I am hoping that someone can shed some light on the way a Campus PV PPA will be viewed for EAc1 and EAc2 in LEED NCv2009. We are working on a project with a Campus PV array that is owned and operated by a third party. The power generated is used on the campus and the campus pays the third party for the power generated. The third party entered into Excel Energy's Solar Rewards Program and receives a premium for the electricity generated in exchange for the RECs (Excel purchases the RECs). My question is: Since the PV system is not owner occupied or operated but the power generated is used by the campus (not specifically fed into our building) can we simply purchase additional RECs to replace the RECs purchased by Excel for the portion of power we would like to allocate to our project?
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Marcus Sheffer
LEED Fellow7group / Energy Opportunities
LEEDuser Expert
5867 thumbs up
January 10, 2014 - 12:55 pm
There are various LEED Interpretations that cover the issues you raise. First third-party ownership is allowed as long as the PPA is for alt least 10 years and a few other criteria (ID#1842). If those criteria are met then you must replace 100% of the RECs before it can count (ID#2594).
Chad Coleman
Project ManagerJanuary 10, 2014 - 3:29 pm
Thanks for the response Marcus. It appears that my scenario is similar to the one described in the following FAQ (from above FAQ section), with the exception that the PV system in my scenario is on a campus:
"Our project will have a PV system onsite, but it will be installed, operated, and owned by a separate entity that is paying for the system through a premium price per kWh paid by the utility, per state regulations. Is there any way to count this toward the project, in EAc2 or EAc1? Answer: Probably Not"
I am confused by the answer of “Probably Not” to this FAQ.
If requirements 1-3 of LEED Interpretation #1842 are met, it would appear that the project in the FAQ could meet the requirements by purchasing the offsetting RECs (Interpretation #2594). Requirements 4 and 5 of Interpretation #1842 deal with the RECs being sold and the energy system owner not counting the RECS associated with the system to meet a mandated renewable portfolio standard goal. Is the main issue in the FAQ that the separate entity (third party) is funding the system through a premium price per KWh paid by the utility? If additional RECs are purchased as outlined in Interpretation 2594, isn’t this issue addressed?
If so, then it appears that the only additional hurdle that my project faces is that the system is located on a campus and not within my project boundary. If all other requirements are met, I do not believe that this will be an issue as long as the campus does not allocate the same “power” for other projects. I assume we would require a letter with a breakdown of the power allocation from the owner.
Sorry, as you can tell I am a little confused :)
Marcus Sheffer
LEED Fellow7group / Energy Opportunities
LEEDuser Expert
5867 thumbs up
January 10, 2014 - 5:26 pm
Yes I think the issue in the FAQ is the mandated nature of the system addressed in #1842. This does get a bit complicated.
Within #1842 #4 - If the RECs are sold they can be replaced (#2594).
Within #1842 #5 - If it was part of a mandate then I think the RECs are not really sold as they go to the utility in order to claim it as part of the mandate. The question raised in the FAQ is if they were never really sold then can they be replaced? As they suggest in the FAQ this subtle nuance may require submission of a new LEED interpretation. I think that is the issue raised by the FAQ but I agree it is not really clear.
The campus issue should not be a problem and as you indicate is a matter of allocation.
Chad Coleman
Project ManagerJanuary 10, 2014 - 6:26 pm
Thanks again Marcus. This does get a little tricky. The utility is purchasing the RECs from the owner (third party) to meet a mandate, but since they are not the owner of the system as called out in requirement #5 then this requirement does not appear applicable to our situation.
Maybe the important word in requirement 5 is "mandate" and I am focusing too much on "owner".
If the third party is providing the utility with the RECs in exchange for money, wouldn't the RECs technically be considered "sold"?
As you suggest this is where submission of a new LEED interpretation or CIR will likely be required. Now to convince the client that this is good use of their money....
Marcus Sheffer
LEED Fellow7group / Energy Opportunities
LEEDuser Expert
5867 thumbs up
January 11, 2014 - 3:11 pm
I think mandate may be the most important word. Sounds like the RECs are "sold". You could also try to submit it as it stands and see what the reviewer might have to say. Agreed it is a bit tricky.
Chad Coleman
Project ManagerJanuary 13, 2014 - 11:28 am
Thanks again Marcus. Once we receive a response, either during the Design Review or to a CIR / LEED Interpretation, I will provide an update.