Cost-Effective Solar Options Pay Off for Parking Facilities
By Jon Sarno
Parking lots and garage rooftops offer expansive, unshaded and unobstructed spaces ideal for housing commercial-scale solar energy systems. For years, solar photovoltaics (PV) have proven to be a smart choice for parking facilities for a variety of reasons.
With the growing trend of installing plug-in electric vehicle charging stations in some parking lots and garages, energy usage and operating expenses have also increased, making solar PV parking lots a solution for facility owners looking to counteract the increase in energy demand.
Other parking facility owners have found that renting unused rooftop or open lot space to third-party solar developers to build solar installations on the property is a way to collect “rent” and add a consistent revenue stream to the bottom line with the seemingly unusable space 15 feet above the parking spaces.
Bexar County, Texas, hosts a carport installation built atop its parking garage in San Antonio. It provides energy to a few onsite plug-in electric vehicle charging stations, as well as some additional electricity to the few commercial offices on the first floor of the garage. The design and material procurement of the project were completed by Borrego Solar, and the electrical construction was completed by Triple R Electric.
As a public entity operating partly through tax revenues, Bexar County felt it was inappropriate to apply for any municipal incentives for going solar that would offset a portion of the total installed cost of the solar power installation. So, in the end, the county paid for its solar power installation with its own funds. Ultimately, over the life of the solar project, Bexar will save more than $600,000.
Shade structures can be a great addition to any parking lot, as they provide numerous benefits as well as the potential to carry solar panels. Adding shade structures to a parking lot can reduce lighting costs through the installation of energy-efficient LED lighting under the structures in place of the often low-efficiency light poles in many lots.
Additionally, as hard as it may be to quantify, elevated shade structures—sometimes called carports—help keep cars dry in inclement weather, provide security from sun and hail damage, and keep cars cooler in the summer. Finally, the structures can be used as the racking system for a solar installation, maximizing the utility of the space and adding energy-producing value to a once-barren parking lot.
Financing Options for Privately Owned Parking Facilities
Parking facilities without access to upfront capital can go the route of a power purchase agreement (PPA) to finance a solar energy project. A PPA is a mechanism by which a third party pays for the installation of the solar system, taking on all finance, design, installation, ownership and maintenance costs, and then pays the savings forward by selling the power back to the plant manager (or host) at a predetermined economical rate.
PPAs allow parking facilities to enjoy the immediate cost-savings and environmental benefits of a renewable energy system without the upfront costs, while third-party investors bear all financial risk and maintenance costs associated with the system. At the end of the agreement, the facility owner has the opportunity to renew the PPA, purchase the system outright at fair market value, or have it removed at no charge.
Renting Lot or Garage Rooftop Space to a Solar ‘Tenant’
For parking facilities without high energy usage, the economics for the building itself to go solar might not make sense. However, solar energy procurement programs focused on so-called wholesale distributed generation (WDG) exist, which allow property owners to lease their unused rooftops to solar developers. It generates a guaranteed revenue stream at no expense and without operating risk, while also increasing the property’s resale value. (This is similar to leasing rooftop space to phone companies looking to host their cellphone towers.)
Here’s how WDG works: Instead of owning or leasing a solar energy system, parking lot and garage owners can “rent” a facility’s rooftop to a solar project developer. Think of it as having a tenant on the roof. WDG projects are small, wholesale generators that sell energy directly to the utility, instead of delivering energy to the user to credit a specific utility bill or meter.
The “tenant”—a solar developer, an independent third party, or a partnership between the two—installs and owns the solar energy system. WDG mechanisms align the interests of the tenant with those of the parking facility owner: The tenant obtains a contract to sell the clean energy to the local utility, then installs the system, generates revenue from selling energy to the utility, and pays rent to the facility owner for use of the space.
The arrangement has no impact on parking facility operations, other than, perhaps, a greater attraction to the building because it is being used to generate clean, renewable energy.
WDG projects are typically located near a point of interconnection to the grid, such as on top of or near an existing building tied to the utility grid. As it turns out, parking facilities with large flat and unshaded spaces, good proximity to grid interconnection and solid infrastructures are some of the most cost-effective locations to install solar for WDG.
It’s important to find a solar partner that has shown success in developing WDG projects, as not all properties are a good fit for this program, and if inexperienced, working with the utilities on permitting and interconnection can be difficult.
The solar partner you choose should have a long track record of installing rooftop and ground-mounted, commercial-scale solar energy solutions and immediate access to project financing, and should help address any site and permit issues through a properly drafted lease.
Solar has proven to be economical to parking facility owners working to further reduce operating costs and tap into available resources and programs. With the right analysis of the opportunities and hurdles associated, solar can benefit other parking facilities throughout the country.
Jon Sarno, Senior Project Developer at Borrego Solar,
can be reached at email@example.com.
Article Abstract from September, 2013