August 20, 2010
Austin Energy Enters Into Solar Supply Agreement

The Austin City Council this week approved Austin Energy’s first solar supply agreement. In just two years, the cost of solar modules has dropped by almost 50% due to improved manufacturing methods and cheaper silicon. At $1.85 per watt, AE is taking advantage of the exceptionally good rate through a volume purchase of up to 2 MW of American-made solar modules over a three-year period. The total contract cannot exceed $3.7 million.

Under this agreement, Austin Energy will have the option to purchase as many as 8,500 solar modules to be used on municipal buildings and schools in AE’s service area. Once installed, they will generate an estimated 2.7 million kWh annually – enough electricity to power 270 average-size homes in Austin for an entire year. The emission savings (by not having to produce the same power at a power plant) is the equivalent offset of about 3 million vehicle miles traveled, the removal of almost 400 cars from our roadways, or the planting of almost 60,000 trees creating 2,900 acres of forest.

These 235-watt solar modules are made of crystalline silicon and are roughly 5 feet by 3 feet. AE purchased similar modules for $2.98 per watt in September 2009 and for $3.59 per watt in October 2008. Generally speaking, this type of solar module is used on traditional rack-mounted systems similar to the solar installation on the parking garage at Palmer Events Center in downtown Austin.

Over the next three years, Austin Energy plans to use the modules on as many City of Austin photovoltaic projects as possible unless a specific project does not lend itself to this type of solar array. Austin Energy will also use the supply agreement to purchase $174,000 worth of solar modules to build solar outdoor learning centers at approximately 15 schools in the Austin Independent School District. Funding is available for this particular solar project through a federal grant awarded to Austin Energy earlier this year by the Department of Energy through its Solar America Cities program. The list of schools to receive these new solar structures will be announced in the coming months.

The additional 2 MW of installed solar capacity in our community is expected to generate approximately 2,726 Renewable Credits (RECs) annually. RECs are tradable environmental commodities representing proof that one megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource.

As part of Austin Energy’s Strategic Plan, the utility has been selecting high profile locations such as City buildings, libraries, and schools to install solar panels as a way to create public awareness and educate Austinites about the advantages of using solar power. To date, 35 City of Austin facilities have solar installations totaling 425 kW. That number is expected to increase to at least 2.4 MW over the next three years, setting the City closer to its goal of increasing solar capacity to 200 MW by 2020.