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f N[ B L Y~ 0 1 U 1 1 0 Y 5 scsrcm cost. pot the recommended 1'V' project this financing model is rdaticdc unatu~ac~ice because the Cite cauuot monetize the federal tas ardit and accelerated depreciation ~chich could a~picalh anrr Deer halt of the s_cstem cou. ~hhe Citc's ineligibili~c for the federal ina~nticcs resuhs in a loan package in ~chich the debt pacmeuis scould eseeed uv mthh euergc cost saciugs. Financial Analysis Results the huancial analysis for installatifm cfF Pt' scstems at the Operations Sen~ice Center and \V~cll No. 8 includes project costs and re~-enues under three scenarios: Scenario L Status Ouu Scaiarin 3. Oun-ight purchase of PV' Scstem Scenario 3. 'Third parts financing of PV" scstcm (Poo-cr Purdiasing .Agrn~mcn[ or PP.1) .A net present ~-aluc (NPV') e-as calnilated o~~cr an analcsis term of 3U scars ai a discount rule of sip percent 6~r cads scenario to inform our final rccommcnda[ion. SCENARIO 1: STATUS QUO 1~he 5tattu <)uo analysis assumes drat dx~ Cite rfkes no action. l'mler ibis scenario the Ci~c does n~~t install a PV' scstcm and continues ro purchase electriciic at retail market rates from PGr~li. ~hhe 3U- ccar NPV' of Sccuario l is SI,L78,f1UU, for the OSC and -Sl,~3G UIIU for \C~cll Vo. R. 1'he financial analcsis ut the Status Ouo scenario assumes the Follo~cing: • Ctilitc dcariciic nt PG&I'. I?-195\ sdtcdulc flit the OSC and PG&I~:.A-G sdudulc for AV~dl L~'o. 3, each kith a I percent auuual escalator. • lileciricitc usage remains antstaut at current lcrcls SCENARIO 2: OUTRIGIIT PURCHASE OF PV SYSTEM Oun~ight purchase of nc~ PV' scsrcm can be nc~ lo~ccst cost option for purdiasing a soLir PV' s~sicm i( the cost of capital is rdaiicch~ h>~~- and the entire is able to take advantage of State and Federal tai incen tines. I~or the purpose of ibis report, the auaksis assumes uo Gnaucing cosy associated pith the project. "hhe 3U-sear NPV' of Scenario 3 is fin'-SI 3C,3 UUU die USC and -S1,7iC,000 for A\cll Vo. 8. 1'he financial analcsis of the outright purchase of the PV~ scstcm assumes the tollo~w~g: • I :Iectricitc cost escalniion of -4 percent per scar • Alodule degradation of U5 percent per scar • Project Costs PV' scsrcm capital cost of S3,~33,OIIU (includes labor uud m:ucrials) Pcrmittiug tees of S~~II On.lAI costs of II °~ percent of gross scstcm cost per scar (~ci~h 3 percent annual iutlatiou) Replacement inceru•r in scar 13 ai S70U~k\V~° • L Cilia dcctricitc at PG&I? I~: 19SS schedule for nc~ OS(. and VGKI (.1-G sdtcdulc flit \Vdl No. H, cads kith a 1 percent annual escalator. ~~1,AA PII ._.u ..