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Growing the U.S. Commercial Solar Water Heating Market
[email protected] David Hoedeman
(412) 334-9279
PRESENTATION FOR ISES
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Who is Nextility?
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§ Founded by three entrepreneurs under the age of 25 in 2009 in Washington, DC as Skyline Innova@ons
§ Mission: Break down the barriers to renewable energy adop@on from small to mid-‐size commercial customers
§ Started with solar water hea@ng
§ Have added solar PV and energy brokerage
§ Grown from three employees in Washington, DC in 2009 to over 60 employees in DC, California, and Puerto Rico
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What Barriers Needed Breaking Down?
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UP FRONT COST
§ Average commercial systems cost between $100,000 -‐ $1 million ($80 – $120 per square foot)
§ Solar water hea@ng has lots of fixed costs, hard to gain economies of scale on small commercial projects
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What Barriers Needed Breaking Down?
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LOW NATURAL GAS PRICES § Most US Water Hea@ng
done with Natural Gas
§ Prices range from $0.70 -‐ $1.10 per therm ($0.024 -‐ $0.038 per kWh)
§ Total monetary savings is low, simple project payback period is long
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What Barriers Needed Breaking Down?
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LONG-‐TERM UNCERTAINTY § Solar Water Hea@ng system Performance less
understood than PV
§ Most commercial system sizing for maximum total energy offset, not financial op@miza@on
§ Customer and installer incen@ves not aligned
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How Does Nextility Overcome This Uncertainty?
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NEXTILITY FINANCING MODEL § Nex@lity pays for 100% of installa@on of system for
qualified buildings
§ Bills the customer through an indexed power purchase agreement, guaranteeing the rate will always be below the u@lity rate
§ Provides 24/7 remote system performance monitoring and covers 100% of all maintenance over the length of the contract
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Price-Indexed Energy (PIE)
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$0.00
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
$0.16
$0.18
J F M A M J J A S O N D
Solar Energy Rate
Conventional Energy Rate
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Price-Indexed Energy (PIE)
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Utility Energy Bill
Utility Energy Bill
Savings Shared with Nextility
Your Savings
Utility Energy Bill
Your Savings
BEFORE SOLAR CONTRACT AFTER CONTRACT
CUSTOMER TAKES FULL OWNERSHIP OF THE SYSTEM,
BENEFITTING FROM 100% OF ENERGY
SAVINGS
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What’s a Qualified Building?
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>1,500 square feet þ
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What’s a Qualified Building?
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Multifamily: 40 units / 60 residents þCollege Dormitories: Minimum 100 residents þHospitality þReally, any commercial property using >1,500 gallons of hot
water daily on a single, central water heating system þIndustrial Applications þ
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How Does the Financing Model Work?
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FINANCIAL INCENTIVES § 30% Federal Investment Tax Credit
§ Local State Incen@ves § Solar Renewable Energy Credits § State Tax Credits § State Cash Grants
§ Nex@lity partners with solar project funds
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Which US States Support Solar Water Heating?
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California
Oregon*
North Carolina*
Hawaii
Washington, DC
Delaware Maryland
New York Massachusejs
*Requires in-‐state tax equity
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What About System Performance?
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California
Oregon*
Hawaii
Washington, DC
Delaware Maryland
Massachusejs
SkyBox
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What About System Performance?
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California
Oregon*
Hawaii
Washington, DC
Delaware Maryland
Massachusejs
EUREKA!
§ Remote connec@vity to all systems
§ 15 points of measurement
§ Automa@c flagging of maintenance issues
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What About System Performance?
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Hawaii § Best predictor of system performance? Ra@o of gallons per day hot water use per
total square feet of collectors
§ Nex@lity has used many different collectors, both tubes and flat plates. Collector
performance majers, but ooen not as much as system configura@on
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And Customer Billing?
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California
Oregon*
Hawaii
Washington, DC
Delaware Maryland
Massachusejs
ReeBill
§ Character recogni@on sooware breaks apart customer u@lity bill
§ System produc@on data from Eureka! spliced in
§ Determines monthly customer savings to the penny
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Working with Nextility
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California
Oregon*
Hawaii
Washington, DC
Delaware Maryland
Massachusejs
§ As with every financed solar project there are three major factors:
§ Cost of installa@on
§ Fuel price
§ Available Incen@ves
§ Every project has an install cost that makes it work for our model
§ (Ooen, that install cost is impossible to hit)
§ So, we target the following states where incen@ves make it easiest to
compete
§ DC
§ Maryland
§ California
§ Hawaii
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George Washington University Washington, DC
Harbor House Annapolis, MD
4600 Connecticut Condos Washington, DC
Thank You! Tuelyn Terrace Los Angeles, CA