Palo Alto aims to achieve a carbon neutral electric supply portfolio by 2020. It has undertaken several initiatives to promote distributed solar generation and meet its renewable energy goals, including a feed-in tariff program, solar rebates, and power purchase agreements. Recent solar contracts totaling 100 MW will supply around half of the city's electricity and allow it to reach carbon neutrality with a modest customer rate increase of less than $1 per month.

1. Palo Alto: Going Carbon
Neutral by Going Big on Solar
Jim Stack, Ph.D.
Senior Resource Planner
Lindsay Joye, P.E.
Solar Marketing Engineer
Vote Solar Webinar
July 24, 2013

2.  26 square miles
 Territory runs from the SF
Bay to the Mountains
 Population: 64,000
 Employment: >80,000
 Approximately 29,500
customers (73,500 meters)
Palo Alto at a Glance

3. CPAU Delivers Five Utility
Services

4. 4
Palo Alto’s Electric Utility
 Not CPUC regulated
– City Council is decision-
making authority
 Annual load: ~1,000 GWh
 Peak: 190 MW
 Current Supply
– Hydroelectric
– Wind
– Biogas (LFG)
– Natural gas (and RECs)
– Some local solar (NEM)
 Future Supply
– Large solar (utility scale)

5.  Utilities Incentive Programs
 Rebates, Solar water heating, NEM, DR, and more
 Renewable Portfolio Standard (2002)
 33% by 2015 with a rate impact up to 0.5 ¢/kWh
 PaloAltoGreen (2003)
 City’s Climate Protection Plan (2007)
 Community-wide GHG emissions 15% below 2005 level by 2020
 10-year Energy Efficiency Plan (2007)
 Feed-in Tariff Program (Palo Alto CLEAN) (2012)
 Local solar Feed-in-tariff at 16.5 ¢/kWh for a 20 year contract
 Carbon Neutral Electric Portfolio Plan (2013)
Key Climate Initiatives

7. 7
Electric Supply GHG Emissions
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
TotalElectricitySupplyEmissions(TonnesCO2e)
Calendar Year
Total Emissions (Actual / Projected)
Total Emissions (Carbon Neutral Plan)
Total Emissions (Average Hydro)
Actual Projected

8. 8 8
Solar Accomplishments
 1999: PV Partners Rebates for Net Metered PV
 2003: PaloAltoGreen voluntary 100% renewable
 2012: PA CLEAN Feed-in Tariff for PV
 2013: Carbon Neutral Electric Portfolio
 2012-2013: Solar Power Procurement (PPAs)

9. 9
Palo Alto Green
 Voluntary renewable
energy program, started
in 2003
 Premium 1.5 ₵/kWh
 100% renewable energy
credits from CA solar
 >21% of customers are
on PAGreen
 Ranked #1 in US for last
5 years

10. 10
PV Partners Program
 Rebates for Net
Metered PV systems
 Started 1999
 Increased funding in
2007 (SB1)
 6.5 MW goal by 2017
 Current rebates:
– Residential: $1/watt
– Non-Res: $0.25/kWh
paid over 5 years -
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Cumulative Installed PV Capacity (MW)
Residential NonResidential

11. 11
Distributed Generation
 Avoided transmission & capacity costs
~$30/MWh
 Wind and biogas – low potential
 Solar PV is most viable
– Limited space for ground mount
– Best suited for rooftops and parking lots

12. 12
Palo Alto CLEAN Concept
 Clean Local Energy Accessible Now
 Fixed Feed-in Tariff paid for 20 year term
 Interconnected on utility side of meter
 CPAU buys electricity, renewable energy
credits and capacity attributes
 Energy used to meet Renewable Portfolio
Standard goals
 Price based on value of local renewable
electricity to CPAU

13. 13
PA CLEAN Details
 2012 price = 14 ¢/kWh
 2013 price = 16.5 ¢/kWh
 No minimum project size
 2 MW program capacity
 Continued outreach to property owners, solar
developers & CLEAN Coalition
… no projects, YET

14. 14
PA CLEAN: Ideal Candidate
 Has available rooftop space
 Interested in generating green energy, but
not able to use it themselves (e.g. building
owner who leases the building to tenants
who pay utilities)
 Looking for additional revenue from their
rooftop
 May develop the project themselves or lease
the roof to a solar developer

15. 15
PA CLEAN Lessons
 Challenging to find suitable locations
 Hard to compete with higher ROI for net
metered PV
 Hard to locate property owners who don’t pay
utilities and want to monetize roof or parking
areas
 City may need to offer additional services to
match property owners with developers

16. 16
Palo Alto’s RPS History
2002 2006 2007 2011
20% by 2017
(SB 1078)
10% by 2008,
20% by 2015
20% by 2010
(SB 107)
20% by 2008,
30% by 2012,
33% by 2015
33% by 2015
33% by 2020
(SB X1-2)
California
Palo Alto

17. Contracted RPS Resources
0
100
200
300
400
500
600
GWhperYear Large Solar
PA CLEAN
RECs
Landfill Gas
Wind
Small Hydro
33% RPS Target
100% Carbon
Neutral Portfolio

18. Hydro
53%
Wind
12%
LFG
11%
Solar
23%
Market Power
0.7%
2017
Hydro
43%
Wind
12%
LFG
7%
Market Power
38%
2012
Palo Alto’s Resource Supply Mix

19.  Open, competitive solicitation process
 Issue an RFP once a year (approx.)
 No unsolicited bilateral deals
 Response rate has grown exponentially
 Over 90 project proposals received in 2012
 City staff negotiates PPA with seller
 3 step approval process after seller executes
 Utilities Advisory Commission, Finance Committee,
City Council
RPS Procurement Efforts

20.  Go shopping fairly often/regularly
 Get the word out across the industry
 Streamline and simplify the proposal submission
process as much as possible
 “Just the facts”
 Be very clear and very specific about what types
of offers will be accepted
 Establish objective evaluation criteria
 Before issuing the RFP!
RPS Procurement Lessons Learned

21.  4 solar PPAs executed in last 8 months
 Weighted average price: $70.40/MWh
 100 MWAC total
 25-30 year terms
 1 COD in late 2014
 3 CODs in late 2016
Palo Alto’s Solar PPAs

22. Renewable Energy Supplies & Green Premium
Carbon neutrality with a total rate impact of 0.11 ¢/kWh,
or less than $0.75/month for a home
Generation
(GWh/yr)
Green Premium
($000/yr)
Operating Projects 194 (808)
Committed, Not Yet
Operating Projects
91 2,729
Total Committed
285
or 29% RPS
1,921
or 0.20 ¢/kWh
3 Solar PPAs
(2016 start dates)
183 (850)
Total with 3 Solar PPAs
468
or 48% RPS
1,071
or 0.11 ¢/kWh

23. 23
CONTACT INFORMATION
Jim Stack, 650-329-2314
james.stack@cityofpaloalto.org
Lindsay Joye, 650-329-2680
lindsay.joye@cityofpaloalto.org
www.cityofpaloalto.org/solarprograms