Cincinnati Regional Workshop 09.21.12 - PH Slides

Solar Powering Your Community Addressing Soft Costs and Barriers
Agenda
08:30 08:50 08:50 09:20 09:20 10:05 10:05 10:15 Introductions & Overview Solar 101: The Local Solar Policy
Environment
Understanding Solar Financing Options Break
10:15 11:15
11:15 11:45 11:45 12:00
Panel of Local Experts

Panelist and Audience Discussion Wrap Up and Closing Remarks Boxed Lunch, Networking, Mini-Expo
12:00
Agenda
Environment
10:15 11:15
11:15 11:45 11:45 12:00

12:00
Justin Barnes
NC Solar Center / DSIRE
justin_barnes@ncsu.edu (919) 515 - 5693
Philip Haddix
The Solar Foundation
phaddix@solarfound.org (202) 469-3743
About the SunShot Solar Outreach Partnership
The SunShot Solar Outreach Partnership (SolarOPs) is a U.S. Department of Energy (DOE) program designed to increase the use and integration of solar energy in communities across the US.
Increase installed capacity of solar electricity in U.S. communities
Streamline and standardize permitting and interconnection processes Improve planning and zoning codes/regulations for solar electric technologies
Increase access to solar financing options

Resource Solar Powering Your Community Guide
A comprehensive resource to assist local governments and stakeholders in building local solar markets.
www.energy.gov

Resource Sunshot Resource Center Case Studies Fact Sheets How-To Guides Model Ordinances
Technical Reports
Sample Government Docs www4.eere.energy.gov/solar/sunshot/resource_ce nter

Technical Support Ask an Expert Live Web Forums
Ask an Expert Web Portal

Peer Exchange Facilitation In-Depth Consultations Customized Trainings www4.eere.energy.gov/solar/sunshot/resource_ce nter For more information email: solar-usa@iclei.org
Poll Whos in the room?
Poll What is your experience with solar?
Workshop Goal
Enable local governments to replicate successful solar practices and expand local adoption of solar energy
Explore benefits
and
Overcome barriers
Activity: Identifying Benefits

What is the greatest benefit solar can bring to your community? [Blue Card]
Right Now
During Session
After Break
Write answer on card
Compile results
Group discussion
Activity: Addressing Barriers

What is the greatest barrier to solar adoption in your community? [Green Card]
Right Now
During Session
After Break
Compile results
Group discussion
Installed Capacity
Germany 35.6%
http://www.map.ren21.net/GSR/GSR2012.pdf
Installed Capacity
Total installed solar capacity in the US
4 GW 4 GW
Capacity installed in Germany in Dec 2011

http://www.map.ren21.net/GSR/GSR2012.pdf
The Cost of Solar in the US
Source: NREL (http://ases.conferenceservices.net/resources/252/2859/pdf/SOLAR2012_0599_full%20paper.pdf) (http://www.nrel.gov/docs/fy12osti/53347.pdf) (http://www.nrel.gov/docs/fy12osti/54689.pdf)
Profits, Taxes, & Overhead

Solar Soft Costs
Agenda
Environment
10:15 11:15
11:15 11:45 11:45 12:00

12:00
Solar Technologies
Solar Photovoltaic (PV)
Solar Hot Water
Concentrated Solar Power
23
Solar Technologies
Solar Photovoltaic (PV)
Solar Hot Water
Concentrated Solar Power
24
Some Basic Terminology

Cell
Panel / Module
Array
Production Kilowatt-hour (kWh)
e- e- eCapacity / Power kilowatt (kW)

Residence 5 kW Factory 1 MW+
Office 50 500 kW
Utility 2 MW+
Benefits of Solar Energy

Local economy growth
Local jobs
Energy independence
Stabilizes price volatility

Valuable to utilities
Smart investment
29
Fact: Solar works across the US
4.62 KWh/m2/day
Source: National Renewable Energy Laboratory
30
Regional Solar Market

20
Megawatts Installed Capacity
15
10
0 2008 2009 2010 2011
Ohio
Indiana
Kentucky
Source: IREC
Comparison: Regional PV Financial Incentives

Ohio
Rebates
State Grants State Loans PACE Financing Prod. Incentives Corp. Tax Credits Pers. Tax Credits Prop. Tax Incentives
Kentucky
Revolving Loans for State Agencies TVA Programs $3.00/W; Max. $1,000 $3.00/W; Max. $500 -
Indiana
IP&L Rebate: $2.00/W up to 19.9kW
IP&L Rate REP NIPSCO Feed-in Tariff Assessed value of PV system is exempt from Res/Com/Ind Prop. Tax
AEP Ohio: $1.50/W up to 50% of cost or $12k/$75k

ECO-Link; Energy Loan Fund Local Option SRECs
OAQDA Incentives; Commercial/ Utility Exemptions
Ohio State Loan Programs

Energy Conservation for Ohioans (ECOLink):
Offers homeowners reduced interest rates on loans for renewable energy or energy efficiency upgrades offered by participating banks; maximum incentive = 3% rate reduction for up to $50,000 and 7 years of the bank loan
Energy Loan Fund:

Offers public entities, manufacturers, and small businesses loans for RE and EE upgrades Public and nonprofit entities: 90% of project costs or $1 million
AEP Ohio: Solar Rebates

Multi-Sector, esp. Residential, Commercial, Public, Nonprofit
$1.50/W
Max incentive: 50% of system costs up to $12,000 (Residential) or $75,000 (Non-residential) Net metering and Interconnection to AEP grid Surrender RECs (15 yrs.)
Renewable Portfolio Standard
Renewabl e Energy
Any electricity source
e$
Fossil Fuel
Two revenue streams
Utility
e- $ $ REC
Renewable Energy

Solar carveout Renewabl e Energy
Any electricity source
Solar Renewable Energy Credits (SRECs)
Three Requirements: RPS solar carve out Unbundled, tradeable credits Penalty for non-compliance
solar alternative compliance payment (SACP)
Alternative Energy Portfolio Standard

12.5% from renewables by 2024 for
IOUs and retail suppliers At least half of this renewable energy must be generated at facilities in Ohio 12.5% from advanced energy resources
by 2024
Solar carve-out of 0.5% of total electricity supply by 2024
SRECs in Ohio
SACP: $350/MWh (2012 and 2013); declines by $50 bi-annually Two Markets: In-State (50%) Out-of-State (50%) PA, IN, KY, WV, MI

www.dsireusa.org / August 2012.
(8 states and 2 territories have renewable portfolio goals).
Washington DC and 2 territories,have Renewable Portfolio Standards
29 states,+
Performance Incentives: IN
Indianapolis Power & Light Rate Renewable Energy Production (REP)
15 year contract; $0.24/kWh (20 kW 100 kW); $0.20/kWh (100 kW 10 MW)
NIPSCO Feed-in Tariff:

15 year max. contract term; $0.30/kWh (10 kW or less); $0.26/kWh (10kW 2 MW); 500 kW allocated for small scale solar ( 10 kW)
Performance Incentives: KY
TVA Generation Partners:
Up to 50 kW; $1,000 + $0.12/kWh above retail; 10-yr. contract;
TVA Mid-Size Program Standard Offer:

50 kW 20 MW; variable seasonal/TOD rates from $0.035/kWh - $0.16/kWh; Avg. $0.055/kWh (3% escalation); 10 to 20-yr. contract
Net Metering
Net metering allows customers to export power to the grid during times of excess generation, and receive credits that can be applied to later electricity usage
Net Metering: Overview

Morning
Customer
Utility

Afternoon
Excess Credits
Customer
Utility

Night
Customer
Utility
Solar covers 100% of the customers load, even at night!
Net Metering: State Policies

DC
+ Washington DC & 4 territories,have adopted a net metering policy.

Note: Numbers indicate individual system capacity limit in kilowatts. Some limits vary by customer type, technology and/or application. Other limits might also apply. This map generally does not address statutory changes until administrative rules have been adopted to implement such changes.
43 states,
Net Metering: Market Share
More than 93%
of distributed PV Installations are net-metered
Source: IREC (http://www.irecusa.org/wp-content/uploads/IRECSolarMarketTrends-2012web.pdf)
Net Metering: Resources

Resource Freeing the Grid
Provides a report card for state policy on net metering and interconnection
http://freeingthegrid.org/
Net Metering: Ohio
Source: Freeing the Grid
Net Metering: Ohio
Net Metering: Ohio
Recommendations:
Credit Net Excess Generation at the retail rate and provide the option of indefinite rollover
Adopt safe harbor language to protect customer-sited generators from extra and/or unanticipated fees
Specify that RECs belong to the customer
Net Metering: Resources

Resource Interstate Renewable Energy Council
IREC developed its model rules in an effort to capture best practices in state net metering policies.
www.irecusa.org
Interconnection
5,000+ utilities
with unique interconnection procedures
Source: NREL (http://www.nrel.gov/docs/fy12osti/54689.pdf
Interconnection: Best Practices

1. Use standard forms and agreements 2. Implement expedited process 3. Implement simplified procedure for small solar arrays
Interconnection: Ohio
Recommendations:
Remove redundant switch requirements for external disconnect
Expand interconnection procedures to all utilities (i.e., munis and co-ops)
Interconnection: Resources
Resource Interstate Renewable Energy Council
IREC developed model interconnection procedures in an effort to capture emerging best practices in this vital area.
www.irecusa.org
PV and Property Taxes

Ohio Air Quality Development Authority Air-Quality Improvement Tax Incentives
Qualifying projects (including PV) financed through OAQDA bonds or notes can receive a 100% exemption from personal and real property taxes
Qualified Energy Property Tax Exemptions:

Systems 250 kW exempt from utility real and property taxes Systems > 250 kW also exempt, but requires payment in lieu of taxes of $7,000/MW Applies to facilities that generate electricity for sale to 3rd parties
Solar Access
Solar Access Laws:
1. Increase the likelihood that properties will receive sunlight 2. Protect the rights of property owners to install solar 3. Reduce the risk that systems will be shaded after installation
Solar Access
DC
Solar Easements Provision

Solar Rights Provision Solar Easements and Solar Rights Provisions
U.S. Virgin Islands
Local option to create solar rights provision
Source: DSIRE
Solar Easements: Ohio

Ohio law allows property owners to create binding solar easements for the purpose of protecting and maintaining proper access to sunlight. Easements must be executed in writing and are subject to the same conveyance and recording requirements as other easements.
Solar Access
Resource Solar ABCs A comprehensive review of solar access law in the US Suggested standards for a model ordinance
www.solarabcs.org
Q&A
Agenda
Environment
10:15 11:15
11:15 11:45 11:45 12:00

12:00
Understanding Solar Financing

PACE Private PPA/Lease Sponsored Loan
New Model?
Financing
QECBs
Public PPA/Lease Non-QECB Debt
Morris Model
Third Party Ownership
Power Purchase Agreement
e$
REC
Customer
Developer

Pros
No upfront cost No O&M costs Low risk Predictable payments
Cons
Market electricity price risk Opportunities may be limited in some locations Dont keep RECs
3rd-Party Solar PV Power Purchase Agreements (PPAs)

www.dsireusa.org / August 2012
RI: may be limited to certain sectors UT: limited to certain sectors
VA: see notes
AZ: limited to certain sectors
At least 22 states + PR authorize or allow 3rd-party solar PV PPAs
Authorized by state or otherwise currently in use, at least in certain jurisdictions within in the state Apparently disallowed by state or otherwise restricted by legal barriers Status unclear or unknown
Puerto Rico
Note: This map is intended to serve as an unofficial guide; it does not constitute legal advice. Seek qualified legal expertise before making binding financial decisions related to a 3rd-party PPA. See following slides for additional important information and authority references.
Qualified Energy Conservation Bonds
What?
Tax credit or direct payment subsidy
Why?
Subsidy lowers the effective cost of capital
Relevance for Solar?

Financing public facilities (numerous) Green Community programs (a few)
How?
State allocation or automatic allocation
Qualified Energy Conservation Bonds
Local Examples??? Kentucky: Allocation mostly gone ($3M left) Ohio: 11 issuances to date ($95M left) Indiana: 2 issuances to date ($8.4M in state allocation remaining)
Source: National Association of State Energy State Energy Officials: State Financing Energy Resources.
Property Assessed Clean Energy
City creates type of land-secured financing district or similar legal mechanism (a special assessment district)
Property owners voluntarily signup for financing and make energy improvements
Proceeds from revenue bond or other financing provided to property owner to pay for energy project
Property owner pays assessment through property tax bill (up to 20 years)
Property Assessed Clean Energy

PACE financing authorized by the state*

*The Federal Housing Financing Agency (FHFA) issued a statement in July 2010 concerning the senior lien status associated with most PACE programs. In response to the FHFA statement, most local PACE programs have been suspended until further clarification is provided.
+ Washington DC, authorize PACE (27 states have passed legislation and HI permits it based on existing law). .
28 states,
Innovative: Morris Model

Public Debt PPA
MORRIS MODEL
Source: NREL . 2011. Financing Solar PV at Government Sites with PPAs and Public Debt
Replication of Morris Model

Legality of PPA Model
Laws Governing Public Contracts

Laws Governing Bonding Laws Government Procurement
Source: NREL . 2011. Financing Solar PV at Government Sites with PPAs and Public Debt
Innovative: PACE + PPA

PACE PPA
Untested
Source. Vote Solar. 2012. Commercial Scale Solar Financing PACE and Third-Party Ownership
Mitigate Soft Costs
$0.56
per Watt
Source: NREL (http://www.nrel.gov/docs/fy12osti/54689.pdf)
Customer Acquisition
Solarize Group Purchasing
Solarize: Advantages
Barriers
High upfront cost Complexity
Customer inertia
Solutions
Group purchase Community outreach
Limited-time offer
Solarize: Advantages
Benefits to Local Government: Low implementation cost: $10,000 $20,000
Quick turn-around: 9 Months

Long-term impact: Sustainable ecosystem
Solarize: Process
Select Installer
Marketing & Workshops
Enrollment
Site Assessment
Decision & Installation
Solarize: Case Study
Harvard, Massachusetts Population: 6,520

Source: Wikipedia
Solarize Mass Harvard

Select Installer
April 2011
Marketing & Workshops
Enrollment
Site Assessment
April 2011
Dec 2011
Group Purchasing
Average PV Cost July 2011: $5.75 / watt

Select Installer Marketing & Workshops
May July 2011
Enrollment
Site Assessment
April 2011
Dec 2011

Marketing Strategy:
Electronic survey of 1,100 households Email newsletters and direct mailings Float in July 4 parade Articles and advertisements in local newspaper
Facebook page and online discussion board

Source: Vote Solar

429 households signed up

Enrollment
June Oct 2011
Site Assessment
April 2011
Dec 2011

151 feasible households

Enrollment
Site Assessment
Oct 2011
April 2011
Dec 2011

75 Contracts

Select Installer Marketing & Workshops Site Assessment
Enrollment

Oct Dec 2011
April 2011
Dec 2011
Group Purchasing
403 kW capacity contracted
75 new installations totaling 403 kW 30% reduction in installation costs
575% increase in residential installations
Solarize: Lasting Impact
Lasting Impact
Source: NREL
Solarize: Resources
Resource The Solarize Guidebook A roadmap for project planners and solar advocates who want to create their own successful Solarize campaigns.
www.nrel.gov
Q&A
Agenda
Environment
10:15 11:15
11:15 11:45 11:45 12:00

12:00
Agenda
Environment
10:15 11:15
11:15 11:45 11:45 12:00

12:00
INSERT LOCAL EXPERT DECK
Agenda
Environment
10:15 11:15
11:15 11:45 11:45 12:00

12:00
Agenda
Environment
10:15 11:15
11:15 11:45 11:45 12:00

12:00
Agenda
Environment
10:15 11:15
11:15 11:45 11:45 12:00

12:00
Justin Barnes
NC Solar Center / DSIRE
justin_barnes@ncsu.edu (919) 515 - 5693
Philip Haddix
The Solar Foundation
phaddix@solarfound.org
Activity: Identifying Benefits

What is the greatest benefit solar can bring to your community? [Blue Card]
Right Now
During Session
After Break
Compile results
Group discussion
[Results from Survey]
Activity: Addressing Barriers

What is the greatest barrier to solar adoption in your community? [Green Card]
Right Now
During Session
After Break
Compile results
Group discussion
[Results from Survey]
Activity: Next Steps
What do you pledge to do when you leave todays workshop? [Orange Card]
Net Metering: Virtual

School
Landfill Town Hall
Police Station
No direct connection necessary
Net Metering: Meter Aggregation
DC
Aggregation of some from authorized by state
ButIts complicated
Ownership requirements Contiguous vs. non-contiguous properties Multiple customers Multiple generators Modified system/aggregate system size limits Rollover rates Distance limitations Number of accounts How to address accounts on different tariffs
Process
Option 1: Direct Ownership

Decide on Ownership Structure
Option 2: Third Party Ownership
Ownership Structure Decision

Are you a taxpaying entity? Do you have access to financing or available cash? How does this compare to other opportunities? Can you enter into long-term contracts? Do you want to own the system? Do you have a municipal utility? Do you need the RECs for compliance?
Process
Direct Ownership
Location Selection Site Assessment Finance Project Installer Procurement
Construction
Process
Direct Ownership
Construction
Step 1: Location Selection

Who is using the energy? Where is the energy being used? What is the users energy load? What is the users energy cost?
Step 1: Location Selection
Rooftop
Ground
Process
Direct Ownership
Construction
Step 2: Site Assessment

Solar Access Rights Interconnection Wind loading Roof age, type, & warranty Electrical configuration Slope, Shading and orientation
Step 2: Site Assessment

Usable acreage Slope Distance to transmission lines
Distance to graded roads

Conservation areas
Process
Direct Ownership
Construction
Step 3: Finance Project

Direct purchase Grant financed ESCO/performance contracting Loans Bonds
Process
Direct Ownership
Construction
Step 4: Installer Procurement

EPC = Engineer, Procure, Construct
Designs the project
Completes necessary permitting requirements Works with the utility to file for interconnection Assists in procuring components Applies for incentives Manages project construction
Process
Direct Ownership
Construction
Direct Ownership
Pros
Low cost electricity REC revenue
Cons
Large upfront cost Long term management Cant take all incentives
Maximize underutilized spaces
Development risk
Performance risk
Process
Direct Ownership
Location Selection
Developer Procurement
PPA & Lease Negotiation
Construction
Process
Direct Ownership
Location Selection
Construction
Process
Direct Ownership
Location Selection
Construction
RFP vs RFQ
Step 2: Developer Procurement

Avoid Five Common Pitfalls:
RFP/RFQ specifications are too restrictive or too unstructured Competing measures of system efficiency Finding sufficient number of qualified bidders Lack of effective O&M program Lack of strong monitoring program
Source: NREL Webinar Procuring and Implementing Solar Projects on Public Buildings: How to Avoid Common Pitfalls December 8, 2010
Step 2: Developer Procurement

In Santa Clara County, CA, nine municipalities collaboratively bid out 47 sites. Benefits include:
50% savings in administrative costs 10-15% reduction in energy cost

Source: NREL Webinar Procuring and Implementing Solar Projects on Public Buildings: How to Avoid Common Pitfalls December 8, 2010
Process
Direct Ownership
Location Selection
Construction
Step 3: Contract Negotiation

Negotiation points:
Fixed or floating electricity price
Price escalator
Contract term length Property taxes Liability Performance guarantee
Regulatory risk
Process
Direct Ownership
Location Selection
Construction

Pros
No upfront cost No O&M costs Low risk Predictable payments
Cons
Market electricity price risk Limited opportunity in PA Dont keep RECs
Factors PPA Providers Look For

States that allow PPA providers to operate without being regulated as utility
State financial incentives tax credit or rebate REC market

Good net metering and interconnection
PPA providers allowed to net meter
Case Study: Kansas City
The City will lease 40 80 rooftop grid connected 25 kW solar PV installations

Source: Solar Ready KC
Case Study: Kansas City

Direct Ownership
Location Selection
Construction
Proposals due July 2012

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Solar Powering Your Community Addressing Soft Costs and Barriers

Panel of Local Experts

Panel of Local Experts

About the SunShot Solar Outreach Partnership

About the SunShot Solar Outreach Partnership

Increase installed capacity of solar electricity in U.S. communities

About the SunShot Solar Outreach Partnership

About the SunShot Solar Outreach Partnership

About the SunShot Solar Outreach Partnership

Ask an Expert Web Portal

Poll Whos in the room?

Poll What is your experience with solar?

Activity: Identifying Benefits

Write answer on card

Activity: Addressing Barriers

Write answer on card

Capacity installed in Germany in Dec 2011

The Cost of Solar in the US

Source: NREL (http://ases.conferenceservices.net/resources/252/2859/pdf/SOLAR2012_0599_full%20paper.pdf) (http://www.nrel.gov/docs/fy12osti/53347.pdf) (http://www.nrel.gov/docs/fy12osti/54689.pdf)

The Cost of Solar in the US

Source: NREL (http://ases.conferenceservices.net/resources/252/2859/pdf/SOLAR2012_0599_full%20paper.pdf) (http://www.nrel.gov/docs/fy12osti/53347.pdf) (http://www.nrel.gov/docs/fy12osti/54689.pdf)

The Cost of Solar in the US

Profits, Taxes, & Overhead

Source: NREL (http://ases.conferenceservices.net/resources/252/2859/pdf/SOLAR2012_0599_full%20paper.pdf) (http://www.nrel.gov/docs/fy12osti/53347.pdf) (http://www.nrel.gov/docs/fy12osti/54689.pdf)

The Cost of Solar in the US

Source: NREL (http://ases.conferenceservices.net/resources/252/2859/pdf/SOLAR2012_0599_full%20paper.pdf) (http://www.nrel.gov/docs/fy12osti/53347.pdf) (http://www.nrel.gov/docs/fy12osti/54689.pdf)

Panel of Local Experts

Solar Photovoltaic (PV)

Solar Hot Water

Concentrated Solar Power

Solar Photovoltaic (PV)

Solar Hot Water

Concentrated Solar Power

Some Basic Terminology

Some Basic Terminology

Some Basic Terminology

Production Kilowatt-hour (kWh)

e- e- eCapacity / Power kilowatt (kW)

Some Basic Terminology

Benefits of Solar Energy

Stabilizes price volatility

Fact: Solar works across the US

Source: National Renewable Energy Laboratory

Regional Solar Market

Megawatts Installed Capacity

0 2008 2009 2010 2011

Comparison: Regional PV Financial Incentives

AEP Ohio: $1.50/W up to 50% of cost or $12k/$75k

OAQDA Incentives; Commercial/ Utility Exemptions

Ohio State Loan Programs

Energy Loan Fund:

AEP Ohio: Solar Rebates

Renewable Portfolio Standard

Any electricity source

Renewable Portfolio Standard

Two revenue streams

Renewable Portfolio Standard

Any electricity source

Solar Renewable Energy Credits (SRECs)