Photon Energy Wins Major Naval Solar Power Contract

The United States Navy has selected Photon Finance LLC, Island Pacific Energy LLC, and Pacific Energy Solutions LLC for $500 million of solar development contracts.

The Navy has made energy security and renewable energy development a cornerstone of its future.  As a result, it has been dolling out millions across various new energy sectors. On Wednesday, Reid Rutherford, Founder and CEO of Photon Finance, told EnergyBoom the Navy's latest round of funding represents Photon's largest contractual award to date.

There is no guarantee however, of just how much of the $500 million will be awarded to Photon Finance. The three firms were selected from a batch of 13 bids the Naval Facilities Engineering Command (NAVFAC) Pacific received in response to its request for proposals from small businesses . The Navy will not own, operate or maintain the solar systems -- all of the allotted money will go directly to power purchase agreements (PPA).

Over the next 12 months, NAVFAC Pacific will create task orders (projects) for distributed solar power systems which the companies will compete for.

The solar systems will be installed on roofs, parking shade structures, and vacant parcels of land on Navy properties in Hawaii including, but not limited to, the Joint Base Pearl Harbor-Hickam; Marine Corps Base Hawaii; Schofield Barracks; Wheeler Army Airfield; Tripler Army Medical Center; Fort DeRussy; the Asia Pacific Center for Strategic Studies; Naval Computer and Telecommunications Area Master Station; Naval Magazine West Loch; the Pacific Missile Range Facility on Kauai; and the Army Reserve Center on Maui.

Each company may submit proposals for each task order produced. The Navy is looking for "comprehensive project proposals," Rutherford says. Rutherford also said that although the Navy will evaluate proposals based on quality, the real deciding factor will be price.

Photon's CEO was succint in saying the Naval projects have to simply be, "A. solar; B. safe; and C. cheap. The power has to be less expensive than what they are paying the utility."

As it has been doing since its inception in 2006, Photon Finance will produce proposals that take care of all of the project's logistics including financing, design, installation, operation, and maintenance. The Navy just decides if the proposal meets safety and security protocol and signs a PPA to purchase the energy over 20 years.

Currently, Photon Finance is working on one of its largest installations -- a 3.5 MW project in California -- and Rutherford says the company is in discussions on a proposed 5 MW project.  With $30 million worth of solar PPAs signed and the project list growing, the California-based company's biggest competitors are local utilities.

The cost of solar capturing technology is a major part of keeping its rates down and competitive with utlities. Because Photon Finance is a distributed solar system developer the technology employed depends on where the system is being installed (on a roof or ground mounted).

When asked if his company had a preferred solar module manufacturer, Rutherford said that Photon Finance selects technology appropriate for the situation. Of course the cost factors in to that choice. The CEO commented that he and his team had visited Solyndra just days before the company declared bancruptcy.  "Even though we found their product very interesting, we felt that management had priced the product too high," he said.

Cost is not the only factor, however; the product has to be reliable and must deliver. "We take a 20 year risk. The Navy doesnt have to pay for power that is not delivered. If our system fails in 10 years the Navy can still get powered by its local utility. To this end it is not an option for us to be not deliverable."

Under the terms of the contract the Navy expects the projects to be completed by August 2016.

Image Credit: Photon Finance