2. 2
Customer Overview:
In an effort to improve profitability by reducing their electric bill, the owners contacted Solar
Choice Solutions to recommend energy efficiency measures for their 86 room Holiday Inn
Express and Suites in Woodland Hills, CA.
The building’s electricity was initially powered by LADWP exclusively. Electricity powers:
1. Lighting in the subterranean garage, hallways, elevator and lobbies;
2. Washers and dryers in the basement; and
3. Guest rooms.
The electric charges consisted of:
1. Service charges
2. Facilities (Demand) charges
3. Electric usage charges
4. Taxes and government surcharges
This building used approximately 427,000 kWh per year of electricity with a demand load of 104
kW. Together these charges produced a bill of $64,000 a year.
Our initiative targeted these charges in two different methods: a) reducing electric usage and b)
creating electricity through a solar electric system.
Solar Choice Solutions suggested that the reduction in electric charges would be accomplished
in a two phase approach;
1) Installation of LED lighting in all rooms and the common area to reduce electric
consumption which would produce immediate savings; and
2) Size a roof top mounted solar electric system for the remaining electric consumption.
3. 3
Reducing Electric Usage
LED Lighting
Since LED lighting does not require permitting or utility approvals, the lighting retrofits were
done right away. We replaced all the lighting from fluorescent and incandescent to more
energy efficient LED lights. Even though an individual LED bulb is more expensive than the bulb
it is replacing, the energy savings payback is as little as 9 months and the bulbs last about 5
years vs. 1.5 years for the CFL bulbs when used 24 hours a day. The total cost of these
upgrades was $6,600. Management chose to install the bulbs themselves to save installation
costs.
This LED upgrade generated an impressive savings of 25% of the electric usage. In addition, the
demand usage went down 5 KW, an additional 5% savings. This is a double savings to the
power bill. This proved to be a savvy investment.
An LED bulb lasts 3 to 4 times as long as the replaced bulbs which translates into a reduction in
maintenance cost previously incurred to replace those old bulbs. We did not include the
maintenance savings in the benefit analysis.
Solar
Based on the size of the roof, Solar Choice Solutions maximized the number of solar panels that
could be installed. This solar system generates 181,000 kWh a year, or 42% of consumption.
The building is three-stories and lot line to lot line, so the roof’s size was the limiting factor.
Implementation
LED Lighting
There are many advantages of using this dual method to target the power bill. The most
obvious is that LED lighting doesn’t require permits, expensive labor or months to see
savings. After identifying the targeted lighting replacements, this process took less than
3 weeks and started generating savings immediately.
4. 4
Solar System
A solar system installation can take between 3 and 6 months to complete. The utility
and building department (permitting process) can cause delays. Solar Choice handled all
the interactions with outside agencies and used our relationship with these agencies to
speed up the process.
We contracted the roof mountings with the original roofing company that installed the
roof to ensure that their warranties remain in place after the installation. The client was
concerned that roof penetrations would cause leaks but after reviewing our 5 layer
approach to waterproofing that concern was eliminated. A year after the install, there
have been no leaks. Following this document are pictures of the step-by-step process,
we recommend to provide those 5 different layers of waterproofing.
The solar system itself was installed in 3 weeks after the permits were obtained. It then
took LADWP an additional 6 weeks to activate the system and connect to the grid
although it was ready immediately after the installation. Six months after the
installation, the customer received the rebate check from LADWP.
Costs and Savings
Savings for the Future
LADWP has been increasing their rates over 6% per year and are expected to follow the
trend for years to come. The estimated electric savings over the next 20 years is
$1,250,000.
5. 5
The installed system was energized on March 15, 2016. As you can see from the usage history
provided by LADWP, there was no bill for 4 months. The first bill received after the system was
activated was July 1st
. The kWh consumption on the July bill for 119 days was about the same
as the kWh consumption for the 29 day March 4th
bill. We basically reduced the electric usage
for that period by 25% and on the August 2nd
bill by 90% (2,240 kWh vs 23,360 kWh).
6. 6
Solar Choice Solutions Proposal
Costs
The following are the costs and credits associated with this project:
Costs:
Solar System and installation $388,000
LED Lights/Fixtures $ 6,600
Total: $394,600
Credits:
LADWP rebate $ 69,280
Federal Investment Tax Credit (30%) $118,380
Depreciation (5 year accelerated after tax) $131,600
Total: $319,260
Net Cost: $ 75,340
Since the entire system was financed, there was no cash out of pocket. The payback
was 1.5 years. Financing was arranged by Solar Choice Solutions.
Conclusion
By implementing a dual strategy of LED lighting and solar panels to substantially reduce the
power bill, versus simply relying on the solar exclusive approach, the client was able to save
$50,025 in the first year.
Additional Advantages
1. Eliminating 78% of the power bill increased the property value without increasing the
property taxes. A 10-year discounted cash flow analysis of the after installation
demonstrates a major value enhancement, particularly on the exit strategy.
2. An additional benefit of installing LED fixtures is on reduced maintenance and bulb
purchases. A study of the labor and material costs associated with this building for 2013
showed that 18% of the maintenance costs were related to light bulb replacement. LED
7. 7
lights have an estimated life of 50,000 hours vs. 15,000 hours for fluorescent and 5,000
hours for incandescent bulbs.
Solar Company Claims
Many clients have told us that during the process of interviewing solar companies, they had a
feeling that the claims made by these companies were ”too good to be true”. It appeared that
the payback promised was overstated so we at Solar Choice Solutions have compiled the
following documentation to substantiate our promises and claims:
1. Federal Investment Tax Credit of 30% is available on solar projects through the end of
2019. IRS publication 3468 confirms the 30% tax credit and can be found at
https://www.irs.gov/pub/irs-pdf/i3468.pdf.
2. The federal tax credit is available even if the taxpayer is subject to the alternative
minimum tax (AMT). An IRS Q&A found at https://www.irs.gov/pub/irs-drop/n-13-
70.pdf confirms in Section 3 answer 2 that this is in fact correct.
3. You have the choice to depreciate 85% of the system price over 5 years as modified
accelerated cost recovery system (MACRS), or you can take 100% of the first $500,000 in
the first year. See https://www.irs.gov/publications/p946/ch02.html
4. The footers that are placed in the roof supporting the panels will not cause any leaks.
We use a professional roofer to seal any penetrations that are required during the
install. If your roof is under warranty, we contact your original roofer to seal our
penetrations to maintain the existing warranty. The roofer that we use has a method
that has worked on all our buildings with success. Pictures of the step-by-step method
are included at the end of this document.
5. This system will generate 180,000 kWh of electricity. We use a web based program that
is endorsed by the utility companies as a determination of the output production of the
system and is used to calculate the rebates. The program can be found at
http://epbb.ladwp.com/.
9. 9
3. Roof Sealant Applied to Square Base & Lag Bolt Driven into Beam
4. Sealant Applied Over Aluminum Square Base
5. Sealant Applied to Base of Flashing
10. 10
6. Flashing Applied over Footer
7. Square of Roofing Material Glued Over Flashing Base
8. White Silicone Sealant Applied Over Roofing Material
