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December 26, 2008

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Craig R Horne

Solar on schools on a PPA basis is a natural. If one looks at a curve of natural gas price and production over time you will see that the 2005 & summer 2008 price spikes did not spur increased supply. The drop in prices we experienced during fall 2008 suggests that we are on the margin...small increases or decreases in demand drive prices in dramatic fashion because supply cannot be ramped. So natural gas prices are only going to go up from current levels. Since approximately 50% of California's electricity comes from natural gas, there is a vulnerability. PG&E's rates increased 7% from Apr08 to Oct08 due to the summer 08 gas price spike. So having price surety via a solar PPA helps buffer school budgets against electricity price spikes. Once a system is in place, Step 4 is a critical task in the project. For a system as large as a school, a continuous monitoring program should be implemented with commissioning of the system. Over time there are various things that can happen within a system that would decrease output (trees growing & causing shade, connections coming loose, component failure, etc). Even though an event like this might occur as little as 2-3 times over the 20 year life of a system, the problem is the event lowers system output. This compounds the impact on a daily basis. If the occurrence of the event coincides with high grid electricity cost periods (e.g. PG&E's annual peak of 12p-6p M-F during May to October) then the owner will have a most unpleasant surprise in their mailbox. So monitor closely!

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