May 3, 2016 | No comments yet
With 17% of the Hawaiian Electric Company (HECOs) customers utilizing solar electricity, one could argue that solar is reaching mainstream on the islands. But as is often the case, all projects are not created equal. Historically it has been easier for homeowners to switch to solar and Oahu is proof with 32% of single family homes generating power from the sun that hits their rooftops. While we don’t have exact numbers, we know that small businesses and non-profits are drastically under-served by comparison. Two main reasons are lack of access to financing and space constraints.
The Polo Beach Club is a Homeowners Association (HOA) that fell squarely into this underserved market. Nuzzled in one of the most secluded beaches in Makena, Maui, Polo Beach is a destination for luxury travelers from all around the world. This location is noted particularly for its ideal location with beautiful scenery, abundant sea life, and relaxing condominiums.
Due to the high cost of electricity in Maui and the marketability of sustainable investments in renewable energy infrastructure, the owners of Polo Beach were particularly interested in the economic benefits of installing solar panels. Reducing the operating costs of running Polo Beach will allow for further investments in other areas to improve the experience of their residents. While Polo Beach had been on the hunt for an optimal solar agreement since 2014, their association had a hard time identifying the best fit for their needs.
In a conversation with Andy Clark, Polo Beach Operations Manager, he explained that they were looking to partner with financial and technical firms to assist them in the purchase and installation of solar at Polo Beach. When they could not find the right fit for their situation, Wiser Capital was brought on board to identify the best route forward. Polo Beach management wanted to reduce operating costs while maintaining the aesthetic quality of the HOA. Since they were space constrained, they knew that finding a high efficiency panel would be important to meet their needs.
“The economics of the plan presented by Wiser Capital and HNu were more favorable, encouraging our board of directors to move forward with this project.” – Nancy Montgomery, previous President: Polo Beach Board of Directors.
In addition, the Board was uncertain about investing in solar due to their fluctuation in electricity usage – they have lower usage in the summer and higher usage in the winter months. This variable energy consumption throughout the year is due to the fact that most people use their condos as vacation or second-homes. It was very important for all owners to understand the importance of modeling electricity usage beforehand to help determine the proper system size and the associated utility savings. Accurate modeling, taking into account such features as net energy metering and time of use, can make the difference between a financially successful project and a financially infeasible one.
While Polo Beach is a well-established business with healthy reserves and a strong client base, it does not have a public debt rating and is therefore considered an unrated facility – a qualification that had historically been difficult to finance. At Wiser Capital, we take a slightly different approach. We look for businesses with reliable occupancy, predictable electricity usage, history and longevity. Homeowners associations are prime candidates because even if one owner leaves, the likelihood of the energy being used throughout the complex is high. With Polo Beach’s prime location in Makena, it’s unlikely that a condo space will remain empty for an extended period.
Wiser Capital provided financing for a 157kW solar array that covered 65% of Polo Beach’s annual electricity use. At the time of financing, savings were expected to be approximately 30% when compared to the current cost of electricity from their provider, Maui Electric Company (MECO). While actual savings will fluctuate based on the MECO prices, the cost of the solar electricity is fixed and guaranteed for the entire 25-year term.
Wiser assisted the HOA through accurate electricity modeling; calculating energy and cost savings, as well as optimized their solar system for maximum savings. The system is designed with high efficiency panels to maximize the production capacity with limited roof space while lying flat to maintain aesthetics.
Ruth Birchall, current Board President, explained that while the process of going solar took longer than expected, they appreciate that their daily operations will not be affected. They look forward to the cost savings from working with Wiser Capital and reducing their carbon footprint over the next 25+ years. In the end, Wiser Capital and Polo Beach Club made a great partnership that resulted in a solar installation that met the needs of their association.
About the Author: Brandon Kaysen is a research intern at Wiser Capital and student at UCSB’s Bren School of Environmental Science & Management. His pursuit of energy innovation and corporate environmental management has helped him establish a deep understanding of the built environment and sustainable technological advancement.