A Sunny Future for Local Governments
The time has never been better for local governments to stabilize long-term
electricity prices and supply, and to reduce future fossil fuel price risks
for municipal facilities. A combination of incentives, including the California
Energy Commission's (CEC) emerging renewable technologies buy-down rebate,
recent political support for energy alternatives, and grants from municipal
utilities and other organizations has helped local governments find renewable
energy to be a cost-effective and smart investment.
Santa Cruz
In July, the City of Santa Cruz leaped into the solar age when it installed
a 25-kilowatt photovoltaic (PV) system on the City Hall annex. The system
provides enough electricity to power four homes or about 7% of the power
used in the annex. The purchase was made possible by the CEC's $4,500/kilowatt
(kW) rebate – which covered nearly half the cost of the $133,000 system – and
a Palo Alto Municipal Utility grant.
"The city and City Council are basically interested in moving forward
with renewable power wherever we can," said Mary Arman, a Santa Cruz
Public Works analyst, in the Santa Cruz Sentinel.
To encourage solar energy citywide, the City has also lowered permit
fees for solar equipment – resulting in seven new requests for permits
and a total of nine permits for 2001.
San Francisco
San Francisco is taking steps toward a future with distributed, clean
power. Proposition B, a $100 million revenue bond slated for the November
ballot, proposes 10 MW of solar panels on city facilities and 30 MW of
wind power. Because the City spent $7 million on electricity purchases
in FY 1998-99 and $39 million in FY 2000-01, the need for energy independence
and price stabilization is recognized. This kind of investment in renewable
energy technologies will act as a mechanism for local economic development
by creating jobs, generating income, and likely attracting a solar factory
to San Francisco thus creating a new, clean industrial base.
If passed, Prop B will stimulate the industry by increasing demand and
encouraging investment in new manufacturing and assembly facilities. For
more information on Prop B, visit http://www.votesolar.org.
Finding Savings on the Roof
Local governments are in a unique position to demonstrate the effectiveness
of distributed generation technologies to the private sector, and encourage
and facilitate their widespread use. As seen in Santa Cruz, local governments
can streamline or incentivize permitting of renewable systems; they can
also enact solar access ordinances, and even require the installation of
conservation measures and distributed energy technologies in new construction.
Furthermore, as large energy users, local governments have the ability
to stimulate the renewable energy industry and alleviate much of the strain
on California's energy grid.
An October 2000 study by the US Department of Energy's National Renewable
Energy Laboratory (NREL) confirms that local governments have the potential
to demonstrate the benefits of solar-electric rooftops. The study found
that 200 megawatts (MW) of rooftop PV generation could be accommodated
on buildings owned by California's 475 cities and 58 counties, with 1500
MW more on schools. These figures do not address sites with perhaps greater
PV potential ø parking lots. The study concludes these systems can break
even annually when using bulk purchasing and low-interest financing.
The NREL study looked closely at the City of San Jose, with an estimated
two million square feet of municipal rooftop space. The study determined
that the city could saturate their available rooftop capacity with six
megawatts of solar rooftop (assuming that only 40% of rooftop area is available
for solar electric use).
At a system-installed cost of $5 per watt, the City's investment would
be $15 million (one-half of the cost bought down by the California Energy
Commission). With 7% municipal financing over 30 years, the annual payment
is $1.2 million but the energy cost savings would exceed $1.43 million,
for a net saving of $230,000 per year.
Perhaps the most amazing thing about these figures is that they were
calculated using pre-2001 utility rate increases. Even greater savings
should be realized now.
Overcoming Cost Barriers
However, cost may still remain an impediment to installing solar-power
and renewable energy systems for some municipalities. The Local Government
Commission (LGC) is addressing this need through a grant with the CEC to
make renewable energy more affordable and accessible to local governments
than ever before.
Through the Stimulating Public-sector Investment in Renewable Energy
(SPIRE) program, the LGC is working with the League of California Cities,
California State Association of Counties, Regional Council of Rural Counties,
and California Special Districts Association to provide financing, procurement,
and installation assistance for the purchase of renewable energy systems.
Low-interest financing and aggregated purchasing of solar photovoltaic,
solar thermal, small wind turbines, and fuel cell systems will lower the
price of these systems considerably.
Combined with the CEC's emerging renewable buy-down rebate, purchase
and installation of distributed generation systems will be a cost-effective
option for local governments wishing to stabilize long-term prices and
supply.
The program aims to mobilize local governments to reduce peak load demand
from California's electric grid by implementing clean, distributed energy
generation and developing local support for clean energy alternatives that:
- Reduce local, regional and global air emissions
- Demonstrate the reliability of renewable generation
- Guide and attract economic development
- Set an example of environmental stewardship
- Ensure reliability for constituents, and
- Protect constituents from high electricity prices.
A financing and procurement assistance packet will be available in October
to help guide local officials through the process of purchasing distributed
generation systems.
The LGC is partnering with the National Photovoltaic Construction Standards
and Certification Partnership and the US Department of Energy's Million
Solar Roofs Initiative to provide regional workshops for local officials
beginning in Fall 2001. The workshops will focus on design features, safety
and quality, and may include the on-site installation of a system which
will prepare participants for installation projects in their jurisdictions.
For more information about the SPIRE program or copies of the NREL study,
contact the LGC's Pat Stoner at pstoner@lgc.org or
(916) 448-1198 x309.
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