City Council Approves Performance-Based Incentive, Adds Solar Panels to Commercial property

The City of Austin voted 7-0 on the March 7, 2013 city council meeting to approve a performance-based incentive for the generation of solar energy in three facilities located on southeast Austin.

“Council Member [Chris] Riley voted for this item because he believes in a generation mix that includes renewable energy sources like solar power,” Council Member Chris Riley’s Chief of Staff, Lewis Leff said.  “The City of Austin has been a leader in solar energy programs for decades and our continued investment in solar projects will help us reach our generation plan goals of increased renewable energy sources.”

One of those goals is to have 200 megawatts come from solar energy through the use of solar panels.

“[Austin has] a very ambitious goal,” Vice-President of Distributed Energy Services at Austin Energy Debbie Kimberly said. “Having this goal will create a great legacy and benefit the future. It’s [also] a way make our dollars stretch out farther.”

The three locations are 1600 Royal Crest Drive Building 2, 1600 Royal Crest Drive Unit 1, and 1601 Royal Crest Drive Unit 2. These addresses make up the common areas at the Autumn Hills Apartments, which include the laundry room, pool area and office space. Many of the tenants are students.

“We are looking to conserve energy and be green as possible. We want to make our community attractive to those who want to save on their electric bills,” Autumn Hills Apartments manager Garrett Wiess said.

The apartment complex will continue to receive electricity from the Austin Energy grid as well as the energy from the solar panel. AE will pay for the energy that is sent to the grid if the apartment complex produces more electricity that the complex can use.

“The solar panels will not affect rental rates because it would only affect the common areas and our offices. It would only affect the cost of electricity in these areas,” Wiess said.

Austin Energy requested authorization to be in an agreement with Coeus BE Austin, LP, to provide the incentive for an estimated $12,194 per year, for ten years. The total amount of the ten years cannot exceed $121,940. That means that if any other monetary needs, they cannot ask the city for more money.

“The city benefits from these investments because we’re helping to incentivize private dollars towards solar energy production. The more solar power that exists in our city means that our citizens don’t have to spend major dollar amounts in new large traditional power plants,” said Leff.

The total cost for the installation of the solar energy costs $321,172.50, which makes the incentive pay 33%-38% of the total cost of the solar panels.

“This performance-based incentive program for commercial customers is relatively new but I believe the city gets a good deal because we only pay a partial rebate for the actual energy that is produced from the solar panels. This means [Austin Energy] customers are helping to produce more clean, renewable energy and eventually helping to make solar power cheaper for everyone,” Leff said.

Even though the incentive is paying for the installment of the solar panels, the customers are responsible for the maintenance of the panels.

“The customer is responsible for the panels after they are installed. If the panels degrade, that means that the customer will be paid less,” Kimberly said.

According to the Environmental Defense Fund, $108 billion is spent each year on energy bills for commercial buildings and 30% of energy used by commercial buildings could be cut through investments in energy efficiency.

“If we started to use green energy, we can decrease the dependence of energy from foreign countries. Green energy is cost effective,” Kimberly said. “We would also be meeting the market demand for this technology. We need to make sure that [our planet] is a good place to live now and in the future.”

Infographic on how much energy the solar panels would save.

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