AGENDA DATE: 8/21/2024
TITLE:
Title
Solar Power Purchase Agreement to Lease Roof of 5th Street County Office Building
BODY
SUBJECT/PROPOSAL/REQUEST: Request that the Board schedule a public hearing for a proposed Solar Power Purchase Agreement (PPA) Lease of areas on the 5th Street County Office Building Roof
ITEM TYPE: Consent Action Item
STAFF CONTACT(S): Richardson, Wall, Rosenberg, Herrick, Stewart, Dumars, Strother, Powers
PRESENTER (S): Bill Strother, Jamie Powers
LEGAL REVIEW: Yes
REVIEWED BY: Jeffrey B. Richardson
BACKGROUND: A solar energy Power Purchase Agreement (PPA) allows a solar development company to lease either a rooftop or land for the installation of a solar energy generation system. Under such an agreement, the system is designed, installed, financed, owned, operated, and maintained by the solar development company for the life of the agreement. Throughout the life of the system, the property owner pays the solar development company for the energy, just as an owner would pay for energy from electric utilities. In addition to a lack of up-front costs, a primary benefit of a PPA is the predictability of energy costs from the system. The owner can design the rate of increase over the PPA term, and that price (and its increases) are fixed by the agreement. At the end of the agreement’s term, many PPA’s specify that the owner may either request that the developer remove the system or purchase the system at an amortized rate.
STRATEGIC PLAN: Infrastructure & Placemaking - Invest in infrastructure and amenities that create connection, opportunity, and well-being
DISCUSSION: In the fall of 2023, County staff began pursuing options to install a solar photovoltaic system on the roof of the 5th Street County Office Building (COB-5). Staff consulted with six solar developers to learn about project delivery alternatives. County staff also consulted staff of the Albemarle County Public Schools, which has installed solar energy systems on several school roofs via PPA agreements. Based on preliminary estimates, a solar energy generation system at COB-5 could generate as much as 660 kilowatts of electricity, from more than 1,500 solar panels. The system would produce an estimated 900,000 kWh of electricity annually, which is approximately half of COB-5’s current consumption. The resulting savings would translate to almost 10,000 tons of avoided greenhouse gas emissions over the term of the proposed PPA, or the equivalent of removing 2,159 cars from the road for one year. Additional information is provided as Attachment A.
The proposed Solar PPA Agreement would entail a lease of the roof area where the system would be installed (Attachment B). If the lease were approved, the solar developer would lease only the roof space, while maintaining ownership and maintenance responsibility of the system. This arrangement would allow the County to purchase the solar power from the solar provider’s installed system.
BUDGET IMPACT: There would be no increase in costs to the County’s operating or capital budgets. The proposed solar energy generation system is estimated to generate cumulative 30-year operational budget savings of approximately $1,247,000.
RECOMMENDATION:
Recommendation
Staff recommends that the Board schedule a public hearing on October 2, 2024, to consider a proposed lease agreement.
ATTACHMENTS:
Attachment A: COB 5th Street Solar Energy Project Additional Information
Attachment B: Proposed Deed of Lease Agreement