Saipan and Rota solar power

Editor’s Note: The following is a statement issued by the author in response to the Coldwell Solar report that appeared in this paper on July 23.

We have reviewed Coldwell Solar’s protest as filed with the Commonwealth Utilities Corp. and find that they have misused a very broadly derived annual average solar module pricing estimate in such a way as to significantly mislead the people of the CNMI regarding the solar panel cost decrease since the time of our award and the resulting impact on our project’s pricing as a whole.

Coldwell’s protest quotes a 2011 solar module price of $2.00/watt. This was the basis of their statement that prices have dropped “up to 60 percent” since 2011. While not disputing that the average solar module price for all of 2011 may have been approximately $2.00/watt, by the time ACE was negotiating final PPA pricing with the CUC, solar module prices had fallen to approximately $1.00/watt, as indicated by the module quote from the module manufacturer Yingli from Dec 2011. I also have attached an independent module pricing report from Oct. 2011, describing the same approximately $1.00/watt pricing level and trends. 

However, Coldwell Solar CEO Dave Hood also seeks to mislead about the actual impact of falling solar module prices on overall project cost. The roughly $40 million total cost for our project, as quoted in news reports following the CUC approval to finalize the PPA contract in June, is comprised of many project elements, only one of which is solar modules. Additional project costs include engineering costs, solar mounting equipment, myriad electrical components, inverters (for converting the DC power to AC power), transformers, grid interconnection costs, financing fees and other direct and indirect project and transactional costs, shipping to Saipan and Rota, and labor and other construction costs, among them.

We estimate that solar modules have decreased by approximately $0.20/watt since late 2011; and so the overall impact on the baseline project cost is a reduction on the order of 5 percent.

Add to that, however, as discussed openly at the CUC board meeting, as a result of the Renewable Energy Integration Study completed in 2013, we have committed to incorporating additional recommended technology as needed in order to ensure the highest possible level of solar energy delivered. This will be additional cost over and above costs assumed in our original pricing proposal. But we are able to do this as a way to deliver more solar energy to the Saipan and Rota grids because of the decrease in solar module pricing.

Finally, with respect to the CUC Solar PPA price, our pricing is well within the current market for projects being constructed under PPA’s in the region. We note specifically, that based on information publicly available on the Guam Power Authority website, our CNMI CUC PPA pricing appears to be lower than the solar project that recently started construction on Guam. (see http://www.guampuc.com/dockets/puc20130403121026.PDF, Item 14; see also,http://www.guampuc.com/dockets/puc20130409221641.pdf, footnote 8, bottom of page 2).

Tom Anderson
CNMI CUC Solar Program Manager