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Holiday Inn Express

22617 Ventura Blvd.

Woodland Hills, CA 91364

Electricity Savings Initiative

Case Study

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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.

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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.

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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.

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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).

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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

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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/.

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Solar Footer Installation

1. Footer Composed of Aluminum Plate, Barrel and Lag Bolt

2. Flashing with Rubber Gasket

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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

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6. Flashing Applied over Footer

7. Square of Roofing Material Glued Over Flashing Base

8. White Silicone Sealant Applied Over Roofing Material