PSC Approve Solar Photovoltaic Project - SolarStar

A decision Friday by the V.I. Public Services Commission gave the green light to the territory""s new solar energy project.

In a unanimous vote, the commission approved six power purchase agreements between the V.I. Water and Power Authority and three solar companies -- Toshiba International Corporation, Lanco Virgin Islands and Sun Edison.

Under the agreements, the companies will invest about $65 million to build, operate and maintain multiple solar arrays on St. Thomas and St. Croix to produce a total of 18 megawatts of power.

WAPA Executive Director Hugo Hodge Jr. said the solar PV project  will supply the utility with about 14 percent of the territory""s peak load demand.

On St. Croix, three solar array sites will be placed throughout the island -- one east, one west and one mid-island. The mid-island site will be next to the Home Depot.

On St. Thomas, the majority of the solar panels  will be constructed on the roof of Tutu Park Mall, as well as on the roof of a canopy covered parking at the mall that will be constructed soon. Ground-installed solar arrays also will be located in the Donoe area near Home Depot.

Each solar array will sell power to WAPA at a different rate based on the cost to produce the electricity. Hodge said the cost to purchase the solar power will be between 14 and 24 cents per kilowatt hour, with a weighted average of between 16 and 17 cents per kilowatt hour. The rates represent the average terms for the life of the power purchase agreements, which are about 20 years.

Hodge said the rates are far below WAPA""s avoided cost -- the amount it would cost to produce the same amount of energy in its power plants.

Hodge said the solar PV project provides stability for the utility, because the rates will not change as they do being dependent on the volatile fuel oil market. Additionally, the peak load hours -- during the day -- are when the sun is shining and the solar panels are producing the most energy, he said.

Public Services Commission consultant Jim Madan recommended at Friday""s meeting that the commission approve the power purchase agreements.

"The PV projects will reduce price volatility and increase WAPA""s fuel diversification, and we think those are important objectives," he said.

Madan said the average residential customer using 500 kilowatt hours a month will see a decrease in their bill by about $1.55 to $1.75 once all the solar panels are operational.

Commercial customers using 5,000 kilowatt hours a month will see bills drop by about $15, and those using about 20,000 kilowatt hours a month will see a $62 savings, Madan said.

Public Services Commission Chairman Donald Cole said the time has come to move to alternative energy.

"I think WAPA has done an excellent job in going out and procuring this so we can diversify our energy here in the territory," Cole said.