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Solar Power Best Practices Guide
Renewable Energy Fund Application
Introduction
The following guide contains items that are critical to the success of a Renewable Energy Fund
application and project. The intent of the guide is to aid particularly rural applicants in the
submission of a comprehensive project proposal, and is meant to add additional details specific
to solar projects. Smaller and simpler projects may not have to address all of the items below.
Larger and more complex systems will be expected to have a more thorough analysis of the
system.
Since the inception of the Renewable Energy Fund, AEA has managed dozens of grants for
renewable energy projects across the state. Over time, a number of common planning issues
have been identified. Recognizing that each project is unique, this best practice guide does not
prescribe a one-size-fits-all approach for project development. Instead the guide poses a series
of questions and prompts to help an applicant and project developer work through the process
of developing a successful application and project. A well planned project is more likely to be a
strong proposal and benefit the community.
The guide does not follow the REF application precisely, but the application provides references
to this document.
The guide is organized to address these factors:
(1) Site selection,
(2) Understanding the existing system,
(3) Proposed system design,
(4) Economic analysis & optimization,
(5) Financing and operations planning, and
(6) Common planning risks.
Project design and optimization is not generally a straight line, but an iterative process where
new information will require that plans be reevaluated. An applicant is expected to have
performed the data collection and analysis appropriate for all phase(s) that precede the
proposed phase. The applicant should likewise use this guide to help develop the scope of work
for the proposed phase(s).
Each phase of project development investigates two main questions: “Can the project be built?”
and “Should the project be built?” Answering these questions requires an investigation of the
technical, economic, environmental, and business aspects of the project. Every project has
development risks; a thorough plan will identify these risks as early as possible, investigate
possible ways to mitigate the risks, and ultimately determine if the expected benefits outweigh
the risks. Where possible, the guide provides information on the detail and content for each
phase (reconnaissance to construction).
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1. Reconnaissance studies are a “desktop” study and the analysis should use resource,
economic, and operational data that is readily and/or publicly available. The study should be
sufficient to identify high-level flaws in the use and integration of the resource.
2. Feasibility and Conceptual Design studies should include site specific data collection and
analysis. The conceptual design (also called a 35% design) will not be sufficient to give to a
construction company, but will be of sufficient detail that a thorough economic and feasibility
analysis can be accomplished. Planning for the business and financial aspects of operating
the project will be started.
3. Final Design and Permitting will make the project “shovel-ready”. The conceptual design
will be refined and improved. The specific operational conditions and parameters will be
finalized. All business, operational, and financial plans will be finalized.
4. Construction and commissioning activities are not specifically addressed in this
document.
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Contents
INTRODUCTION ........................................................................................................................................... 1
1 SITE SELECTION & ASSESSMENT ................................................................................................... 4
1.1 RESOURCE ASSESSMENT ................................................................................................................. 4
1.2 SITE CONTROL ................................................................................................................................. 4
1.3 ENVIRONMENTAL AND PERMITTING RISKS ...................................................................................... 5
2 UNDERSTANDING THE EXISTING SYSTEM ..................................................................................... 5
2.1 CONFIGURATION OF EXISTING SYSTEM .............................................................................................. 6
2.2 OPERATIONS OF EXISTING SYSTEM ................................................................................................... 6
3 PROPOSED SYSTEM DESIGN ........................................................................................................... 7
3.1 PROPOSED SOLAR SYSTEM ............................................................................................................. 7
3.2 PROPOSED OPERATIONS ............................................................................................................... 10
4 PERFORM ECONOMIC ANALYSIS & OPTIMIZATION ................................................................... 11
4.1 COSTS FOR THE EXISTING SYSTEM ................................................................................................. 12
4.2 ECONOMIC OPTIMIZATION ............................................................................................................... 12
4.3 BENEFIT-COST ANALYSIS............................................................................................................... 13
5 FINANCIAL AND OPERAT IONAL PLANNING ................................................................................. 14
5.1 FINANCIAL MANAGEMENT ............................................................................................................... 14
5.2 OPERATIONAL MANAGEMENT ......................................................................................................... 14
6 COMMON PLANNING RISKS ............................................................................................................ 14
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1 Site Selection & Assessment
A solar project begins with selecting and understanding a site: the available resource, the
potential restrictions in accessing and controlling the site, and any environmental or other
permits that may be needed for project activities.
1.1 Resource assessment
1.1.1 Data to collect & how to collect
All data collection should be done to industry standards, the specifics of which are beyond the
scope of this guide. While a reconnaissance project may be a “desktop” study using existing
data, a Feasibility and Conceptual Design project is expected to collect robust data. Depending
on the amount of investment needed and the uncertainty associated with the resource, longer
monitoring may be required and be continued into Final Design and Permitting.
The National Renewable Energy Laboratory’s (NREL) PVWatts website (pvwatts.nrel.gov) is
a web-based solar PV tool that estimates the power production from a grid-connected solar
PV system based on a few simple inputs. This method is sufficient for most Alaska solar
assessments, but should be adjusted if there is significant shading or other site-specific
impacts.
Has a shading analysis been completed? What is the impact on expected insolation from
shade at the site? Shading analysis is critical. Most Alaska solar projects experience some
degree of shading and related performance impacts.
Are there other data sources that can be used to correlate data?
1.2 Site control
The applicant must be able to have legal right to use and access the site(s) for the solar panels,
distribution, roads, etc. Applicants should identify potential issues as soon as possible. Legal
and/or financial agreements may be required to resolve site control issues. Site control must be
finalized before construction funds are committed. Do not underestimate the complexity of land
ownership in Alaska.
The grantee shall be responsible for resolving any land ownership disputes between state
and/or federal entities, local landowners, native corporations, municipalities, boroughs and
community organizations, or other entities.
Proof of valid title to the land and/or written documentation of any private agreements is
required.
The landowner must guarantee that there are no liens or encumbrances on the property.
Final proof of ownership shall be the certificate to plat.
Site control for transmission or distribution power lines may be established using easements
or utility right-of-ways so long as the period of the agreement meets or exceeds the intended
life of the project.
If the project expects secondary loads to be placed in non-utility facilities, ownership and
access of infrastructure must be agreed to by all parties.
If the project site is adjacent to or near an airport or runway, the grantee must research FAA
permit requirements, existing or pending leases and easements, and DOT expansion or
relocation plans
Land transfers required for project development shall be recorded with the appropriate
District Recording office and a copy of the recordation provided to the AEA grant manager
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1.3 Environmental and Permitting Risks
Permitting, environmental or otherwise, may stop projects or require change in size, location, or
operations. It important that any potential permitting issues are identified early so that the scope
of the project can be changed, mitigation measures are taken, or the project can be ended
before significant funds have been spent.
In addition to understanding which permits are required, and the studies and/or
modifications (either in infrastructure or operations) required for the permits, the amount of
time required to do the necessary work must be included in the project plan.
Document communications and approval from US Fish & Wildlife Service, FAA, Army Corp
of Engineers, DNR, local government and any other appropriate agencies.
o Contaminated sites database
o Threatened or endangered species
o Habitat issues
o Wetlands and other protected areas
o Archaeological and historical resources
o Land development constraints
o Telecommunications interference
o Aviation considerations
o Visual, aesthetics impacts
o Identify and describe other potential barriers
Fire Marshal Plan Review
National Electric Code
National Electrical Safety Code
Solar Energy Code 8 AAC 63.010
Local construction permit
Electric utility interconnection permit (if project not proposed by the local utility)
In addition to understanding which permits are required, and the studies and/or modifications
(either in infrastructure or operations) required for the permits, the amount of time required to do
the necessary work must be included in the project plan.
2 Understanding the existing system
Having a detailed understanding of the existing system (also called the base case) is key to
knowing if the proposed system will be beneficial. The base case will be used both to
understand the economics and the feasibility of integrating the solar system.
The level and type of detail required will be based on the proposed phase and the proposed
system’s complexity. If secondary loads and energy storage systems (ESS) are proposed,
additional information is needed to do the integration and economic analysis.
This section is also a good time for the applicant to see if fixing or upgrading the current
infrastructure is the best option for the community. This is not required for the REF process, but
is a good idea nonetheless.
The following sections are divided into configuration and operation. The configuration is the
infrastructure that is currently in place. The operation is how that infrastructure is used.
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2.1 Configuration of existing system
2.1.1 Power—Info & data
Current configuration and condition of power generation system (gensets, switchgear,
controls, heat recovery)
o What is the make, model, kW rating and hours of each diesel genset?
o What are the fuel curves for each unit?
o What type of mechanical or electronic throttle controls exist?
o What are the actual reported kWhs per gallon of fuel for this facility?
o What kind of switchgear and/or other controls exist – make, model,
manual/automatic? Can the existing system be expanded for the proposed
renewable energy system and secondary loads?
o What kind of SCADA currently exists?
o Are upgrades or replacements planned for any key system components?
Transmission and distribution
o What is the condition of the distribution lines, transformers and poles?
o Provide a map showing single versus three-phase power lines and varying voltage
levels
o How are the phases balanced through the grid?
o How are the transformers in the community loaded or overloaded? Where is there
transformer capacity to add additional loads?
o Where are the major electrical loads located in the community from a geospatial
perspective?
2.2 Operations of existing system
2.2.1 Power—Data
Load analysis and growth projections
o Load profile by month (peak, minimum, average) and/or 15-minute interval load
profile for one year
o What generation is used by the community to meet the current load?
o Is there sufficient existing generation to meet the future needs of the community? Or
if the load is declining, can the existing generation run efficiently at lower loads?
o How much spinning reserve is needed and how is it met?
o What are the parasitic and other system losses?
o Are there additional potential electrical loads in the community that are not currently
being met? Are any new electrical loads being planned?
Power quality
o Have there been issues with
Outages,
High/low voltage incidents,
Phase imbalances,
Power factor, or
Frequency deviations
Operational
o Describe the controls strategy with existing electrical system
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o Are there existing diversion electrical loads in the community? Are there electrical
loads that could be converted to interruptible loads if needed?
o If you participate in the PCE program, how much line loss does the utility
experience? Has there been an investigation of if the line loss is from physical losses
or metering and accounting issues?
3 Proposed System Design
Designs should take into account the site-specific requirements of the energy resource, the
physical environment, and the system into which it will be integrated. The design should aim to
reduce costs to customers, while maintaining or improving service to customers. Care should be
taken that the solar project does not adversely impact the operations of the utility or customer
service.
The level of design required is based on the phase. The proposed system design should include
a description of any civil infrastructure (buildings, towers, etc.) that will be built or changed, the
power system, and/or heating system as appropriate for the application. In all cases, designs
should meet or exceed state and federal standards and regulations and be performed by people
with proper credentials (such as a licensed Professional Engineer) for the design.
All appropriate building permits must be received prior to construction. What follows are a
selection of common considerations that will need to be incorporated into the final design of the
project prior to construction.
3.1 Proposed Solar System
3.1.1 Proposed Power Generation System
The proposed electrical system must be described in sufficient detail consistent with the phase
of development. The configuration of the proposed system are the specific components that will
be built or installed for the project; the operations will explain how all of the components will be
designed to work together in the system.
Some of the important questions and ideas to consider while evaluating and designing the
power generation system include:
Physical location(s)
Total economically optimal installed kW based on current and reasonable future load
estimates and the evaluation of the available resource. Include model as appropriate.
Make, model, capacity of each proposed unit.
Upgrades needed before RE project
o Transmission/distribution—phase balance, transformers, wires, etc.
o Supervisory controls for RE to interface with diesel powerhouse
o Controls for diesel engines
o What metering will be included to track performance for the utility and reporting to
AEA?
Controls on renewable energy system for each generator and between generators (fossil
fuel and solar)
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3.1.2 Proposed Energy Storage
The proposed heating system must be described in sufficient detail consistent with the phase of
development. The configuration of the proposed system are the specific components that will be
built or installed for the project; the operations will explain how all of the components will be
designed to work together in the system.
Integrating complex energy storage into a system is not trivial. The upfront capital costs and
ongoing operational costs can be significant, and the complexity increases risk to the system.
More training, employees, and expenses should be expected, all which should be accounted for
in the appropriate areas of the REF application.
Some of the important questions and ideas to consider while evaluating and designing the
energy storage system include:
What is the optimally sized energy storage system needed to meet the design
load of the system most economically?
o Make/model, size in both kWh of storage and kW of power output
How is the system sized relative to average and peak loads?
The mechanical room has ample room to access the ESS components for
operations and maintenance.
3.1.3 Perform Stability Analysis of Options
To ensure that the proposed design will not adversely impact customers’ service, it is important
that the stability of the proposed system is analyzed. Especially since the solar resource can
change very quickly, it is important to ensure the system will remain stable. With both relatively
simple and complex projects, it is important that at a minimum the proposed project is evaluated
for:
Ramp rates
Voltage rise/drops across lines
Frequency excursions
3.1.4 Proposed Electrical System Design
The applicant should include a description of the electrical infrastructure that will be built in
support of the project. The infrastructure must be built to perform as expected for the life of the
project in the particular environment of the preferred site and within the context of the existing
generation system.
Total optimal installed kW based on current and reasonable future load estimates and the
evaluation of the available resource. Include model as appropriate
Make, model, capacity of each unit. Include why chosen generating systems were selected
based on the system’s expected load and environmental conditions.
Controls on renewable energy system for each generator and between generators (fossil
fuel and RE)
o Can the diesel system parallel safely with the solar PV system during periods of
maximum solar output and minimum electric loads?
o Will the solar PV power output adversely affect three-phase balance, i.e. is it a
single-phase system that may significantly unbalance the phase amperages?
o Can the proposed power system handle the ramp rate resulting from cloud impacts
on solar output?
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Will there be excess electricity generated or excess resource available? What components
will be included to maintain system reliability and stability?
o Load regulator(s), energy storage
o Are there existing diversion electrical loads in the community? Are there electrical
loads that could be converted to interruptible loads if needed?
o Are there additional potential electrical loads in the community that are not currently
being met? Are any new electrical loads being planned?
Physical location(s)—resource
Upgrades needed before RE project
o Transmission/distribution—phases, phase balance, voltage, transformers, wires, etc.
o Controls for RE to interface with diesel powerhouse
o Controls for diesel engines
o What metering will be included to track performance for the utility and reporting to
AEA?
3.1.5 Proposed Civil Infrastructure
The applicant should include a description of the civil infrastructure that will be built in support of
the project. The infrastructure must be built to perform as expected for the life of the project in
the particular environment of the preferred site. If the application is for a construction project, the
applicant’s schedule should reflect the seasonal and logistical constraints.
3.1.5.1 Designs for new or changes to existing buildings, foundations, etc.
Design best practices include preparing logical, readable, and professional drawings and
specifications and other documents for construction and operation and maintenance phases of
the project. General goals of the design are as follows.
That the project is designed and constructed in a safe manner that minimizes the danger to
human life and harm to the environment.
The design results in a low project cost while serving the project purpose and need for its
useful life.
The design is sufficiently detailed and adequate to minimize change orders, cost deviation,
and reasonably minimizes risk of major repairs or modifications following construction.
The design appropriately balances cost of construction with lowered operation and
maintenance costs and the potential for expansion is considered.
The design incorporates energy efficiency and arctic design best practices.
At a minimum, prior to construction the applicant should expect to have the following things:
Project overview map(s) and general information
o At least one map showing full project extents and a vicinity map
o A sheet index for all drawings
Design Criteria and information
o Design codes and standards used along with a code analysis
o Design loadings
Structural loads
Wind loads
Foundation(s)
o Geotechnical investigations and reports to design for:
Permafrost and other geotechnical concerns
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Earthquake
o Design analysis, calculations/report
o Future maintenance and expansion
Drawings showing horizontal and vertical design sufficient for layout and construction of
infrastructure. Typical methods include plan and profile drawings with stationing for
alignments, standard road cross sections, limits of grading, grades or slopes, and general
topography, drawing scale bars and north arrows, point or dimensional data, structural
sections showing embedment’s, equipment layout drawings, electrical and mechanical
schematics, and equipment lists, size, and locations
Submittal requirements including drawings and basic design data for contractor design build
items, fabrications, and procured equipment with requirement for submittal and review of the
electrical switchgear engineered and shop drawings.
Technical specifications for materials and methods
Engineers cost estimate, updated feasibility report, owner’s business development and
operational plan, and schedule.
3.1.5.2 Construction requirements
Applicants should start planning for construction in the Feasibility phase—only by understanding
and preparing for site specific risks and logistics can accurate costs be determined. Final
Design and Permitting will end with all of the following logistics and plans must be worked out to
make sure the construction is safe, cost effective, and done properly. Earlier stages of
development can address the points below generally—that is identifying that a road may need
to be designed to handle the load of a crane, but not specifically how the road will be built.
Safety plan for construction activities
Logistics for getting materials, supplies, machinery, etc. on-site
o Getting it in place—are new roads or trails needed?
Are there seasonal limitations on when materials can be delivered to the community and/or
delivered to the site?
General specifications governing execution of work
When is labor available? Are there sufficient trained workers in the community, or will there
need to be contractors brought in from other places?
3.2 Proposed Operations
Planning for operations and understanding the expected outcomes should start early.
3.2.1 Operations of Proposed Power Generation System
Controls strategy
o Describe control strategy for the multiple components within the system (Diesel,
wind, solar, load regulator(s), energy storage, secondary loads)
A robust and reproducible model should be used to understand the system. The applicant
should provide the model’s results of the proposed system with solar resource, load, and
control strategy and be prepared to provide the model at request.
o Generation by 15-minute increments
Are there conditions that create instability?
Generation to primary load vs. secondary loads vs. voltage regulator vs.
storage
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o Parasitic power
o What amount of spinning reserves will be required? How will these spinning reserves
impact the expected fuel savings?
o Continued fuel consumption in existing generation infrastructure
o Summary
Anticipated annual generation
Include any excess generation that would be not be usefully
consumed
% available
Capacity factor
Post-project fuel consumption estimate—both fossil and RE fuels
4 Perform Economic Analysis & Optimization
Planning and designing a solar project should be an iterative process, as new information is
learned the design is refined and improved, progressively more tailored to the site and system.
A project that receives REF funding must be both technically possible and economically viable.
A proposed system may be technically possible, but cost prohibitive—it will increase costs to
customers or the costs outweigh the benefits.
AEA will perform an economic analysis for all applications. In all cases, AEA compares the
proposed system against the base case (the current system configuration). The proposed costs
must be outweighed by the expected savings. For solar projects, most of the economic savings
is in displaced fossil fuels, but it can also see savings in the O&M of the diesel system if the
diesels can be turned off. Communities may have additional values that are important—
increased local employment, decreased imported diesel, or reduced greenhouse gases.
Ideally an applicant will investigate multiple options, including improving the base case.
The economic evaluation assesses the economic viability of a project. The entire project
proposal is assessed, not each individual component. If the costs for the project are greater
than the expected benefits, then the project would not be economically viable. If the total
benefits to all parties outweigh the costs incurred by all parties, then the project is considered to
be economically viable. The economic analysis is indifferent to who receives benefits and who
pays costs.
Benefits: Savings to utility customers, non-utility customers, Power Cost Equalization,
and others
Costs: Expenses paid for by utility customers, grants from state, federal, and regional
governments; non-profits, non-utility
AEA uses an Excel-based economic model to provide the underlying assumptions (such as
expected fuel costs), calculations and analysis. The model is available to all applicants. While
AEA encourages applicants to perform and submit an economic analysis, AEA’s analysis is
used in the scoring process. Ideally, applicants would use the model to maximize the project’s
benefits and minimize the costs.
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4.1 Costs for the existing system
Before analyzing the benefits of the proposed project, it is important to understand the existing
system (the base case). Any savings that can be realized by the project will come from
displacing costs from the base case. Keep in mind, there may be a number of costs that will not
be displaced, even with the best solar project.
4.1.1 Power
Capital costs: any current depreciation and/or loans?
Operational costs
o Efficiencies of the existing energy (electricity and heating, as appropriate) systems
o Cost of diesel at the utility
AEA has forecasts for the price of diesel in most communities
o Annual O&M
o Expected (Repair & Replacement) R&R and/or amortized R&R
4.2 Economic optimization
Even if an applicant expects to receive grant funds for their project, the proposed project should
be designed to get the best economic return on the investment. By maximizing the savings from
the projects and keeping the cost as low as practical, the applicant will be more likely to get an
REF grant. This may mean that a proposed project may not end up displacing the maximum
amount of diesel or heating oil, because the extra cost might not be worth it.
4.2.1 Develop options based on generic infrastructure
It is encouraged that applicants use industry-standard modeling programs, such as HOMER.
Just note that AEA’s economic assumption may be different from the models, and the economic
results may be different. AEA does not require applicants to provide an analysis of all options
that were analyzed, but the applicant will need to be able to justify why the preferred alternative
was chosen.
Using generic solar panels and high-level modeling programs are sufficient for early phase
development, but it is likely that more robust modeling with be needed for Final Design.
HOMER model with accurate solar resource, electrical load, thermal load, solar panel power
curves, shading values, diesel power curves and diversion loads. Pay special attention to
the excess power in the system: this number must be subtracted from your total kilowatt-
hours to accurately estimate diesel fuel savings. Proposed projects should find a
dispatchable load that can use this excess energy. Bear in mind that the economic benefit of
offsetting a heat load is less than offsetting diesel electric generation.
If excess electricity is being proposed to be sold for heat, model (through HOMER or some
other model) excess solar energy throughout the year to the heat load profile(s). Expect that
not all excess energy will be usable by customers, especially excess energy produced
during the summer.
Annual modeling including variables of demand and fuel price, financing and O&M
projections, and climate projections for both the existing/alternate and proposed generation
system. Note that these assumptions may differ from AEA’s assumptions. Please check
AEA’s economic model for additional guidance.
Investigate how the economies of scale are effected by using different types and quantities
of panels. How do these options vary the overall system cost and unusable excess power?
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If the project involves, or could involve, the intertie of two or more communities, analysis
becomes more complex to determine where diesel and solar power generation are located
relative to community loads. Cost and efficiency of reliable communication between the
solar site and the powerhouse should be considered.
4.2.2 Costs for the preferred alternative
Any savings that can be realized by the project will come from displacing costs from the base
case. Savings are expected to be found in displacing fuel and the potential of reduced O&M if
diesels can be turned off. Expect that the solar project will increase some costs.
4.2.3 Power
Capital costs:
o Estimates based on phase-appropriate cost estimates for panels, integration,
controls for solar panels and/or diesel generation, batteries/flywheels/capacitors, etc.
Operational costs
o Annual O&M
o Expected (Repair & Replacement) R&R and/or amortized R&R
4.3 Benefit-Cost Analysis
The Renewable Energy Fund evaluation process uses the benefit-cost ratio as its primary
metric for economic viability. The benefit-cost ratio (B/C ratio) summarizes the all of the
project’s benefits and costs into a single number.
The total benefits of the project are found by taking the present value of all of the annual cost
savings. The cost is the present value of the project’s capital costs.
B/C ratio=Project Benefits
Capital Costs
Understanding the B/C ratio
B/C ratios communicate the economic viability of a project as a single number making it ideal for
communicating the benefits and costs concisely.
A B/C ratio greater than 1 means that the benefits are greater than the capital costs.
Even without grant funds, the project should be cost effective and save the utility and
customers money.
A B/C ratio of 1 means that the benefits equal the Capital costs—the project just breaks
even.
A B/C ratio less than 1 means that the costs are greater than the benefits—economically
things would be worse than before the project was built. Without grant funds, the project
would not be cost effective and the utility and/or customers would lose money.
Since many projects will lead to savings for utilities and customers, even projects with B/C ratios
below 1, it can be confusing why AEA would use the benefit-cost ratio to rate projects. The state
wants to maximize its return on investment, its “bang for the buck”, and wants to promote cost
effective designs.
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5 Financial and Operational Planning
Planning for the eventual operation of the solar project is too frequently overlooked. The training
and skills needed to successfully operate and maintain the solar project and the complex control
systems are different than what is needed for a diesel power house. The additional need to
track and pay for the parts, maintenance, and other necessary things can stress an owner if
adequate preparation is not made. With proper planning, training, and management, a solar
project can be a long-term benefit to a community.
Below are selected aspects of a business plan that should be included in the REF application.
Please see the phase appropriate business plan template for a complete version of what should
be included.
5.1 Financial Management
Since grant funds cannot be used to operate the solar project, an applicant must know how the
maintenance and operations of the infrastructure is going to be paid for over its useful life. Solar
projects face failure without a plan for paying for needed training, personnel, contractors,
materials, and supplies.
Additionally, most solar power developers are also utilities. The utility must be able to have a
financially viable project that shares expenses fairly across all rate classes. A utility should not
build a project that will require some customers to pay more so that other customers may
benefit. At the very least, a utility should understand how the costs for solar power should be
fairly divided between customers. For a more thorough explanation, please see AEA’s white
paper on the economic and financial analysis of excess renewable energy sold for heat. It is
available through AEA’s website. What follows is a short list of aspects that the applicant should
address.
How will the applicant pay costs including expected capital costs and operations and
maintenance
o What are the expected rates ($/kWh) for each rate class?
Explain how O&M activities will be tracked for required performance reporting to AEA
Heat sales agreement(s), if applicable – required for construction
Accounting system to track revenue and expenses
5.2 Operational Management
The business plan should identify who will have overall responsibility for all components.
Inspections & Maintenance—include checklists for responsible personnel, estimated time to
completion, parts and supplies to keep in inventory, etc.
Employees—including a back-up operator, training
6 Common Planning Risks
Not having a plan should costs exceed estimates
Not engaging agency stakeholders early-on and throughout project development
Making major changes without consulting agency stakeholders
Not receiving support and authorization from land owners prior to project development
Not including all infrastructure required during economic analysis
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Placing all focus of the design at the solar installation site - Much of the needed design
activity deals with integrating solar power with the existing power plant, distribution system
and community heat loads.
Ignoring the excess kilowatt-hours reported by HOMER – This number must be subtracted
from your total kilowatt-hours to accurately estimate diesel fuel savings. Proposed projects
should find a dispatchable load that can use this excess energy. Bear in mind that the
economic benefit of offsetting a heat load is less than offsetting diesel electric generation.
Oversized diesel generators may negate some assumed benefits from solar power – Unless
solar produces all of the power and diesels can be turned off, solar diesel systems require
small, medium and large gensets so that as solar power comes online, smaller diesel
generators can be selected based on which generator is currently in the optimum part of the
fuel efficiency curve for the net system load. Particularly given the fast changing nature of
solar power, the system must be able to respond to cloud- and shading-events providing
sufficient spinning reserve in sufficient time so as not to cause system disturbances.
Proposing unproven storage or controls technology to the Renewable Energy Fund – New
technology falls outside of the scope of the Renewable Energy Fund and should be proven
out in a more accessible location than remote Alaska.
Building a solar-diesel project without a remote SCADA system that allows for performance
data collection and offsite troubleshooting.
The grant applicant has not verified that the electric utility will allow interconnection of a
renewable energy resource. This should be verified by Memorandum of Agreement, copy of
utility tariff and policies, or other written proof. These documents should be included with the
grant application.
The grant applicant assumes that the solar PV system can operate in a net metering mode,
but has not verified that the electric utility will allow that type of metering
The project site is in a floodplain
The project is single phase and will result in imbalance of the three-phase distribution
system during periods of high solar insolation
Oversizing the proposed solar system. Simply adding battery storage and an inverter may
sound like a trivial solution, but it is technically complex and challenging.