Steve Leone, Associate Editor, RenewableEnergyWorld.com
March 26, 2012 | 14 Comments
The thick binder sat on the corner of J.W. Postal's desk for more than two weeks – not a good place to be in the fast-moving world of project finance. For someone whose job it is to review proposals, it was always close enough to keep in mind but far enough away to ensure it wouldn't derail more pressing needs. Besides, at first glance it elicited the same reaction this plan always seemed to receive.
“No one’s going to finance this thing.”
Bruce Mercy had heard this all before — only it wasn’t always put so nicely. What the developer didn’t know, though, was that he was dealing with a company that prided itself on looking at things a bit differently.
So Postal, a Senior Vice President of Business Development at Main Street Power, and his team, which included Marc Bencivenni, a V.P. of Business Development, took a second look. “As we dove in deeper, we said, ‘You know, this is kinda cool,’” recounted Bencivenni.
Like a screenwriter searching for a producer, Mercy had finally found a financial partner who understood his vision.
“After talking to J.W., I immediately knew he got it,” said Mercy, CEO of PPA Partners, who said he pitched the idea easily more than 100 times over two years. “All along, probably the biggest problem was that no one truly got it. They wanted what they wanted and they couldn’t see beyond that.”
Main Street Power helped Mercy clear the insurmountable financing hurdle — his project would be funded and as a result, the solar industry would get a showcase project like no other.
Flipping the Switch
The long-awaited ceremony in the Arizona desert brought out Arizona Gov. Jan Brewer, who in December officially turned on the landmark 5-MW solar project on the campus of Arizona Western College (AWC). Its location in Yuma, designated the world’s sunniest town for its number of sun-drenched days, is ideal in many ways. And the power produced by the project, which is now owned and operated by Main Street Power, is also vital to the college’s bottom line.
What makes the project stand out, and what has many in the industry monitoring its steps, is how it came together and the data it will produce.
The development started as a traditional 1-MW installation that would help the college offset part of its utility bill. Then it grew to 3-MW and ultimately to 5-MW. The utility, Arizona Public Service, was intent on adding more solar capacity to the Yuma area. And the college wanted any project to offer more than just electricity.
That’s when Mercy settled on an idea to turn this 5-MW project into a testing ground for solar technology. It would include five solar technologies, each at 1 MW. It would involve many levels of monitoring and data extraction. And it would use that data to help the companies that participated, as well as researchers and the industry at large, to better understand how different technologies compare under similar circumstances.
A Driving Tour
If you were to drive northbound onto the AWC campus today, you would be greeted by the GreenVolts’ integrated dual-axis concentrating PV system. The vertical rows of distinct green-hued CPV installation alerts visitors that this isn’t just any campus, and that this isn’t just any solar project.
To the right, you’ll pass Sharp’s thin-film array in which panels are set on a tracking system. To create as level of a playing field as possible, it was decided that since CPV tracked the sun as an inherent part of its technology, that all the technologies would also need to have a tracking system. Initially, Mercy said he was widely mocked for his plan to put thin film on trackers, but First Solar’s recent foray into tracker technology has quieted many of the critics.
Just north of the GreenVolts array is Suntech’s 1-MW installation, which introduced polycrystalline panels to the project. This part of the installation was among the trickiest because of the almost unheard of combination of panels and trackers mounted onto the roof of a giant carport.
A short drive around the athletic facilities brings you to the northeast corner of the campus, where you first see SolarWorld’s monocrystalline panels. On the other side of the road is the SolFocus array featuring another CPV technology that differs greatly in how it concentrates the sunlight.
From Main Street’s perspective, this project had a lot of components that made it appealing. The company was founded on the ideals of education and the benefits of clean energy. So a project at a college centered on job training and student involvement was an easy sell. The incentives available from APS totaling $23 million — about half the cost of the project — made it more attractive for MS Solar Solutions, a fully owned subsidiary of Morgan Stanley, to sign off on the concept and the technologies involved.
Mercy credits APS, and especially Rex Stepp, with providing the technical expertise and the patience required to guide the project through a maze of hurdles and challenges. EPC Rosendin Electric handled the design and construction for all five installations — often times doing so in temperatures that reached 115 degrees.
The power produced by the project feeds into the grid and will cover virtually 100 percent of the daytime power needs for the campus of 12,000 students. According to the college, AWC will save $3.5 million over 10 years, more than $15 million over 20 years, and including revenue from smaller solar testing sites planned on campus, the project could save $40 million over the 30-year power purchase agreement with Main Street Power.
For the industry, the real measure of the project will be the data produced. What Mercy describes as a Consumer Reports-type analysis will give researchers a deeper understanding of how these technologies compare under certain circumstances — especially under the intense heat of the Arizona desert. For the companies involved, it will give a detailed look at how they are performing and for curious on-lookers, it will allow them to log in to see top level data that compares all the technologies. Mercy expects to roll out the visitor website some time in the spring.
“We’re keeping a very close eye on this site,” said Eric Romo of GreenVolts, whose CPV technology is a relative newcomer to the project and to the industry in general. “We get to be not only compared and contrasted against each other but we get to say we did a 1-MW project at a school in this environment.”
For all participants, the data will be valuable. For those in CPV, whose technology is much younger and whose installations thus far are much smaller, the results could help convince investors that it measures up against more traditional forms of solar.
“When you have a third party validating the data, that’s very important. When we started this, CPV projects weren’t much bigger than 1 MW,” said Nancy Hartsoch of SolFocus, who has seen her part of the industry grow much larger in scope over the past two years. “We have 30-MW projects now. It’s not a lab experiment anymore. It’s nice when there’s an educational component watching you. But now it’s about making clean energy at a large scale.”
It’s the large-scale investments where the technology-based results could have the biggest impact. From Mercy’s point of view, developers will no longer have to rely on individual unvalidated claims made by individual manufacturers.
“If a new panel is going to launch in the market, you can get some data and ratings, but it’s not real world and it’s not at the utility level,” said Mercy. “Domestically, if we want to compete in the world market, we’re missing the boat. In order to get us to a point where we can compete effectively in a world market, we need to know where we are. ‘Who’s doing what, and what’s the comparison? In the spring, here’s what happens. In the summer, here’s what happens. Here’s what happens in this type of market.’ Then you can bring products to the market faster.”
The AWC project does have plans to expand in the short-term with the creation of a series of 30-kW incubation sites. Companies will be able to test their panels using the same trackers, inverters and monitoring systems as the five 1-MW installations, though they’ll do so at much smaller levels. The power produced by these smaller on-campus incubation sites will also feed into the grid, while deepening the amount of data produced.
Mercy sees the AWC project as a template that can be replicated in other parts of the country, where differing climates offer new opportunities to better understand how the technologies perform. He also sees these types of projects remaining at universities where they can tap into research institutions. Ultimately, he’d like to see an even larger installation, perhaps up to 50 MW where many technologies can test themselves against their peers.
Such an endeavor would have seemed impossible when Mercy was struggling to get anyone to call him back. And any new project would surely come with its own new sets of potholes, though many have been paved by the Yuma experience.
To hear Jonathon Postal talk about this project, which won an award at the recent PV America show in San Jose, Calif., play the video below: