NEM2 Solar PV Project
City of Fort Bragg
June 10, 2024
AGENDA
2 NEM 2 Solar Opportunity
Inflation Reduction Act (IRA) Incentives
Process and Timeline
Project Overview
Next Steps
3 Installing Solar PV Ahead of Net Energy Metering (NEM) 3.0 Why is This Important and What Does it Mean?
What is NEM 3.0?
NEM 3.0 drastically alters the way solar system owners are compensated for the energy they generate and provide to the utility grid, lowering the value that owners are able to capture with their new solar systems. 4 On December 15, 2022, the California Public Utilities Commission (CPUC) unanimously voted to approve NEM 3.0
What Does This Mean?
The previous program (NEM 2.0) export rate was $0.30/kWh Potential reduction in compensation ranges from 75 - 80% Under NEM 3.0, PG&E customers with solar systems will receive only $0.08/kWh on average for the same energy they’ve been providing to the utility grid City of Fort Bragg has locked in the lucrative NEM 2.0 tariff by successfully submitting Interconnection Applications ahead of the 4/14/23 deadline In order to preserve NEM 2 status for at least 20 years, the systems must be built and connected to the grid by 4/15/2026 5 Inflation Reduction Act (IRA)
6 Available through Inflation Reduction Act (IRA)
Called a “tax credit”, awarded as a rebate via Direct Deposit Paid out at Completion of Project
Direct-Pay “Base” Incentive = 25.5% Off Solar Project Costs Additional Low-Income Bonus Incentive = 8.5% Off Solar Project Costs Must apply by June 27, 2024 for Low-Income Bonus Incentive City must be under contract for project implementation in order to apply
Process and Timeline
Project
Identification /
Securing NEM 2
Contract
Execution &
Project
Implementation
Initial Conceptual Considerations
Feb 2023
Preliminary Project Development
March 2023
Submit NEM Interconnection Applications
April 2023
Acceptance of NEM2 Applications Securing NEM2 Status
May 2023
Council Approves LOI with SES to Begin Project Development July 2023
Consideration of Approving Construction Contract with SES June 12, 2024
Apply for 10%
Bonus Incentive Application
June 2024
Begin Project Implementation
July 2024
Estimated Project Completion
Q4 2025
NEM 2 Deadline
IRA Incentive Application
April 15, 2025
Project Summary Financials (2) IRA Incentive Scenarios
8 Total Project Price
$7,501,224
IRA Incentive
< $1,811,389 >
NET Cost to City
$5,689,835
Cumulative Lifecycle Savings
$9,614,063
Total Project Price
$7,501,224
IRA Incentive
< $2,415,185 >
NET Cost to City
$5,086,039
Cumulative Lifecycle Savings
$10,523,070
Scenario 1
30% Direct Pay
+ 10% Low Income
Scenario 2
30% Direct Pay Only
Police Station - 46.0 kW
9 Fire Department – 22.0 kW
10 Cv Starr Community Center - 372.0 kW
11 Corp Yard / Water Treatment – 127.0 kW
12 City Hall – 40.0 kW
13 Wastewater Treatment Plant – 327.0 kW
14 Next steps
Council Consideration of Contract Approval with Syserco Energy Solutions. If approved, then:
1. Execute Agreement
2. Apply for 10% Bonus IRA Incentive
3. Begin Project Implementation
4. Complete Project, Gain Permission to Operate from PG&E
5. Submit Paperwork to Claim IRA Incentives