For years, “going green” seemed to mean paying more for less. It should come as no surprise to read that solar energy is an environmentally friendly and sustainable alternative to fossil fuels, but to hear that it has also become a less expensive option makes it worth a second glance. Whether climate change has become impossible to ignore, or the simple cost of residential power bills has risen too high, Guam’s energy paradigm is about to make a profound shift. The island’s industry has already set gears in motion so that before the end of the decade, the Guam Power Authority will be running on liquefied natural gas, the military will be drawing almost exclusively from renewable sources and hundreds of residents will have photovoltaic power plants on the roofs of their homes.
Between Guam’s growing solar energy industry and Environmental Protection Agency compliance timelines, GPA has been going through serious changes in identity and infrastructure.
“For 40 years, GPA has been the only power provider on the island,” says Artemio S., communications manager for GPA. “Now we have 80 other partners, and that’s only going to grow, so we need to maintain a grid that’s going to adjust and adapt to do the best things for our island.”
With 80 potential partners for purchasing solar energy, GPA is working to create and expand its renewable energy portfolio, with its two-phase Integrated Resource Plan. As part of phase one, GPA entered into two 25-year power purchase agreements with NRG Energy Inc., a subsidiary of NRG Solar LLC and Boeing, which began construction on Guam’s first solar farm, the Dandan Project in Inarajan in March. The Dandan solar farm is expected to produce 25.65 megawatts of power, which is enough to power 10,000 homes. The plan’s initial phase includes an additional agreement with Pacific Green Resource for a 20-year contract to produce 9.3 MW of wind power. The second phase of GPA’s plan will seek an additional 45 MW purchase of renewable power and extend the net metering program.
But GPA is not looking to the sun alone.
“Very simply put,” Perez says, “GPA is interested in breaking away from oil to a combination of solar with liquefied natural gas.”
While the power utility is completely reliant on oil — a fuel source criticized for its expense, added importation cost and environmental impact — several of its generators are also in violation of the Clean Air Act, the EPA’s Maximum Achievable Control Technology Standards for Stationary Reciprocating Internal Combustion Engines and several National Ambient Air Quality Standards.
Running in tandem with GPA’s renewable expansion, 10 legacy generators, or 60% of GPA’s current power output, will have to be retired. To avoid $400 million in EPA fines, GPA intends to invest $800 million to convert several retired generators to run on liquefied natural gas.
LNG only produces half the carbon emissions that oil does, but it also has a projected 200-year supply and is a fraction of the cost. LNG is not without critics, who have been quick to point out that as an imported fossil fuel, LNG may become as problematic as oil down the line.
GPA’s current plan anticipates a somewhat conservative allotment for photovoltaics. Even during peak hours, GPA foresees the need to supplement a large portion of energy with its own power generation.
“Although it would be ideal to achieve maximum renewable energy production,” Sen. Thomas C. Ada says, “These sources are normally available only for 12 hours in the day. Thereafter, when solar energy production ceases with the setting of the sun at the end of each day, the production of energy using generators that run on some form of petroleum is inevitable at this time.”
Therefore “under the gun in terms of U.S. EPA compliance,” Perez says that GPA’s investment in LNG is the “best value acquisition” currently available. “We cannot continue to burn oil. We’re going to get penalized for not putting in technologies to better our CO2 [carbon dioxide] output.”
Joint Region Marianas, which includes Naval Base Guam and Andersen Air Force Base, consumes 20% of the island’s energy and its non-interconnected system relies on GPA for grid stability. The Naval Facilities Engineering Command Marianas has taken a doublepronged approach to reducing its own carbon footprint. In addition to investing in solar, it has also investigated simple power-reducing appliances, like advanced power strips, air conditioning units and solar hot water heaters. According to Desiree Masterson, regional energy program manager for Joint Region Marianas and panelist at GPA’s Integrated Resource Plan Forum on April 14, the first step in moving toward better power management was simple shifts in military culture and behavior.
The military’s EPA mandates are slightly higher than those set for the public, but IT has also set higher goals for itself. While the EPA has said the military must reduce energy intensity by 30% in 2015 and 7.5% of its power must come from renewable sources by 2013, the secretary of the Navy has given until 2020 for the military to draw 50% of its power from renewable sources.
On top of this, Masterson says they have “a stretch goal,” to reach Net Zero, also by 2020. Net Zero is the point where the amount of energy purchased from utility is equal to grid electricity sell-back. Out of a 600,000 BTU energy budget, Naval Base Guam estimates two-thirds of its power can come from photovoltaic and more efficient power use alone. The remaining third will come from wind and the grid with the catch that equal grid power is returned. The Andersen Air Force Base’s Net Zero estimate relies less on wind and energy efficiency, drawing 50% of its power from photovoltaic.
With net metering, there is a 1:1 ratio of kilowatt hours produced to kilowatt hours credited — if a solar spread produces 10 kilowatt hours and the building only uses 5, then 5 kilowatt hours are credited back. To comply with federal and Department of Defense mandates, 50% of military installations must be operating at Net Zero by 2020.
As of fiscal 2014, Joint Region Marianas has already reduced its energy consumption by 13.34% in addition to installing a 250 kW solar field and installing solar lights along more than 300 sidewalks. In order to meet these goals, the military is using rooftop as well as ground mounted photovoltaics and has set a building code that all new construction must be LEED Silver.
One of the largest challenges is going to be securing the 800 acres needed to produce Joint Region Marianas’ required 50 kW of photovoltaic power. On existing military land, 94 acres have been flagged as potential photovoltaic locations. Masterson recognizes that Guam’s future is in renewable energy and says the military aims not only to reduce its power load, but is also looking to become a photovoltaic power provider to GPA.
While GPA is looking to invest in solar energy, so are its customers. To date, 128 out of GPA’s 4,200 customers produce their own energy through solar photovoltaic panels.
“People decide to do something that is environmentally correct,” says William H. Hagen, founder of Pacific Solar and Photovoltaics. “And the price of electricity is a major factor.”
Hagen adds, “The Dandan project has wonderful environmental consequences. It will reduce our oil imports. It’s going to reduce our carbon footprint. It is not going to reduce your power bill. […] We will essentially be buying power from the owner of that plant for the same cost. […] It’s incorrect. It’s unfair for the utility to say, ‘We’re going solar. We’re going to save you money.’ ‘We’re going solar’ — that’s correct, but you’re not going to save any money.”
According to Perez, GPA’s wholesale power purchase agreement approach to solar enables everyone to use renewable power, not just those who can afford to install it. “We want to manage and control the power bills where it is still affordable, but how affordable can it be where they can invest $50,000 to $60,000 for solar panels? So we’ve adopted a wholesale approach. […] Dandan will give 10,000 customers [renewable power] whether they have solar panels are not.”
The idea that solar is only for the rich is a myth the solar sector is trying to debunk.
“Our customers are a mailman, a school teacher, GPA employees, people who are members of the National Guard,” Hagen says. “They’re not rich people. […] 90% of them are wagers, people who are working by the hour.”
Five years ago, Hagen says, installing solar panels was “out of reach. The system that I put on my roof five years ago cost me twice as much as what it costs now.” According to Scott Hagen, owner of Pacific Solar and Photovoltaic, in 2009, a $53,550 system used 48 SW170 panels, covered 18 square feet of space and took three months to install. In 2014, the same version of the system costs $25,000, uses 31 SW270 panels and can be installed in three days. Not only have the panels become more efficient and take up less space, but the price has dropped more than 50%.
If a monthly power bill of $250 were converted into a $250 bank payment, then this $25,000 would be paid off in 10 years, after which one’s power bill would be reduced to the cost of being attached to the utility’s grid, which for GPA is $11. In addition to falling prices, the federal government offers a federal income tax credit crediting back 30% of the cost of solar panel installation.
Thomas Blaz from Micronesia Solar Installers predicts that as the price of solar drops, the price of utility power will continue to go up. “There is going to come a point where solar prices and GPA prices intersect,” he says.
“When you say you want to be on solar,” Blaz says, “We are going to make it so you can’t say, ‘I can’t afford it.'”
Although Guam lacks a specialized low-interest solar loan, various payment plans are available from $0 down to everything. Scott Hagen says the remaining hurdle for Guam’s solar industry is that there is no serious support from local banks and they may have to turn to private investors to offer low-interest loans tailored to finance photovoltaic installation.
Still, William Hagen foresees another way to finance solar. “There’s no reason why 5,000 people out there could not own their own system, produce surplus and sell it to GPA.” This arrangement would be similar to the Dandan Solar Farm, except instead of purchasing power through an off-island company, power owners would be GPA customers. “That would reduce GPA’s overall demand. They wouldn’t have to generate [power]. Just let the people own it.”
Although to date there have been no local government incentives for going solar and it has not been said how these funds will be used, Ada notes that, “The recent passage by the legislature of Bill 207-32 mandates the establishment of a revolving fund of $5 million to promote renewable energy programs that will increase penetration of renewable energy generation.”
William Hagen would like to see Bill 207 funds used to “get the homeowner in the ownership mentality” by offering “low-interest or zero-interest loans for solar water heaters.”
New to Guam in 2010 and gaining in popularity is another form of technology that reduces the power bill of homes and facilities. It is not a form of producing energy, but rather a form of cleaning up the electricity that goes into a structure, thereby reducing energy costs by an average of 12%. The technology is called USES Green Technology.
“We are growing steadily each year as more satisfied customers experience the results of their new USES system,” says Rachel M. Nack, chief financial officer and director of sales and marketing for 1st Green Solutions LLC, which installs and maintains the systems. “Our clients include many of Guam’s major resorts, hotels, businesses and homes.”
The technology is substantially more affordable for the average homeowner than solar panels, yet for those who already have solar panels, the system is still compatible and will still reduce the amount of power needed. Customers who have turned to this technology also appreciate its compact size that fits on the wall of a utility closet and that it also protects electronics from power surges and spikes.
“After installing the USES system, other green technologies, such as LED lighting, variable frequency drives, solar, newer air-con unit, etc., have a much higher success rate and lifespan due to the full power conditioning,” Nack says. “Without USES technology, those investments have a much shorter lifespan and are subject to many maintenance issues here in Guam.”
The green technology system has a 17-year lifespan on average, Nack says, and 100% financing is available through several lending companies.
For the first time in 50 years, the role of Guam’s power utility is called into question. Customers are now able to decide for themselves whether they can continue to afford to purchase energy from the power company or whether they are ready to take power into their own hands. Even though it is able to offer customers cheaper, cleaner power now, Guam’s solar industry has made it clear that it does not want to part with GPA’s grid. The question isn’t whether solar needs a grid, but whether the solar industry on Guam needs the grid and how the grid will adapt to the changing industry.
“[Photovoltaic] only operates for about eight or nine hours a day, so what do you do at nighttime?” William Hagen asks. “Net metering allows you to produce a lot of power. Noon is when it peaks. So between 9 a.m. and 4 p.m., you’re producing a lot of power. You’re probably producing three times more power than you need to use at that moment. You’re pushing that power onto GPA, and at night you’re pulling it off. So the grid is there to fill in the gaps.” Since solar still needs the grid, Perez says it is not really competition for the power authority. “You can have as much solar power as you want, but in order to put it out, you need a grid. So what GPA does is manage the grid. Without the grid, the solar companies would have to absorb that cost, and right now they can’t.”
William Hagen envisions Guam planning to work as a series of micro grids. “The possibility exists, and it depends a lot on GPA because GPA has the grid. It’s very possible that in the near future — 10 years — you can get groups of houses or an entire village with solar on its roofs and small storage units for batteries. They can become pretty much independent of the main grid. They are interconnected to each other. I use his battery; he pulls off mine.” The role of utility in this scenario would no longer be to provide power, but to manage “all the interconnections and distribute the power that’s being produced, storing it in all of these micro grids and providing backups.”
Even this scenario requires better batteries for power storage. Battery technology is still developing, and the price of converting power without the utility company is not cost-effective; however, “The landscape is changing. Grid defection is something that the utility is afraid of; they don’t like it because they’re losing control over customers,” William Hagen says citing the Rocky Mountain Institute, which is studying conditions customers can choose to break away from their utility companies.
“Equipped with a solar-plus-battery system, customers can take or leave traditional utility service with what amounts to a ‘utility in a box,'” the Rocky Mountain Institute states. “Whereas other technologies, including solar [photovoltaics] and other distributed resources without storage, net metering and energy efficiency still require some degree of grid dependence, solar-plusbatteries enable customers to cut the cord to their utility entirely.”
William Hagen contemplates that one way GPA can avoid grid defection is by realizing “that their customers can be partners, not just customers, but share the ownership, share the information, share the storage, share generation.” Instead of isolationism, solar technology can enable better collaboration within a community.
Every tier in the consumer chain has a stake in planning for the future of Guam power. Perhaps the utility will successfully transition to LNG and solar and consumers will continue to buy from them. Perhaps consumers will beat the utility and make the transition to solar first. The question is no longer whether Guam will convert its system to operate on solar and renewable energy, but how, and what will it look like?
“Ten years ago, we didn’t know what we didn’t know. Now we know more,” GPA General Manager Joaquin Flores said at GPA’s Integrated Resource Plan Forum. Even though the Integrated Resource Plan is a decade in the making, Flores continues to ask questions with curiosity. To presenter David W. Burlingame, principal of ElectricPower Systems Inc. of Anchorage, Flores asked, “Can we be 100% solar by 2030?” Burlingame replied, “If you plan for it. You can plan to be renewable. Can you do it without planning? No.”
Amid detailed planning and developing technology, the question remains to be answered: Will we be 100% solar in 2030?
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