Guam Solar PV Energy Sense
Guam Solar PV Energy Sense
Guam Solar PV Energy Sense

Guam Solar PV Energy Sense



Guam Energy Sense Makes Good Cents

Awarded:: TA Voucher, Participant

Team Information

Team Lead
John Cruz
Team Lead LinkedIn Profile
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Project Description

Project / Program Description

1         Introduction

Strong interest exists for Community Solar from the Consolidated Commission on Utilities (CCU), Guam Public Utilities Commission (PUC), and the Legislature. GPA will soon award additional solar PV Power Purchase Agreements (PPA) for solar energy priced between 6.25 and 8.55 cents per KWH. At present, this is much less costly than GPA’s current LEAC charge. All charges for renewable Energy for Phase I, II, and III Renewable Acquisition PPAs are passed through GPA’s LEAC: our fuel charge. All customers will benefit from these PPAs. Additionally, these new PPAs present the opportunity to offer Community Solar subscriptions for renewable energy. The program can be quickly set up starting at the commercial operating date of the Phase II projects. GPA can focus this program towards customers receiving Federal assistance and administered through Guam Housing and Urban Renewal and the Guam Department of Public health. About 29% of Guam Households fall below the poverty line. Additionally, GPA can include Government and certain non-profits into this program. The CCU and PUC must review and approve implementation of this program.

GPA bids out for solar PV PPAs creating jobs within the community. GPA expects renewable energy to supply up to 35% of Guam’s electricity needs within three years.

2         Situation Analysis

CCU Commissioner Simon Sanchez opined an excellent situation analysis to stakeholders including solar industry representatives. Commissioner Sanchez identified the following points:

  • Obtaining capital is a big issue resulting in many struggling “community solar” projects around the country
  • Residential customers may want to participate in renewables but the up-front cost to participate is difficult for those living pay check to pay check, like here on Guam
  • GPA’s Utility Scale Renewables and Solar strategy is a much better way to finance “community solar” with no up-front costs to customers while bringing both generation and storage capacity to Guam while lowering fuel use and costs and providing a real-world laboratory for cutting edge technology and business processes
  • Some of the renewable energy lease packages being sold on Guam have onerous conditions, especially the cost escalators on the back end
    • Leasing companies take all the ITC and accelerated depreciation up front, but they may not pass these “savings” on to consumers
    • Some of the sales material has been very deceptive and inaccurate in portraying “savings” when compared to GPA rates, using projections of GPA rates that have never ever been charged such as pricing oil at $180/barrel.

3         General GPA Community Solar Program Outline

Renewable Energy Acquisition (REA) Contracts under negotiations will provide GPA with renewable energy resources at less than current LEAC rates and highly competitive with LEAC rates during the recent fuel market downturn from 2014 to 2016. GPA may use these contracts as part of a Community Solar Energy Subscription Program. The general details of this program may include:

  • Carving out a portion of the energy production from the Phase II REA contracts for a Community Solar Subscription Program
  • Substituting the LEAC charge in subscribed customer bills with a reduced charge: Phase II REA energy price plus administrative fees
    • Subscription may include the provision of using the Renewable Energy Charge or the LEAC charge whichever is less
  • The Community Solar Subscription Fee would have an irrevocable one-year term to allow customers to get back on LEAC if it is advantageous to do so, and to minimize administrative burden.

This program would have no onerous lease provisions. Customers would not need to front capital costs. Metering, billing, and servicing infrastructure and process are already in place and do not need to be modified much or at all.

4         Market Segmentation

GPA may wish to a priori set the amount of energy eligible for subscription among different customer segments. GPA may wish to consider apportioning according to customer class energy sales. Additionally, GPA may want to reserve a segment for customers who receive government assistance (SNAP, subsidized housing, welfare), emergency life support customers, government, and select non-profits.