Community Solar Project

The Hummingbird Project estimates participants will get a bit over 28% of their investment back in the first year if they’re eligible for the Federal tax credit, and the rest back over the next 18 years. How much this no interest loan costs per tonne of reductions depends on how you think about the time value of the money. If you figure you might be making 5% a year investing it in some other way, a $300 investment in one share means you’re contributing $91.28 in current dollars to the project.

They estimate each $300 unit will produce 165 kWhs a year and reduce emissions by 150 pounds/year. At that rate, one unit is reducing emissions by 2,850 lbs or 1.3 tonnes over the first 19 years of the project. That would make it cost roughly $70/tonne of reductions. (The carbon intensity of PSE’s power according to the 2018 TCAT inventory is somewhat higher than the number they apparently used. Using that number increases the annual reduction to 170 lbs/year,  increases our total reductions to 1.5 tonnes, and lowers our cost to $60.85/tonne.)

However, the panels are going to keep producing power for longer than 19 years, though the financial benefits of their additional life go to the Museum. The panels and inverter optimizers are warrantied for 25 years, and the inverter is warrantied for 20. If the system only lasts 6 more years, and the power is worth its $0.1035/kWh value in current dollars, one unit produces $93.15 worth of additional power for the museum. (The financials put the value of the power in the 19th year at $0.16/kwh, but I don’t know how much of that is inflation and how much is an actual expected increase in the cost of power. If that were all an increase in the real cost of power, six additional years of it would be worth $144 in current dollars to the museum.) From that point of view, one can consider the deal as a way of making a delayed contribution of at least $93 to the Museum, starting in 20 years, and getting the emissions reductions along the way for nothing, rather than thinking about as a deal in which you’re paying $91.28 for the emissions reductions over 19 years.

In fact, the system might well last longer, at least if they replace the inverter at some point. (The Hummingbird materials say the deal could save the Museum up to $500,000 in power costs, on the assumption that the system could continue to produce power for up to 40 years, and some assumption about how the real cost of power will keep increasing. That works out to $625 in savings over 21 years from each $300 share.)

However, the system will not keep producing emissions reductions as well as financial savings. PSE’s grid is supposed to become coal free in 2025, and to go to “carbon neutral” in 2030. (According to the details in the estimates for residential solar, this implies that the reductions after 2025 will be roughly 58% of the current ones, and that after 2030 the panels will not be avoiding emissions compared to the grid.) At that rate, we get 150 lbs/yr of reductions for the first five years, and 87 lbs/yr of reductions for the next five. That works out to a total of 1,185 lbs, or .54 tonnes of reductions altogether from a $300 share.

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