Optimize Deployment of Renewable Energy 

Technologies for Government Agencies, 

Industrial Facilities, and Military Installations

NREL Offers Proven Tools and Resources to Reduce Energy 

Use and Improve Efficiency

• Site Assessments

• Analysis

• Training

• Project Financing Support

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NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and

Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.
2
Optimize Deployment of Renewable Energy 

Technologies at Government Agencies, 

Industrial Facilities, and Military Installations

NREL Offers Proven Tools and Resources to Reduce Energy Use and Improve Efficiency 

Optimize Deployment of Renewable Energy Technologies | Introduction 1

With energy demands and costs increasing as budgets shrink in response to the 

economic downturn, large enterprises are recognizing that initiatives aimed at 

improving energy efficiency are as critical to the bottom line as they are to the 

environment. And with the passage of the 2009 American Recovery and Reinvestment 

Act, new funding is available for energy, transmission, and renewable integration 

projects. The National Renewable Energy Laboratory (NREL) can assist your 

organization in comprehensively evaluating and prioritizing these projects to ensure 

that investments are made where they can have the greatest impact on energy 

efficiency, renewable energy integration, and reduction of greenhouse gas emissions.

As the nation’s primary laboratory for renewable energy and energy efficiency research 

and development, NREL uses its expertise and facilities to provide technical assistance 

for applying renewable energy and energy efficiency technologies. 
2 Optimize Deployment of Renewable Energy Technologies
3

The assessments NREL offers can be applied 

in two ways: 

•	To develop campus-wide strategies for

improving energy efficiency, optimizing

renewable energy use, and reducing

greenhouse gas emissions

•	To develop strategies for improving the

energy efficiency of new construction

and building modifications.

FACILITIES: CAMPUS-WIDE

NREL is pioneering a process for assessing

campuses, industrial facilities, and military

installations from a “net-zero” perspective, and

the assessment we recently conducted for the U.S.

Navy provides a case study that illustrates the

value of this process. The Navy defines a netzero military installation as one that produces as

much energy on or near the site as its buildings

and facilities consume. Achieving net-zero status

involves minimizing energy demand through

conservation and efficiency as well as producing

energy from renewable resources. To benchmark

an installation’s status from a net-zero perspective,

energy use and production are net-averaged over

a year. All energy required for the functioning of

the installation, regardless of what organization

controls it, is included. Transport fuel (for fleets,

commuting, business travel, and flying missions)

is also included in the analysis.

For the Navy’s San Nicolas Island facility, NREL

established the energy, water, and waste baseline

and provided a roadmap for transitioning San

Nicolas Island into a renewable community.

(A detailed account of the assessment and the

resulting recommendations is available in a draft

report titled San Nicolas Island, CA Renewable 

Community Plan Outline, Baseline Development, 

and Initial Renewable Assessment. To obtain a 

copy, contact: Alicen.Kandt@nrel.gov.

The San Nicolas Island assessment is one example

of how NREL harnesses many areas of expertise,

tools, and resources to help develop site-wide

energy efficiency strategies.

NREL is also conducting a net-zero assessment for

the Miramar Naval Air Station. This assessment

process leverages a variety of tools and protocols,

including the Renewable Energy Optimization

(REO) tool, the Climate Leaders Greenhouse Gas

(GHG) Inventory Guidance, and the Petroleum

Reduction Planning Tool.

In addition to using these resources to identify

the right technologies to meet the needs of a site,

NREL’s assessments also incorporate several other

engineering tools to help optimize the design of

these energy systems. Learn more about these in

Optimization and Analysis on page 9. 

Assessments and Technical Analysis

Optimize Deployment of Renewable Energy Technologies | Assessments and Technical Analysis
4 Optimize Deployment of Renewable Energy Technologies | Assessments and Technical Analysis 

Renewable Energy Optimization Tool

The REO tool is used to identify the optimal

combination of renewable energy technologies that

minimize life-cycle cost. The method relies on a

variety of information, including:

•	Data from the NREL Geographic Information

System

•	 Information regarding the loads to be served,

such as energy use and cost; purchased data,

such as the amount utilities will pay for power;

construction costs; and incentives available at a

location

•	Specific characteristics of the technologies, such

as cost and performance.

The technologies considered include:

•	 Photovoltaic (PV)

•	 Wind

•	 Solar hot water

•	 Solar ventilation air preheating

•	 Parabolic troughs for heat and electricity

•	 Biomass for heat and electricity

•	 Daylighting.

All of these interact to yield a dispatch algorithm

that we use to estimate how the energy delivery of

the different technologies coincides.

A Newtonian search algorithm is used to determine

the optimal combination of renewable energy

technologies to minimize life-cycle cost. A

constraint may be added, such as a percentage from

renewables or even net-zero utility use. Results

include the optimal size for each technology and

report of capital investment required, operating

costs, 25-year life-cycle cost, and rate of return.

This method has been used for seven Frito-Lay

plants; 62 Anheuser-Busch facilities; the town

of Greensburg, Kansas; the National Zoo in

Washington, D.C.; agricultural research stations in

Texas; military installations, including San Nicolas

Island; and U.S. Coast Guard facilities, including

the Sand Island Integrated Support Command

facility in Honolulu, Hawaii.

Renewable Energy Optimization Tool

Optimization

Life-Cycle Cost

Dispatch Algorithm

PV

Geographical Information System Data

Utility Data from Platts Inc.

Incentive Data from DSIREUSA.ORG

City Cost Adjustments from RS Means & Co.

Wind Biomass Daylighting

Concentrating 

Solar Power

Solar

Water Heat The REO tool 

analyzes a variety 

of data used to 

identify the optimal 

combination of 

renewable energy 

technologies needed to 

minimize the life-cycle 

cost of achieving the 

net-zero goal.
Optimize Deployment of Renewable Energy Technologies | Assessments and Technical Analysis 5

Climate Leaders Greenhouse 

Gas Inventory Guidance

The Climate Leaders GHG Inventory Guidance

is based on an existing protocol developed by the

World Resources Institute (WRI) and the World

Business Council for Sustainable Development

(WBCSD). The WRI/WBCSD GHG Protocol

was developed through a collaborative process

involving representatives from industry,

government, and nongovernmental organizations.

The Climate Leaders GHG Inventory Guidance

is a modification of the WRI/WBCSD GHG

Protocol that fits the needs of Climate Leaders

more precisely. Conducting the GHG inventory

requires identifying energy use for all buildings

and vehicles as well as other uses of energy (for

example, air travel and commuting), as defined

by the type of facility doing the inventory. As a

member of the U.S. Environmental Protection

Agency Climate Leaders program, NREL has used

this protocol to create our own GHG inventory. In

addition, we are supporting the U.S. Department

of Energy (DOE) Federal Energy Management

Program (FEMP) in assisting other federal

agencies with their GHG accounting.

Petroleum Reduction 

Planning Tool

The Petroleum Reduction Planning Tool

(https://www.afdc.energy.gov/afdc/prep/index.

php) allows users to calculate the petroleum

reduction potential of various strategies and

combined strategies, including using alternative

fuels and hybrid electric vehicles, increasing fuel

economy, and reducing vehicle miles traveled.

Solar Advisor Model

For organizations looking to finance energy

efficiency and renewable energy projects that

incorporate Solar Energy Technology Program

(SETP) technologies, NREL provides assistance

through the use of our Solar Advisor Model

(SAM). Using SAM, we can help clients evaluate

several types of financing (from residential to

utility-scale) and a variety of technology-specific

cost models. The SETP technologies currently

represented in SAM include concentrating solar

power parabolic trough and dish-Stirling systems

and PV flat plate and concentrating technologies.

Other technologies will be added in future versions,

including concentrating solar power central

receivers and residential solar water heating.

Strategic Planning for Renewable Energy Deployment 

at Barber’s Point Air Station

Analysis shows $1 million investment in wind, solar, and 

daylighting could save the U.S. Coast Guard $100,000 per 

year and pay for itself within a decade

Need

To support the U.S. Department of Defense’s commitment to reducing the environmental footprint of U.S. 

military forces in Hawaii, 

the U.S. Coast Guard sought 

to implement renewable 

energy technologies at the 

Barbers Point Air Station near 

Honolulu, Hawaii. Because of 

budgetary considerations, a 

critical first step was identifying the optimal 

combination of renewable technologies to minimize the life-cycle 

cost of the installation.

Solution

The Coast Guard contracted NREL to analyze the potential savings 

from photovoltaics, wind power, solar ventilation air preheating, 

solar water heating, solar thermal steam and solar thermal electric, 

and daylighting technologies. Using the REO tool, NREL performed 

a 25-year life-cycle cost analysis, discounting future costs to their 

present value. 

The analysis factored in site data, information from NREL’s renewable energy resource databases, utility data (avoided cost or wholesale power cost), and applicable financial incentives. 

Results

The results of the analysis showed that a combination of wind 

energy, photovoltaics, and daylighting at its Barber Point facilities 

could help the Coast Guard cut its annual electricity and fuel costs 

by $100,000 per year, with a payback of less than 10 years for its 

initial $1 million investment.
6 Optimize Deployment of Renewable Energy Technologies | Assessments and Technical Analysis

NEW CONSTRUCTION AND 

BUILDING MODIFICATIONS

Energy Efficiency and Renewable Energy 

Assessment Tools 

The suite of tools NREL uses to develop energyefficient design strategies for buildings and

electric infrastructure are automated, Excel-based

calculation tools that use Visual Basic programming.

Each individual calculation module is designed to

operate transparently, so the user is not required to

be proficient in the engineering analyses that are

automatically generated by the tool.

The user is responsible for entering data that are

easily collected during an energy assessment. The

tool is set up such that each individual energy

conservation measure (ECM) or renewable energy

opportunity has its own worksheet. Each worksheet

has a set of automated user forms that guide the

user through the technological specifications that

should be met for each ECM and provides cost

guidelines that should be used when scoping a

project. Once the user enters data into a worksheet

and clicks on a control button, all of the ECM data

automatically populate an output file. The tools

also incorporate the building life-cycle costing

equations and will calculate simple payback,

discounted payback, net present value, and savingsto-investment ratio for each ECM.

The tools are currently set up to analyze ECMs for 

low- and high-bay lighting; and water conservation,

plug load, and renewable opportunities. In addition,

NREL is building ECMs for motors; insulation;

steam and compressed air leaks; heating, ventilation,

and air-conditioning (HVAC) systems; and electric

power systems.

Among the energy efficiency and renewable

energy assessment tools and protocols NREL

uses to develop energy efficiency strategies for

buildings and infrastructure are eQUEST software,

the Building Energy Optimization Tool (BEopt),

LEED certification consulting and guidance, and

design charrettes.

eQUEST

eQUEST is a commercially available software

package used with the DOE-2.2 building energy

simulation and cost calculation engine to simulate

the hourly performance of buildings. We also use

this software to analyze options for the design or

retrofit of buildings. eQUEST facilitates defining

building geometry, space characteristics, schedules,

and HVAC systems, as well as running parametric

analyses to study design options. Another major

benefit of eQUEST is the relatively short run times.

eQUEST was used to model NREL’s Science

and Technology Facility (S&TF), which is the

first federal LEED Platinum laboratory building.

We used eQUEST to analyze various envelope,

lighting, and HVAC ECMs throughout the design

process to achieve a sustainable building design.

eQUEST was instrumental in helping the S&TF

achieve a 40% reduction in energy use over a

standard laboratory building. We have also used

eQUEST to model buildings for federal agencies.

Building Energy Optimization Tool 

The Building Energy Optimization Tool (BEopt)

is a software program developed by NREL that is

designed to find optimal building designs along

the path to net-zero energy. Used for residential

construction, BEopt software finds optimal and

near-optimal designs based on discrete building

options reflecting realistic construction options.
Optimize Deployment of Renewable Energy Technologies | Assessments and Technical Analysis 7

In addition to an optimization search, BEopt

includes:

• 	A main input screen that allows the user to select

from many predefined options those to be used in

the optimization

• 	An output screen that allows the user to display

detailed results for many optimal and nearoptimal building designs

• 	An options library spreadsheet that allows the

user to review and modify detailed information

on all available options.

NREL used BEopt software to compare the

costs of a typical 1990s home to those of a lowenergy home based on an analysis of the GEOS

neighborhood in Boulder, Colorado. Factoring in

the local climate, the BEopt analysis demonstrated

that the homeowner costs for an average home that

meets the minimum standard for energy efficiency

were equivalent to those of a home designed to use

65% less energy. For more information, see BEopt: 

Software for Identifying Optimal Building Designs 

on the Path to Zero Net Energy (www.nrel.gov/

buildings/energy_analysis.html#beopt).

Design Charrettes for LEED Certification 

In-house NREL staff resources completed all of

the documentation to achieve the LEED Platinum

rating for NREL’s S&TF, the first Platinum

certification achieved for a federal building.

Leveraging our considerable experience and

success in this area, NREL assists federal managers

with their LEED certifications. We offer in-depth

knowledge of federal regulations governing the

design of new buildings, including the guiding

principles found in the Federal Leadership in

High Performance and Sustainable Buildings

Memorandum of Understanding

(www.epa.gov/oaintrnt/projects/buildings_mou.

htm). Executive Order 13423, “Strengthening

Federal Environmental, Energy, and Transportation

Management,” signed on January 24, 2007,

makes mandatory the five guiding principles of

the Memorandum of Understanding for all new

construction and major renovations and sets an

aggressive goal for applying these practices to 15%

of the existing federal building portfolio by 2015.

Drawing on our depth of experience in this area,

NREL also co-authored a leading guide to design

charrettes, A Handbook for Planning and Conducting 

Charrettes for High-Performance Projects (www.

nrel.gov/docs/fy03osti/33425.pdf).
8 Optimize Deployment of Renewable Energy Technologies
Optimize Deployment of Renewable Energy Technologies | Optimization and Analysis Tools 9

Optimization and Analysis Tools

NREL has developed a number of engineering

tools designed to optimize the design of energy

systems, including:

• Renewable Energy Sensitivity Analysis Tool

•	 Hybrid Optimization Model (HOMER®)

•	 Distributed Engineering Workstation (DEW)

•	 In My Back Yard (IMBY).

Renewable Energy Sensitivity 

Analysis Tool

NREL developed the Renewable Energy Sensitivity

Analysis Tool for the U.S. Navy to provide worldwide prescreening of solar (PV, solar wall, solar hot

water) and wind, integrated with a modeling tool

for U.S. Navy and Marine Corps energy managers,

to assess potential payback of renewable energy

technologies. The model includes tax and financial

incentives and allows users to conduct “what if”

scenarios by plugging in energy rates, technology

costs, size, and other variables to identify conditions that will improve economic viability. This

tool can be readily adapted to help other clients 

with geographically distributed facilities optimize

deployment of renewable energy technologies and

maximize their impact.

NREL Assesses Cost-Effectiveness of 

Photovoltaics at John F. Kennedy Center for 

the Performing Arts

Analysis Shows Potential for 15-year Return on 

Investment 

Need

To comply with new energy efficiency standards for federal 

agencies, The John F. Kennedy Center for Performing Arts in 

Washington, D.C., was considering installing a rooftop photovoltaic (PV) system. The National Energy Policy Act of 2005 

sets a goal for federal agencies to reduce their energy use by 

2% annually and source energy by at least 7% of their electricity from renewable energy by 2015. The first priority of the 

Kennedy Center was to determine whether such an installation 

could be cost-effective.

Solution

To evaluate the economic viability of the proposed PV installation, the Kennedy Center engaged a team of experts from 

NREL, DOE, and Sandia National Laboratories to perform a site 

assessment using the Renewable Energy Sensitivity Analysis 

Tool. During site visits to identify potential opportunities 

and obstacles, the team documented site conditions, collected data on electrical usage, tariffs, incentives, grants, and 

rebates. The team ran detailed simulations to analyze performance, then estimated energy delivery and energy demand 

savings. Finally, the team performed a 25-year life-cycle cost 

analysis, adjusted for inflation. 

Results

The analysis showed the potential for installing numerous arrays on the building to deliver more than 1,178 kilowatts (kW) 

of photovoltaics at a cost of $9.5 million. Under scenarios 

that included financial incentives and renewable energy credits, the installation could bring a return on investment within 

15 years, with a 5% rate of return. This would also save about 

1.5 million kW of electricity annually and reduce greenhouse 

gas emissions by an estimated 1.2 million of CO2

 annually. 
10 Optimize Deployment of Renewable Energy Technologies | Optimization and Analysis Tools 

Hybrid Optimization Model 

Developed by NREL, the HOMER computer

modeling tool simplifies the task of evaluating

options for off-grid and grid-connected power

systems. The HOMER tool simulates various

renewable energy configurations to optimize

system design. The HOMER software evaluates the

economic and technical feasibility of a large number

of conventional and renewable energy technologies,

ranking the feasibility of various system

configurations according to total net present cost.

Distributed Engineering Workstation 

DEW is a steady-state electrical simulation

environment capable of developing very large and

complex electrical distribution system models.

DEW algorithms include:

•	 Time-varying load flow

•	 PV impact analysis

•	 Protection/coordination analysis

•	 Contingency analysis

•	 Reconfiguration for restoration or minimum loss.

DEW can be used to:

•	 Evaluate resource placement and electrical

interconnection

•	 Analyze the impacts of distributed resources

on the existing base infrastructure

•	 Identify and evaluate opportunities to improve

load and renewable resource coincidence.

HOMER software 

simulates hour-byhour operation of the 

system and the load 

profile to evaluate its 

performance and lowest 

cost of energy. It uses 

hourly resource data for 

wind and solar. 

Hybrid Optimization Model
11

The IMBY tool can 

be used to estimate 

electricity production 

for a specific location 

using a Google Maps 

interface. 

In My Back Yard Mapping Tool

Optimize Deployment of Renewable Energy Technologies | Optimization and Analysis Tools 

In My Back Yard

The IMBY tool estimates solar PV array and wind turbine electricity production based on

specifications of system size, location, and other variables. IMBY uses a Google Maps

interface to allow users to choose a system location with pinpoint accuracy. It then draws

data for that location from one of NREL’s renewable resource databases to estimate

potential electricity production. The IMBY solar estimator is based on NREL’s PVWattsTM

calculator. However, unlike the PVWatts calculator, IMBY provides estimates only for

fixed-tilt PV arrays. In addition, IMBY uses Perez data rather than typical meteorologicalyear data. Perez data are satellite-derived, high-resolution data from visible channel images

from geostationary satellites.
12 Optimize Deployment of Renewable Energy Technologies
13

NREL provides training for government agencies

and organizations worldwide to assist with

energy efficiency and renewable energy project

planning and development. These sessions

introduce technologies and techniques for

energy conservation and help participants better

understand economic drivers and challenges

that influence the adoption of energy efficiency

and renewable energy technologies. Using this

integrated approach, the training expands skill and

knowledge and encourages energy management as

a sustained organizational goal.

Trainings can be adapted for an organization’s

particular interest and geographic location or

country, and may be targeted to specific audiences

such as policy makers, energy planners, and

engineers. These sessions can range from two

to five days as onsite workshops, or presented

as teleconferences or self-guided modules. In

addition, NREL has also developed a series of

1-hour Webinars on specific topics.

Assessment Training

NREL’s energy efficiency and renewable energy

training expertise includes:

•	 Models and software tools

•	 Rural energy development

•	 Technology overviews

•	 Project financing options

•	 Policy development.

Energy assessment training helps engineers and

other facility personnel increase their technical 

knowledge of energy efficiency and renewable

energy technologies. This training introduces

the tools and techniques needed to identify

opportunities. The goal is to create energy

management expertise among an organization’s

own workforce. Technical topics prepare

participants to assess opportunities such as:

•	 Applying renewable energy technologies

for buildings and fleets

•	 Improving building envelope efficiency

•	 Identifying approaches to lighting, HVAC,

and plug load efficiency

•	 Reducing water use.

Training

Optimize Deployment of Renewable Energy Technologies | Training 

NREL Training Supports Defense Department Goals in Hawaii

NREL offers one-week, modular training sessions that provide instruction on the use of energy 

efficiency and renewable energy assessment tools. One such course, the Hawaii Energy Assessment Training held in December 2008, addressed the challenges involved in improving the energy 

performance of DOD facilities on Oahu. To reduce Hawaii’s heavy dependence on fossil fuels for 

transportation and electricity generation, the state of Hawaii recently launched an initiative to 

achieve 70% clean energy by 2030 through increased energy efficiency and development of renewable technologies. The NREL training helped support this aggressive goal by providing hands-on 

tools and assessment techniques, improving understanding of the regulatory environment and 

renewable energy policy, and building awareness of the long-term benefits of energy management 

and conservation.

Several training modules are scheduled for 2009, including one in Guam and another in Hawaii.
14 Optimize Deployment of Renewable Energy Technologies | Training

Alternative Financing Training

While assessment training provides the tools and

knowledge to help facilities identify which energy

technologies and projects to consider, training on

alternative financing options enables decisions on

how they can be implemented. No single option is

right for all facilities; NREL’s experts customize

this training to meet the needs of the project

at hand, providing specifics on the appropriate

mechanism for the situation. Typically, however, the

training covers the process from kickoff to closeout,

and may include topics such as project planning,

proposal reviews and contract selection, roles of

utilities or other third parties, measurement and

verification, schedules, and cost estimates.

In particular, NREL works with facilities to

understand these financing options: 

•	 Energy savings performance projects

•	 Utility energy service contracts

•	 Power purchase agreements.

See page 15 for more on NREL’s expertise in these 

financing options.
15

NREL’s Project Development and Finance team

offers assistance for projects, beginning with identification of goals, assessment of energy efficiency

and renewable energy technical potential, project

structuring and financing options, proposal review,

and assistance with performance period questions

and issues. In the case of campuses, communities, and military installations, we add to the basic

energy efficiency and renewable energy topics,

focusing on the built environment with particular

attention to transportation fuel; the greenhouse gas

impacts of proposed energy solutions; and energy

security, surety, and reliability concerns.

NREL plays a leading role in helping FEMP and

federal agencies develop the FEMP alternative

financing program, and we can assist federal agencies in financing energy efficiency and renewable

energy projects using energy savings performance

contracts (ESPCs), utility energy savings contracts

(UESCs), and power purchase agreements (PPAs).

For example, we:

•	 Developed the PPA template being used by the

Defense Energy Supply Center renewable team

•	 Negotiated NREL’s 750-kW photovoltaic PPA to

provide power to our research facilities

•	 Assisted various agencies (including NASA, the

Jet Propulsion Laboratory, the U.S. Coast Guard,

and DOD) with PPAs

•	 Facilitated or advised on approximately 25

UESC and ESPC contracts and PPAs for federal

agencies annually; in 2008, this included DOD,

the Federal Aviation Administration, the Federal

Bureau of Prisons, and the U.S. Department of

Commerce

•	 Are facilitating an ESPC contract for a 100-MW

concentrated solar project with an excess power

sales agreement at DOE’s Nevada Test Site.

Energy Savings 

Performance Contracts

ESPCs allow federal agencies to form partnerships

with energy service companies (ESCOs) that

enable them to avoid the up-front capital costs

and special Congressional appropriations that

would otherwise be needed to implement energy

savings projects. After conducting a comprehensive

energy audit for a federal facility, the ESCO

identifies improvements that will increase energy

efficiency, works with the agency to design a

project customized to its needs, and arranges the

necessary financing. The ESCO guarantees that the

cost savings resulting from the improvements will

pay for the project over the term of the contract (up

to 25 years), after which all cost savings accrue to

the agency. DOE ESPCs are indefinite-delivery,

indefinite-quantity contracts designed to be as

practical and cost effective as possible for federal

agencies. DOE ESPCs help federal agencies meet

energy efficiency, renewable energy, and emissionreduction goals by streamlining contract funding

for energy management projects.

Utility Energy Savings 

Contracts

The Energy Policy Act of 1992 authorizes and

encourages federal agencies to participate in energy

efficiency programs offered by electric and gas

utilities. These programs enable agencies to partner

with their franchised or serving utilities to finance

energy improvements through UESCs.

With a UESC, the utility arranges financing to

cover the capital costs of the project and is repaid

over the contract term from the cost savings

generated by the energy efficiency measures.

Alternative Financing Support

ESPC Quick Facts:

•	 More than 460

ESPC projects have 

been awarded by 

19 different federal 

agencies in 47 states.

•	 Approximately $2.3

billion has been 

invested in federal 

facilities through 

ESPCs, saving more 

than 18 trillion Btu 

annually—equivalent 

to the energy used 

by a city of more 

than 500,000 people.

•	 ESPC projects have

saved the federal 

government $7.1

billion in energy 

costs ($5.7 billion

goes to finance 

project investments, 

for a net savings of 

$1.4 billion).

Optimize Deployment of Renewable Energy Technologies | Alternative Financing Support
16

These contracts provide an ideal option for

federal agencies looking to implement energy

improvements with no initial capital investment,

minimize their net costs, and save significant time

and resources by taking advantage of the one-stopshop financing services their franchised or serving

utilities provide.

Power Purchase Agreements

Federal agencies seeking ways to finance their

renewable projects can also opt for a PPA, wherein

a private entity installs, owns, operates, and

maintains customer-sited renewable equipment,

and the site purchases the electricity. Such

agreements allow renewable energy developers

to benefit from tax incentives and accelerated

depreciation while allowing agencies to reduce

their exposure to risk and secure long-term

electricity pricing. PPA contracts typically range

from 10 to 20 years, with longer terms being ideal.

As an example, under a 20-year PPA contract

for a 720-kW (1,200-MWh) NREL PV project

on approximately five acres, solar developer

SunEdison sold renewable energy certificates to

Xcel Energy for a Renewable Portfolio Standard

solar set-aside. The PPA price was equal to or less

than utility electricity prices (based on Energy

Information Administration projections). The PV

installation became operational in December 2008.

For agencies interested in exploring this

option, NREL can provide support in the form

of renewable screening and assessments to

determine cost-effectiveness and project viability;

project facilitation, including market research;

development of requests for information, requests

for proposal, and opportunity notices; assistance

with land use agreements and similar requirements

(e.g., leases, easements, licenses); and bid

evaluations.

Optimize Deployment of Renewable Energy Technologies | Alternative Financing Support
Optimize Deployment of Renewable Energy Technologies 17

Photos Credits

Cover: iStock_000003777688; Pacific Industrial Electric 

(PIE)/PIX06132; Robb Williamson/PIX10885; University 

of Texas Health Science Center at Houston/PIX09436. 

Page 3: Daryl Myers/PIX03201. Page 5: Petty Officer 3rd 

Class Michael De Nyse, U.S. Coast Guard/PIX16910. Page 

6: Carl Cox/PIX16282. Page 7: RNL Design/PIX16250. 

Page 9: iStock_000003598344. Page 13: David Parsons/

PIX07267. Page 15: iStock_000003869232.
For information on how to work with NREL, 

please contact:

Stephen Gorin

Executive Manager, Partnership Development

303-384-6216

Stephen.Gorin@nrel.gov

For more information on NREL’s capabilities and tools for 

comprehensive energy assessments, please contact:

Nancy Carlisle, AIA

Director, Integrated Applications Office

303-384-7509

Nancy.Carlisle@nrel.gov

National Renewable Energy Laboratory

1617 Cole Boulevard, Golden, Colorado 80401

303-275-3000 • www.nrel.gov

NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy 

Operated by the Alliance for Sustainable Energy, LLC

NREL/BR-7A2-45630 • January 2010

National Renewable 

Energy Laboratory

Innovation for Our Energy Future