If you’re thinking about implementing a distributed generation solution, you likely have questions. There is a lot to consider before taking that step. It’s important to maintain current client and supplier relationships while also forging the new relationships necessary to integrate distributed generation. You need to take into account the ratio of short-term cost to long-term payout. Also, if you’re going to undertake such a project, the logistics of how exactly it’s going to proceed need to be weighed.
Over the years, we’ve received a lot of questions from prospective partners. A few of these questions come up frequently.
How can distributed generation really be cheaper?
How can I avoid antagonizing my current supplier(s)?
Who is going to build, own, operate, and maintain the system?
Are the people involved financially stable?
What can I really save?
We want all of our clients to have reliable information so they can make informed decisions. For this reason, our team sat down together to provide real and honest answers to these questions.
How can distributed generation really be cheaper?
Each element of distributed generation systems has different value propositions. Solar has no fuel cost. Sunshine, after all, is free. RICE engines are quickly dispatched to overcome demand and respond to market pricing. Energy storage can enhance performance of other pieces of a distributed generation system while responding to customer power and energy conditions.
As demand for distributed generation increases, the cost of equipment is becoming economized. Integrating distributed generation also eliminates transmission cost. This allows for cheaper delivered cost, even if the generation isn’t necessarily cheaper. Solar PV systems also have little maintenance cost associated with them. As long as the grass is mowed and proper protection from wildlife is ensured, the systems will function as they should.
Most importantly though, Implementing PV solar is an investment in the future. It’s an important step toward grid modernization and reliability. Price assurance is not affected by the price of fuel. It also ensures continued member satisfaction and loyalty. Members are increasingly looking for renewable solutions and it’s important to deliver them before they install distributed generation systems themselves.
How can I implement distributed generation while working together with my current supplier(s)?
Perceptive Power Infrastructure is all about partnership. The last thing we want is to disturb your current relationships. How we proceed when working with your current suppliers is up to you. You can initiate the conversation or if you prefer, we’ll be happy to reach out to them. As we move forward, we’ll make sure that everyone is on the same page. Transparency is essential in our dealings.
The energy sector is changing rapidly. As it does so, all Rural Electric Cooperatives (REC) and community suppliers are adapting and changing to include renewable energy. It’s normal to worry about how this will affect your existing relationships. You can rest assured that we have experience in navigating these changes.
Who is going to build, own, operate, and maintain the system?
Perceptive Power Infrastructure is a dedicated developer for True Green Capital Fund IV. Currently, True Green Capital has experience with over 500MW of solar assets. The companies and organizations that we work with have a proven history of successful implementation, operation and maintenance of solar assets.
Before we begin building the system, we sit down together and find the solutions that work best for you. We open our books, giving you a transparent view of what the project will cost. Once we understand your community and how you operate, then we create a plan that will benefit all of us.
As we move forward, we keep the lines of communication open. While we and our colleagues in the True Green Capital family will oversee the planning, procurement, construction and maintenance, we will do so as your partner.
We offer both power purchase agreements and equipment leases. Each option allows you to buy after ITC recapture and will be tailored to your specific needs.
Are the people involved financially stable?
This is a very important question. True Green capital, our parent company, has raised over $660 million in capital. In fact, they closed Fund IV $150 million over target! This means that funding is already available. More than just having capital though, they have a proven history of putting assets in the ground which have resulted in successful energy costs for the clients and higher than expected returns from previous funds.
It’s also important to note that Perceptive Power Infrastructure has technical and project development leadership in house with decades of experience in successful project delivery for energy producing assets. We’re adept at creating and managing realistic budgets.
What can I really save?
Perhaps the most important question of all. There are plenty of reasons why distributed generation solutions like PV solar make sense, but what is the financial reality?
The short answer is that it’s not unusual for our clients to save 10-15%. Yes, you really can save money with onsite distributed generation!
The long answer is that we’re going to take your energy needs, put them into our financial model and see what the initial numbers look like. Meanwhile, we encourage you to have other providers open up their books as well. We want you to be able to make the best decision possible.
Our open-book method works like this: First, we allow you to determine what your price is by choosing the things that are most important to you.
- Term number of years you are willing to commit to
- The target price based on an unlevered 8% IRR
- Are you willing to have an annual escalator in pricing?
- Are you providing land for the project?
- How much land is available for the project?
- Energy load profile
- Total price of putting the project in the ground
From there, we create a timeline. True Green Capital, the operating owner of the project, can typically improve the time for project completion based on inventory of critical equipment. With that being said, we’re also realistic about the fact that recent supply chain issues have affected market availability and can increase time to obtain the necessary equipment for construction.
We’re also realistic about all of the costs associated with the project, like upgrades that are needed to interconnect with distribution and transmission systems. Distribution systems should be updated to smart metering. However, as mentioned earlier, distributed generation systems like PV solar have few moving parts and thus little maintenance cost associated with them. As long as the grass is moved and the system is protected from animals, the system is easily viable for 30 years.
Still have questions?
Every community is going to have specific needs and this is going to raise specific questions. Take a look at some of our other resources and feel free to reach out at any time. Scott, Gary and the rest of our team would be happy to give you honest answers.
Learn more about us and our processes here:
The Perceptive Way: Building a Partnership Founded On Trust
What We Offer Rural Electric Cooperatives
Get Back on Track When Development Funding Runs Out
