massachusetts, under the SREC program, solar energy systems needed to be paired with the load of the building occupant; with a demand monitoring system it’s now easy to see what is happening.

Demand monitoring systems can also tell you how you are using your energy. They will be able to identify your peak energy usage. This is important because utilities assess “demand charges” based on these peak periods. Once you know the peak, you can take steps to better manage your load and flatten out your usage. This could also tell you if you might be a candidate for an energy storage system which can be charged during times of low usage and deployed during peak times.

The above chart shows a prime example of a solar array that produces most or all of the building’s mid-day consumption, but may not be reducing monthly peak demand charges. This system would be a perfect fit for a solar + storage solution that would store the extra energy produced during the day for use during the unaddressed peak periods.

Lastly, installing a demand monitoring system is relatively simple. It requires a data logger and installation of a few CT (Current Transformer) meters that measure the supply of current. Software systems can track the data and provide other options like dashboards and invoicing services. A reputable energy services company will typically offer demand monitoring services and the price is usually quite reasonable. So if you are still wondering about those energy bills, it might be worth taking a closer look at demand monitoring.