San Francisco’s Board of Supervisors has given its approval to build one of the largest urban solar photovoltaic arrays in the country. The solar energy installation, which will be located at 24th and Ortega Streets in the Sunset district on the roof of the city’s largest reservoir will have a 5 megawatt capacity when completed in early 2010. It will consist of nearly 25,000 solar panels covering an area the size of nearly twelve football fields and becoming California’s largest photovoltaic system and the nation’s largest municipal solar project. This project will more than triple the municipal solar generation in San Francisco and reduce carbon emissions by over 100,000 metric tons, furthering the City’s leadership in clean energy implementation. It will also generate 71 green collar jobs in the city.
“Earlier this week, San Francisco took another major step towards achieving our commitments to reduce greenhouse gases and grow our green economy. bWith this single project, we will more than triple San Francisco’s solar energy production, build California’s largest photovoltaic system and help lead the state towards a future of clean, renewable energy.”, said San Francisco’s mayor, Gavin Newsom, in an e-mail message.
Under the terms of the public/private partnership, San Francisco based Recurrent Energy, will assume all the risk and responsibility of financing, constructing and operating the project. In return the San Francisco Public Utilities Commission commits to buying all of the solar power from the system at a competitive rate for the next 25 years, at a cost of 23.5 cents per kilowatt-hour. In years 7, 15 or 25 of operation, the city will also have the option to purchase the array outright at fair market value or $33 million — whichever is higher.
By structuring the deal in this manner the city will pay for predictable green power and not the large up front capital cost of the the solar PV infrastructure itself. The contract allows the city, which being a government entity doesn’t pay taxes, to effectively benefit from a 30 percent federal investment tax credit that is available to private companies. It is estimated that the city of San Francisco will save $25 million by choosing this public/private route over building out the solar PV arrays itself.
Four of the City’s 11 supervisors voted against the project citing concerns about how the deal was structured and that the city would be locked into paying too much for the power should the cost of PV modules come down significantly in the next few years. Some have also raised concerns about the location in the Sunset district, which in spite of its name is often blanketed by fog in the summer months.
