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Site selection key to success of any renewable energy project

By Helen Tocco

Site selection is key to the success of any renewable energy project, financially and technically. This applies to every size project and every renewable energy technology—from solar to wind to biomass and more. Site selection plays a crucial role in the financial returns of the project and in the ease of construction and ongoing operations and maintenance.

As we advise clients on site selection, we have witnessed first-hand many mistakes made by developers and others through the process. I'll focus on site selection for solar photovoltaic projects, but many of these questions apply to all technologies.

How much does electricity cost, and is there enough demand?

Because of utility rates, it is much harder to make a solar project pencil-out financially in the Southeast U.S. than it is in California or the Caribbean. We often see proposals for projects that exceed a site host's energy usage—we recently saw a school project where the proposed system size was nearly double the school's energy needs. Review 12 months of bills or load data to make sure the PV size matches the site.

What is the solar resource?

Identify whether there is shading from trees, nearby buildings, parapet walls, or rooftop equipment. You may be able to obtain a solar easement to prevent shading from an adjacent property. We recently worked on a portfolio of projects where many of the proposed sites had significant shading from trees. I was extremely concerned about output losses—even if the trees are trimmed now, they will continue to grow in the future. However, the engineering, procurement, and construction (EPC) firm agreed to provide an output guarantee, mitigating the risk for the customer and the investor.

Who has site control?

If you or your clients do not have site control, you will need to determine whether it is possible to buy or lease the site or work out another arrangement with the site owner. We have worked with retail customers under long term leases, and we have also worked on the other side of the fence with real estate investment trusts. The challenges include: how the power from the system is metered, who is obligated to purchase the power, and what happens to the asset at the end of the lease or if the host customer goes out of business.

Is the customer under a direct access contract that precludes on-site generation?

For distributed generation projects, you must ensure that the site host does not have a contract with a third party electricity supplier that disallows on-site generation. If a direct access contract is in place that precludes on-site generation, it is sometimes possible to renegotiate the terms of that contract, in exchange for a modified electric rate.

Are there potential barriers based on utility rules?

Many utilities have requirements for the maximum system size that may interconnect to the grid and/or the maximum system size that may net meter to the grid. These limits vary by state. In some states, net metering is limited by address, while in others, net metering is limited by meter number. Some states, like California, allow "virtual net metering" whereby certain types of entities, such as public schools, may transfer net metered credits from one site to another. We recently worked on a project where the utility would not allow the customer to tie-in because two meters were "totalized" onto one bill. The utility visited the site with the developer and host customer's electrical engineers, and collectively they determined that the only way to tie-in to the proposed meter would be a $1 million upgrade to the substation; "un-totalizing" was not an option. As a result, the host customer is now considering a different meter on the same campus.

Are there permitting barriers?

Identify all local, regional, and national permits required for your proposed site. Regional building codes and permits vary. In the Northeast, sites must meet stringent snow load requirements, while in California virtually all rooftop solar systems must be mechanically attached to the roof to meet seismic requirements (in the past some ballasted systems were allowed, but recently we have found permitting agencies are being much stricter). Be sure to ask the building department if any codes are about to change—one project we worked on faced a wind zone change just before the design was completed, resulting in the addition of hundreds of roof attachments and an increase in cost for the developer/EPC.

Is the site physically able to accommodate the technology?

This includes considerations such as the amount of physical space required for the system and equipment, structural stability of the roof or the soil, proximity to a nearby interconnection point, roof age, and roof condition. We have seen many solar projects proposed on roofs that are near the end of their lifespan. It is sometimes possible to build the cost of a roof replacement into the deal.

Developers, consultants, property owners, and investors who are new to renewable energy will inevitably find that site selection is a learning experience, but we hope that this introduction serves as a useful starting point.

Helen Tocco is an Engineer with CohnReznick Think Energy and leads projects associated with on-site generation and green buildings. She can be reached at [email protected].

January/February 2014