Proposed Business Case: Public Housing Model

Chicago Housing Authority - Altgeld Gardens

The Chicago Housing Authority’s Altgeld Gardens is a public housing development located on Chicago’s far South Side. The 190 acre development was built in 1945 and has more than 1,600 housing units, a community center, health center and other buildings, as well as approximately 40 acres of undeveloped land.

The proposed ground-mounted PV system would incorporate more than 6,100 panels installed on fields at the eastern edge of the property. In this model, the CHA would be the system owner and would use 40 percent of the energy. The remainder of the system would be leased by low-income residents in the community and at other CHA properties.

Community Solar

Community solar is a solar photovoltaic (PV) installation that provides energy, financial benefits, or both to multiple participants. Participants, also called subscribers, can buy or lease a share of the community solar installation and receive credits on their electricity bill for the power generated by that share. Subscribers can be households, businesses or anyone with an electric bill.

System Design

The proposed design utilizes 6,120 ground mounted, 325 watt panels. The proposed system will use single-axis tracking to maximize production. The tracking system allows the panels to tilt to approach a perpendicular angle to the sun’s rays, allowing for greater capture of the sun’s energy compared to a fixed angle mount. While the cost for tracking is approximately 10 percent higher than fixed racking, the output is as much as 30 percent greater.

Business Model

Both developer-owned and host-owned systems were modelled. While the host-owned system requires significant upfront capital and does not qualify for tax benefits, the ISFA Public Sector incentive allows for an overall return nearly three times that of the developer-owned system. The CHA would develop the system, and outsource subscriber management and system maintenance. In this model, the CHA would achieve an IRR of 8.1 percent and average annual earnings of more than $71,000 per year for the life of the system.

Host Metrics/Host Owned System

25-Year Costs……………………………………………. ($5,589,348)

25-Year Revenues…………………………………….. $7,454,588

25-Year Net Benefits………………………………… $1,865,240

25-Year Net Present Value (NPV)……………..  $13,419

Return On Investment (ROI)…………………….. 33.4%

Payback Period…………………………………………  6.3 years

Internal Rate of Return (IRR)……………………. 8.1%     

SREC Value (1MW-2MW Block)………………..  $45.00/MWh*

SREC Adder Value-Subscriber Type………….  $0

SREC Adder Value-100% Low-Income.……..  $4.05/MWh*

Host Metrics/ Developer Owned

25-Year Costs……………………………………….…..  ($946,423)

25-Year Revenues…………………………………….  $1,566,842

25-Year Net Benefits………………………………..  $620,419

Payback Period………………………………………..   0.0

Average Monthly Savings over 25 yrs……..   $2,086

Average Annual Savings over 25 yrs….......    $24,817

SREC Value (1MW-2MW Block)………………..  $45.00/MWh*

SREC Adder Value-Subscriber Type………….  $0

SREC Adder Value-100% Low-Income.……..  $4.05/MWh*

*All SREC and SREC Adder values are assumptions. See Overview for more details.

Documents

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