EyeOn Energy Loses Minneapolis Convention Center Project

As early as February of 2008, the Minneapolis City Council began discussing solar panels on the roof of the Convention Center to replace the outdated EPDM rubber roof.

By August of 2008, the council felt they had enough of their ducks in a row to begin negotiating a power purchase agreement with Boulder, Colorado-based EyeOn Solar, the single caveat being that EyeOn had to produce the numbers and the paperwork that would seal the deal by June 5 of 2009.

June 12 came and went without any indication that EyeOn had completed its due diligence. With no agreement in place, both parties appeared hung up on the insurability clause, the matter was referred back to committee.

The project – which relies on $3.3 million in state funding (or matching funding that would reduce the state’s portion to $1.65 million) – would create a 425,000-square-foot sustainable roof system consisting of 3,000 reflective photovoltaic (PV) panels. It was not only badly need renovation, but aimed to demonstrate the city’s position on renewable energy and a sustainable lifestyle.

When completed, the system will become the largest solar electric system in the Upper Midwest, covering nearly four football fields. As designed, it comprises three uniquely different (or differently purposed) sections: one third angled to capture maximum solar energy; one third oriented to capture solar energy during the building’s peak use periods; and one third fed into the grid to relieve loading during the city’s peak demand periods.

Concerns abounded from the beginning. As vice president for the non-profit Institute for Local Self-Reliance David Morris noted, EyeOn was a startup inspired by solar tax incentives, which is not the firmest foundation on which to build a business. Second, it was a Colorado company, and the state’s Renewable Development Fund – operated through local utility Xcel Energy – was originally targeted toward Minnesota firms. Lastly, EyeOn seemed consistently unable to meet deadlines. As Minneapolis Mayor R. T. Rybak said:

“We arrived at the altar, but they didn’t have the ring.”

On June 26, the Minneapolis City Council voted unanimously to sever ties with EyeOn, and plans to ask the Minnesota Public Utilities Commission to take EyeOn’s name off the original grant.

It’s a blow for EyeOn, which admits it is having trouble attracting venture capital as a result of the recession. EyeOn’s president, Oleh Alexander Kramarchuk, also cited increasingly complicated and time-consuming permitting constraints. However, the Minneapolis deal isn’t the first where EyeOn has dropped the ball. A 2008 bid, to install solar panels on the roof of a Newburyport, Massachusetts middle school also fell through, reportedly on failed financing, as did a 1-megawatt project in EyeOn’s home town, Boulder.

EyeOn, which bills itself as aggregating investment grade energy projects and matching them to equity funding, relies on various federal, state and regional tax credits, rebates, RECs, depreciation schedules and power sales agreements to keep the company afloat. Like many other companies operating in the same niche, it faces an immediate future in which the recession appears to be stealing all the benefit from renewable energy incentives. One can’t take advantage of a tax credit without first finding a banker who is willing to foot the cost for the system.

Until, and if, money starts flowing freely again, clean, “green” energy technologies like solar remain caught in a backwater of what economists are calling stagflation.

Author: Tom Staples

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Posted in: Solar Policy

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