Dylan Pappas SBE Capstone Final Paper Solarizing the University of Florida
Table of Contents 1. Problem Statement 2. H ypothesis 3. Solar Energy a. Solar Economics and Feasibility 4. My Capstone a. Duke Energy & REC Solar 5. Why Solar Energy 6. Helioscope 7. Buildings/Number of Panels/Total kW 8. UF Solar Examples a. Reitz Union b. Commuter Lot c. Library West d. Rinker Hall e. Jennings Dorms 9. Tax Documentation/Non Profit Status a. IRS Document b. Sizing & Cost Breakdown 10. Lease/For Profit Breakdown a. Sizing & Cost B reakdown b. MACRS Tax Depreciation
c. 30% Federal Tax Incentive 11. Florida Lease Ruling 12. UF Carbon Neutral 13. Duke Energy and the Future 14. Why Carbon Is a Problem a. EPA Carbon Offset 15. Citations giving me the resources ne cessary to complete my thesis. I look forward to years of success with Power Production Management in the Solar
Problem Statement The University of Florida currently has a con tract with Duke energy where it receives about 470,000,000 kWh of mostly nonrenewable (coal and natural gas) energy on an annual basis. This means that the University spends over 40 million dollars to run the scho ol every year, paying around 10 8 cent a kWh (depending on the building) Coal, which is a commonly used ene rgy source for Duke energy, creates byproducts like Sulfur dioxides and Nitrogen Oxides. These chemicals are incredibly harmful to the environment and have caused undoubtable damage to the environment. Over the past decade natural gas, a fossil fuel, has b ecome very cheap and is slowly phasing out coa l as an energy source. Though the burning of natural ga s is far less harmful to the environment than coal, the largest concern with the fossil fuel is the process by which it is drilled for and ultimately extracted The University of Florida has set a carbon neutral goal for itself by 2025, and though the school has taken some steps to further the initiative it is a long way off rbon footprint is to reduce energy consumption and change from non renewable energy to renewable sources. Hypothesis University money while also improving its carbon footprint over the lifespan of the
Solar Energy This very simple and reliable form of energy production has been around for over 40 years and has become incredibly cheap in the past decade. In 2008, it was common for a contractor to charge around $8 a watt fo r a solar project, but today it can be as low as $1.80 in Florida In addition, the panels that are used today have the highest efficiency rating in recorded history for commercial PV solar production and as well as very reliable manufacture warranties tha t last 25 years. With no moving parts and little to be maintained, solar is a highly desirable energy source for those looking to improve their carbon footprint as well as save money on energy. Luckily PV solar technology has been around for a very long ti me and the data backing the technology is incredibly reliable. Article on Solar Economic and P roduction F easibility In the Journal of Renewable and Sustainable Energy a study was done on a 86.4 kW solar rooftop grid connected PV system. The system was ex amined based on its feasibility both environmentally, and economically. Even though this project believe is represents the information very well. The PV system was installed i n Atlanta GA, just 5 hours north of Gainesville, FL. The article sites that the global solar irradiant will vary from 3.3 to 9.0 kWh/m day (around 4.7 kWh/m day on average). The system is expected to cut around 25.2 tons/yr of carbon. In order to understan d the total system, degrade losses and levelized cost of electricity (LCOE)
system Advisory Model modeling was performed. Ultimately this would allow us to understand how much the actual cost of electricity would be when including the degradation of the pa nels and inverters from external contaminant and loss of efficiency over the panels lifetime. The result was a 27% loss at 14 cents kWh with the system being installed at 4.18 dollars a watt in 2011 Analysis of a commercial scale photovoltaics system performance and economic feasibility However, in is on average 7 cents a kWh, around half of what it was 5 years before. With the average price in Georgia being around 9.6 costs, these projects are financially justifiable as well as being environmentally sound Analysis of a commercial scale photovoltaics system performance and economic feasibility My Capstone I will be using sola r mapping tools like Helioscope and Energy Tool Base to get exact figures on what S olarized the aesthetically the cost, savings and production This will include weighing the benefits of a solar lease of an outright purchase from the school. Because of my relationship with PPM Solar I have had the opportunity to access cutting edge solar data and tools.
Duke Energy & REC Solar 40 Univer sity of Florida facilities using REC 320 PE 72 Panels. T he REC 320 is a 320 watt panel with 72 PV cells on it. both very affordable and efficient, with a Duke Energy pu rchased a majority interest on REC Solar, a provider of rooftop/ground mounted solar systems on the commercial scale. With Dukes commitment to pushing the boundaries of innovation and sustainability a powerful partnership could potentially be worked out (Ann Kroll Duke Energy assumes full ownership of California based REC Solar I also propose that in future negotiations with any utility company that The University of Florida mandates clean energy being part of the energy consumption. Logistically I do not know if it this is possible to ask of a utility company but the University of Florida has incredible purchasing power and if being carbon neutral is one of our goal we must also about fighting for wha t is right for the environ ment.
Why Solar Energy? The sun will keep on shining, and as the stock market swings up and crashes, your public entities to go solar, its reliable and has anywhere from a 10% 20% return on investment which is by all accounts fantastic! Not only is the power source seemingly endless but the technology is incredibly reliable. There are very few products in the world that are as expensive as solar energy but have a 25 year manufacture warran ty. The reason a warranty like this can be offered by solar companie s is because the product is highly trusted Unlike investing in the stock market, which is inherently risky, investing in solar energy is a known entity. This means that you know what you are going to get out of it, which yields a more consistent and higher return than any other investment you can make with your money. Aside from the obvious financial benefits from investing in solar the University of Florida is a top 10 public University t hat wants to bring top talent to the school. I believe by investing in the future of clean energy, the University will be investing in its current success. Helioscoping the University of Florida
Helios cope is a very power solar mapping tool which is commonly used in the solar industry to do a rudimentary sizing of solar on rooftops using satellite imagery. This technology accounts for sunlight, geographic location, roof top materials, shading effects, panel wattage, inverters used and wiring. o p ed I calculated the 41 sites that I would implement solar on. These locations were chosen because of the roof surface, a ssumed roof quality, shading, ease of installation and size. Facilities included football training facilities, and dormitories. This was done in an effort to show the range of buildings and locations solar energy could be implemented. Ultimately my analysis brought me to the conclusion that the University of Florida has the infrastructure to implement a minimum of 11.5 MW of solar energy which is roughly 36,199 panels. The majority of th e roofs would require a ballast mounted system which relies on weights to secure the panels on a flat roof surface. The other roofs would utilize a flush mounted system which would be secured by racking that would bolt into the roof and k eep the panels at the fixed pitch of the roofs surface.
B uildings/Number of panels/Total kW sized
Helioscope Examples The Reitz Union will be a massive 1.34 MW system housing 4,191 panels.
I believe that the newly renovated Reitz Union should have had solar energy implemented on it when it was being re built. But the ample new roof space makes for a fantastic platform for the U niversity of Florida to show off how progressive the school is in regard to clean energy. This system alone would cost the University 2 million dollars but would be well worth the overall investment. The largest of all the projects, the Commuter Lo t would be a huge 2.52 MW of energy holding 7,869 panels. The shading from the solar structure will reduce the Urban Heat Island effect created by the pavement in the parking lot while also turning that currently unused sunlight into a renewable energy source. The cost of
developing this parking lot into a solar structure is costs more than simply bolting the panels onto a rooftop because of the necessary materials needed to build such a Energy & The Continuum a solar covered parking lot is a p racticable way to implement solar energy ( Michigan State University Solar Parking Lot Lease 700,000 square feet of solar parking lot that stands 14 feet high and is expected to produce 15,00 0 megawatt hours of electricity The parking bays are being constructed to house an State estimates that this investment will shave 5 6% of their total energy consumption The 40,000 panels that they estimated would be installed is expected to save Michigan State University 10 million dollars over 25 years ( de Coming The project will not be owned by the school but instead will be a lease owned by the installing company called Inovateus Solar. The school will pay them an annual lease payment that is less than the amount they currently wou ld be paying for that same energy from the energy company. This works out very well for Michigan for the panels, installation, or maintenance. Instead they would only be paying for the lower rate o f energy they are offsetting on their campus. The panels will also
serve to reduce the urban heat island effect created by the parking lot, heat on the panels will melt snow off of them, and it will keep cars shaded that park in the parking lot. Michigan S tate University will also be installing solar on some of their laboratories as well. Commuter Lot continued On average solar parking lots cost, roughly twice as much to install compared to conventional ground mount of roof top solar. This has to do with the massive amount of resources that are necessary to support thousands of solar panels 14 feet in the air.
https://www.solarpowerworldonline.com/2014/07/solar parking garages qa solaire generation/ This image of Staples HQ in Framingham, MA shows how effectively a solar array can shade a parking garage, while also looking very aesthetically pleas ing. Commuter Lot Continued
http://www.thegreenskeptic.com/2011/04/solaires parking canopies cool solution.html The solar canopy is a great example of what the Commuter Lot will look like with a solar car port. Library West Solar Project
In this proposal 514 panels are planned to be placed on the largest library at the U niversity of Florida with ballast mountin g. Sun Power, one of the premier brands of solar panels in the country has a SunShot financial burden of around the ( They recently installed a mid sized system on the roof megawatts of solar energy by 2020. There are dedicated organization across the country who woul d jump at the opportunity to get the University of Florida set up
Rinker Hall Solar Project panels are propo sed to go on the roof of the facility. Rinker hall is LEED Certified and boasts being the first building on cam pus to achieve this status. LEED scoring
awards minimal points f ocus when making a building LEED certified. Rinker uses the highest quality lighting figures, passive lighting, smart sensors that know if people are in a room and many other techniques in its efforts to save energy. In addition, on the Key "Green" Features: Bicycle racks and shower facilities Preservation of existing trees and vegetation Adjacent to campus bus stops Use of rainwater harvesting Low flow plumbing fixtures; waterless urinals Reclaimed water system for irrigation lad aluminum doors, and low emittance insulated glass Building material reuse from previous campus construction, use of recycled content, certified wood, local/regional materials Day lighting used throughout building Low Volatile Organic Compound (VOC) materials such as interior paint, adhesives Operable windows No smoking policy Waste management plan post construction It is truly a shame to me that some form of on site renewable energy production building would use it still fails to generate its own energy which would h ave a substantial impact on its non renewable energy consumption.
Jennings Hall Solar Project
Finally, Jennings Hall, a popular freshman dorm that stands 3 stories tall is proposed to have 875 panels installed on it. This dorm is very large and u ses a huge amount of energy fro m cooling its over 500 residences powering mini fridges and because it is an older and inefficient building. The purpose of showing these five demonstrate the diversity of ways that solar can be utilized on a campus. I chose the Reitz union The commuter lot was chosen because it is exposed to a large amount of sun every day and a solar array would both shade cars and generate energy. Library West is the busiest library on campus and also the largest. Rinker Hall is a typical building d Tax Documentation/Incentives The largest incentive to investing in solar are the tax incentives that play into the price tag of inv esting in solar energy. On the commercial scale a solar arrays cost can come down as much as 50% between the 30% Federal Tax Incentive and MACRS tax depreciation. Simply put, all a business has to do to acquire these incentives is pay any form of taxes. Be low I have a letter I was sent that speaks the
Non p rofit Financial A nalysis of The University of Florida
Due to the fact that the University of Florida does not pay federal tax it is not eligible for the 30% federal tax incentive or the MACRS tax depreciation credit. Thus, the University of Florida is left with the entire cost of implementing solar energy on campus unless the project is financed by a third party for profit investor. Solar sizing breakdown of the University of Florida Each of the REC 320 watt panels will cost roughly $604.80 after installation With a rough utility rate of $0.1050 consumption is about $4,112,499.93. Industry standard energy inflation rate is about 3.50% in Florida. This will result in a monthly offset of $147,782
The solar array is currently sized at 11.58368 megawatts which is expected to produce 16,912,173 kWh of energy annually with 4 hours of peak sunlight. The initial investment in the system will cost $21,893,155 and is expected to have a 11.24% return on its investment These assessments take into account a 3.5% energy inflation rate as well as a .5% annual degradation rate of the panels from year 1 10 with a .7% degradation rate from years 11 25.
The only incentive on the market for non profits currently comes from a company called CollectiveSun who monetizes th e tax credit by owning the solar array for 6 years, giving it back to the non profit after then. The incentive comes in the form of 15% off of the entire cost of the system from the entity purchasing the system while the contractor gets payed the full pri ce of the system. CollectiveSun works exclusively with non profits of all types and has been credited with being the first incentive program for non profits that allows them to own their own solar system. (Collective Sun. April 3, 2018)
For Profit A nalysis The solar array stays constant with the Non profit analysis. In this situation, a private company will purchase and manage the solar array. The school will pay no upfront costs but will pay a fixed annual lease cost that will have a 2% escala tor attached to it.
For the solar array proposed the leasing company would save over 10 million on the upfront cost, only costing them $11,4127,280 instead of the $21,893,155 the school would have to pay. This option is very tantalizing because it puts a ll the risk and most of the reward on the leasing company. The school would benefit financially from an investment that would cost them absolutely nothing. Straz Center Example of a PPA
As you can see in the above example of what a PPA payment struct ure looks like, in year one the Straz Center of Tampa, a massive performing arts center, is saving money in the first year of their PPA. Due to the difference in the 2% fixed PPA lease payment annually and the 3.5% annual energy increase the difference bet ween what the non profit pays and saves from year 1 to year 25 is vastly different. In the first year the Straz center will be paying $70,547 to the leaser, saving $71,694 from solar energy which net $1,148. By year 25 Straz center will pay $103,939 to the leaser, saving $149,951 from the solar energy and netting $46,012. By the end of the lease the Starz Center will have saved over half a million dollars having made no initial investment into solar energy while reaping the benefits of it. Pay Back Period It is expected that the investor will have a 5 year payback period. The for profit entity will make over 60 millions off of their $11,417,000 investment.
Taking Advantage of Federal Tax Incentives Investment Tax Credit incentive was extended by congress in 2015 the ITC saved residential installations $5,000 in 2017. This incentive is sadly nearing its 2 019 deadline, but a website called EnergySage as some easy answers that breakdown what will happen when 2019 comes around. 2016 2019: The tax credit remains at 30 percent of the cost of the system. This means that in 2017, you can still get a major disc ounted price for your solar panel system. 2020: Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their taxes. 2021: Owners of new residential and commercial solar can deduct 22 percent of the cost of the s ystem from their taxes. 2022 onwards: Owners of new commercial solar energy systems can deduct 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems. Solar tax credit everything you need to know about the federal ITC for 2018 In addition, need to be operational to take advantage of the credits before the deadlines, you only have to have the system completely installed.
MACRS Tax Depreciation The Modified Accelerated Cost Recovery System also known as MACRS is a Federal Corporate Depreciation method. The program spans across almost all the notable sustainable energy practices in the Comerica, industrial and agricultural sectors. The idea behind this tax incentive is that a business can make a long term inves tment and the commercial entity can recover some of the long term losses that come along with that investment. In the case of solar a panel, depending on the make and model and lose anywhere from .5% 1.0% annually which over the 25 year manufacture warrant y and the 40 year lifespan of the product equates to large losses. As for renewable energy, pre Trump tax bill, a business could take an incentive on their solar based on the 39% business tax over the course of the first 5 years of the solar system. This m eant that the business would see around a 25% discount on their solar panels, in addition to the 30% federal tax incentive. Today, post Trump 2018 tax law, businesses taxes are now 21% which translates to roughly a 12 15% savings on their solar system. The only good thing to come out of it for solar energy is that instead of taking the savings over 5 years the entire MACRS savings can be collected year one. Today, on average, a business will see anywhere from 40 45% savings on solar. The investment entity t hat would be conducting a PPA with the University of Florida would be able to take advantage of these savings and this is why a project like this is so incredibly cost effective for a for profit business. http://programs.dsireusa.org/system/program/detail /676
The Florida solar market over the last decade has been met with lots of lobbying from big corporations. The image below shoes the major lobbying and what corporations inve sted to try to prevent the waiving of property taxes on solar homes https://cleantechnica.com/2017/07/16/fl orida utilities try stymie rooftop solar tea party conservatives try save/ But the predominantly untouched solar market in Florida is now met with some big players like Solar City and Sunrun. Very recently the Florida Public Service Commission issued a dec laratory statement that affirms solar companies in Florida
can offer residential solar equipment leases. Sunrun is making waves in the Florida market being one of the largest solar companies is the world. This is both big news and also inconsequential for the Florida market as of now. Leasing solar equipment h as What this means is that in the near future. Other, more advanced solar leases like non profit leases which are tricky ce on solar will become legal in the near future. This is huge for a school like the university of Florida which could potentially lease a $20,000,000 solar array at some point in the near future. https://solarindustrymag.com/florida ruling allows sunrun to lease rooftop solar equipment to homeowners https://cleantechni ca.com/2017/07/16/florida utilities try stymie rooftop solar tea party conservatives try save/
Even though it seems like we have come very far the clean energy industry is still n on anti solar lobbying. which states that one of its biggest goals to bringing UF to carbon neutrality by 2025 is to eliminate the need for employees of the school to commute. They state ( ) My question is what For example, where are the efforts to first reduce energy consumption on campus with smart technology and cheap energy conservation practices? I have no doubt Dr. Porter and Professor Armag h ani would happi ly volunteer their time to make these improvements on campus. Then, taking this a whole step further and implementing on site clean energy production. From my calculations, if UF wanted to, it could offset around 5% of its current energy consumption. If st eps are taken to reduce the Universities energy consumption that number would be much higher in regard to on site energy production ( ).
Info about Duke Energy Duke energy proudly owns/operates a variety of energy generation mechanizes which also include renewables. They provide Florida with about 8,800 megawatts to approximately 1.8 million customers across a 13,000 square mile service are. Its headquarters is l ocated in St. Petersburg, Florida and they are one of the largest utility companies in America. In August of 2017 Duke Energy Florida filed its annual request to set electric rates for 2018 with the Florida Public Service Commission This request is based on fuel, capacity, energy conservation and for a total cost of 128.54 per 1,000 kWh Duke Energy Florida files 2018 rates with FPSC for review Duke Energy filed for an increase of $7.14 from $33.77 to $40.91 per 1,000 kWh due primarily to a $196 million under recovery in fuel costs for 2017. The total projected fuel cost to be recovered is approximately $1.7 billion. The company makes no profit from fuel. The company also filed the Capacity Cost Recovery Clause, which increased by $1.43 from $11.38 to $12.81 per 1,000 kWh due to an increase in purchased power costs and a 2017 under recovery. DEF previously filed for recovery of Nuclear Cost Recovery Clause costs. These costs will increase from $1.56 to $4.02 per 1,000 kWh due to recovery of Levy costs, which the company stopped collecting from customers in May 2015 when the FPSC bills. Duke Energy filed the Energy Conservation Cost Recovery Clause, which will increase 11 cents from $3.17 to $3.28 per 1,000 kWh to recover On Sept. 1, 2017, Duke Energy will file the Environmental Cost Recovery increase by 7 cents from $1.51 to $1.58 per 1,000 kWh due primarily to a smaller over recovery included in 2018 rates compared to 2017.
Why does carbon matter? In 2016 history was made when the atmosphere broke the standing carbon dioxide recorded: 400 pa rts per million. 400 parts per millions is by no means a magical number but it marks a dark day for scientists around the world. Carbon is dug up out of the ground, burned and released into the atmosphere. Scientists have linked this to issue to rising tem peratures around the world which has a cascading effect on sea level rise, the melting of permafrost and other tragic environmental issues. Natural gas, which is what Duke Energy predominantly uses to fuel the school has many unforeseen environmental effec t s. On the surface, it looks less harmful than other fuel sources but not the burning of natural gasses that causes problems, imes stronger than CO2 trapping heat over 100 years and 86 times stronger o ver 20 years) the environment but this is far from the truth. Bans on fracking for natural gas have been instituted across the country not only because of the atmospheric effects of the fuel but because of the water and land pollution that also come with its extraction. Companies that extract the gas pump toxic chemicals into the ground that fracture the Earth and leach out the gas for collection. But ma ny communities have been destroyed by this irresponsible energy extraction from the poising of their lands and their water sources. The question I ask is if this is all worth it?
h ttps://www.eia.gov/outlooks/steo/report/electricity.php School s That Lead by Example : Drexel University goal from the University of Florida, but since the goal was set a few years ago not much has been done to actually achieve this lofty goal. Other Universities like Drexel have been doing their part in hitting this goal. Drexel University has been purchasing 100% of their school energy from sustainable sources in the form of credits. This Renewable Energy Certificate purchase will ensure that 84,0268 megawatt hours of electricity will be matched annually ( Drexel University Commits to 100 Percent Clean Renewable Wind Energy
Their purchase is equivalent to off setting approximately 60,518 metric tons of carbon dioxide per year, equivalent to the carbon sequestration of 12,904 acers of trees or removing 11,571 passenger vehicles from the road. Instead of simply setting a goal, Drexel has put their money where the ir mouth is. The on site renewable renewable energy consumption by 5%. Even if we cut our consumption in half on campus we will need to invest in some type of energy credit program to achieve o ur 202 5 goal. Conclusion My conclusion is that the University of Florida will be able to install a sizeable solar system, reduce a large amount of energy used by the University of Flo rida. This proposal makes both financial and environmental sense for UF.
Citations 1. Analysis of a commercial scale photovoltaics system performance and economic feasibility ble and Sustainable Energy. March 2017 https://aip.scitation.org/doi/abs/10.1063/1.4979502 [April 7th] 2. Ann Kroll Duke Energy assumes full ownership of California based REC Solar th 2017. https://recsolar.com/press/duke energy purchases rec solar/ [April 3rd] 3. 26 2015. http://www.greenlancer.com/five reasons why solar is a safe investment/ [Apri l 2nd ] 4. https://www.infiniteenergy.com/blog/infinite energy goes solar power/ [Apri l 15th ] 5. Journal. July 7, 2017. https://www.lansingstatejournal.com/story/news/local/2017/07/07/solar power shade coming msu parking lots/456701001/ [Apri l 3rd ] 6. Energy Efficiency & Renewable Energy. June 16 th 2016.
https://www.energy.gov/eere/articles/sun powered schools helping universities go solar [April 3rd] 7. Building. May 7th, 2004. http://www.myfloridagreenbuilding.info/profiles/RinkerHall.html [Apri l 15th ] 8. Collective Sun. April 3, 2018. https://www.collectivesun.com/main/offer [Apri l 11th ] 9. Solar tax credit everything you need to know about the federal ITC for 2018 https://news.energysage.com/congress extends the solar tax credit/ [Apri l 5th ] 10. th 2018 http://sustainable.ufl.edu/topics/neutralufcoalition/ [Apri l 12th ] 11. 3 MEGAWATTS OF SOLAR News Service, Including US State News; Washington, D.C., 06 Nov 2014https://search proquest com.lp.hscl.ufl.edu/science/docview/1620537402/fulltext/E74DDDD772084057 PQ/5?accountid=10920 [April 3rd]
12. Drexel University Commits to 100 Percent Clean Renewable Wind Energy th 2010. http://drexel. edu/now/archive/2010/October/Drexel University Commits to 100 Percent Clean Renewable Wind Energy/ [Apri l 15th ]