Reinvestment Fund is financing the Navy Yard Community Solar Project in Philadelphia, the first demonstration of “community solar” in Pennsylvania.
Philadelphia’s Navy Yard is a waterfront business campus that houses over 12,000 employees from 152 various development companies, over 7.5 million square feet. This unique location has become a vibrant business hub in Philadelphia.
The Navy Yard is managed by the Philadelphia Industrial Development Corporation (PIDC). The first phase of the Navy Yard Community Solar Project involves the installation of a 425 kW solar photovoltaic system on the roof of Building 990, home to the motorcycle gear company RevZilla. The installation will produce an estimated 901,758 kWh annually of clean, carbon-free electricity for the Navy Yard microgrid under a 20-year Power Purchase Agreement. Tenants at the Navy Yard will be able to subscribe to the project and be credited on their electric bills for their prorata share of solar generation. The project became operational on October 17, 2017.
Reinvestment Fund provided both an 8-month construction loan and a 20-year permanent loan to the Alternative Energy Development Group (AEDG) of Berwyn, PA. AEDG developed, built, owns and will operate the project for the next 20 years. Other project partners include PIDC, DTE, GE Grid Services and NetZero Microgrid Solutions.
The Building 990 project is only the first phase of this work. Reinvestment Fund has approved a total of $1.1 million in financing and a second phase is now in early development. Other project partners include DTE, managers of the PIDC Navy Yard Grid, Glaxo Smith Klein, Liberty Property Trust, and Diversified Every Services.
WHY THIS COMMUNITY SOLAR PROJECT IS IMPORTANT
Customers who install solar on their roof qualify for “net metering,” which means the output from their solar system offsets their electricity usage. If at any time their system is producing more power than their home or business is using, the excess power is fed onto the grid and the owner is credited with the full retail rate for that power. It is as if they were spinning their electric meter backwards. This rate treatment of solar generation, along with the massive price drop for solar equipment in recent years, is why solar makes economic sense today.
Unfortunately, not everyone can install solar with this traditional model. Many homes or businesses are shaded by trees or other buildings during much of the day. Many people and businesses are renters who have no reason to install solar on their landlord’s property. And financing solar can be impossible for low- and moderate-income families or small businesses. For these people, community solar is the answer.
Community solar is a new solar business model that builds large systems that share the output with many subscribers of the project through something called “virtual net metering.” This puts each subscriber in the same position as if their share of the community solar system was on their own roof. This type of community solar project is now possible in 26 states. Unfortunately, Pennsylvania law does not allow for this type of virtual net metering. This community solar project can be built in the Navy Yard because the Navy Yard is its own micro-grid, managed by PIDC. As a micro-grid, it is not subject to the Pennsylvania Public Utility Commission’s net metering rules.
To help make community solar a reality in Pennsylvania, Reinvestment Fund will be studying how the project’s power flows out on the Navy Yard distribution system using a portion of the grant from its Sustainable Development Fund. After current flow data is collected for one year, it will be analyzed to determine how much the project impacts the Navy Yard distribution system. The end-product of this analysis will be a cost-of-service study that quantifies the costs and the benefits of the community solar project.
Photo credit: Joe McGowan Solar Sense