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American Nuclear Society
Massachusetts Clean Energy Center
November 28, 2012
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MassCEC Statutory Mandate
Advance Clean Energy Technology
Create Jobs
Develop a Trained Workforce
Accelerate Deployment of Clean Energy
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Source of funding is a Systems Benefits Change on ratepayers’ electric bill Available for customers of IOUs and MLPs that opt-in
MassCEC Eligible Customers
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Agenda• Solar PV Basics• Solar PV Incentives• Solarize Massachusetts• Solar Hot Water Basics and Incentives
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$18B Energy Dollars Flow Out of MA Annually
Oil & Natural Gas - Canada
Oil - Venezuela
Oil & Natural Gas - Middle East
Coal – Colombia
MA Energy Imports 2008
$B
Fuel Oil (heating, diesel) $5.0Gasoline $9.2Jet Fuel $1.4Other Petroleum $0.9Natural Gas $5.2Coal $0.3 Total $22 BPer Household Average ~ $4,600
Natural Gas - Caribbean
Natural Gas - U.S. Gulf Coast
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Massachusetts Retail Electricity Prices
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2010 Average Retail Electricity Price c/kWh
Mass. is 7th Highest
U.S.
Source: EIA Form 826 19901992
19941996
19982000
20022004
20062008
2010
$- $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 $0.20
Residential Electricity Rates
$/kW
h
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Residential Project Trends
2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
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# ProjectsAverage Project Cost
Aver
age
Cost
($/W
att)
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Is There Enough Sun In MA?
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Installed Solar in MA• 174 MW of solar installed (as of 10/31/12)
• Produces about ~198,151 MWh per year
• This is equivalent to:
• Removing 136,636 MT of CO2
• Removing annual emissions of over 26,000 cars
• Visit EPA Greenhouse Gas Calculator http://
www.epa.gov/cleanenergy/energy-resources/calculator.html
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How do solar PV panels work?• NEED DIRECT SUNLIGHT!
• Sunlight dislodges electrons in a layer of silicon
• Electrons flow to layer that needs electrons
• Metal contacts direct electricity from panel to wires
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How Does Solar PV work on my house?
Grid-connected projects can apply for Net Metering (utility meter spins backwards)
Power outage: Inverter shuts down, unless a battery-back up system is installed
Cour
tesy
of N
REL
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What is Net Metering?
• Credits generated when system is producing more than is being used– “Meter runs backwards”
• Excess credits are carried over month-to-month indefinitely
• Receive credits at almost full retail rate
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How big a system do I need?• Avg. MA residence uses ~8,000
kWh/year
• Electricity bill shows summary of prior year’s consumption
• Incentives are designed for systems sized ≤ load
• Efficiency or lower energy use allows for a smaller system!
Back of the Envelope Calculation: 1 kW PV = approximately 1,200 kWh/year
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What makes a good site?
http://energy.ltgovernors.com/solar-energy-pv-systems-self-generation-make-your-own-power.html
• Southern exposure
•PV panels angled 30˚ – 45˚
• At least 4-6 hours of direct sunlight
• Open roof area of ~100 sq ft per 1 kW
• Open space for a ground or pole mounted system
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Shading of Solar PV Systems• Initial site feasibility can be
determined online through aerial images
• Shading can significantly reduce the output of a system, changing the financials of a project
• Installer is the expert in determining feasibility
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What to do with a Non-Feasible Site
• Consider energy efficiency– www.MassSave.com
• Other renewable energy technologies– Solar Hot Water (
www.masscec.com/solarhotwater)
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Agenda• Solar PV Basics• Solar PV Incentives• Solarize Massachusetts• Solar Hot Water Basics and Incentives
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Solar Incentives in Massachusetts
IncentivesTax Incentives:Federal (30%)
State (15% up to $1,000) Accelerated Depreciation
Rebates from MassCEC
Net Metering
SREC Sales
Low/No money down optionswww.house-power.com/blog/wp-content/uploads/2009/12/iStock_000009001180XSmall.jpg
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• Any eligible PV system ≤ 15kW, rebate paid on first 5kW
• Rebate ranges from $2,000 to $4,250 for 5kW system
• Average rebate covers ~7% of installed cost
MassCEC RebatesBlock 12 Rebate Levels ($ per watt (DC @ STC))
Base Incentive $0.40
PLUS:
Massachusetts Company Component Adder $0.05
Moderate Home Value Adder OR Moderate Income Adder ≤ 120% of MA median income (only residential projects eligible)
$0.40
Natural Disaster Relief Adder $1.00
Go to www.MassCEC.com/solar to learn more.
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MassCEC Rebates (cont.)
County Property ValueBerkshire, Franklin, Hampden, and Hampshire ≤ $300,000Bristol, Suffolk, Worcester ≤ $350,000Barnstable, Duke, Essex, Middlesex, Nantucket, Norfolk, and Plymouth
≤ $400,000
Income Category Income Levels
Individual Income ≤ $75,810*
Domestic Unit Income ≤ $95,420*
Moderate Home Value Adder Criteria
* 120% of median household income as determined by the US Census Bureau
Moderate Income Adder Criteria
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MassCEC Rebates (cont.)• Minimum Technical Requirements
– Equipment must meet certain standards– Required warranties
• Panels have 20 year warranties• Inverters have 10 year warranties• 5 year workmanship warranty
– 80% of optimal system production
• Insurance– Incumbent on host customer to verify Installer insurance
• Tax Questions– MassCEC will issue 1099s to all System Owners– Consult tax advisor with any questions about rebate taxability or other
incentives
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Solar Renewable Energy Certificates (SRECs)
Electricity Pathway
• Electrons from all generation sources are physically the same
• Cannot be tracked independently on the grid
SRECs Pathway
• SRECs represent the “green” attributes of the renewable generation source
• Utilities are required to purchase SRECs every year
• 1 SREC = 1,000 kWh
• Verified SRECs ensure that only one buyer can claim each SREC
Electricity and SRECs can be, and often are, sold
separately
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SRECs (cont)
• Small-scale project owners will work with SREC aggregators or brokers to sell SRECs to utilities
• Projects installed in 2012 will be eligible to sell SRECs for 10 years
• SRECs generally sell between $285 - $550/SREC
• Monthly production reported to MassCEC’s Production Tracking System (PTS)
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Assumptions: Simple Solar Ownership Model
* Assumes qualification for the base rebate incentive and is eligible for federal and state tax incentives.
Disclaimer: This financial analysis is only an estimate. Actual installed costs, savings, and revenues are subject tochange and will be specific to individual projects.
Assumptions
Size: 5 kW (5,000 watts)
Panel Degradation: 1% Annually
Electricity Price: $0.15/kWh
Electricity Price Escalator: 3% Annually
Life of System: 20 years
SREC Value: $285.00
Timeline for SREC Sales: 10 years
Income Tax Rate: 28%
Discount Rate: 7.5%
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Simple Solar Ownership ModelState Average Price
Dollar Per Watt Cost $ 5.00
Total Installation Cost $ 25,000.00
CSII Rebate (base of $0.40/watt) $ (2,000.00)
Total Upfront Cost $ 23,000.00 Federal Tax Credit (30% of cost) $ (6,900.00)
MA Tax Credit $ (1,000.00)
Total After Tax Credits $ 15,100.00 NPV SREC Income (over 10 yrs) $ (7,714.24)
NPV Electricity Savings (over 20 yrs) $ (10,073.75)
Net Project Cost $ (2,687.99)
Payback after rebate & tax credits 7-8 yearsDisclaimer: This financial analysis is only an estimate. Actual installed costs, savings, and revenues are subject to change and will be specific to individual projects.
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Levelized Cost of Solar PV (w/o Financing)
Years
Cost
of E
lect
ricity
($/k
Wh)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 $-
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
3rd Party Ownership
Electricity Prices
PV after Incentives
PV before Incentives
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Levelized Cost of Solar PV (w/ 5% Financing)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 $-
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
Cost
of E
lect
ricity
($/k
Wh)
Years
Electricity Prices
PV after Incentives
PV before Incentives
3rd Party Ownership
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Agenda• Solar PV Basics• Solar PV Incentives• Solarize Massachusetts• Solar Hot Water Basics and Incentives
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Goals of Solarize Mass
• Increase education through community outreach
• Introduce model to simplify process
• Reduce installation costs• Reduce time to contract Equipment
Costs
“Soft” Costs
Sales
Installation
Average
Equipment Costs
“Soft” Costs
Installation
Solarize Mass
Drive down the cost stack
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2012 Solarize Massachusetts Basics• 17 Green Communities • 8 Installers • Tier Pricing (based on contracted capacity)
• Limited time offer – Sign Ups through Nov 4, 2012
Tier 1 Tier 2 Tier 3 Tier 4 Tier 5
1 kW-25 kW >25 kW-50 kW >50 kW-150 kW >150 kW-250 kW 250 kW+
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Solarize Mass Pricing
$3.00
$3.50
$4.00
$4.50
$5.00
$5.50
$6.00 Avg. PV Cost in MA @ Begin-
ning
Avg. 2012 So-larize Cost*
Pric
e ($
/watt
)
Tier Pricing versus Average Price in Massachusetts
* Price does not include any cost adders that may apply.
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Solarize 2012 Final Metrics
Total Number Of:
Leads Generated 5,405
Contracts Signed 803
Contracted Capacity (kW) 5,146
Communities at Tier 5 Pricing 10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 210
1000
2000
3000
4000
5000
6000
Cont
ract
ed C
apac
ity (k
W)
Week of the Program
Cumulative Contracted Capacity
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Total number of Projects more than DOUBLED
Acton
Arlingto
n
Boston
Hopkinton
Melrose
Mendon
Montague
Newburyport
Palmer
Shirley
Lenox/P
ittsfi
eld
Millbury/S
utton
Lin/W
ay/Sud
0
50
100
150
200
250Total number of PV Projects
During Solarize
Pre-Solarize
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Agenda• Solar PV Basics• Solar PV Incentives• Solarize Massachusetts• Solar Hot Water Basics and Incentives
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Solar Thermal ApplicationsWhat can a SHW system be used for? • Domestic Hot Water • Pool Heating• Process Hot Water• Space Heating• Solar Assisted Cooling
What makes a good SHW application? • High hot water load • Minimal shading• Structure capable of supporting
collectors• Space available for storage tank
Urban Edge, Jamaica Plain
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How does solar thermal work?
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• For any residential, multi-family or commercial building Displace ANY fuel type
• Two types of incentives offered: Feasibility Study Grants (Commercial Projects Only)
• Help building owners assess the potential benefits of installing a solar thermal system
Construction Rebates • Help system owners with the upfront capital costs of
installing the solar thermal system
• www.MassCEC.com/SolarHotWater
Commonwealth Solar Hot Water Program
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Thank you!
Elizabeth KennedyProgram Director, Solar Programs
MassCEC55 Summer St., 9th Floor
Boston, MA 02110