Athletic Facility Solar Success Stories

Athletic facilities have notoriously high operating costs, and don’t have a lot of flexibility to adjust their practices to save money going forward. From complex HVAC systems, to industrial scale lighting, these expansive facilities can be challenging to maintain throughout the volatile New England seasons. Furthermore, many of these facilities are non-profits whose operating margins are slim to begin with, making coping with the fluctuating energy premiums challenging at best. Luckily, many of these facilities also have large, open roofs, making them an ideal fit for a solar energy installation. Below we have highlighted a number of the successful partnerships we’ve formed with arenas, rinks, gyms, and more across New England.

 

 

Stonehill Athletic Building

Location: Easton, MA

System Size: 460 kW

Panels Installed: 1,518

Installation Date: January, 2015

Stonehill College has made a continued effort to bolster their sustainable practices over the last several years, with the first among them coming back in 2013, when they added a large solar canopy to help power the school as a whole. After seeing the impact it had on their energy expenses they looked to address the energy costs for one of the biggest draws on campus, their field house. 

 

Long Fellow Clubs

Location: Wayland, MA

System Size: 148 kW

Panels Installed: 564

Installation Date: December, 2014

Owners Laury Hammel and Myke Farricker wanted their business to be “as sustainable as possible,” while also being financially conscious. As a result they decided to take the PPA route to finance their installation, which allowed them to benefit from solar energy without having to make the upfront capital investment. The 148 kW system installed on the roof of the fitness club generates over 180,000 kWh of solar energy annually, covering at least 21% of the club’s electricity needs.

 

Pingree School

Location: South Hamilton, MA

System Size: 227 kW

Panels Installed: 770

Installation Date: March, 2013

The Pingree school has been an active member in its community since being founded in 1960, and is dedicated to demonstrating responsible and sustainable practices. The Johnson Ice Rink on their campus plays an important part in their athletic program and to the local community, however, the cost associated with running the facility is quite high. In fact, during the summer of 2011, a decision was made to shut down the rink during the summer partially due to the high cost of electricity. Once they realized that solar could solve this issue, they turned to Solect Energy to pursue a PPA installation. The 227 kW array on the roof of the ice rink has resulted in a 50% reduction in their energy costs, allowing Pingree to maintain year round operations of the rink.

 

Beverly Athletics

Location: Beverly, MA

System Size: 128 kW

Panels Installed: 320

Installation Date: December, 2017

Like most active business owners, Ed Soul, the owner of Beverly Athletic Club, was looking to pursue any avenue to bolster his company’s operations. Having seen the benefits of solar energy in his town, he decided to partnered with our team here at Solect Energy to install a 128 kilowatt (kW) solar energy system on the athletic center’s roof.  The solar array consists of 320 photovoltaic (PV) panels and is expected to produce 155,041 kilowatt hours (kwH) of energy annually. The power generated will cover 33 percent of the BAC’s energy needs, and is equivalent to the annual charging of 7,752 electric vehicles or 31,008,200 smart phones. It is projected that BAC will save approximately $233,000 over the course of 10 years.

 

 

Fore Kicks

Location: Norfolk, Marlborough, Taunton, MA

System Size: 888 kW

Panels Installed: 3600

Installation Date: May, 2012

With several expansive facilities and demanding lighting, heating, and HVAC systems Forekicks was faced with a myriad of challenging energy bills and wanted to avoid raising costs for their membership programs for fear of pricing out families in their communities. Forekicks began a commitment to energy efficient green operation across their family of facilities. Solar was the logical next step in their evolution, with their newest facility being built/oriented to maximize their north/south exposure. By installing three arrays across their facilities in Marlborough, Norfolk and Taunton, Fore Kicks add over 880 kW of solar to the roofs of their buildings, to join the energy-efficient lighting systems (LED is being explored) and HVAC systems, and on-site recycling programs. Fore Kicks was able to put their energy expenses in check, and keep their programs affordable.

 

Metrowest YMCA

Location: Framingham, MA

System Size: 144 kW

Panels Installed: 374

Installation Date: June, 2017

For more than 55 years, the MetroWest YMCA, has responded to community needs in the MetroWest area and made a significant impact throughout Framingham and the surrounding towns. MetroWest YMCA anticipates the array will provide up to 13 percent of its facility’s annual electricity, for a projected yearly savings of more than $10,000. The MetroWest YMCA had also been doing its part to become more environmentally sustainable by encouraging recycling, conserving energy with responsible use policies, and LED lighting initiatives. The addition of solar is a significant step forward in the organization’s sustainability commitment.

 

 

Clark Memorial YMCA

Location: Winchendon, MA

System Size: 275 kW

Panels Installed: 888

Installation Date: October, 2016

Like most nonprofits, The Clark Memorial YMCA is always looking for opportunities to better serve their members, and as with any large athletic facility their spending on energy was significant. Solar energy presented an opportunity for them to reduce their energy expenditures, and thanks to their relationship with PowerOptions, they had an easy avenue to install a solar array. After pursuing the opportunity the Clark YMCA installed two arrays totaling 275 kilowatt (kW) on the roof of its field house and main building in Winchendon, MA. The solar arrays are expected to cover over 80% of the facility’s annual electricity use, and save the organization over $18,000 a year.

 

Charles Moore Arena

Location: Orleans, MA

System Size: 345 kW

Panels Installed: 960

Installation Date: August, 2017

Charles Moore Arena (CMA), a nonprofit ice rink in Orleans, MA, faced the same challenges as many of its peers; high operating costs, with tight margins, and unpredictable conditions. Considering the high energy prices in Massachusetts, keeping an ice rink running at optimal levels during the sweltering summer months is no easy task. By collaborating with Solect Energy, CMA was able to install a 345 kilowatt (kW) rooftop solar system at the arena using a PPA financing model, which allowed them to avoid the upfront investment, while still reaping the benefits of solar. The installation will help stabilize and reduce their biggest operating outlay, as the array will cover 50% of their energy demands.

 

Considering Solar and Need a New Roof?

One of the most common barriers for commercial property owners who want to install a solar energy system is the age and condition of their roof. Minor repairs such as seams and flashing can easily be addressed, but many owners need more significant upgrades and some require complete replacements. But what if adding a solar energy system to your roof could help pay for roof upgrades, and in some cases an entire new roof?

Starting this fall, Massachusetts is introducing a new solar incentive program called Solar Massachusetts Renewable Target program (SMART) where building owners will now have the option to install “stand alone” projects where the energy is sold directly to their utility at a predetermined price for 20 years.  

This means property owners don’t have to find tenants or other off takers for the energy produced.  Also it eliminates the need for power purchase agreements and billing to get compensated for the energy produced. Under the current SREC program the incentive is paid quarterly and the value is not fixed but subject to the market pricing that changes quarterly. Under the new SMART program the incentive is included in the monthly tariff payment to the array owner by the utility and is fixed for 20 years! Also the “customer” for the power is an investment grade credit entity, your utility. The combination of an investment grade credit and fixed monthly payments has allowed solar developers to structure deals for property owners that include the costs of roof upgrades and even new roofs with the solar project.

Let’s take a closer look at how this works. Under the new incentive program, a standalone project essentially means that a solar energy provider is leasing your rooftop. The solar company will own the system and be responsible for operating and maintaining it, you are just leasing them your rooftop. Because the project’s “offtaker” is now the utility, this allows solar providers to secure better terms for the financing of their projects. In turn, this allows solar developers to give more options to building owners including ongoing lease payments, or in some cases, an entire upfront payment that could provide enough cash for a new roof.

The new SMART program will reward property owners for investing in solar with a fixed monthly incentive that is truly “bankable.” So, if you have been considering exploring the benefits of solar energy, or if your need a new roof on your building, the timing has never been better! Contact a qualified solar provider and they can work with you to better understand your options under the new SMART program.

 

Commercial, Industrial & Institutional Facilities are the Next Frontier for Energy Storage

Energy Storage Facilities

 

Game changing energy storage technologies will fundamentally alter the functionality of the electric supply system: What this means for energy consumers, and why commercial facilities should be considering it today.

As we consider the future of the built environment, one of the most dramatic changes will be the way we generate and consume electricity. The challenge to decarbonize our energy supply has created a myriad of opportunities for new ways to generate, manage and consume power. Over the last decade, clean energy technologies like solar and wind have been complimented by super-efficient technologies like LED lighting and new heating and cooling technologies, resulting in lower costs for consumers and fewer emissions. Energy storage is the critical third leg of this stool, the lynchpin that enables more rapid penetration of new efficiency technologies and clean energy generation.

Why energy storage is important

Because electric power cannot be stored, it requires the overbuilding of our energy systems with a vast amount of expensive, and often dirty, capacity waiting on the sidelines ready to be called upon during periods of peak demand. For example, a recent study by the Department of Energy Resources in Massachusetts calculates that the top 1% of peak energy demand for the state represents 10% of the overall supply costs and that the top 10% of peak demand represents 40% of total energy supply costs.[1] Energy storage gives grid operators much more control in managing their load. Batteries can be charged in periods of low demand and deployed when energy  is needed. It also allows energy resources to be located closer to where the energy is required, relieving congested nodes on the grid and reducing the need to upgrade distribution systems.

In recent years, as the world has begun to address the carbon intensity of electric power supplies, we have seen a significant deployment of clean energy generating sources. Much of this new capacity has come from solar and wind energy which are “intermittent” resources, meaning that they produce power dependent on the wind blowing and the sun shining.  At higher levels of penetration, intermittency can create additional burdens for managing the grid; not producing enough power when it’s needed or producing too much power when the grid can not accommodate it. A well known pattern of solar energy production is called the “duck curve” (see image below) where solar energy systems deliver maximum output during the middle of the day, but then trail off as the grid hits its peak in the evening. Energy storage can help to balance these intermittent resources and smooth out load problems like the duck curve.

The “Duck Curve:” Image from California Independent System Operator

Energy Storage Facilities

Another important benefit of energy storage is resiliency, as a battery system can allow a facility to continue operations during a power outage. This is especially important for critical infrastructure like hospitals and public safety facilities. Traditionally these facilities have often relied on diesel generators for backup power, but with the penetration of on-site solar, declining battery costs and the ability to avoid demand charges, storage is becoming an attractive and cost effective option to enhance resiliency.

With the expense of building a grid that needs to ramp-up on a moments notice to meet demand, and a growing amount of intermittent generation sources from solar and wind, the ability to store energy becomes much more urgent. Historically, batteries have been too expensive to displace peaking assets on the grid, but with the plummeting costs of batteries this is rapidly changing, and may happen sooner than many think.

Early Deployment at Utility Scale

In European countries that were early adopters of storage friendly policies, energy storage has seen robust market penetration. According to Energy Storage News, 300 Megawatt (MW)  hours of energy storage was installed in the EU in 2015 which grew to 700 MW hours installed in 2017. 60% of the total installed capacity is utility scale. These are larger projects that benefit from scale efficiencies and are often referred to as “front of the meter.” This means it is a stand alone project that feeds power directly into the grid. Commercial and Industrial (C&I) projects are often called “behind the meter” as they sit behind the meter at a facility and provide on-site energy with benefits going directly to the energy consumer.

The C&I market is expected to see explosive growth over the next five years

A recent study by Delta Energy and Environment predicted that by 2021 up to 210 MWs of energy storage would be installed annually in Germany and the UK for C&I markets; this would be ten times the 22 MWs installed in 2016.[2] Like Europe, the U.S. has seen initial market penetration at the utility scale. However, behind the meter systems are expected to see tremendous growth in the next few years. A report by Green Tech Media and the Energy Storage Association forecasts the U.S. C&I market to grow 15 times its current size in 5 years (by 2023) reaching 3.3 Gigawatts (GW) of new annual capacity. By 2019, it is expected that behind the meter projects (residential and C&I) will comprise 50% of the new capacity.[3]

Behind the boom: a closer look at the economics of commercial and industrial energy consumers

To understand why C&I facilities are expected to see such rapid rates of adoption we need to take a closer look at how C&I customers are charged for their energy. Typically utilities charge commercial customers in two different ways. Most well known are volumetric charges, i.e. how much energy is consumed over a period of time. This is calculated in terms of kilowatt hours (kWh).  However, because of the expense of managing peak demand, many utilities will also send economic signals that encourage consumers to “flatten” their load; i.e. avoiding dramatic energy surges that will trigger the need to call upon more expensive generating assets.

The most common way that utilities send these signals is through demand charges. Although these charges can vary in the way they are calculated, typically a utility will look at a consumer’s peak load each month for a short duration of time, usually a fifteen minute window. The demand charge is calculated by taking the peak usage for each month and multiplying it by a certain rate. Unlike energy consumption charges, demand charges look only at a snapshot in time, and thus are based on kilowatts (kW) as opposed to the volumetric charges which are based on kilowatt hours (kWh).

For example, a small manufacturing company may have a big order due at the end of the month and utilize all of its machinery in a short period of time, causing a spike in its energy consumption. Let’s say their typical load is 750 KW but during the end of month surge it ramps up to 1200 KW. The rate for demand charges can vary from zero to as high as $50+/KW. Let’s assume $40/KW. This would translate to a monthly charge of $48,000, just for that one spike in energy consumption. Typically demand charges are anywhere from 30%-70% of a customer’s bill.

Price signals justify commercial scale energy storage projects today

High demand charges are sending price signals that are accelerating the energy storage market. In looking to mitigate these charges, facility and energy managers are looking for ways to even-out their load profiles. At the same time, commercial energy storage systems have rapidly declined in price, making storage an attractive option today. In fact, according to a study by the Clean Energy Group and the National Renewable Energy Laboratory (NREL), installing an energy storage system makes economic sense for customers who are paying more than $15/kW in demand charges. Based on this threshold, NREL determined that energy storage systems would make economic sense (2-5 year payback) for 5 million commercial customers in the US.[4] As policy makers establish incentive programs for energy storage, the numbers will become even more compelling.

In another study, NREL looked at two specific case studies for commercial facilities to determine the potential value of an energy storage system. The first project was in Los Angeles, CA and looked at a storage system paired with photovoltaic (PV) solar energy, and a second project in Knoxville TN that only had a battery system. Based on the potential performance of a lithium ion battery system, both projects had a positive Net Present Value (NPV); $31,874 for the Los Angeles project and $60,731 for the project in Knoxville.[5]

Incentives for Energy Storage:

Like Europe and other global markets, the rate of penetration for energy storage is dependent not only on the underlying market conditions but also government policies to jump start the market. In Europe, first Italy, then Germany and then the UK each created rapid growth as they rolled out storage friendly policies.  In the U.S., early stage markets are driven by state policies with the leader being California where a rebate program called the Self Generation Incentive Program (SGIP) drove 45 MW of new installed storage capacity for the C&I market in 2017. More recently, New York, New Jersey and Massachusetts have all launched new storage incentive programs. Of course federal policies are also important and customers who co-locate storage with solar, will be able to take advantage of the 30% Investment Tax credit and accelerated depreciation.

Types of Energy Storage:

Energy storage can come in multiple forms. Systems can range from pumped hydro to compressed air systems. For commercial facilities, we have already seen the use of thermal energy storage where buildings are heated or cooled during off-peak hours when electric prices are cheaper. We have also seen the deployment of ice systems that exploit the same arbitrage opportunity. Flywheels have been deployed to help with frequency modulation on the grid and flow batteries have the potential for longer-term storage requirements. For electrical power and the demands of the C&I market, lithium-ion batteries are currently the technology of choice. These systems are produced by reliable OEMs, require little maintenance and are easily installed at a commercial facility. Their “energy profiles” match well with storing energy from the grid or a solar energy system and then deploying that energy over shorter period of time to mitigate the demand charge by “peak shaving”.

 

Energy Storage Facilities
An example of an installed DSS®Distributed Storage System ©2018 NEC Energy Solutions, Inc. – Used with Permission

 

Bringing intelligence to energy storage

As mentioned above, the preferred technology for C&I applications is a lithium ion battery. Although we are still seeing innovations in manufacturing that are driving down costs, the performance characteristics and longevity of lithium ion are well understood and predictable. However, a battery needs an operating system to tell it what do. This system needs to be sophisticated enough to understand when the facility load is at its peak and when to deploy its energy. Most commercial battery systems come with their own integration software or can be combined with other energy management software.

Over time, these systems will become increasingly sophisticated to factor in a variety of additional variables such as market pricing signals, time of use rates or even predictive models using weather, load and other data. This is called demand monitoring and many C&I customers are installing these software systems, even without storage, because it gives them in-depth insight into their energy load and the ability to control it. For example, they could sub-meter tenants or identify specific pieces of equipment that they wish to monitor in order to operate it more efficiently.

The Benefits of Pairing Solar and Storage

When combined with a solar energy system, energy storage essentially allows a facility to be self sufficient in that it can generate its own power, store it and use it as needed. However, although it is technically possible, the economics at this point do not favor disconnecting from the grid. The sizing requirements for a storage system large enough to be completely independent of the grid does not yet make economic sense in most market conditions. Instead, energy storage systems will be designed to lower costs through demand mitigation (reducing demand charges by reducing load spikes), arbitrage (for facilities with time of use rates) and back-up power that can keep facilities fully operating for a limited amount of time or a subset of critical systems for a longer period of time. Lastly, as policy makers continue to leverage the benefits of distributed generation and storage there are likely to be more opportunities for facilities to monetize their systems. This will give facility managers even more flexibility with their energy choices down the road.

Exploring the advantages of energy storage

Across the globe, policy makers are recognizing the benefits of energy storage and this is reflected in aggressive market forecasts. With large, complicated energy loads commercial, institutional and industrial facilities are ripe for storage deployment. In turn, the benefits to these entities go beyond cost savings giving them more control and optionality with their energy strategies, increasing their resiliency and helping them to achieve their sustainability goals.

However, for facility managers who are interested in pursuing these benefits the initial steps can be quite daunting. The best choice will be dependent on specific incentives, tariff structures and load profiles. If you think storage, or a combined solar and storage system might be a good fit for your facility, a reputable energy company should provide a basic assessment free of charge. That assessment should indicate the potential for savings. In-depth analysis is often done for a fee or a shared savings model. By understanding your options, you are taking the first step in lowering your bills and your carbon footprint while also building resiliency and gaining control of your energy future.

 

 

John Mosher is the vice president of energy solutions at Solect Energy in Hopkinton, MA. John leads Solect’s Energy Storage Division and he can be reached at jmosher@solect.com.

[1] Massachusetts Department of Energy Resources, State of Charge Report, https://www.mass.gov/service-details/energy-storage-study

[2]Jason Deigh, C&I Storage Expected to Grow Threefold…, Feb 17, 2017, Greentech Media: https://www.greentechmedia.com/articles/read/study-sees-big-ci-storage-potential-in-germany-and-u-k#gs.Xj35EQY

[3]Energy Storage Association & Greentech Media, US Energy Storage Monitor: 2017 Year in Review, March, 2018: http://www2.greentechmedia.com/ESM17YIR#gs.9T1PArk

[4]Joyce McLaren & Seth Mullendore, Identifying Potential Markets for Behind the Meter Energy Storage…, Clean Energy Group & National Renewable Energy Laboratory, August, 2017.

[5]DiOrio N, Dobos A, Janzou S. Economic Analysis Case Studies of Battery Energy Storage with SAM. National Renewable Energy Laboratory. https://www.nrel.gov/docs/fy16osti/64987.pdf. Published November 2015.

Energy Storage Systems: A Closer Look at the Newest Technology for Energy Management

There is a lot of buzz here in New England about energy storage and its potential in the commercial and industrial (C&I) sector. Working in tandem with a rooftop solar PV system, an energy storage system allows a facility to be nearly self sufficient: enabling it 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 enabling back-up power when needed.

These behind the meter energy storage systems are typically pre-configured, require little maintenance and are easily installed at a commercial facility. For the demands of the C&I market, lithium-ion batteries are currently the technology of choice. Their “energy profiles” match well with storing energy from the grid or a solar energy system and then deploying that energy over a shorter period of time. As is the case with any project, it is important that customers engage with a reputable vendor and installation partner.

Today we are going to show you what a C&I scale energy storage system looks like and how they are installed.

Energy storage batteries come in various sizes, and the best are scalable. For example, the schematic shows a fully contained unit, that can be scaled up from 85 kilowatt-hours to 510 kilowatt-hours of energy storage capacity, and between 30 kilowatts to 650 kilowatts of power capacity. Most commercial battery systems come with their own integration software or can be combined with other energy management software. The most sophisticated storage systems have been factory pre-configured and are optimized for rapid installation by qualified installation partners.

Typically, energy storage systems are located outside a facility. A concrete mounting pad is recommended. Site preparation includes minor excavation, pouring of a foundation and the positioning of conduits for power and communication connections. Wiring can be embedded into the concrete pad.

Depending on the size of the battery, either a crane or forklift can be used to position the battery. Typically the batteries are encased in secure, and tamper-resistant NEMA rated housing; security fencing may be required but that will be dependent on local codes. Finally, the battery can be secured with concrete anchors after installation.

A qualified installer can complete the electrical connections. These include between the battery and PCS (power conversion system), and the main and auxiliary power connections to the facility’s electrical panels. In addition, there will need to be connections for the meters and for communications such as Ethernet LAN for remote access and control. In some case cellular modems are used if a LAN is not available (security or remote). Installation of appropriate equipment grounding will also be required. A typical PV system will be located behind the meter and connected to the facilities main distribution panel. A typical energy storage system will be connected to a sub-panel.

One of the final steps, that is often dependent on local utility requirements, would be a grid interconnect validation and test witnessing. The last step is to conduct a system start up, commissioning and test.

Today’s battery systems are self contained and easy to site. Energy storage is an ideal complement to a solar energy system, giving greater control to property owners and facility managers to reduce their energy costs, increase their buildings resiliency and lower their carbon footprints.

An Open Letter: To the EEAC on the Future of Energy Storage in Massachusetts

 

Dear Commissioner Judson and Members of the EEAC:

 

I am writing on behalf of Solect Energy regarding the 2019-2021 Three Year Energy Efficiency Plan. With more than 80 MWs installed and over 400 customers, Solect Energy is the largest solar energy company in the Commonwealth focused exclusively on the commercial scale market. This means we have worked with hundreds of businesses, municipalities, schools, housing projects and other institutions throughout the state to help them lower their energy costs and their carbon footprints by installing solar energy systems.

As we worked with many of our customers we observed that most of them were paying extremely high demand charges and capacity charges, but had limited ability to pursue active demand management (ADM) practices to mitigate these costs. In turn, these market fundamentals convinced us to start an energy storage division. We strongly believe that energy storage paired with solar is the most cost effective way to reduce expensive demand charges for C&I consumers. We also believe that energy storage will improve the economics and further accelerate the deployment of solar energy in the C&I sector. Lastly, assuming that the EDCs design their rate structures to send price signals, via higher demand charges, to mitigate regional and nodal congestion on the grid, behind the meter storage (BTM) is likely the most efficient way to relieve these expensive congestion challenges, lowering peak emissions and costs for all consumers across the grid.

Over the past year or so, we have performed over one-hundred energy storage assessments for our customers. For most of them, the economic analysis shows a payback that would normally be very attractive. (A recent study by the National Renewable Energy Laboratory showed that energy storage offered compelling payback windows for 189,000 commercial customers in Massachusetts — those paying more than $15 per kilowatt). Yet, with the exception of projects that have received demonstration grants from the state, not a single customer has decided to install a system.

The reasons for this are obvious and are confirmed by our conversations with our customers: there is too much risk. As was originally the case with solar, and also remains true for energy efficiency, good economics are often not enough to start a market based on unfamiliar technologies and mobilize adoption from consumers. Although BTM storage technology is well proven and has a large installed base in California and other parts of the world, consumers in Massachusetts are still unfamiliar with the entire approach. Therefore, even though many projects will pencil today, customers are waiting on the sidelines. We strongly believe that enhancing price signals and defraying upfront capital costs through an energy storage rebate program is exactly what is needed to get these consumers off the sidelines and to start building projects. We are aware of and fully support a recent proposal crafted by the Northeast Clean Energy Council (NECEC) and other clean energy advocates called MOR Storage (Massachusetts Offers Rebates for Storage), modeled in part on the successful California Self Generation Incentive Program (SGIP). Based on our analysis and conversations with our customers, we know that this incentive will be enough to get them across the tipping point to begin greenlighting projects.

We urge the EEAC and the Program Administrators to increase funding available for commercial and industrial energy storage applications in the finalized three-year plans, likely through the use dedicated or enhanced ADM offerings. These programs should be increased to at least $25M in participant incentives per year for the 2019-2021 Plan to provide a pool of funding commensurate with the robust opportunity for energy storage adoption in the C&I sector across the Commonwealth, including and especially for solar+storage retrofits of existing SREC I and SREC II systems.

We understand that the traditional cost benefit analysis performed by the Program Administrators may not be ideally suited for assessing the benefits of energy storage and other ADM measures, and we would strongly urge that these analyses be updated to reflect the differentiated characteristics of energy storage savings (kW vs. kWh) and current economics of our energy markets in the Commonwealth. Energy storage can and should be part of the 2019-2021 plan; we speak from direct experience when we say that an energy storage rebate program is the single most important incentive for the short-term for the deployment of storage and its associated benefits.

 

Respectfully,

John Mosher

Solect Energy

Hopkinton, MA

 

The Lowest Cost Energy Choice for Property Owners

 

Like any business, owners of commercial properties are constantly faced with choices  regarding capital investment options that will improve a building’s value and reduce operating costs. Investing in energy systems can offer some of the most compelling business cases due to incentives offered by the federal and state governments. However, to take full advantage of those incentives they must consider the entire life of the asset, and solar energy systems are meant for 20+ years of operation.

The federal government offers tax benefits for solar energy assets that when monetized can pay for more than 45% of a solar energy system. In addition the Commonwealth is transitioning into a new incentive program, the Solar Massachusetts Renewable Target program (SMART) which is projected to start September 2018. The new program provides two significant benefits for building owners. First, the new incentive is calculated upon entering the program and paid out monthly at a fixed price by the local utility. This is by far the most “bankable” incentive offered to date to Massachusetts business owners because the “offtaker” is your local utility, considered by most banks and investors as an investment grade credit rating. Second, you no longer need to tie the system to the building’s energy load. A building owner can now take advantage of solar energy to produce revenue, even if the building uses a small amount of energy.

The SMART program will allow property owners to look at asset investments in terms of IRR instead of ROI, which is a  more holistic assessment looking at capital costs and energy savings over the life of the project. Another measure, what one pays for energy over the life cycle of the project, is the levelized cost of energy (LCOE). LCOE factors in capital expenses and projected energy savings to give an “apples to apples” comparison of different energy options.

For example, a typical property owner today pays anywhere from $.13 to $.23 per kWh to their local utility, plus fixed and Demand charges (which are measured and billed per KW). A solar energy system, including the costs of the system,  would likely be closer to $.01/KwH; in some cases, the number may even be negative, meaning the customer is being paid for every kWh produced! Let’s take a simple example. If you use on average 25,000 kWhs per month at $.15 per kWh, your energy cost for year one is $45,000, and is $900,000 over twenty years assuming no escalation! The same solar energy system with a LCOE of $.01 per kWh will cost only $3000 for year one, and $60,000 over twenty years. Is there a better long term hedge against rising energy costs?

The new SMART program  is great news for property owners who are looking to lower their energy costs and enhance the value of their assets. More predictability, lower risk, investment grade customers all combine to make solar energy systems under the new SMART program an attractive investment option for building owners, and a long term hedge against rising energy costs. If you are considering building enhancements, a qualified solar energy company can help you explore your options and walk you through the analysis for your specific situation. With the ability to enhance your property’s value, generate additional revenue and lower energy costs, it’s definitely worth a look.

Understanding Different Benefits of the Two Ways to go Solar Under the SMART Program

 

Solar energy is about to get a lot more attractive for commercial property owners in Massachusetts. Under the state’s new solar energy incentive program (known by its acronym SMART) building owners will now have the option to build “stand alone” solar energy projects on their roofs.

 

To better understand this new option it’s important to also understand how traditional “behind the meter” (BTM) systems work. A “behind the meter” system means that the solar energy system is paired with the energy load of that building, supplying the building tenant directly with power. A BTM solar system allows an owner to use the energy generated by their solar system first, before having to use energy supplied from the grid, directly reducing the amount of energy purchased.  As energy rates continue to rise over time, as they traditionally have, the owner’s energy savings from avoided electricity costs increases. This model is ideal for owner occupied buildings that use lots of energy, but is more challenging for tenant occupied buildings since it requires the building owner to enter into individual power purchase agreements with each tenant/additional meter.

 

A stand alone system sits “in front” of the meter and feeds power directly into the grid, as opposed to  using it on-site. In the newly proposed SMART program, owners of stand alone systems will be allowed to sell 100% of the energy generated directly to the utility at a fixed price for 20 years. The solar energy system is no longer tied to the load of the building and this allows the property owner to turn their roof into an additional revenue generating asset – regardless of whether the building is occupied or not. The long-term nature of the incentive makes it easier to finance the system and the owner can benefit from federal tax incentives such as the 30% Investment Tax Credit and accelerated depreciation. In locations where Property Assessed Clean Energy (PACE) financing is approved, building owners may be able to take advantage of low-interest PACE loans where clean energy projects are financed at low rates and then paid back via property tax bills, typically over the useful life of the asset.

 

The chart below shows the different revenue streams for each kind of project:

 

Cash Flows and Benefits of Behind the Meter Vs. Stand Alone Solar Energy Systems
Behind the Meter 200KW System Stand Alone 200KW System
Year 1 Savings/Revenue $60,600 $60,600
Lifetime Savings/Revenue $1,566,000 $1,390,000
Year 1 Return on Investment 66.5% 66.5%
Annual Return on Investment (Life of Project) 15.3% 14%
Financial Considerations Slightly higher returns May be easier to finance
Practical Considerations Needs to be tied to on-site energy load Can be independent of on-site energy load
Benefits Energy savings go to owner of meter for the next  20 years 100% of benefit paid  in cash directly to system owner

*Above financial figures are estimates based on a series of assumptions and will vary slightly depending on utility zone, current rate of electricity and program application date.

 

There are many factors that will ultimately drive the decision for the best way to site an energy solar system. Speaking with an experienced commercial solar provider will help you to determine which model will be the better investment based on your unique circumstances and and financial goals.  Regardless of whether you move forward with a stand-alone or behind the meter system, each option offers property owners the ability to directly participate in the benefits of going solar, while also adding a long-term asset to their building.

Solar Powered Manufacturing Recap

 

The manufacturing industry has faced its fair share of challenges in the United States. As the global economy has driven more and more facets of the industry overseas where overhead is less expensive, and regulatory restrictions are less severe – allowing for larger margins and easier operation. However, many companies have remained dedicated to maintaining their operations on American soil, delivering quality products while providing careers for millions across the country.

 

These manufacturers face stiff opposition from their counterparts overseas to remain competitive in spite of the inherent challenges associated with operating stateside. Energy costs generally account for a large portion of manufacturers’ overhead, and until recently were an insurmountable obstacle for these business.

 

Today, solar energy presents the perfect complement to the operational hurdles faced by manufacturers, allowing them to leverage and monetize their buildings roof space, while significantly reducing their energy costs. Solar delivers less expensive clean energy during peak demand periods throughout the day, making bills more predictable and saving businesses money everyday for the 20+ year life of the array.

 

Solect has helped dozens of manufacturers throughout New England turn the challenge of their energy costs into an opportunity. The most recent of which, was Accurounds, a precision manufacturer in Southeastern Massachusetts who is also a leader in helping to support educational opportunities for the skilled workers needed to keep the industry running. On April, 26th Solect held a  ribbon cutting ceremony to celebrate their installation which was held in conjunction with a STEM education and business event that demonstrated the progress and inter dependencies of the state’s economic, education and clean energy initiatives.

 

While Accurounds is the most recent example of a local manufacturer taking advantage of solar energy, Solect has partnered with several other manufacturing  businesses to help them take control of their energy costs with solar.

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accurounds-solar-arrayAccurounds

Location: Avon, MA

System Size: 162 kW

Panels Installed: 405

Installation Date: January, 2018

AccuRounds, founded in 1976, is a leader in Advanced Manufacturing. They machine precision mechanical components such as shafts, pins and bushings for a variety of industries including medical, aerospace, defense, oil and gas, and emerging technology. The company’s 162 kilowatt (kW) rooftop solar array is comprised of 405 photovoltaic (PV) panels and is projected to generate 187,000 kilowatt hours (kWh) of energy annually. It is estimated that the array will cover approximately 18% of the manufacturer’s energy needs, and is expected to generate $460,000 in savings over the life of the array.

 

north-atlantic-co-solar-manufacturingNorth Atlantic Corporation

Location: Somerset, MA

System Size: 1,551 kW

Panels Installed: 4,250

Installation Date: October, 2016

North Atlantic Corp (NAC) is one of the largest millwork distributors and custom manufacturer of windows, doors, kitchens and stairs to the residential and commercial markets in New England. North Atlantic Corp installed a 1.55 MW array that covers up to 90% of the company’s energy costs, tremendously reducing their monthly energy bill. The benefits are palpable, as NAC’s savings help them pay for their investment in a new building and more. Factor in the avoided instability and price hikes of the energy market and the array is working for North Atlantic Corp on a number of levels.

hyde-tools-solar-manufacturingHyde Tools

Location: Southbridge, MA

System Size: 658 kW

Panels Installed: 1621

Installation Date: August, 2015 & 2017

Established in Southbridge, MA over 100 years ago, Hyde Tools has grown from a cutlery manufacturer to a manufacturer of hand tools for remodeling and home repair. With the installation of their 350 kw array in 2015, Hyde Tools offset 13% of its annual electricity costs, saving over $180,000 per year. The solar savings have allowed Hyde to keep manufacturing jobs in Massachusetts, and were so significant they went on to install a second array, nearly doubling their production and savings numbers.

 

Chemetal rooftop commercial solarChemetal

Location: Easthampton, MA

System Size: 201 kW

Panels Installed: 560

Installation Date: June, 2017

Chemetal is one of the world’s largest sources of metal designs and laminates for commercial and residential building projects. The 50 year-old, family-owned business has a strong commitment to green practices. Having recently doubled the size of their facility they recognized adding solar to their new roof as a real opportunity to offset the new operating costs. With their solar installation, they save approximately $25,000 annually on their electricity bill.

 

swiss-turn-solar-manufacturingSwissturn USA

Location: Oxford, MA

System Size: 135 kW

Panels Installed: 451

Installation Date: January, 2015

Swissturn/USA is a family-owned manufacturer of fine-precision metal and plastic components located in Oxford, MA. The company employs 50 high-tech employees. The solar energy system reduces Swissturn’s electricity costs by up to 30 percent annually, saving the company up to $20,000 each year. In addition, Swissturn is able to generate significant additional revenue annually through the SREC incentive program.

 

Fourstar Connections SolarFoustar

Location: Hudson, MA

System Size: 240 kW

Panels Installed: 330

Installation Date: November, 2011

Fourstar Connections is a contract manufacturing firm based in Hudson, MA. Fourstar Connections was founded in 1986 as a cable assembly shop, but over the years grew in volume and added more capabilities to the product mix. Fourstar Connections enjoys significant electricity cost savings through their solar system. Additionally, the company is also able to take advantage of state and federal tax incentives, including SRECs.

 

WILEVCO rooftop solar energyWilevco

Location: Billerica, MA

System Size: 82 kW

Panels Installed: 350

Installation Date: December, 2012

Wilevco has been building and perfecting innovative, quality machinery for the Food Processing Industry for over 50 years! They offer equipment used in three distinct areas: spray application of coatings, mixing of liquid batters, and chilling of liquids and slurries. The system has offset approximately one-third of the building’s energy costs, while also allowing WILEVCO to benefit from state and federal tax incentives, and the sale of Solar Renewable Energy Credits (SRECs).

 

Old Time Sports

Location: Salisbury, MA

System Size: 175 kW

Panels Installed: 594

Installation Date: March, 2014

Old Time Sports is a family-owned apparel company located on the North Shore of Massachusetts. The company is an NHL licensee, providing apparel to sporting teams across North America. The system covers 100 percent of the company’s annual electricity needs, generating up to $70,000 a year in environmentally friendly electricity.

 

Yeuell Nameplate Rooftop SolarYuell Nameplate

Location: Woburn, MA

System Size: 261 kW

Panels Installed: 656

Installation Date: Installation Date: October, 2017

Yeuell Nameplate & Label is a manufacturer of custom nameplates, labels and decals who has been in business since 1913 and supplies product identification systems to companies worldwide. The 261 kW array is big enough to cover 50% of Yeuell’s energy costs on an annual basis. Additionally, the company is also able to take advantage of state and federal tax incentives, including SRECs which will provide additional revenue for years to come!

 

Mass Tank Solar PowerMass Tank

Location: Middleborough, MA

System Size: 457 kW

Panels Installed: 1,512

Installation Date: December, 2015

Mass Tank is the largest steel tank manufacturer in New England, and combines their ninety-year fabrication experience with their certified inspection staff to deliver solutions for any tank project. Under a long-term lease agreement, Mass Tank will receive annual lease payments for the use of their roof, from investor and array owner, IGS. As a result, Mass Tank gains an additional source of revenue for a twenty-year period and also allows Middleborough businesses and residents to benefit from adding local solar energy to the supply mix.