CC 12-03-2024 Item No. 12. Photovoltaic Systems Project_Supplemental Report
CITY COUNCIL STAFF REPORT
SUPPLEMENTAL 1
Meeting: December 3, 2024
Agenda Item #12
Subject
Capital Improvement Program Photovoltaic Systems Design and Installation Project.
Recommended Action
Approve the Capital Improvement Programs Photovoltaic Systems Design and
Installation Project conceptual design for three City of Cupertino facilities:
Community Hall, Cupertino Sports Center, and Quinlan Community Center.
Background:
Q1: The original proposed project include 5 sites, but the current project
includes only three sites: Community Hall, Cupertino Sports Center, and
Quinlan Community Center. The Blackberry Farn and the Library parking
area are removed. The staff report states ʺThe PV Systems Design and
Installation (budget unit 420‐99‐274) was approved as part of the FY 2024‐25
Budget at $6,300,000. There are no recommended changes to the budget. ...
The project is estimated to reduce expenditures by approximately $276,000
annually, and approximately $13,000,000 over the 30‐year life cycle.ʺ (Chao)
Q1‐1: Is there any reduction in the total project cost of $6.3M, given the fact
that two sites are removed from the previous proposal with 5 sites? Or would
the cost still be $6.3M for the remaining three sites?
(Chao)
Staff response: A reduction to the overall project cost is not proposed.
Q1‐2: Is the estimate of annual saving still $276,000 annually and
approximately $13,000,000 over the 30‐year life cycle, given the fact that two
sites are removed from the previous proposal with 5 sites?
(Chao)
Staff response: The projected annual and lifecycle savings noted above reflect the
savings possible from the three proposed sites.
Q2: As a reference, Google search shows that ʺSolar panels are typically
warrantied for 20–25 years. After that, the panel can still produce electricity,
but the amount is no longer guaranteed,ʺ which i know may or may not be
applicable for the Photovoltaic Systems being installed.
(Chao)
Staff response: The typical warranty for photovoltaic systems is 30 years.
Q2‐1: How many years the proposed Photovoltaic Systems would be
warrantied for?
(Chao)
Staff response: The typical warranty for photovoltaic systems is 30 years.
Q2‐2: Given that the performance of the solar equipment degrades over time,
whatʹs the estimated savings?
(Chao)
Staff response: The projections for estimated savings include a 0.5% factor of
degradation, as noted in Attachment B – Preliminary Cost Estimates.
Q3: Is there any grant funding now to offset the $6.3M cost? Whatʹs the
estimated grant funding the City might receive? (Given that the federal
government might rollback incentives in the next 4 years?)
(Chao)
Staff response: The City will apply for the Inflation Reduction Act funding, which
would provide an approximate 40% rebate. Other grants will be sought and applied
for where possible.
Q4: As a reference, Google search shows that
Commercial solar panels: The cost of solar panels has decreased by 70%
since 2010.
Solar PV module prices: Solar PV module prices have dropped by 90%
since 2000.
Global capacity: Solar panel prices have fallen by around 20% every time
global capacity doubled.
(Chao)
Q4‐1: Given the Cityʹs current structural deficit, whatʹs pros and cons for
installing solar panels in phases, rather on all three sites proposed, in order to
take advantage of cost reduction as technology advances?
(Chao)
Staff response: This CIP project was initiated to take advantage of the NEM 2.0 rates.
Postponing any of the sites to a later “phase” would negate any advantages that the
NEM 2.0 rates provide. Projects must be completed by April 2026 to take advantage of
the NEM 2.0 rates. Projects completed after April 2026 will receive returns based on
the NEM 3 rates, which would be lower than the NEM 2.0 rates. The chart below
provides the savings differentials for each site, based on generation, use, and energy
buy back:
Attachments Provided with Original Staff Report:
A. FY 24‐25 CIP Project Narratives Excerpt
B. Preliminary Cost Estimates
C. Programming Cost Funding Report
D. SCCLD Letter of Support for Postponement
