Florida RPS &

SolarDick Lowry

Assoc. Manager of Government Relations7/26/07

2006 Worldwide Market Share

No. 1 in worldwide production – 6 years running

Solar cell manufacturer since 1959

100,000+ completed residential systems operating worldwide

Sharp26%

A15%

B11%

C10%

D9%

E7%

F6%

G6%

H5%

I5%

Clean Energy

• No Air Pollution

• No Water Pollution

• No Noise Pollution

• No Solid Waste

• No Radiation Risk

• No Transmission

Lines

• No Cooling Water

PV Market Growth Will Mitigate Carbon...and Boost Jobs

EPIA / Greenpeace, Solar Generation, September 2006

PV Installations and Jobs Created

-

10,000

20,000

30,000

40,000

50,000

60,000

1995 2000 2005 2010 2015 2020 2025

AnnualPV MW

Installed

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

PV JobsCreated

Annual Installed Capacity [MW]

Estimated Jobs

PV Installations and CO2 Reductions

-

10,000

20,000

30,000

40,000

50,000

60,000

1995 2000 2005 2010 2015 2020 2025

Annual PV MW

Installed

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

Tons CO2

Annual Installed Capacity [MW]

Estimated Reduction of CO2

Investment and High Quality Jobs

• Estimated 23 new jobs per added MW of PV manufacturing capacity (REPP)

• California - 450 companies , approximately 4,000 jobs (CalSEIA)

• Germany – 3,500 companies, 20,000 jobs (German Ministry of Environment)

Component Mfg

Systems Integration

System Installation

Sales & Finance

Product and System Eng’g

Service & Maintenance

PV Market Growth Spurs Price Reduction

► Costs of solar PV have dropped by 73% in the past 2 decades

Solar Energy is the Most Abundant U.S. Energy Resource

Florida Sunshine Resource 2X Today’s Largest Market - Germany

Strong Public Support For Solar in Florida

21 State RPS Policies

*LBNL, 2007

What Makes an RPS Work for Solar?

•Explicit solar share

•Tradeable SRECs

•ACP mechanism

•Provision for LT contracts

•Provision for small systems

Solar Carve-Outs and Multipliers

*LBNL, 2007

Solar Incentive Results To Date

• Credit Multipliers– WA: no real impact on solar to date, or expected– DE: no real impact on solar to date, or expected– MD: no real impact on solar to date, or expected– NM: some activity to support solar, but few results to

show as of yet• Solar Carve-Outs

– NJ: 18 MW PV in 2006 (27 MW cumulative)– NY: 2.7 MW PV in 2006 (9 MW cumulative)– not significantly impacted by RPS set-aside, yet– AZ: 1.8 MW PV in 2006 (16 MW cumulative); 1 MW solar

thermal plant– CO: 0.9 MW in 2006 (1.8 MW cumulative)– TX: 0.7 MW in 2006 (2.2 MW cumulative)– not significantly impacted by RPS set-aside, yet– NV: 2.6 MW in 2006 (3.5 MW cumulative); 64 MW solar

thermal plant– DC: no real impact, yet– PA: no real impact, yet

*LBNL, 2007

SRECs

• Tradeable RECs– Who has them?

• AZ, CA*, CO, CT, DE, D.C., ME, MD, MA, MN, MT, NV, NH, NJ, NM, OR, PA, RI, TX, VT, VA, WA, and WI

– How do They Work?• Utilities required to purchase pro-rata share of

annual RPS requirements (REC’s and SREC’s) – Companies or individuals who purchase solar

systems can sell their SRECs to the utilities » This leverages private investment to

meet RPS

*In Development

ACP – Alternative Compliance Payment

• ACP– Who has one?

• NJ, MD, PA, D.C., DE, CT, CO, MA, MT, RI, TX

– How do They Work?• A declining penalty for not meeting RPS

requirements is placed on the utilities– This sets a value for SRECs, as utilities are

then willing to purchase SRECs for anything below the ACP

• Without an ACP, utilities have no incentive to meet their RPS requirements

Long-Term Contracts

• Long-Term Contracts– Who has them?

• NJ, CO, MD, AZ , L.A.

– How do They Work?• Utilities must purchase SRECs to meet RPS

obligations• If they are only permitted to buy SRECs under

long-term contracts (such as 15 years) then purchasers of solar systems gain certainty that their SRECs will be bought over the long term– This allows financing of larger systems

Upfront Payment for Smaller Systems

• Upfront Payment for smaller systems– Who does this?

• Most states that offer rebates offer them upfront, at least for smaller systems

• This would not be a rebate but an upfront payment for long term SRECs

– How do They Work?• The PSC would establish a present value for SRECs

created by a solar system over the following 15 years• The utility would then be required to purchase these

SRECs at this upfront price from small system owners, until their RPS obligation is satisfied

• This will be discussed in more detail in a later presentation

Growth of Solar Market in FL Dependent on…

•Explicit solar share

•Tradeable SRECs

•ACP mechanism

•Provision for LT contracts

•Provision for small systems