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Community Shared Solar and Urban

Neighborhoods September 4, 2013

Moderator: Dave Buemi

Senior Director, Gehrlicher Solar America

Community Colleges as Living Laboratories

September 10, 2013 11:30 am – 12:30 pm ET

www.securityandsustainabilityforum.org/events

.

Empowering Communities to Find Resilient Solutions

With Bruce Babbitt

September 5, 2013 1:15 pm – 2:45 pm ET

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Dave Buemi, Senior Director, Gehrlicher Solar America has a 25-year

background in clean energy and energy conservation with a specialization in

solar photovoltaic (PV) energy. Over the past 11 years, Dave has worked

throughout the PV industry supply chain including new technology

commercialization, manufacturing, project development and project

implementation both domestically and internationally. Dave participates

broadly across the industry trade associations, blogs regularly on the PV

industry and markets (www.davebuemi.com) and is a frequent speaker on

solar energy and earth sustainability.

SSF interview on

http://www.blogtalkradio.com/securityandsustainabilityradio

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• Introduction to the Panel: Dave Buemi, Gehrlicher Solar Americas

• Panel Presentations Jill Cliburn: Principal, Cliburn and Associates, LLC Joe Bourg, Chief Executive Officer, Millennium Energy, LLC David Beavers, Principal with the Cadmus Group

• Panel Discussion Questions

• Audience Questions: Send your questions through the chat box

• Summary Points

• Thank you! Please fill out the audience exit survey

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David Beavers, Principal with the The Cadmus Group. David is on the front lines of helping states develop renewable energy programs focusing on strategies for deployment of solar energy systems.

Joe Bourg, Chief Executive Officer, Millennium Energy, LLC Joe has provided strategic solar development support of renewable energy programs and projects for such clients as the US Department of Energy, National Renewable Energy Laboratory, National Rural Electric Cooperative Association, Los Angeles Department of Water and Power, City of San Diego, and the US Naval Facilities Engineering Command

Jill Cliburn, Principal, Cliburn and Associates, LLC. Since 2003, Jill has been widely published and engaged as a leader in establishing strategic solar as part of the utility resource portfolio. She has also developed win-win collaborations between utilities and clean energy advocates.

A New View on Community Solar

Jill K. Cliburn Cliburn and Associates, llc

Jkcliburn@gmail.com

Background

• Best-practice perspective

• Including community solar experience

• Utility/stakeholder collaborative projects

• Coupled with analytics & modeling

• Often with Joe Bourg

• (That is not Joe.)

Definitions

Community solar broadly refers to any solar project that

has multiple participants—co-owners, lease-holders,

subscribers, or donors—where each carries a relatively

small portion of the total project cost and shares

proportionally in the project’s benefits.

Utility-based community solar ideally benefits the

participants, the utility, and the community at large.

Shared solar … benefits primarily flow to the participants

and less to the community at large.

Solar farms, solar gardens, solar crowdfunding, mass-

market solar investing… http://www.sharedrenewables.org

Benefits for Participants &

Community Sponsors Related To…

• Sustainability

• Convenience (siting, O&M)

• Affordability and value

• Community outreach

• Lower risks related to changing rate structures

• Compatible with other solar choices in the

community; helps build the solar industry

Benefits For the Utility Related To…

• Customer choice—beyond green power options

• Compliance and diversification

• Long-term risk management

• Solar interconnection and operational concerns

• Rate issues

• Affordability and value

• Opportunities to support community goals

Key questions: What is the utility role, how do

participants pay/get paid, how is the project

financed, and where is the project built?

• Crowd-funding and mass-market vehicle

investing for a typical PPA

• Developer-driven projects with some utility

involvement

• Utility-based projects with capacity ($/kW) pricing

• Utility-based projects with energy ($/kWh) pricing

SMUD Project Model

• Price set by power

purchase agreement

• Possible buyout to

keep benefits local

& possible siting

benefits

• Incentive if

available

• Virtual NEM benefit

monthly for longer-

term participants

• Rate based on wholesale price

• + admin and fixed charges • Wholesale value

of solar to grid

Community Solar

Competitive With Best

Rooftop

Solar PPA for

High Performance Solar

SMUD

Project Success:

Depends Largely on Financing

• Purchase vs. Lease vs. PPA

• 40% Business ITC + MACRS – Not directly available to

public or non-profit entities

• 30% Residential ITC – Usually not available for CS

• Leasing has

pros/cons

• Long-term disposition

• Who do you trust?

Expertise Required to Design and Complete the

Analysis, the RFP, and Negotiations

And Implementation!

Community Solar: Customer-Driven / Utility-Led Opportunities

for Increased Solar Generation at Lower Prices

Presented by: Joe Bourg, CEO

Millennium Energy LLC

For: The Security and Sustainability Forum’s

Community Solar Webinar September 4, 2013

Millennium Energy, LLC Golden, Colorado jbourg@q.com (303) 526-2972

Utility-Based Community Solar Programs

• There are numerous Community Solar business models and program approaches

• Specific models and approaches are often shaped by the local regulatory environment as well as the leadership within the communities, utilities, and private companies involved in a specific program

• One emerging Community Solar strategy is the utility-based model, where the utility owns (or may acquire) the PV plant, and through a variety of mechanisms (i.e., panel leases/purchases, energy/capacity sales, etc.), provides the customer’s share of the plant output as a utility bill credit

• This emerging model provides a streamlined approach to reach the most utility customers at the lowest cost to both the utility and the customer

• The utility-based Community Solar Program is the focus of this presentation

The Program Participant • Lower cost solar and better economics than

customer-sited options • Available to renters and homeowners with solar

constraints (house orientation, shading obstructions) • No roof penetrations • Time and effort savings from not coordinating an

installation • Participant doesn’t need to worry about O&M • Participant doesn’t need to worry about regulations

and NEM rate structures changing in the future • No financing needed

Who Benefits from Utility-Based Community Solar Programs ?

Representative Economic Values Of Residential PV Options

* Values are for representative comparisons only

Representative Cumulative Cash Flow Analysis

The Utility • No lost revenues – as opposed to customer-sited NEM systems • Community solar farms can be sited to optimize the strategic

benefits of solar generation and maximize distribution system benefits

• Avoids the issues associated with net-metered systems • Allows the utilities to take advantage of economies of scale

associated with larger PV systems • Allows utilities to pass on reduced risk to program participants

as larger PV systems typically include performance guarantees • Utility-led Community Solar Programs reduce utility concerns

over “retailing wheeling” – or 3rd party energy sales to its customers

• Since customers drive the program based on participation rates, utilities can better size systems to meet market demand

Who Benefits from Utility-Based Community Solar Programs ?

The Community

• The community benefits from more solar being installed due to lower cost and utility aggregation efforts

• Utility projects can be designed to produce more energy per installed unit of capacity – resulting in higher emissions reductions and other environmental benefits than residential customer sited systems

Who Benefits from Utility-Based Community Solar Programs ?

Technology Advantages of Utility-Based Community Solar Programs

• Larger-scale systems can utilize trackers and other production enhancing technologies to maximize the system output compared to customer-sited systems

• Customer–sited PV systems may experience limitations on energy production due to roof slope and building orientation with fixed tilt systems

• As PV and BOS technologies advance and decrease in price, the utility can pass these savings onto the program participants

8,180 kWh / year

6,440 kWh / year

5,790 kWh / year

Comparison of Energy Output from Community Solar Vs. Customer-Sited PV

Summary

• Utility-based Community Solar Programs can offer economic, technological, and environmental benefits to customers desiring solar energy

• Program models are still emerging, providing an opportunity for customers to help shape an existing program or create demand for a new program

• Community Solar Programs can provide reduced regulatory risk to both utilities and participants

• Through the benefits accruing through Community Solar Programs, the classic win-win-win scenario is achievable

Community Shared Solar

September 4, 2013

Security & Sustainability Forum

September 4, 2013

Overview

• Background

• What is CSS?

• Key Questions

Structure and Roles

Potential Benefits

Policy options

9/4/13 34

Background

• Cadmus is an employee-owned company staffed with approximately 400 full-time professionals in offices across the United States

• In May 2012, DOER hired Cadmus to identify and assess the opportunities and barriers of implementing community shared solar (CSS) – “Community Shared Solar: Review and Recommendations for

Massachusetts Models” – “Community Shared Solar: Implementation Guidelines for

Massachusetts Communities”

Reports available at www.mass.gov/eea/energy-utilities-clean-tech/renewable-energy/solar/community-shared-solar.html

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What is CSS?

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• Homeowner wants to install solar on their roof, but cannot due to site constraints

• CSS allows homeowner to participate in solar at another location and still receive the energy benefits

Other Desired Attributes?

• Local – Ownership – Financing

• Availability – Low Income Participation – Public entity participation

• Low risk – Participants should be protected from market and

regulatory risks

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Structure and Roles

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Residential Solar to CSS Translation

Residential Solar CSS

Private (Non-Business) Business Incorporation

Federal Residential RE Tax Credit (30%) Investment Tax Credit (30%)

One contract Multiple contracts (e.g., PPAs, lease, O&M)

Permits: building /electrical Permits: zoning, wetlands, etc. (for ground-mounted systems)

Financing: home equity or personal loan (aspirations for solar loan)

Financing: commercial bank and private equity

Exempt from net metering caps Limited by net metering caps

9/4/2013 39

Consult an Attorney

Question

• How do we keep a CSS project as simple as possible while also encouraging:

– Local ownership and financing;

– Limited risk for Participants;

– Participation by low-income households?

9/4/2013 40

One Answer

• Disaggregate the roles of those who invest in the project from the those who get the energy benefits – ~3rd Party Ownership Model

• Individual Homeowners may serve in both roles

• May need loans for low-income participants

9/4/2013 41

Homeowner as investor

Homeowner as Participant

Investor/ PV System

Owner

Source: My Generation Energy , www.mygenerationenergy.com 42

Example: Brewster, MA

Benefits of Disaggregation

• Participants only pay for NM credits and have no business liabilities and see minimal risk*

• Business-savvy investors assume project risk – Investors can be local accredited investors – Possibility for crowd sourced and other funding mechanisms in the

near future

• Possible downside – Participants may feel less of a sense of “ownership” in the project

* Contract with Investors/PV Owner should minimize risk to participants as a good business practice.

9/4/2013 43

Potential Benefits

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Potential Benefits Example • Example from Community Shared Solar:

Implementation Guidelines for Massachusetts Communities (pg. 37) – 105 kW CSS project at a school with 20 participants – $6,000 per participant up front to join – $1,015 annual net metering benefits per participant

• Simple Payback: ($6,000)/($1,015) =5.9 years • Lease Payment to school =$3,805 • Incentives: Federal Tax Credit, MA SRECS, virtual net

metering

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Policy Options

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Policy Question

• If CSS is intended to offer homeowners, renters, etc. an opportunity like solar PV ownership:

Shouldn’t rules and regulations treat the project as non-commercial to the extent possible?

• E.g. apply residential solar rebates

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1. Are there different definitions being used across the country for the terms Community Solar and Community Shared Solar? (e.g. We’ve been using Community Solar to mean municipalities that install solar on schools and other public buildings)

2. If you favor utility-directed projects, then what advice would you have for a local government or community group whose utility currently does not have a community solar program?

3. Could a college or a local government sponsor a community solar project to serve all of its facilities?

4. There’s been a lot of talk about utilities wanting to change their net metering policies, giving individual net metering customers less benefit. Without arguing for or against that, how do you think community solar addresses the risks that net metering policies will change?

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David Beavers, Principal with the The Cadmus Group. David is on the front lines of helping states develop renewable energy programs focusing on strategies for deployment of solar energy systems.

Joe Bourg, Chief Executive Officer, Millennium Energy, LLC Joe has provided strategic solar development support of renewable energy programs and projects for such clients as the US Department of Energy, National Renewable Energy Laboratory, National Rural Electric Cooperative Association, Los Angeles Department of Water and Power, City of San Diego, and the US Naval Facilities Engineering Command

Jill Cliburn, Principal, Cliburn and Associates, LLC. Since 2003, Jill has been widely published and engaged as a leader in establishing strategic solar as part of the utility resource portfolio. She has also developed win-win collaborations between utilities and clean energy advocates.

Moderator: Dave Buemi, Gehrlicher Solar America

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•Community solar programs need to suited to the legal and

regulatory environment

• Community solar programs need to be suited to the market

• Community solar programs can often provide better economic

benefits over rooftop

• Community solar can often mitigate some net metering issues

with utilities

• The risks to participants should be identified and assessed as

part of the decision process

• Community solar programs should stress community rather than

individual benefits only

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Community Colleges as Living Laboratories September 10, 2013 11:30 am – 12:30 pm ET

www.securityandsustainabilityforum.org/events

Empowering Communities to Find Resilient Solutions

With Bruce Babbitt

September 5, 2013 1:15 pm – 2:45 pm ET