Explanation
Background: This ordinance authorizes the Finance and Management Director to amend a solar power purchase and license agreement (PPA) with Tipping Point Renewable Energy, Inc. for the Fleet Maintenance Grove Road Facility (4211 Groves Road Columbus OH 43232). Specifically, amendments to the contract will allow the extension of the current commercial operation date from January 1, 2013 to July 1, 2013 and will authorize consent of an assignment of the PPA to a holding company named Tipping Point Energy COC PPA SPE-1, LLC (or "SPE") that was established by Tipping Point Renewable Energy, Inc. to hold all assets related to the project.
A PPA is an agreement whereby SPE will own, operate and maintain a photovoltaic (PV) system on the roof of 4211 Groves Road. The City, in return, will agree to provide a license agreement on the roof and to purchase the electricity produced by the system. This agreement will allow the City to have the benefit of clean energy without the upfront costs of purchasing and installing the system, or the long-term costs of maintaining the system. This PPA demonstrates the City's commitment to reducing its carbon footprint as well as committing to be a leader in the growth of the solar industry, especially in central Ohio.
The project has experienced two external challenges, which have caused delays therefore requiring an extension to the commercial operation date from January 1, 2013 to July 1, 2013. The first such delay is the result of the current market for securing funding for solar projects, which has proven difficult. The value of Solar Renewable Energy Credits (SRECs) has dropped dramatically over the past several months, due to several very large utility projects in Ohio. This precipitous drop in SREC value adversely affects the financial returns available to investors and has therefore made it challenging for Tipping Point to keep the original investor commitments.
The second challenge was a recent anno...
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