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Renewable Energy Production

There’s no getting around it: adding renewable energy production capacity to a project is likely to be an added cost. However, costs are coming down—for solar photovoltaic (PV), at least—and projects are increasingly finding a variety of benefits to add renewables, including tax advantages, added value, and locked-in pricing.

The following analysis does not include the impact of tax credits or incentives which may offset a significant percentage of initial costs. It assumes that renewable energy credits (RECs) are retained with the project (see below). Local climate, regulations, and building use must be considered in selection of renewable energy systems and have a major impact on installation costs and payback.

New in LEED v4, the option of off-site “community solar” or “solar gardens” is a credit option. These systems can be developed in a variety of ways, but generally offer a way for a project to own its own renewable energy capacity even if it doesn’t have an economical way to provide that onsite.

For this or any system in which a third party is involved in developing the renewable generation capacity, it is important for LEED that the project either retain the RECs associated with the project, or be prepared to buy back an equivalent amount of RECs. This may increase the costs to the project, because the sale of RECs from community solar developments is a common way of helping to finance them.

When applying any of these systems, the importance of using a system expert with knowledge not only of the system, local and utility regulations, and financial opportunities, but also of the project goals and limitations, cannot be overemphasized. System capacity needs to be right sized for the project in order to be financially viable, and not waste money (over-sized) or capacity opportunity (under-sized). Many vendors have sprung up recently marketing their “expertise” and selling these technologies; be prudent.

While renewable system selection and design is well outside the scope of this report, the factors favoring solar photovoltaic are hard to ignore for projects considering renewable energy:

  • long-term downward cost trend
  • growing experience and level of support from trades
  • simple, widely applicable systems with no moving parts and little maintenance 

Cost Synergies

SSc1: Site Assessment
SSc5: Heat Island Reduction EAp2/c2: Energy Performance

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