As energy prices continue to rise, water utilities across southern California are turning to solar energy.
Regarding why there were no solar systems at municipal water agencies in most states, Gary Barsley, a sales and marketing manager for Solar World AG, in Ventura, CA, points out that energy costs are higher in California. “Solar systems are popular in areas where there are high energy costs, a lot of sun, and an incentive program at the state level,” he explains.
In a brief survey of the sunbelt states outside California and Nevada, not one solar installation at a municipal water district could be found. In California alone, there are 18 installations in operation, or under construction, representing 11.2 MW, along with another 34 water districts in the process of negotiating contracts, representing over 20 MW. Additionally, one Nevada water district has six installations totaling 3.1 MW, while its sister agency is in the process of constructing two small arrays totaling 450 kW.
Ten of the 18 installations in California, representing 4.4 MW, were installed prior to 2006, before the federal tax credit for renewables included solar systems. The agencies were primarily motivated by the Self Generation Incentive Program (SGIP) created by the California Public Utilities Commission. Under SGIP, investor-owned utilities must rebate a percentage of the cost back to the owners of the renewable system, usually about half the purchase price when the system is constructed.
In April 2005, the Association of California Water Agencies (ACWA) entered into a five-year partnership program with PowerLight Corp. (now SunPower), and WorldWater & Solar Technologies Corp. The partnership program–which focuses on encouraging water agencies to install solar systems and reduce their energy costs–has met with great success. In fact, of the eight solar installations already contracted for under the ACWA agreement, six are generating 4.8 MW, and two 1-MW solar systems are in development or under construction.
The number of water agencies interested in solar installations took another leap forward in 2006, when companies such as SunPower, World Water, and Solar World created additional partnerships with a variety of financial institutions, that wanted to take advantage of the federal tax credits available as a result of power purchase agreements with potential buyers. This group includes the 34 water agencies mentioned above that are still negotiating contracts.
In Nevada, incentives also exist, although they are quite different from those available in California. For example, the Nevada Legislature, in 2001, passed renewable energy legislation that requires the state’s utilities to select privately developed renewable power projects, from which it will buy renewable energy credits (REC).
Money Talks
Interviews with a few of the water districts in the Sunbelt indicate that high-energy prices are motivating the switch to solar. According to a report, written by Navigant Consulting Inc. for the California Energy Commission (CEC) in December 2006, total water-related energy use in California in 2001 was 19.2% of total energy use in the state. This compares to the national figure of 4%, based on a 2002 study by the Electric Power Research Institute.
In fact, California’s water-related energy use–which includes water supply and treatment and end uses by agricultural, residential, commercial, industrial, and wastewater treatment–totaled 48,013 gigawatt-hours; and agricultural and urban water end uses alone generated 73% of those gigawatts. Essentially pumping costs, these gigawatts represent 14% of total energy use in the state.
The report, “Refining Estimates of Water-Related Energy Use in California,” updated a study completed by the CEC for its 2005 Integrated Energy Policy Report (IEPR). The report reveals that water supply and conveyance energy costs in northern California are less than half the equivalent energy costs in southern California. In southern California, 75% of the area’s total energy costs result from water use, as well as water supply and conveyance. In northern California, these same water demands total only 39% of the areas energy costs.
On of the main reasons for this disparity in energy costs associated with water resource management is the fact that in northern California, water districts, such as Hetch Hetchy, use gravity to move its water, while southern California utilities are mostly dependent on water pumped south from northern California through the Sierras and on water pumped from the Colorado River.
These numbers would suggest that southern California water districts would be more likely to be motivated to install solar systems. Indeed, 11 of the 18 systems installed or under construction are in southern California. It is likely that numbers will increase once the 34 districts still negotiating contracts announce their final decisions.
Sample of California Systems
Desert Water
The Desert Water Agency in Palm Springs, CA, is now in its third year of operation. The agency has been using a 300-kW solar photovoltaic system installed by Shell Solar, now Solar World. The district financed the cost of the project ($2.5 million) by itself and received a self-generation incentive payment to cover half the cost. Originally projected to have a 10 to 11-year payback, the retail price of power has increased from 8 cents per kilowatt-hour to 11 cents per kilowatt-hour in the intervening years, meaning the district will most likely recover its investment sooner, according to David Luker, general manager and chief engineer. “The main reason we were motivated was because we spend so much on power,” Luker says.
From a reliability point of view, it is important for water utilities to take an interest in power. “Without power, no water, and, no water without power,” he says. When Luker proposed the solar system to his Board of Directors, one member responded, “I don’t think you gave us a choice. How could we say no?”
A Southern California Edison (SCE) representative introduced the SGIP program to Luker, who in the past had been skeptical of the existing solar technologies. However, when the district developed and released a request for proposals, Shell Solar was selected to head of the project, the development of which took one year.
The power generated by the system serves the entire operations center, warehouse, offices, shops, and maintenance building. According to Luker, the annual electricity bills for those buildings–originally about $70,000–have now been reduced to $300 to $500 a month, and cover demand charges. Additionally, the district has a net-metering agreement with SCE and can sell additional power generated into the grid.
Luker says the district uses about 35 million kWh annually, for its pumps, deep wells, booster station, reclamation plant, and the recycling system that treats wastewater. The district also sells the recycled water for irrigation. In addition to Palm Springs, the district serves Cathedral City and Desert Hot Springs. According to Luker, the agency intends to expand the system. Because the typical pump size is 400 horsepower, a lot of land is required to expand the system in order to serve all the agency’s pumps. However, an expanded system could offset the power demands of the reclamation plant. The current system is located on nearby ground, and could be expanded to serve an additional load from that location.
The district has experienced few problems with its solar system. Some panels were broken when hit by a rock thrown over the fence, and circuitry components in some of the inverters needed replacing, but were covered under the warranty. All in all, Luker says it’s up to the district to maintain the system.
Cucamonga Valley
The Cucamonga Valley Water District, located in the San Gabriel Valley southeast of Los Angeles (L.A.), CA, has a small, 213-kW solar photovoltaic system that began operating in May 2006. Shell Solar won the turnkey contract, but, in the intervening period, the company sold its silicon solar business to Solar World, who ultimately built the $1.6-million system. In order to fund the project, the used a self-generation incentive payment it received from SCE in the amount of $803,915. Ed Diggs, water production superintendent at Cucamonga Water District, says the project–which came in under budget and early–has generated 622,468 kWh (from start up until present), and saved the district $87,145, at the average rate of 14 cents per kilowatt-hour. To put the savings in perspective, the district’s current annual budget for power is $5 million.
The system is ground-mounted and adjacent to one of the larger pumping stations. The generated power offsets peak power and reduces the demand on the grid, Diggs says. The district has a net-metering contract with SCE, but given its load and the solar system’s small size, there is little chance enough power will be left over to feed to the grid.
All in all, the project has been a success for the district. Diggs says they have experienced no problems with the solar system, and, in fact, the district has been able to promote their facility as a learning tool for local children. The district has done this by capitalizing on its proximity to a nearby a youth learning center, providing the students with an opportunity to learn about all aspects of water via a tour of a treatment plant and solar array.
Kern County
Located in an open field, the solar set-up at the Semitropic Water Storage District in Kern County (in the southern part of the San Joaquin Valley) feeds its power into the District’s electrical system. Will Boschman, the district’s general manager, says the solar system provides stable power for the life of the system. “We look at it this way, instead of an annual out-of-pocket expense.”
In December 2004, Shell Solar won the contract to design and install the solar photovoltaic system with its single axis tracking system at. The following year, the 980-kW system–with pumps that use 10 MW to 15 MW–was installed and fully operational by April. According to Boschman, the cost of the system (about $6 million) was funded self-generation incentive payment of $2.9 million provided by Pacific Gas & Electric. The utility also financed the project with a short-term loan.
The system was originally projected to deliver 1,729 MWh and save $3.3 million over its 25-year lifespan, but the system has already outperformed the projections. From February 2007 through January 2008, the system generated 1,845 MWh. If the $276,800 in savings for the same 12 months (based on an average 15 cents per kilowatt-hour) holds up, the total savings for the lifetime of the project will be double what was projected. Also of note, the greatest amount of generation occurred in May and June every year, according to a bar chart illustrating generation over the past three years. The Semitropic Water Storage District has a nifty display on its Web site (www.semitropic.com), that demonstrates the amount of electricity and its cost, for the day, the week, the month, the year, and since installation.
West Basin
The West Basin Municipal Water District in El Segundo, located on the edge of the L.A. Basin overlooking the Pacific Ocean, installed a 564-kW system that began operating in November 2006. The system is actually made up of three arrays of solar roof tiles covering 40,000 square feet built on top of in-ground concrete treatment storage tanks at the Edward C. Little Water Recycling Facility located just south of L.A. International Airport.
Marc Serna, the district’s engineering manager, says the district conducted an open solicitation before selecting PowerLight to design and build the solar array. He utilized the ACWA energy consultant, Lon House, to evaluate the initial project concept and a separate expert helped write the request for proposals and evaluated the proposals.
The district financed half of the $4 million cost, through its capital facilities improvement fund. SCE provided $1.9 million from the SGIP. Serna says the district is saving close to $100,000 a year. Utility costs run about $1 million, annually. The payback was projected to be 13 years.
Serna explained that the power generated serves 10% of the plants’ operating needs through its main electrical supply that serves the pumps, motors, treatment process equipment, and office systems. He says there have been no problems, and maintenance is low. The district holds a five-year maintenance contract with SunPower. He says a Web site monitors daily production.
Elsinore Valley
Elsinore Valley Municipal Water District, located in western Riverside County southeast of L.A., began operating its 10 solar photovoltaic arrays totaling 765 kW in February 2006. The system cost $6 million, and the district received a self-generation incentive payment of $3 million from SCE. Greg Morrison, director of legislative and community affairs, says the district financed its share of the cost, and owns the system.
The district is not yet realizing its projected $170,000 annual savings or avoided electricity costs. The savings for the 11 months the system was operating in 2006 were $109,988. Savings for 2007 was $108,302. Morrison explained that its utility rates had been increasing substantially for several years and the district assumed they would continue when high utility cost assumptions were used to project solar savings. However, those increases have slowed over the past year and a half. Furthermore, the district has continued to implement energy conservation projects that have reduced energy demand.
The system is made up of two types of arrays. First, PV solar canopies, totaling 462 kW, cover seven carports. Second, solar rooftop arrays, totaling 302 kW, cover the warehouse, maintenance, and administration buildings. They utilize PowerLight’s PowerGuard technology, a lightweight building-integrated PV roofing assembly installed over an existing waterproof membrane. The building-integrated panels have additional benefits: They provide thermal insulation and protect the roofs from harsh ultraviolet rays and thermal degradation, thereby reducing heating and cooling costs, and extending the lifetime of the roofs.
Financed Projects
The Valley Center Municipal Water District (VCMWD) will see construction start on its 1-MW solar photovoltaic system this spring. The district is located in north San Diego County, 35 miles inland, and is said to be the second largest water provider in San Diego County behind the city of San Diego. The solar system will be built on a 5- to 6-acre site and send power over a new distribution line to a 5-MW pumping station located about a quarter mile away.
Ongoing environmental and site engineering work will determine the actual size of the system. WorldWater and Solar Technologies was selected to engineer, supply, and construct the system, because of its proprietary AquaMax drive, which will allow the solar system to switch back and forth from solar power to the grid. It will be able to keep two or three pumps, operating when utility power is offline.
VCMWD signed a 20-year power purchase agreement with Solar Power Partners, that is financing, and will own the $6 million system. Gary Arant, the general manager at VCMWD, says the project would reduce the district’s power costs, budgeted this year at $4.3 million, by 5% to 6%, based on the contract with Solar Power Partners.
Arant says the district would have to raise rates if it had financed the system itself. The district had originally looked at financing a project after WorldWater approached him at an ACWA conference. That proposal didn’t pencil out because of the 15- to 18-year payback, he says. In late 2006, WorldWater came back with a power purchase agreement, and in August 2007, the district board approved the project.
The Rancho California Water District in Murrieta, northeast of San Diego County in southern California’s Riverside County, is the newest of the districts to contract for a solar system. It signed a power purchase agreement in January for a 1-MW solar photovoltaic and tracker system to be designed, built, operated, and maintained by SunPower, and financed by GE Financial Services as part of a five-system financing package. (The other four systems are for three businesses and a county.)
Andy Webster, planning and capital project manager at Rancho California, says the project has been in development for about a year. The district completed an economic analysis, solicited proposals, and decided a power purchase agreement was the best option. The system will be located on vacant land adjacent to the district’s wastewater treatment plant, and will provide enough power to satisfy about 25% of the treatment plant’s electrical demand. It is expected to be operational in December, he says.
The district’s existing electrical rate is 12.5 cents per kilowatt-hour, and under the power purchase agreement it will pay 11.1 cents per kilowatt-hour, about an 11% discount. Webster wasn’t sure of the cost of the system, given that the district had a participatory poverty assessment and did not have to worry about a payback period, but he estimated it ran between $9 million and $10 million.
Eventually, SCE will provide a self-generation incentive payment for almost half of the cost and it will go to SunPower. However, it is too early in the development process to determine the exact amount of the incentive.
The Nevada Systems
The Las Vegas Valley Water District has been operating a 3.1-MW distributed solar photovoltaic tracking system since June 2007 at six reservoir and pumping station sites. The district financed the $23.4 million it cost to build the system through its capital facilities fund. It is being paid back through actual annual energy savings of approximately $725,000 and the annual sale of RECs to Nevada Power, which in 2007 totaled $1.3 million. This yields a payback period of 11.6 years for a system with a projected lifetime of 35 years.
The district won the right to sell its RECs, when Nevada Power selected the district’s proposal as part of its 2003 solicitation. Thus, the Las Vegas Valley Water District will make about $1 million a year selling its RECs, as long as its solar arrays continue to operate.
PowerLight won the contract to build the solar system following the district’s solicitation for proposals. The Public Utilities Commission of Nevada approved it in February 2005. The water district’s board of directors had already approved the contract in October 2004. The district claims it is “one of the largest solar undertakings by a public agency in the US.”
The first 821-kW solar array was installed at the Ronzone Reservoir and Pumping State in northwest Las Vegas, and began operating in April 2006. The remaining systems were rolled out every two to four months, until all were operating in June 2007. One system was installed at the Las Vegas Springs Preserve, the historical home of Las Vegas’ founding springs, where a cultural resource center was built. The solar system’s technology and installation will be one of the elements of the cultural center’s educational program.
Bronson Mack, a spokesman for the water district, says most water pumping is done during off-peak hours, and any excess power fed into the grid helps to offset the nighttime pumping. The power generated by the solar systems serves buildings that have to be climate controlled to cool sodium hypochlorite used to disinfect water. He says no utility power is being used at those buildings when solar-generated power is available.
The other advantage the solar system offers is to defer additional power purchases it may need. The district buys 90% to 95% of its electricity from Nevada Power. It holds an option to purchase power from the Colorado River Commission. “[The solar system] certainly does offset anything we purchase and the amount we purchase,” Mack says.
The solar system has generated 7.2 million kWh since April 2006 when the first installations began generating power. The total revenue offset since then is $728,502. The original cost estimate for solar systems at four sites was $22.6 million, but they added two sites and the total cost of the project increased to $23,399,504, Mack says. Also, increasing the cost was the anti-graffiti coating added to metal supports at the Springs Preserve site, given the exposure that site has to the public.
Mack says all sites have residential housing nearby and are visible to the residents. Before the systems were built, letters were sent to neighborhoods and meetings were held with residents, he says. The district has not received any negative feedback then or now, he added. At one site, kids have thrown rocks and broken a few solar panels, but that’s the only problem that has arisen. “We’re trying to talk to the [kids’] grandparents,” Mack says.
A sister agency, the Southern Nevada Water Authority (SNWA), which serves the Las Vegas metropolitan area, is also installing three small systems–two are for a cumulative 238 kW on the roofs of two covered parking structures at the River Mountain Water Treatment Facility and the Alfred Merritt Smith Water Treatment Facility.
Another 200-kW high concentration solar PV system is in the planning stages, also at the River Mountain Water Treatment Facility. This system will be installed near electrical infrastructure, including pumps, making it less expensive to install, according to Mack. He is also a spokesman for SNWA. Mack says the combined solar systems would offset 920,000 kWh annually.
Concluding Thoughts
There are about 7,500 public water utilities in California, according to the Department of Public Health, which is charged with regulating them. If each could reduce utility-generated electricity at least 5%—if not through a solar system then another renewable technology—it would go a long way toward the CEC’s goal of increasing distributed generation, reducing peak demand, and reducing stress on aging distribution systems. Not only would it allow each water district to save dollars, but it would also go a long way toward reducing the state’s global greenhouse gas footprint, and help California to meet its climate change goals.
The CEC has devoted public interest energy research dollars to water and energy synergies. Saving water saves energy, the CEC argues, in its 2005 IEPR. Moreover, it called for the development of alternative energy generation such as biogas, solar, and wind for water agencies.