New Solar Power Network Promises to Energize Santa Barbara

Unique arrangement with private provider aimed at giving city long-term energy savings, lower bills.

By Lara Cooper, Noozhawk Staff Writer | Published on 03.11.2009

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Flipping the switch on what is intended to be a new era in Santa Barbara's energy use are, from right, Councilman Dale Francisco, Mayor Marty Blum and Council members Helene Schneider and Grant House.
Flipping the switch on what is intended to be a new era in Santa Barbara’s energy use are, from right, Councilman Dale Francisco, Mayor Marty Blum and Council members Helene Schneider and Grant House. (Lara Cooper / Noozhawk photo)

Santa Barbara officials say they’ll be saving money on electric bills as well as reducing the city’s carbon footprint, all thanks to an extensive network of solar panels that was unveiled Wednesday. The panels have been installed atop the buildings that make up the city’s corporation yard along Garden and Laguna streets, where public works and maintenance take place.

During Wednesday’s unveiling of the new system, Mayor Marty Blum said the decision to install the panels is one that will save the city cash, and she talked about the impressive environmental impact that will be afforded by using solar power instead of traditional electricity. The system is projected to produce 550,000 kilowatts of energy per year. That amount would offset 191 metric tons of carbon dioxide, Blum said, and is the equivalent of powering 100 Santa Barbara homes for a year. The installation of the 384-kilowatt system makes it the largest solar power system in the city.

The panels may even produce more power than the complex will need to operate, which will allow power to flow back out to the grid and be used by the community, said Jim Dewey, city facilities and energy manager.

The project is a result of a joint effort by Suntech Power Holdings, the world’s largest manufacturer of photo voltaic modules, and Tioga Energy, a renewable energy services provider.

The project is operated without any initial capital from the city. Instead, the system is financed by Tioga, which owns the system but sells the electricity to the city at a fixed rate. The arrangement helps protect the city from unforeseen utility rate increases throughout the life of its 20-year contract with Tioga.

The funding mechanism that pays for the projects comes from investors who are looking to offset their profits with tax credits for wind and solar projects. By joining up with Tioga, those investors can contribute tax equity dollars for projects like Santa Barbara’s.

Santa Barbara's new solar panel network utilizes available roof space on city structures along Garden and Laguna streets.
Santa Barbara’s new solar panel network utilizes available roof space on city structures along Garden and Laguna streets. (Lara Cooper / Noozhawk photo)
“We’re using all of the different incentives and tax benefits that are provided for solar,” said Preston Roper, Tioga’s executive vice president of corporate development and operations. “As a not-for-profit, or a government institution, the city doesn’t have a tax bill that it can offset. We do, via these investor pools.”

Santa Barbara will only pay for electricity that is generated, he said.

“The city gets a locked-in rate for the electricity for the life of the contract, that you don’t get from Edison,” he said.

And because solar energy can cost between $6 to $7.50 per watt, the city opts out of the risk that usually follows the initial investment; the total cost of the project is somewhere between $2.3 million and $2.9 million. Santa Barbara is the first city Tioga has worked with, Roper said. Municipalities are good candidates for a project like this because they can’t take advantage of the tax incentives, he said, and because cities are so cash-strapped with the current state of the economy, “it’s kind of a no-brainer.”

“This is a long-term hedge in terms of future rate increases,” he said.

Write to lcooper@noozhawk.com

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» A Bad investment on 03.12.09 @ 06:19 AM

Solar panels are a very bad financial investment.

One has to add the interest to the cost of the project and one has to consider how much lost return on the capital if it had been invested in an alternative money making investment such as Government bonds.

When one takes these into proper consideration then it takes a full 30 years to pay for the cost of the panels.
But the dirty little secret in the solar industry is that all solar panels only have a life of 30 years!    So right when they are paid off they wear out and stop producing electricity.

Another dirty little secret is that only 1/3 of ones electric bill is for the generation of the electricity and 2/3 is for the distribution and service.  Solar electricity can’t be stored on site for future use so has to be sold to the utility company.  When one sells excess electricity during the day the Utility only pays you 1/3 the cost of what they charge you to purchase electricity during the night or on cloudy days.  So a building with a solar panel has to sell 3 KW to the power company in order to purchase 1 KW from the power company during the night or cloudy day.

And nobody is taking into consideration that the life of roofing is 20 years.  so when it’s time to replace the roofing the solar panels have to all be removed so that a new roof can be installed and then the panels have to be re-installed.  And the way panels are installed requires support brackets connected to the roof which can and do often leak.  How about the cost to repair leaks and the damage caused by the leak.  and the panels get dirty and lose efficiency so have to be cleaned twice a year.  So add this labor cost to the cost of the project.  And what if there is a hail storm and the panels are ruined.  Or if a tree falls on a building and breaks the panels.  Or earthquake.    The panels have to be insured.  Insurance is nit free.  Yet another cost,  And how about property taxes?  The cost of sola panels is an integral cost of a building project.  the cost of a building project is added to the assessed value and property taxes have to be paid on this value.  So the cost of property tax has to be added to the cost of the panels.

I summary buying solar panels is just like throwing money away.

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» Loud Whispers on 03.13.09 @ 02:35 PM

I’m not a green freak at all but most of the concerns above have been addressed by the city not buying the equipment. Although, what the city may save in energy dollars is negated by the taxes we have to pay to support the federal subsidy (okay, “tax credit”).

I was very disappointed to see the reporter frame the long-term contract in terms of protection against future price increases; prices do go down and municipalities that have agreed to long-term contracts have been hung out to dry in the past. CA has about 25 new power plants in the pipeline and we may be entering a period of prolonged economic contraction. All of that would mean that energy prices would drop (similar to oil’s free fall). Lastly, nuclear power doesn’t leave a carbon footprint.

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» Fact Checker on 03.18.09 @ 03:06 AM

“A Bad Investment” does not have the facts in order here.
Solar panels are a great investment.  With the current incentives, both State and Federal, most solar systems pay for themselves in less than 12 years and the solar panels come with a 25 year warranty.  These systems can yield well over 10% IRR—with a warranty.  You can’t touch that with a bond, and everyone know what can happen with stocks these days.
Further, I own solar panels that are over 30 years old.  They still work beautifully. My Uncle also owns some old (over 30) solar panels, and these panels are currently providing ALL the electricity for his home right now—off-grid. 
Solar panels can last well over 50 years here on earth and even in space, as is demonstrated by the first satellite that was put in orbit—with a solar panel—that still works.
Bad Investment needs to check the facts before giving any more Bad Advice.

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» reply to fact checker on 03.18.09 @ 06:32 AM

Incentives are not free money and is a cost paid by the taxpayers.

So with the incentive cost which is still a part of the ovrall cost it takees 30 years to pay for the overall costs of solar panel ( including the costs of the subsidies to the taxpayer).  And it is a fact that a very many panels stop producing electricity in 30 years right when the savings in electricity pays for them.

So it is a fact that, financially speaking, solar panel are a very bad investment.

A fool and his money is soon parted.

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» reply to Fact Checker on 03.18.09 @ 12:18 PM

I don’t believe you when you say you have solar photovoltaic panels on your house that are 30 years old!

This is because 30 years ago there were something like 2 or 3 houses out of 37,000 units in Santa Barbara that had solar photovoltaic panels.  there were several with solar water heating panels but that not the kind that I claim most, maybe not all, wear out and stops producing electricity after 30 years.
It is just too remote of a possibility that you were one of the first 3.

So I challenge you to prove to all of us that you were not lying, by providing us with the address of the house in Santa Barbara with these alleged 30 year old solar photovoltaic panels that still work, and I will drive there and verify it, and I will report back to the readers and retract everything I said.

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» Ian Slater on 04.30.09 @ 10:23 PM

Hi,

My name Is Ian,

  I have a student run business/school in the Northern California Klamath river(see atachment). I teach how to build zero-waste off the grid housing. I am trying to get a solar program going to teach students who will be going to 3ed world rural communities to build inexpensive housing and clean energy centers.

  I need a practice panel and accessories and am wondering if you know how to get a hold of a used or new one for free. I am from the Santa Barbara area(UCSB and SBCC) and found your company in a solar pannel search. If you can help please let me know. Also do you know about the CCC/CSU/UC sustainabilitty confrence at UCSB in June there will be tabling and lots of people there(i won a scholarship to the last one in S.L.O.)there was tons of workshops and a awards dinner, check it out if you can.http://sustainability.ucsb.edu/conference/workshops.php
  So if you know of a grant I can apply for or just have some junked or some that need work, I am a engenieer so I love working on stuff, Let me know.

School Flyer
http://docs.google.com/Doc?id=dfrrrfb3_10c8g7jvdz&invite=chgw3d7
—
Ian Anthony Slater
College of the Redwoods
.(JavaScript must be enabled to view this email address)

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» Piontert on 05.18.09 @ 02:55 AM

now I’ll stay tuned..

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