In 2005 we decided as a congregation to pursue solar power, however for various reasons we were unable to complete the installation. Recently from the GreenFaith informational sessions on home solar, we were able to inquire as to options to provide solar power for the church. In addition to the cost benefit to the church, the part of the proposal that was attractive was the combination of no-money-down and 13 year lease-to-own. A small team has been working with the vendor to ascertain exact costs and risks, for the initial presentation to the church council, and the subsequent Sep. 9th presentation to the congregation.

Because of the total cost of the project, the congregation must approve the expenditure of these funds. The funding package includes tax advantages and government grants for the leasing company, however these expire Sep. 2012. These promotions translate into savings to us in the overall cost of the system. To take advantage of these, we need to sign an agreement by Sep 15th. In Oct 2012, the total cost of the project is projected to increase by 20%.

The vendor's engineering staff believes that the church roofs are ideal for solar installation placement; however the roof of the older building is 20 years old and must be replaced in the area where the panels are to be installed. Multiple bids have been acquired, and we expect to replace the roof by end of 2012 prior to panel installation in Spring 2013. It is not cost effective to install the panels and replace the roof later. The FDC roof does not need replacement. We've been told the structure of each building is fine to support this project, and the vendor will have an engineering certification sent to the township. The vendor will interface with the township for all aspects of this project.

For the 12 months ending Aug 1st, the church used 64,000 kilowatts, and the solar panel project would deliver 98% of this amount. The law doesn't allow us to exceed our usage. Since this is a 'lease to own' project, the church must verify that the insurance coverage covers the panels but initial estimates are an extra $300 / year to cover all of the equipment. The church is also responsible for the proper operation of the panels to ensure we obtain the maximum benefit. The system can be monitored continuously over the internet, and any issues will be immediately apparent. If we have trouble, we will contact the vendor first to get resolution throughout the life of the panels.  

The church plans to spread the cost of the project over 146 months. After that point, we will own the equipment. The church will purchase extended warranties since the average life of the inverters is anticipated to be about 12 years. This plan also requires us to save for new inverters during the period of the lease. At some point, the church will bear the cost of replacing the inverters ~ $4000 each; our project has six inverters.  

We have run several scenarios while trying to predict the actual benefit (cost avoidance) to the church for electric power. Refer to the FAQ spreadsheets for details. The scenarios range from $94,000 to $423,000 over a 20 year period depending on the anticipated returned value of SRECs and the price escalation of electricity in NJ.  

11) What warranties come with the system? Can we buy extra warranties or extended?

  The solar panels are warranted for 25 years. The inverters with the extra coverage will be covered for 20 years, at which time our 'inverter replacement fund' will be prepared to replace them.

   While the FDC roof is fairly new, the roof on the front of the church is about 20 years old and already missing some shingles. While we may get another 2-3 years from the roof, the cost to remove the solar system and then replace it would add at least $4000 to the cost. It is more effective to just replace the roof now and avoid this cost.  

  There will be an engineering certification / verification for the weight load for the permits and prior to any installation. This information will be submitted to the township.

We propose to use money from the Building Fund.

The installer will guarantee against leakage through the roof.   

AP solar will provide everything necessary to get the permit and installation including the engineering.  

  SREC stands for Solar Renewable Energy Credits. We receive 1 SREC for each Megawatt produced, or about 62 per year. They are currently valued at around $120 each, but the price varies with demand. Recent legislation in NJ was passed to help stabilize these prices.
The SRECs are traded in the open market. We have calculated potential benefits using SREC values of $100, $150 and $200. (see inserts)   

  The details of this proposal are included in the inserts, but in summary:
- Lease of the equipment and installation for 13 years and spread the payments over 146 months = $260,560. No tax will be paid.
- Insurance for the facility will increase by $230 - $300 per year.
- Saving for replacement inverters - an additional $24,000 over 15 years.
- Purchase of the extended warranty - $7000 to cover 6 inverters
- Cleaning of the panels annually for about $500
- Electric bill from utility company to cover degradation of the panels over time  

  Sunlight during the day is converted by the solar panels to DC electricity (about 50,000 watts with the full installation) which then is converted with the 'inverters' to AC power (about 60,000 watts) for our consumption. There are no batteries to store any power locally, all power generated is sent into the power line, and if we generate more power than we use during the day (which is anticipated) the meter runs backwards. In effect the power company is our 'battery'. During the darkness and inclement weather, the meter runs normally (forward) as we use electricity from the power grid. The net should be close to the power we use during the year. If the power company loses power, our system cuts off automatically, so there is no danger to those repairing the lines. The panels can lose about 0.5% of their efficiency each year, being at 90% after 20 years. The life expectancy of the system is 30 years.    

  The IRS has discontinued the Cash Grants on December 31, 2011, but has provided a 'safe harbor' time period of 9 months to still lock in the savings. The leasing company will use these IRS solar grants to reduce their costs about 15-20% over what can be obtained after Sep 15th. These savings are provided to us now, but after Sep 15 the costs will go up and the projected savings will be less (about $50,000).   

  While nothing is 'risk free', the installation will be covered by warranties and insurance for various periods of time. The total facility will be covered by our insurance against damage and destruction. For maintenance, the first 5 years everything is covered, from years 5 - 15 we will have coverage for the panels and inverters. From years 15-20 and beyond we are planning to allocate for a repair fund (just as we do for the building) for normal replacement of parts. The other risk includes the cost variability of the 'SREC' (solar credits) we will receive; these vary in price based on demand, however NJ state has recently passed bi-partisan legislation to stabilize these, and even if they go very low the system is still cost effective. We have assessed the risk using a very conservative analysis.   

  The church has used 64,000 kilowatts for the 12 months ending Aug 1, 2012.  

23) What has the church's electrical bills been for the past few years?

  Our electric bills for the past 5 years have been:
>> 2012 - 8 months so far: $11,689.11 out of spending plan of $16,500.

>> 2011 - $12,222.55
>> 2010 - $13,072.78
>> 2009 - $12,202.29
>> 2008 - $10,826.99
>> 2007 - $11,255.43

   We are only allowed to replace the electricity we historically produce, no more. This system is sized to be about 98% of our historical usage during the past 12 months.   

   This is a "lease to own" arrangement. We engage in a 10 year lease, which is subsidized by IRS solar grants. This lease covers the cost of the equipment (panels, inverters, installation) and maintenance. After the 10 years, we have another 2.5 years to cover the balloon at the end, and in year 13 our lease is finished and the system is paid up. From then to year 20 (& beyond) we only have the costs for insurance and maintenance of the system. Typically these systems will last 25-30 years but the inverters about 15 years; so we provide for inverter replacement in the financial analysis.   

   The first 3 years we have a negative cash flow of about $2,100 total and then it turns positive. We are funding the purchase of the system through a combination of redirecting the money we normally spend on electricity and the NJ SREC's. Our net after the reduction in expected electricity cost, and all payments, is about a positive (good) cash flow of $242,000 over 20 years. If the solar panels continue to work longer, we save more. The Internal Rate of Return (IRR) for the project is around 48% which is outstanding.   

   The full solar panel design will have a positive cash flow around year 6, and should save us $242,000 over 20 years with $150 SREC value and 6% average utility rate increase. It should also displace over 800 tons of CO during its 20 year life.  

   The cash flow for the first 3 years will be a bit more until we hit the breakeven point. We have a commitment for 13 years of lease payments. The value of the SREC (Solar credits) can vary - currently about $150, but can go lower based on demand.     

   The panels can last much longer than 20 years (25 to 30 years). The SRECs can exceed the $150 anticipated value. The inverters can last longer than anticipated. The price of electricity can exceed the projection of 6%/year. The panels don't degrade as fast as the worst case projections, generating more power. Unlike other capital improvements to the church, this project is not only self-funding but generates savings as well.  

  John Welling, a member of our church who is involved with the local fire department, has said as long as the system is installed with a qualified electrician to code, there are no issues with solar and firefighting.
  New Jersey is the largest solar energy provider in the nation, and our firefighters are trained in dealing with these systems. There is danger during the daytime peak hours as the panels cannot be 'turned off', however the power provided to the 'street' can be interrupted (and in fact is automatically during a power outage to protect the linemen repairing the power. There are many ways to access the building through the uncovered parts of the roof or into the building itself during a fire. Our low insurance increased costs reflect their confidence in the abilities of firefighters to protect the building.   

The equipment has a warranty, and in the event AP Solar isn't available we can have them repaired by another company or electrician. AP Solar fully intends to be in business in the future, and has been the top producing unit east of the Mississippi. About 80% of their work comes thru GreenFaith.  

   Yes it is mandated by the State of NJ. The only way to be off the grid is to get a battery back-up. But typically a battery back-up costs a lot of money and there's also a lot of maintenance involved as well. The benefit to staying connected to the grid is to take advantage of a process called net metering. When the solar system produces electricity that we don't use right away it's sent back to the grid, and we get a positive credit. Think of the grid as a bank where we are storing these credits, so at night-time when the system isn't producing electricity and we need to turn on the lights or any other electrical device we are simply pulling out these credits from that grid.   

   The solar power produced will naturally vary depending mostly on the season and number of daylight hours. Most dust and debris that gets on the panels won't significantly impact solar production, and average wind and rainfall will keep the solar panels producing at near optimum. In certain situations, dust and debris can decrease solar production by 5% to 15%, but this would most likely occur in special situations, such as a forest fire near the church. It's best to clean the panels only if we notice a significant drop in electricity production.  

  It doesn't have to be completely sunny for the panels to produce electricity. In bad weather, the panel production won't be 100%, but the panels will still be producing power. On a cloudy day, the panels might produce 30% of what they normally would. The exception is a snowstorm. If it snows enough for there to be a significant accumulation on the panels, then the panels will not produce electricity. However, snow slides easily off of panels, and the panels tend to be located where the roof gets the most sun, so the snow on the panels will melt first, and then the panels will resume producing electricity. Our snow days have been factored into the system's projected production. Solar panels can handle some pretty tough weather. Most solar panels are guaranteed to withstand 3/4 inch hail balls at 120 miles per hour, and they are also built to withstand direct lightning strikes.  

   We will stay connected to the utility grid and keep our current local utility company. On days when our solar system produces more electricity than we are using, our utility will automatically credit our account. At night and on days when our church uses more electricity than our system is producing, we'll use up those credits and draw electricity from the grid. This is called net metering, and it happens in the background automatically while we continue to use all of our electrical power as we always have. We'll still have a bill from our utility, but it will be smaller.  

   No. For safety reasons, the solar power system will automatically shut off if the power goes out. This is to protect utility workers who might be working on power lines in an outage from being exposed to live electricity.  

   Most solar power systems are predicted to last between 25 and 30 years, however for all the cost savings calculations we used 20 years to be conservative. Additional years are more savings, as they should still be 90% of top production and all 'paid for' at that point.  

  The growth rate of 6% is realistic and reasonable. For the 10 year period between 2000 & 2010 the average increase for residential rates was 6.13% and for commercial @ 5.2%. For the 5 year period between 2005 & 2010 the average increase for residential rates was 8.2% and for commercial @ 6.2%.   

  Solar panel efficiency loss is pegged at 0.5%/year and that is deemed conservative by our supplier. We do have a warranty on the panels, they need to meet the spec. and they are continuously monitored as well.  

40) Why don't we just reduce our electric use?

  We are taking actions to do this, however the need for office equipment, air conditioning, heating and other power uses are required by the ministries that we serve. Future actions may include smarter thermostats, upgrade of the air conditioning system, and other energy efficiencies. Formation of a 'green team' by members of the congregation to help conduct an energy audit and make recommendations could go far in promoting savings for our church.

Any other Questions? Please email to:  finance@lordlife.us