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BACKGROUND In 2008, City staff began researching potential solar installations for City buildings to support a City Council work plan priority, to respond to AB 32 requirements to reduce carbon levels by 2020, and to identify long term cost saving alternatives. After conducting an initial preliminary site evaluation, the City hired Energy Solutions to conduct feasibility and funding study. As a basis for the feasibility analysis, staff and the consultant looked at the following factors: 1. Facility structural analysis, shading, existing electrical efficiency and design. 2. Design options including components, mounting, orientation, sizing and generation of the system compared to electrical use. 3. Project costs including capital costs, permitting, operations & maintenance and tax incentives. 4. Funding options including state and federal incentives, utility net metering credits, and renewable energy credits available to the project. 5. Equipment ownership and use options including leasing, power purchase agreement (PPA), and outright purchase. After looking at a total of seven facilities, staff and the consultant identified the installation of solar systems at OSC as the most feasible option. This selection is based on the following conclusions: Considering the cost of the amount of electrical power required annually for Well #8, a 55% reduction in purchased electricity will yield considerable ongoing electrical costs savings over the life span of the equipment. In general, for the entire project, it is estimated that the City will realize a reduction in annual electric costs of approximately $151,000 and a total reduction of $3,775,000 over the 25-year life of the panels. The facilities are positioned well to take advantage of sunlight. The facility's structural design can accommodate the PV panels and related equipment without costly retrofitting. If the Council approves staff recommendation, this project will be added to the City's Capital Improvement Program (CIP) so that it can be tracked and funded, as a capital expenditure. Page 2 of 3