Solar City, USA

November 18, 2008

Gainesville Sun Editorial
All the elements are in place. This is a university city; creativity is our stock in trade. This is the Sunshine State, and Gov. Charlie Crist has challenged Florida to "go green." The people who live here expect their city to be on the cutting edge of innovation.
And Gainesville has a citizen-owned utility whose owners have already resolved that this community's future energy needs will not be supplied by fossil fuels.
And so, we are proud that the city-owned Gainesville Regional Utilities has set out to become the first public utility in America to adopt a European-style "feed in tariff" program to encourage local businesses to incorporate solar photovoltaic systems on their buildings.
Gainesville already offers financial incentives along with a "net metering" plan to buy excess power from privately installed PV systems. Along with federal and state solar tax credits, GRU's programs have helped encourage the installation of 301 kilowatts of PV systems in the city utility's service area. But a feed-in-tariff incentive could encourage the installation of an average of 1,000 kilowatts of PV systems a year for the next two decades, according to a GRU analysis.
What GRU is offering to businesses as an incentive to install PV systems is a long-term guarantee to buy the energy those systems generate.
"The long term nature of the purchase contract makes the installation of renewable energy systems a worthwhile and secure investment," wrote Kellyn Eberhardt, in a Speaking Out piece published in Sunday's Gainesville Sun. "Thus, an individual or business that wants to put solar PV on their roof can go to a bank to obtain financing with a contract in hand guaranteeing a fair price that the utility must pay for producing energy with their new system."
In effect, instead of building additional generating capacity itself, GRU is offering to purchase locally owned, locally generated renewable energy. Such an incentive might not only encourage the installation of PV systems throughout Gainesville, it might also encourage PV manufacturing and development firms to locate here.
"I've already had a number of big investors from New York who have contacted me about the incentives," Tom Lane, president of the Gainesville-based Energy Conservation Services, told The Sun recently.
Beyond that, the solar incentive plan offers the virtue of simplicity to solar entrepreneurs.
"Instead of requiring an explanation of how net metering will work, and when or how credits will be applied, FIT can be explained in a simple sentence," says a GRU analysis. "GRU will purchase the energy produced for $X per kilowatt hour."
The actual rate of purchase has yet to be established, but the idea is both revolutionary and timely. We commend GRU officials for advancing this proposal.
"Gainesville has the opportunity to be a poster child, not only for the county or the state but for the whole nation," Mike Anatheil, executive director of the Florida Allliance for Renewable Energy, said at a recent workshop. "They are at the edge of something that will be historic."
Gainesville Solar City U.S.A. has a nice ring to it. Let's make it happen.
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November 21, 2008

GRU solar plan given city approval
By Megan Rolland, Gainseville Sun Staff Writer

The city of Gainesville moved one step closer on Thursday to adopting a solar energy incentive plan that would be the first of its kind in the nation.
The five city commissioners who attended Thursday's meeting voted unanimously for a plan that would allow Gainesville Regional Utilities to purchase energy produced by solar panels at a rate calculated to be profitable to the owner of the panels.
Commissioners and leaders from GRU were optimistic that the plan - known internationally as a feed-in tariff - would create a blossoming solar industry in Gainesville and attract investment in the renewable energy.
However, details still must be worked out as stakeholders disagreed over what a "profitable rate" was. Commissioners will have to vote at least twice more before the tariff is a done deal, but the vote Thursday set things in motions.
The tariff would be a change from the current solar incentive program.
Now, Gainesville Regional Utilities customers who install solar photovoltaic panels - technology that converts sun rays into energy - are eligible to receive a rebate of up to $7,500 from GRU for residential or $37,500 for commercial.
In addition to that rebate, the customers can use the solar energy produced to offset their energy bills, avoiding not only increasing rates but also taxes that are charged by the utility for energy.
GRU buys any leftover energy at the rate per kilowatt hour of about 13 cents for residential and 14 cents for commercial.
As currently proposed, GRU would stop those incentives, which it calculates offer about a 7 percent return on investment, and instead would purchase all the energy produced by a solar system for 26 cents per kilowatt hour, which would offer an 11 percent return on investment.
"I believe there's enough interest in the feed-in tariff to have the momentum going that we won't have to have the rebate system to incentivize solar," said John Crider, GRU utilities analyst. "(Rebates are) not really giving us the performance for renewable energy that we'd like, because there's not incentive for performance, really, to ensure that we are actually getting energy."
The difference is that rebates don't encourage installation of the highest energy-producing systems, but rather the most inexpensive. If customers were paid based on output, GRU projects much more energy would be produced by the systems.
"We want to make sure the money spent on the solar program is actually well spent," Crider said.
In 2008 GRU spent about $300,000 on its solar incentive program and Crider said the feed-in tariff program will cost more than that.
The expense of the program will be spread out among all GRU customers through the fuel-adjustment rate in their utility bills.
Commissioners expressed concern about that extra charge, which, assuming tremendous growth in the solar market, would be an estimated 21 cents per bill in 2009 for 1,000 kilowatts of electricity. In 20 years the increase would grow to about $2.40 per 1,000 kilowatts.
"However it all shakes out, I think this will be a great," said Commissioner Jeanna Mastrodicasa. "I want to be as aggressive as possible, but I am a little concerned about the increases to the ratepayer. In my own personal world, I don't think 30 cents a bill is significant, but we really have asked (customers) to spend a lot over the past three years when we raised their rates."
Both commissioners Jack Donovan and Scherwin Henry expressed particular concern for the lower-income customers of GRU who already have a hard time paying their bills.
However, several owners of solar installation and manufacturing companies requested that the feed-in tariff rate be raised higher than the proposed 26 cents per kilowatt hour guaranteed for 20 years.
"It comes down to assumptions," said Barry Jacobson, owner of Solar Impact. "Our assumptions are just different. We could kill the solar industry now and then a year from now, it would have to start up again."
Jacobson, who said in 2007 he installed seven of the area's 15 solar panel systems, said he estimates an investor would need 31 cents per kilowatt hour to make a good return on investment into solar energy.
The largest difference in the two estimations is the future cost of energy from traditional sources like coal and natural gas.
"Anytime we do anything, there are going to be winners and losers, and the number of winners in this situation is going to be huge," said Ed Regan, assistant general manager for GRU strategic planning. "These numbers do work and can work. Remember if we overestimate this, it's going to be very expensive for our customers."