OPC Solar Feasibility Summary

8/19/2019 OPC Solar Feasibility Summary

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Solar Feasibility Report

Oakbrooke

Professional Center

3/11/2016

Adrian Wos



Introduction

Oakbrooke Professional Center (OPC) is ideally positioned for solar energy generation. This is a

non-biased overview regarding the feasibility of a solar array installation. Conservative practices

and estimates are used to give a worst-case scenario for electricity generation, installation costs,

and payback period.

Why Solar?

OPC common areas consume approximately 80,000 kWh of

electricity each year. This resulted in a cost of $8,700 in the year

2014. This number will go up as electricity rates increase ~4% each

year. OPC’s low shading and generous roof space will allow the

installation of a solar array with a 12kW capacity, if not more. A

12kW system, on average, would generate 17.2% of OPC’s common

area electrical demand. Decreasing equipment costs, generous

federal rebates, and increasing electricity costs make 2016 an

excellent year for solar energy installation. Furthermore, the

presence of green energy technology can increase the resale value of

individual OPC suites.

Setup

OPC’s roof is clear of any shading, other than that given off

by AC units and the “tower” on the south side. Placing solar

panels at the North end of the roof at an elevation equal to

knee walls should prevent any shading on the solar panels.

The panels should be mounted at a 35° angle to maximize

productivity throughout the year. A detailed structural

analysis has to be conducted (usually done by solar installer)

to confirm that the roof can support the weight of the panelsand racking. Placing the panels on the North side will also

allow close connection to the electric room. The ~93 m2 of

available space would allow at least 48 250w panels for a

total of 12kW. Use of other parts of the roof could increase

the maximum capacity to approximately 20kW.



Electricity Production

Analysis of meteorological data provided by the National

Renewable Energy Laboratory (NREL) gives an accurate

estimate of solar energy reaching Chesapeake. The closestdata collection facility is NAS OCEANA, which will

experience very similar conditions to Chesapeake. The lower

margin of solar energy (9% lower than average) was used to

give a conservative estimate.

The graph to the right shows monthly energy production

from a 12kW array. This takes into account inefficiencies

associated with the panels, inverter and wiring. Winter

months will produce less energy than summer months

because of the sun’s intensity and cloud coverage. OPC will

generally use more electricity in the summer because of air

conditioning loads.

In the first year, the solar array will generate a total of

~15,161 kWh, corresponding to $1,705 of savings. Each

subsequent year will produce slightly less energy because the

panels themselves will denature each year (By year 25, they

will produce ~80% of their original energy). On the other

hand, yearly electricity price increases will overcome the yearly degradation of the solar panels. The below graph

indicates yearly utility bill savings.

0

200

400

600

800

1000

1200

1400

1600

1800

J a n u a r y

F e b r u a r y

M a r c h

A p r i l

M a y

J u n e

J u l y

A u g u s t

S e p t e m b e r

O c t o b e r

N o v e m b e r

D e c e m b e r

k W h

Monthly Electricity

Generation

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Lifetime Yearly Energy Savings



Installation

A certified installer should be contacted if the board of

directors chooses solar energy. They will handle

structural integrity analysis, equipment

sourcing/installation, electrician approval, city and

utility permits, maintenance, and connection to

Dominion’s electrical grid. By nature, solar arrays are

not in need of maintenance. However, the electric

inverter should be examined every few years to prevent

premature failures. Since the maintenance is very rare

and easy, the installer will either give a warranty or

include future maintenance services in the initial

contract price.

The estimated quote given by an installer is $37,080.

This is based on a 2015 report issued by NREL

regarding average national prices for a comparable

array size.1 The graph to the left shows a breakdown of

the costs associated with the quote. Knowledge of

expenses is valuable when negotiating with installers.

Fed. ITC 2016 2017 2018 2019 2020 2021 2022Costs

covered30% 30% 30% 30% 26% 22% 10%

Policy

Solar installers should be familiar with any specific city/state codes for solar construction. There

are also a few state and federal policies which incentivize renewable energy. The Business Energy

Investment Tax Credit (ITC) is the most useful policy as it will cover 30% of all solar energy costs

as long as the construction begins before 2020, as shown in the table above. 2 This will bring the

cost down to $25,956. Net Metering policy guarantees that local utilities must purchase any excesspower generated from renewable energy sources at retail prices.3 Finally, Renewable Energy

Certificates will be awarded to OPC for every kWh of energy generated. These can then be

auctioned off to utilities from all over the state. Utility companies purchase these credits in order

to claim that they use renewable energy to meet a percentage of energy demand (in Virginia,

renewable energy portfolio standards are voluntary rather than mandatory). The sale of these

RECs will not be factored into this report’s financial analysis.

$8,400

$3,480

$1,440

$2,400

$2,400

$960

$3,960

$1,320

$4,320

$3,840

$4,560

0

5000

10000

15000

20000

25000

30000

35000

40000

Breakdown of Installer

Quote

Profit

Overhead

Customer

Acquisition

Permitting fee +

Labor

Installation Labor

Equipment Sales

Tax

Supply Chain

Costs

Elec. Equip. (Wire,

switches, etc.)

Racking

Inverter

Solar Panels

1. http://www.nrel.gov/docs/fy15osti/64746.pdf

2. http://programs.dsireusa.org/system/program/detail/658

3. http://programs.dsireusa.org/system/program/detail/40



$(30,000)

$(20,000)

$(10,000)

$- $10,000

$20,000

$30,000

$40,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Lifecycle Cumulative Cash Flow

Financial Bottom Line

Predicted Installer Quote $ 37,080

Cost after Tax Credit $ 25,956

Payback Period 13 Years

Average Yearly Savings $ 2,468

Profit Over 25 Year Lifetime $ 34,015

Economic Analysis

A 12kW solar array installation has a payback period of just under 13 years. Selection of solar

panels and electronics can have a very positive impact in regards to lowering initial costs and

increasing yearly production. This analysis also assumes that the inverter will break in the 13 th

year. Over the 25 year minimum lifetime of the solar panels, OPC would see a profit of $34,015.

There are several factors which can lower this payback period. This analysis assumed electricity

rate increases of 4%, when the average is closer to 4.5%. If Virginia passes legislature for

mandatory renewable energy generation percentages, as other states have done, then the RECs will become more valuable and can cut down payback period by approximately one year. REC sale

price was not factored into this analysis at all. The estimate for total installation price was based

on data for residential 5kW arrays. Due to economies of scale, a 12kW+ array should result in a

slightly lower $/kW ratio.

Conclusions

A solar array installation at OPC will have a realistic payback period of 9-13 years and a lifeexpectancy of at least 25 years. This would result in a total profit of at least $34,000. Most solar

installers will provide a free quote with information regarding yearly generation and payback

period. The extension of the 30% Federal Business Energy Investment Tax Credit into 2019 gives

over 3 years for decision-making. Future years will most likely see a slight decrease in equipment

costs, but labor and other expenses will most likely stay the same. Additional state incentives are

unlikely as the energy committee is mostly staffed by former Dominion employees.



Appendix A

Cumulative Cash FlowYear Array Cost ITC kWh Elec. Rate Bill Savings Cash Flow Cum. Cash Flow

0 $ (37,080) $ 11,124 15161 $ 0.11 $ 1,656 $ (24,300) $ (24,300)

1 15040 $ 0.11 $ 1,708 $ 1,708 $ (22,592)

2 14919 $ 0.12 $ 1,762 $ 1,762 $ (20,830)

3 14800 $ 0.12 $ 1,818 $ 1,818 $ (19,012)

4 14682 $ 0.13 $ 1,876 $ 1,876 $ (17,137)

5 14564 $ 0.13 $ 1,935 $ 1,935 $ (15,202)

6 14448 $ 0.14 $ 1,996 $ 1,996 $ (13,205)

7 14332 $ 0.14 $ 2,060 $ 2,060 $ (11,146)

8 14218 $ 0.15 $ 2,125 $ 2,125 $ (9,021)9 14104 $ 0.16 $ 2,192 $ 2,192 $ (6,829)

10 13991 $ 0.16 $ 2,262 $ 2,262 $ (4,567)

11 13879 $ 0.17 $ 2,333 $ 2,333 $ (2,234)

12 13768 $ 0.17 $ 2,407 $ 2,407 $ 173

13 $ (1,740) 13658 $ 0.18 $ 2,483 $ 743 $ 916

14 13549 $ 0.19 $ 2,562 $ 2,562 $ 3,478

15 13440 $ 0.20 $ 2,643 $ 2,643 $ 6,121

16 13333 $ 0.20 $ 2,727 $ 2,727 $ 8,848

17 13226 $ 0.21 $ 2,813 $ 2,813 $ 11,662

18 13120 $ 0.22 $ 2,902 $ 2,902 $ 14,564

19 13015 $ 0.23 $ 2,994 $ 2,994 $ 17,558

20 12911 $ 0.24 $ 3,089 $ 3,089 $ 20,648

21 12808 $ 0.25 $ 3,187 $ 3,187 $ 23,835

22 12705 $ 0.26 $ 3,288 $ 3,288 $ 27,123

23 12604 $ 0.27 $ 3,392 $ 3,392 $ 30,515

24 12503 $ 0.28 $ 3,500 $ 3,500 $ 34,015

OPC Solar Feasibility Summary

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