Friday, May 8, 2009

San Francisco Approves Major Solar Project

The New York Times, May 8, 2009

San Francisco’s Board of Supervisors has approved a plan to build what would be the largest solar photovoltaic array in California. With 5 megawatts of capability spread over 25,000 panels, it will, if completed, also be the largest municipal solar project in the United States.

(Larger, non-municipal arrays exist, including a 14-megawatt, 70,000 panel array at Nellis Air Force Base in Nevada.)

San Francisco’s proposed system — which would produce roughly the amount of energy used by 1,000 households, the developers said — would bring the city’s total solar capacity to 7 megawatts. It will be used to power municipal properties such as schools and government offices.

“Earlier this week, San Francisco took another major step towards achieving our commitments to reduce greenhouse gases and grow our green economy,” said San Francisco Mayor Gavin Newsom in an e-mail message. “With this single project, we will more than triple San Francisco’s solar energy production, build California’s largest photovoltaic system, and help lead the state towards a future of clean, renewable energy.”

Under the deal, Recurrent Energy, a local solar company, will assume the initial financial responsibility for the panels, as well as pay for ongoing operating and maintenance costs. In return, the city incurs no up-front expenses, but is obliged to purchase energy directly from Recurrent Energy at a cost of 23.5 cents per kWh, plus 3 percent per year.

In years 7, 15 or 25 of operation, the city has the option to purchase the array outright at fair market value or $33 million — whichever is higher.

The project had seen some controversy. Four of the eleven San Francisco supervisors voted against the project, most of them citing concerns that the deal does not allow the the board to review the contract terms each year. Other opponents thought the city would end up wasting money over the 25-year life of the agreement, should solar panel prices drop significantly in the short term.

Proponents of the deal, however, argued that the project wouldn’t be possible without the public-private partnership. By farming out construction to a private company, the project becomes eligible for major federal tax incentives worth 30 percent of total project costs. (Although Recurrent Energy is not releasing its estimates, the city estimated it would cost $40 in initial construction costs alone.)

Had the city undertaken the project itself, it would not be eligible for those same tax credits, raising the price tag, according to some estimates, to over $85 million.

Construction on the project is slated to begin this summer and should be completed by 2010.

See the original article here

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