The financials of constructing a solar PV for net-zero energy operations on college campuses

The LACCD has a goal of establishing net-zero energy operations across its nine campuses. The project faces many challenges, including limited open areas for installing solar PV, increasing energy consumption challenges associated with campus energy growth and the high cost of installing solar PV. A previous study by Kwan and Hoffmann (2010) found that the LACCD would need to install a 9.5 MW solar PV array in order to meet total campus energy demand on a college campus through the year 2020. This paper attempts to evaluate the financial feasibility of such a project, taking into account the current local, state and federal renewable energy incentives available. We find that despite the availability of financial incentives by local municipal utility companies including installation rebates and net metering, the cost of electricity generated by solar PV still remains approximately 30% higher than electricity generated by fossil fuels. We also find that the optimal solar PV array size from a financial standpoint is one that is sized to generate and meet all electrical demand during sunlight hours. Any array larger than this yields diminishing returns. Finally our analysis examined the influence of per kW installation cost and found that only when prices dropped to $3.00 per installed watt did a net-zero energy solar PV array have an NPV of 0.

► We perform a financial analysis of a 9.5 MW solar PV array used for net-zero energy operations.
► We examine the impact of current renewable energy incentives on the cost of electricity by solar PV.
► We find that electricity generated by solar PV remains 30% higher than generated by fossil fuels.
► Renewable energy credits and incentives are important to promote renewable energy installations.
► Installed cost of solar PV needs to drop to $3.00/W for large installations to be financially viable.