August 31, 2015
Solar Power Opportunity for Embassies: D.C. Greening Embassies Forum members have a new opportunity to save money, obtain renewable energy, and reduce greenhouse gas emissions. WGL, an energy company founded in the District of Columbia in 1848, is looking to pool embassies’ energy demand to build an off-site solar energy farm in the D.C. area that would provide 100% renewable energy to the embassies – at a cheaper electricity rate than they currently pay. The offer is for an initialelectricity rate of $0.07/KwH for the first five years, with an escalation rate set at 1% for each year thereafter of the contract. (For comparison, Pepco’s residential rate is $0.091/KwH and its small commercial is $0.086/KwH.) WGL’s offer rate is 23% less than the residential rate, and 18% less than the small commercial rate.
Background information: WGL’s offer rate is possible because of two favorable market conditions. Firstly, the investment tax credit (ITC) which is set to expire in 2016, allows companies like WGL to qualify for a 30% tax credit, as such there is a major effort to develop and construct solar assets well ahead of the ITC expiration. As we get closer to the second and third quarters of 2016 the challenge of timely completion of solar assets increases risk premiums in business models, which translates to higher rates. Secondly the ability to aggregate the energy supply across the portfolio of Embassies is critical to the success of the effort. By aggregating the supply across the larger portfolio of participants, everyone benefits from near record low energy rates.
How embassies join: This aggregation means that no Embassy is too big or too small to get electricity from a new solar renewable plant. The enrollment process is simple and involves connecting with WGL to share your annual energy use. Contact Nate Greenberg at Nate.Greenberg@WGLenergy.com for more information.
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