pursuing economic development through local government solar programs and policy
TRANSCRIPT
Pursuing Economic Development through Local Government Solar
Programs and Policy
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.
About the SunShot Solar Outreach Partnership
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
About the SunShot Solar Outreach Partnership
We want to get to know you better
Program Overview and Local Policy Context
Soft Costs and Local Impacts
Break
Soft Cost Reduction Strategies
Policy and Program Recommendations
Lunch and Local Speaker Panel
Discussion and Next Steps
Agenda
09:15 – 09:55
09:55 – 10:25
10:25 – 10:40
10:40 – 11:40
11:40 – 12:25
12:25 – 1:10
1:10 – 2:00
Program Overview and Local Policy Context
Soft Costs and Local Impacts
Break
Soft Cost Reduction Strategies
Policy and Program Recommendations
Lunch and Local Speaker Panel
Discussion and Next Steps
Agenda
09:15 – 09:55
09:55 – 10:25
10:25 – 10:40
10:40 – 11:40
11:40 – 12:25
12:25 – 1:10
1:10 – 2:00
8
Solar Technologies
Solar Hot Water Concentrated Solar PowerSolar Photovoltaic (PV)
9
Solar Technologies
Solar Hot Water Concentrated Solar PowerSolar Photovoltaic (PV)
Some Basic Terminology
Panel / Module
Cell
Some Basic Terminology
Array
e-e-
Some Basic Terminology
Capacity / Powerkilowatt (kW)
ProductionKilowatt-hour (kWh)
e-
Some Basic Terminology
Residence5 kW
Office50 – 500 kW
Factory1 MW+
Utility2 MW+
Solar Economic Growth
Source: SEIA/GTM Research – 2009/2010/2011/2012 Year in Review Report http://www.seia.org/research-resources/us-solar-market-insight
14
2006 2007 2008 2009 2010 2011 2012 2013$0
$2,000,000,000
$4,000,000,000
$6,000,000,000
$8,000,000,000
$10,000,000,000
$12,000,000,000
$14,000,000,000
$16,000,000,000
~40% CAGR
15
Solar Job Growth
Source: SEIA Estimates (2006-2009), The Solar Foundation’s National Solar Jobs Census (2010-2013)
2006 2007 2008 2009 2010 2011 2012 2013 2014 (est.)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000Solar Job Growth in the US
SEIA Estimates
The Solar Foundation
16
Job Creation
Sources: Interstate Renewable Energy Council, The Solar Foundation, Meister Consultants Group
0 500 1000 1500 2000 2500 30000
10,000
20,000
30,000
40,000
50,000Correlation of Market Size & Jobs in Each
State
Cumulative Installed Capacity (MW)
Num
ber
of
Sola
r Jo
bs 90%
Correlation
42 Jobs and $4.9
Million
The Local Economic Opportunity
Source: JEDI Model, NREL
In economic output
1 Megawatt of Residential Solar Development in Michigan:
176 solar companiesthat employ
2,700 people
Economic Development in Michigan
Source: SEIA, The Solar Foundation
There are currently
Economic Development in Michigan
Source: SEIA “National Solar Database”
20
Price Stability
Source: ISO New England, Inc.
Mar-
03
Jul-03
Nov-
03
Mar-
04
Jul-04
Nov-
04
Mar-
05
Jul-05
Nov-
05
Mar-
06
Jul-06
Nov-
06
Mar-
07
Jul-07
Nov-
07
Mar-
08
Jul-08
Nov-
08
Mar-
09
Jul-09
Nov-
09
Mar-
10
Jul-10
Nov-
10
Mar-
11
Jul-11
Nov-
11
Mar-
12
Jul-12
Nov-
12
Mar-
13
Jul-13
Nov-
13
0.00
20.00
40.00
60.00
80.00
100.00
120.00Boston Area Historic Average Wholesale Electricity
Price
Date
$/M
Wh
.
21
Valuable to Community & Utilities
Source: Rocky Mountain Institute (http://www.rmi.org/Content/Files/eLab-DER_cost_value_Deck_130722.pdf)
1 kW 3 kW 8 kW$0.00
$5,000.00
$10,000.00
$15,000.00
$20,000.00
$25,000.00
$30,000.00
$35,000.00
$40,000.00
$45,000.00
$50,000.00
Average Home Value Premium for Solar PV Systems in California
Smart Investment for Homeowners
Source: LBNL, Exploring California PV Home Premiums (2013)
$8,892
$20,714
$47,312
Smart Investment for Businesses
Source: Solar Energy Industries Association
Walmart
Kohl's
Ikea
Johnson and Johnson
Staples
U.S. Foods
Kaiser Permanente
Walgreen's
Safeway
Intel
General Motors
White Rose Foods
0 10 20 30 40 50 60 70 80 90 100
Top 20 Companies by Solar Capacity
Solar Capacity (MW)
445 megawatts deployed as of August 2013 – enough to power 73,400 homes
24
Smart Investment for Governments
Source: Borrego Solar
Smart Investment for Schools
Source: The Solar Foundation (http://schools.tsfcensus.org)
Current:
+ 3,752
+ 40,000 – 72,000
Potential:
$
$
= $77.8m
$800m=
Michigan Solar Market
Source: SEIA/GTM Research, Solar Market Insight
20072008
20092010
20112012
2013
0
5
10
15
20
25
Cumulative Installed Capacity
MW
dc
~22 Megawatts
Enough to power approx.
2,200 MI homes
Installed Capacity by ZIP Code
Source: NREL Open PV
Installed Capacity by ZIP Code
Detroit/ Ann Arbor
Grand Rapids/ Muskegon
Traverse City
California
New Jerse
y
Massach
usetts
Colorado
New Mexic
oTexa
s
Maryland
Georgia
Connecticu
t
Delaware
Indiana
Louisi
ana
Vermont
Wash
ington
Michigan
Utah
Virginia
South Carolina
Rhode Island
Iowa
West
Virginia
Arkansa
s
Kansas
Wyo
ming
Nebraska
North Dako
ta0
1000
2000
3000
4000
5000
6000
Installed Capacity by State (MW) 2013
US Solar Market
Source: IREC, Solar Market Trends 2013
0.2% of US capacity
World Solar Market
Source: REN 21
Germany26 %
USA 8.6%
~8.5% of World Total
31
US Solar Resource
Source: National Renewable Energy Laboratory
The Cost of Solar PV
Tracking the Sun VII: The Installed Cost of Photovoltaics in the US from 1998-2013 (LBNL); Solar Energy Industries Association Solar Market Insight Q2 2014
19981999
20002001
20022003
20042005
20062007
20082009
20102011
20122013
2014
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
US Average Installed Cost for Behind-the-Meter PV
Cost
per
Watt
DC
44% drop in price
since 2010
The Cost of Solar in the US
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf) LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(
http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
US Solar Cost German Solar Cost $-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00 Comparison of US and German Solar Costs
Non-Hardware CostTotal Installed Cost
$ p
er
Watt
The Cost of Solar in the US
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf) LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(
http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
US Solar Cost German Solar Cost $-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00 Comparison of US and German Solar Costs
Non-Hardware CostHardware Cost
$ p
er
Watt
The Cost of Solar in the US
US Solar Cost German Solar Cost $-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00 Comparison of US and German Solar Costs
Non-Hardware CostHardware Cost
$ p
er
Watt
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf) LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(
http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
US Solar Cost German Solar Cost $-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00 Comparison of US and German Solar Costs
Column1Non-Hardware CostHardware Cost
$ p
er
Watt
The Cost of Solar in the US
Profits, Taxes, &
Overhead
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf) LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(
http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
US Solar Cost German Solar Cost $-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00 Comparison of US and German Solar Costs
Column1Non-Hardware CostHardware Cost
$ p
er
Watt
The Cost of Solar in the US
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
Other Paperwork
Permitting & Inspection
Financing Costs
Customer Acqui-sition
Installation Labor
$ pe
r Watt
Solar Soft Costs
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf) LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(
http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
The Cost of Solar in the US
2010 2012 2014 2016 2018 2020 $-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
Change in Soft Costs and Hardware Costs Over Time
Soft CostsHardware Costs
$/w
att
$3
.32
$3
.32
$3
.28
$1
.90
No change in soft costs
between 2010 and 2012
Session GoalTo discuss previously identified and new strategies for enhancing economic development, job creation, and energy customer benefits through solar deployment.
Federal Investment Tax Credit
Accelerated Depreciation
Qualified Energy Conservation
Bond
State & Utility
Renewable Portfolio Standard
Net Metering
Interconnection
A Policy Driven Market
State&
Utility
Federal Investment Tax Credit
Accelerated Depreciation
Qualified Energy Conservation
Bond
Renewable Portfolio Standard
Net Metering
Interconnection
A Policy Driven Market
State&
Utility
Type: Tax Credit
Eligibility: For-Profit Organization
Value: 30% of the installation cost
Availability: Through 2016
Investment Tax Credit
Accelerated Depreciation
0 2 4 6 8 10 12 14 16 18 20 22 240%
20%
40%
60%
80%
100%
Modified Accelerated Cost-Recovery System (MACRS)
Straight Line50% Bonus (2013)MACRS (2014+)
Year
Proj
ect V
alue
+ 3.7%
+ 2.3%
$
Qualified Energy Conservation Bond
US Treasury Local Gov
Bond Holders
Project
QECB
Qualified Energy Conservation Bond
Source: Energy Programs Consortium (June 2014)
Local Government Amount Use
Saginaw County $2,088,779 Efficiency improvements to county facilities
Osceola County $650,000 Efficiency improvements to county annex bldg.
Genesee County $4,515,976 EECBG
City of Greenville $800,000
Ottawa County $2,825,981
Total Used $10,880,736
Total Remaining $92,899,264
Federal Investment Tax Credit
Accelerated Depreciation
Qualified Energy Conservation
Bond
State & Utility
Renewable Portfolio Standard
Net Metering
Interconnection
A Policy Driven Market
State&
Utility
Renewable Portfolio Standard
Retail Electricity Sales
Any electricity source
Renewable
Energy
Renewable Portfolio Standard
Retail Electricity Sales
Any electricity source
Solar carve-out
Renewable
Energy
$e- $
$e-
REC
Renewable Portfolio Standard
Utility
Fossil Fuel
Renewable Energy
Two revenue streams
Michigan RPS
Source: DSIRE
2015 Retail Electricity Sales
Re-quired10%*
Any electricity source
Wind94%
Solar 2%
Other4%
29 states,+ Washington DC and 2 territories,have
Renewable Portfolio Standards
(8 states and 2 territories have
renewable portfolio goals).
www.dsireusa.org / August 2012.
Renewable Portfolio Standard
Federal Investment Tax Credit
Accelerated Depreciation
Qualified Energy Conservation
Bond
State & Utility
Renewable Portfolio Standard
Net Metering
Interconnection
A Policy Driven Market
State&
Utility
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
Net Metering
12 AM2 AM
4 AM6 AM
8 AM10 AM
12 PM2 PM
4 PM6 PM
8 PM10 PM
0.0
0.5
1.0
1.5
Consumption and Generation in a Solar Home
Household Consumption Solar Generation
kWh/
hour
Net Metering: Market Share
Source: IREC (http://www.irecusa.org/wp-content/uploads/IRECSolarMarketTrends-2012-web.pdf)
More than 93% of distributed PV Installations are net-metered
Net Metering
Source: DSIRE (July 2013)
43 states,+ Washington DC and 4 territories,have Net Metering Policies
Provides a “report card” for state policy on net metering and interconnection
http://freeingthegrid.org/
Net Metering: Resources
Resource
Freeing the Grid
Net Metering: Michigan
Source: Freeing the Grid
Net Excess Credit ValueRetail Rate (<20 kW)Power Rate (>20 kW
System Capacity Limit150 kW
Aggregate Limit0.75% of peak load
Credit RolloverIndefinite
B 2007 2008 2009 2010 2011 2012 2013
D F B A A B B B
2014
Federal Investment Tax Credit
Accelerated Depreciation
Qualified Energy Conservation
Bond
State & Utility
Renewable Portfolio Standard
Net Metering
Interconnection
A Policy Driven Market
State&
Utility
Standardized interconnection rules require utilities to provide a fair and transparent pathway for customer-generators and other developers of distributed energy resources to interconnect with the utility’s grid.
Interconnection
Interconnection: Michigan
Source: Freeing the Grid
Applicable TechnologiesIncludes solar PV, as well as other distributed generation technologiesSystem Capacity LimitNo limit specified
BonusInsurance waived for generators up to 25 kW; dispute resolution process
Applicable UtilitiesIOUs, electric co-ops
2007 2008 2009 2010 2011 2012 2013
D D C C C B C C
2014C
Federal Investment Tax Credit
Accelerated Depreciation
Qualified Energy Conservation
Bond
State & Utility
Renewable Portfolio Standard
Net Metering
Interconnection
A Policy Driven Market
State&
Utility
Solar Access
Source: Google Earth
A landowner does not have any legal right to the free flow of light and air across the adjoining land of his neighbor.
Fontainebleau Hotel
Eden Roc Hotel
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
Solar Access
Source: Database of State Incentives for Renewables & Efficiency (www.dsireusa.org)
Solar Easements Provision
Solar Rights Provision
Solar Easements and Solar Rights Provisions
U.S. Virgin Islands
DC
Local option to create solar rights provision
A comprehensive review of solar access law in the US – Suggested standards for a model ordinance
www.solarabcs.org
Solar Access
Resource
Solar America Board for Codes & Standards
Program Overview and Local Policy Context
Soft Costs and Local Impacts
Break
Soft Cost Reduction Strategies
Policy and Program Recommendations
Lunch and Local Speaker Panel
Discussion and Next Steps
Agenda
09:15 – 09:55
09:55 – 10:25
10:25 – 10:40
10:40 – 11:40
11:40 – 12:25
12:25 – 1:10
1:10 – 2:00
1. What is the status of Detroit’s solar policy, and how does this affect the value of solar to customers?
2. How would different soft cost-cutting policy actions affect the value of solar to customers?
Soft Costs & Local Impacts
High upfront c
ost
Lack
of educa
tion
Lack
of policy
support
Lack
of utility
support
Private
interests
Lack
of HOA su
pport
Historic
preserv
ation
Reliabilit
y conce
rns
Envir
onmental
impact
Other
0% 0% 0% 0% 0%0%0%0%0%0%
What are the top 3 barriers to solar adoption in Detroit?
A. High upfront costB. Lack of educationC. Lack of policy supportD. Lack of utility supportE. Private interestsF. Lack of HOA supportG. Historic preservationH. Reliability concernsI. Environmental impactJ. Other
Most policies that impact soft costs are controlled at the local level
– Permitting & Inspections
– City Planning/Zoning– Solar Access Rules (municipal &
community association level)
– Financing Options
Solar Policy in Detroit
Homeowners wishing to install solar must obtain building & electrical permits from the municipal government
Permitting & Inspection
Source: IREC Efficient Solar Permitting Presentation- Centralina (2014)
Pre-Application (accessing
requirements & info on process)
Application Submittal (forms & fees) &
Review
Inspection
Why is this important?– Adds cost & time to solar installation– City resources could be spent elsewhere– Creates uncertainty for installers
Permitting & Inspection
Source: Sun Run Report: http://www.sunrunhome.com/solar-lease/cost-of-solar/local-permitting/
Local permitting and inspection add an average of about $0.50 per watt, or $2,516 per residential install!
Permit forms posted onlineChecklist for building permits and
planso No checklist for solar permit
requirements o Solar permit requirements are
currently unclear and difficult to findo No special or expedited permitting
procedure is apparent for solaro Expedited plan review request is
subject to additional fees
Permitting & Inspection: Detroit
Permitting & Inspection: Detroit
Source: City of Detroit website
From the City of Detroit’s website:
Permitting & Inspection: Detroit
Source: City of Detroit website
Taken from Detroit’s electrical permit application:
Permitting & Inspection: Detroit
Source: City of Detroit website
Electrical Permit Fee: $225 (grid-connected PV system)
Planning & Zoning: Solar Access
Source: Database of State Incentives for Renewables & Efficiency (www.dsireusa.org)
Solar Easements Provision
Solar Rights Provision
Solar Easements and Solar Rights Provisions
U.S. Virgin Islands
DC
Local option to create solar rights provision
Detroit Zoning Ordinance (2012) mentions solar 4 times– 3 out of 4 times vaguely refer to solar
PV:
Planning & Zoning
Source: Detroit Zoning Ordinance: http://www.detroitmi.gov/portals/0/docs/legislative/cpc/pdf/Ch%2061%20Nov%2021,%202012.pdf (2012)
“Careful consideration should be given to orientation for solar access to both the proposed project and surrounding development”
Financing options allow more people to choose solar by providing options for those who don’t have the cash to pay for a system out of pocket
Financing
Source: NREL, Benchmarking Non-Hardware Balance-of-System (Soft) Costs for U.S. Photovoltaic Systems, Using a Bottom-Up Approach and Installer Survey- Second Edition (Oct. 2013)Source: U.S. Census Bureau QuickFacts
Median Household Income (2008-2012)Detroit United
States $26,955 $48,471 $53,046
Michigan
Detroit’s median income is $26,091 below the national median- financing is particularly important
Loans– Home equity loans– Unsecured loans
PACE (Property Assessed Clean Energy)
Third Party Ownership– Leases– Power Purchase Agreements (PPAs)
Types of Financing Options
Michigan Saves Home Energy Loan Program
Offers loans for $1,000 to $30,000 for energy efficiency improvements, as well as solar installations– Available to residential customers– Term lengths of 12 to 120 months– APR no higher than 7%
Financing: Michigan Saves
Source: Database of State Incentives for Renewables and Efficiency (DSIRE)
Financing Offered in Wayne County through Michigan Saves: Ascentium Captial- Business, Multi-Family,
& Public Sector financing Genisys Credit Union- Residential
financing; 4.99% interest rate MSU Federal Credit Union- 4.99% interest
rate Opportunity Resource Fund- Serves
customers previously denied; 6.00%-9.00% interest rate
Financing: Michigan Saves
Loans– Home equity loans– Unsecured loans
PACE (Property Assessed Clean Energy)
Third Party Ownership– Leases– Power Purchase Agreements (PPAs)
Types of Financing Options
Michigan signed PACE legislation in Dec. 2010 Detroit has a PACE financing program through Lean and Green Michigan Open to owners of commercial,
industrial, and multi-family properties Typically no down payment
Financing: PACE
Loans– Home equity loans– Unsecured loans
PACE (Property Assessed Clean Energy)
Third Party Ownership– Leases– Power Purchase Agreements (PPAs)
Types of Financing Options
Benefits
No upfront cost
No O&M costs
Low risk
Predictable
payments
Drawbacks
Investor needs higher
ROI
Not available in all
states
Financing: Third Party Ownership
Source: DSIRE (map)
Financing: Third Party PPAs
Source: Database of State Incentives for Renewables and Efficiency (DSIRE)
U.S. National Average Residential Electricity Rate= 11.9 cents/kWh
DTE Energy Residential Service Rate (D1)– 11.915 cents/kWh for the first 17 kWh
per day– 13.260 cents/kWh for all kWh above 17
kWh per day– PLUS rate riders and monthly service
charge of $6.00
Electricity Rates in Detroit
Source: U.S. Energy Information Administration Form 861; DTE Energy Rate Book
Electricity rates in Detroit are higher
than the national average
Electricity rates are projected to increase 48% in Detroit over the
next 25 years…
Solar’s Financial Value
Source: U.S. Energy Information Administration – Annual Energy Outlook 2014
1998
2000
2002
2004
2006
2008
2010
2012
$0
$2
$4
$6
$8
$10
$12
$14
Cost
per
Watt
…while the cost of solar continues to decline
Tracking the Sun VII: The Installed Cost of Photovoltaics in the US from 1998-2013 (LBNL)
Analysis based on a 5 kW rooftop system– (nat. avg. is 5.3 kW- rounded down to 5)
System located in Detroit- DTE Energy territory
Cost is based on a Q3 2014 regional average (Midwest)*
Typical energy usage patterns (NREL data)
NREL System Advisor Model (SAM)
Solar’s Financial Value
*Data provided by EnergySage
Disclaimer: Values will vary significantly based on household energy usage patterns, system location, etc.
Avg. Monthly Bill Savings (First Yr):
$80.68
First Year Bill Savings: $968.12
Avg. Annual Bill Savings Over 25 Yrs:
$1642
Levelized Cost of Energy (LCOE)– Cash purchase: 19.0 cents/kWh– Fully financed: 10.8 cents/kWh
Solar’s Financial Value: Today
Net Present Value as compared to an investment in stocks (S&P 500)--- 6.61% discount rate– Cash purchase: -$549.43– Fully financed: $5,408.35
After Tax Cash Flow (Total Net Income)– Cash purchase: $26,417– Fully financed: $11,934
After Tax Net Equity Cost Flow (Total Costs-- does not include value of energy produced)– Cash purchase: -$14,644– Fully financed: -$29,126
Solar’s Financial Value: Today
Impact of reducing soft costs by $0.64 cents/Watt*
Levelized Cost of Energy (LCOE)– Cash purchase: 15.6 cents/kWh– Fully financed: 8.87 cents/kWh
Net Present Value as compared to an investment in stocks (S&P 500)– Cash purchase: $1,911.34– Fully financed: $6,789.36
Impact of Cutting Soft Costs
*Figure chosen from LBNL report (How Much Do Local Regulations Matter?) stating impact of soft costs ranges from $0.64-$0.93/W
After Tax Cash Flow (Total Net Income)– Cash purchase: $28,791– Fully financed: $16,933
After Tax Net Equity Cost Flow (Total Costs-- does not include value of energy produced)– Cash purchase: -$12,269– Fully financed: -$24,127
Impact of Cutting Soft Costs
Impact of a 20% discount on total system cost
Levelized Cost of Energy (LCOE)– Cash purchase: 15.1 cents/kWh– Fully financed: 8.6 cents/kWh
Net Present Value as compared to an investment in stocks (S&P 500)– Cash purchase: $2,295.84– Fully financed: $7,005.14
Impact of a Solarize Program
After Tax Cash Flow (Total Net Income)– Cash purchase: $29,162– Fully financed: $17,714
After Tax Net Equity Cost Flow (Total Costs-- does not include value of energy produced)– Cash purchase: -$11,898– Fully financed: -$23,346
Impact of a Solarize Program
Program Overview and Local Policy Context
Soft Costs and Local Impacts
Break
Soft Cost Reduction Strategies
Policy and Program Recommendations
Lunch and Local Speaker Panel
Discussion and Next Steps
Agenda
09:15 – 09:55
09:55 – 10:25
10:25 – 10:40
10:40 – 11:40
11:40 – 12:25
12:25 – 1:10
1:10 – 2:00
Program Overview and Local Policy Context
Soft Costs and Local Impacts
Break
Soft Cost Reduction Strategies
Policy and Program Recommendations
Lunch and Local Speaker Panel
Discussion and Next Steps
Agenda
09:15 – 09:55
09:55 – 10:25
10:25 – 10:40
10:40 – 11:40
11:40 – 12:25
12:25 – 1:10
1:10 – 2:00
Local Policy
Planning for Solar
Solar in Development Regulation
Effective Local Solar Policy
Local Solar Policy
Local Policy
Planning for Solar
Solar in Development Regulation
Effective Local Solar Policy
Local Solar Policy
Neighborhood Plans
Corridor Plans
Special District Plans
Green Infrastructur
e Plans
Planning for Solar Development
Source: American Planning Association
Communitywide Comprehensive Plan
Detroit Master Plan of Policies (2009)
Citywide Policies: Environment and Energy
The City’s central location among the Great Lakes necessitates sound environmental policy. Current environmental trends require new directions in local policy that will help sustain our vital ecosystem and insure a high quality of life for all residents. Environmental and energy considerations transcend political boundaries and require regional cooperation…
Existing Goals
Environment and EnergyGoal 2: Ensure Environmentally Healthy NeighborhoodsGoal 3: Minimize Resource Use and Waste
Policy 3.1: Promote the use of renewable and/or
sustainable resources
Policy 3.4: Provide incentives to attract green industry and to encourage retooling of existing
industries to incorporate sustainable practices.Goal 5: Improve Air Quality
Health and Social ServicesGoal 4: Reduce Health Risks for Young Children
Existing Goals: Citywide
Environment and Energy“Attract industries that emphasize
pollution minimizing technology and research.”
Cluster 4Middle East CentralUpper East Central
Cluster 5SpringwellsWest Riverfront
Existing Goals: Neighborhoods
A guide for planners on determining and implementing local solar goals, objectives, policies, and actions
www.planning.org
Resource
Planning for Solar Energy
Technical Resources
Local Policy
Planning for Solar
Solar in Development Regulation
Effective Local Solar Policy
Local Solar Policy
Zoning Standards
Source: American Planning Association
Section Topics to Address
DefinitionsDefine technologies & terms
Applicability Primary vs. accessory use
Dimensional Standards
• Height• Size
• Setbacks• Lot coverage
Design Standards• Signage• Disconnect
• Screening• Fencing
Typical Requirements:
Permitted as accessory use
Minimize visibility if feasible
Requirements:– District height– Lot coverage– Setback
Zoning Standards: Small Solar
Typical Requirements:
Allowed for primary use in limited locations
Requirements:– Height limits– Lot coverage– Setback – Fencing and Enclosure
Zoning Standards: Large Solar
Zoning Standards: Model Ordinances
Resource
American Planning Association
Bethany Beach, Town of. 2010. Ordinance no. 455: An Ordinance to Add A New Chapter 484 “Solar Energy Systems” To the Town Code of Bethany Beach.
Allows solar energy systems for on-site energy use as permitted accessory uses in all zoning districts. Encourages rooftop panels on side and back roof slopes rather than ground-mounted systems. Commercial solar energy installations are prohibited.
https://www.planning.org/pas/infopackets/open/pdf/30intro.pdf
Typical Requirements:
Prevent permanent loss of “character defining” features
Possible design
requirements– Ground mounted– Flat roof with setback– Panels flush with roof– Blend color
Zoning Standards: Historic
Source: SolarCentury
Zoning Standards: Historic
Resource
North Carolina Clean Energy Technology Center
Provides sample design principles and example regulations incorporating historic preservation into sustainability and energy projects.
www.solaroutreach.org
Private Rules on Residential Solar
Resource
The Solar Foundation
Guide for HOAs on solar access law and simple recommendations for reducing barriers to solar in association-governed communities.
www.solaroutreach.org
Provide clear, unambiguous design guidelines
Post rules and requirements online
Provide a list of all required documents
Waive design rules that significantly increase cost or decrease performance
Allow exceptions from tree removal rules for solar
Solar in HOAs: Best Practices
116
Installation Soft Costs
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
Other Paperwork
Permitting & Inspection
Financing Costs
Customer Acquisition
Installation Labor
$ pe
r Watt
$0.55Per watt
Solar Ready Construction:Preparing a building for solar at the outset can help make future solar installations easier and more cost effective.
Update Building Code
Require builders to:
Minimize rooftop equipment
Plan for structure orientation to avoid shading
Install a roof that will support the load of a
solar array
Record roof specifications on drawings
Plan for wiring and inverter placement
Update Building Code
During Construction After Construction $-
$1,000
$2,000
$3,000
$4,000
$5,000
LaborEquipment
Update Building Code
Source: Solar Ready: An Overview of Implementation Practices [Draft]. NREL, Feb. 18, 2011.
60% Savingswhen a building is
solar ready
120Source: NREL (http://www.nrel.gov/docs/fy13osti/59155.pdf)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
Current Trajectory Roadmap Target
Ad
ded
Cost
Per
Watt
Installation Labor Roadmap
Local Policy
Planning for Solar
Solar in Development Regulation
Effective Local Solar Policy
Local Solar Policy
18,000+ local jurisdictions
with unique zoning and permitting requirements
Challenge: Inconsistency
Source: http://www.nrel.gov/docs/fy12osti/54689.pdf
Consumer Challenges
Source: Forbes
Regulatory Barriers
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
Other Paperwork
Permitting & Inspection
Financing Costs
Customer Acquisition
Installation Labor
$ pe
r Watt
$0.17Per Watt
Planning & Permitting Roadmap
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
Current Trajectory Roadmap Target
Ad
ded
Cost
Per
Watt
Permitting: Best Practices
Resource
Interstate Renewable Energy Council
Outlines leading best practices in residential solar permitting and provides examples of implementation.
http://projectpermit.org/wp-content/uploads/2013/04/Expanded-Best-Practices-7.23.13_VSI.pdf
127
Financing Costs
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
Other Paperwork
Permitting & Inspection
Financing Costs
Customer Acquisition
Installation Labor
$ pe
r Watt
$0.30Per watt
Third Party Ownership: Cost
Third Party Ownership Direct Ownership with Debt0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Weighted Average Cost of Capital
Fewer than 5%of the
6,500 banks in the USare
actively financing solar PV
projects
Engage Local Lenders
A guide for local governments seeking to engage financial institutions
www.solaroutreach.org
Engage Local Lenders: Resources
Resource
Local Lending for Solar PV
Program Overview and Local Policy Context
Soft Costs and Local Impacts
Break
Soft Cost Reduction Strategies
Policy and Program Recommendations
Lunch and Local Speaker Panel
Discussion and Next Steps
Agenda
09:15 – 09:55
09:55 – 10:25
10:25 – 10:40
10:40 – 11:40
11:40 – 12:25
12:25 – 1:10
1:10 – 2:00
City Goals
– Boost the local economy and
employment– Help residents and businesses save on
energy expenses– Find ways for the city to save energy– Don’t get “left behind” on solar
Policy & Program Recommendations
Others?
Streamline City’s Solar Permitting
Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize)
Program
Engaging Local Lenders
Performance Contracting
Policy & Program Recommendations
Solar Permitting Best Practices:
Post Requirements Online
Implement an Expedited Permit
Process
Enable Online Permit Processing
Ensure a Fast Turn Around Time
Streamlined Permitting
Source: IREC/ Vote Solar
Transparent process
Source: Breckenridge, CO (http://www.townofbreckenridge.com/index.aspx?page=694)
Permit checklist
Electronic materials
Solar Permitting Best Practices:
Collect Reasonable Permitting Fees
Narrow Inspection Appointment
Windows
Eliminate Excessive Inspections
Train Permitting Staff in Solar
Streamlined Permitting
Source: IREC/Vote Solar
Expedited Permitting:
Simplifies requirements for PV applications
Facilitates efficient review of content
Minimize need for detailed studies and unnecessary delays
Model Expedited Permitting ProcessResource
Solar America Board for Codes & Standards
1-1. Example Design Criteria:• Size < 10-15 kW• Code compliant• Weight < 5 lb / sqft • 4 strings or less
List out all current requirements with permitting staff
Examine Solar ABCS model permitting process & streamlined processes from other cities
Identify opportunities to streamline Detroit’s process or consider adopting the Solar ABCS model
Ensure fees represent staff time requiredClarify solar permitting requirements- list
on websiteConsider creating an expedited process for
systems meeting certain requirements
Permitting Next Steps
Streamline City’s Solar Permitting
Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize)
Program
Engaging Local Lenders
Performance Contracting
Policy & Program Recommendations
Revise Zoning Code
Consider utilizing a model zoning ordinance for solar energy systems
Specifically address: Definitions Uses Siting
Preferences Design
Preferences
Planning & Visioning– What are Detroit’s solar goals?
Look at Massachusetts and North Carolina model solar development ordinances
Utilize existing model ordinances and adapt to Detroit’s needs for both large solar and small solar
Zoning Next Steps
Streamline City’s Solar Permitting
Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize)
Program
Engaging Local Lenders
Performance Contracting
Policy & Program Recommendations
Reduce the upfront cost of solar for residential customers in Detroit (other programs have seen reductions of 20%!)
Expand access to solar & help more residents save on energy costs
Consider streamlining permitting first and engaging local lenders to offer solar financing products to participants
Solarize
Source: Solarize Plano
Barriers
High upfront cost
Complexity
Customer inertia
Solutions
Group purchase
Community outreach
Limited-time offer
The Solarize Program
Solarize: Process
Select Installer
Marketing &
Workshops
Enrollment
Site Assessm
ent
Decision &
Installation
A household is
0.78% more likely to adopt solar
for
each additional installation in their zip code
Solarize: Lasting Impact
Source: NYU Stern and Yale School of Forestry – Peer Effects in the Diffusion of Solar Panels
Solarize: Lasting Impact
Source: NREL
Lasting Impact
Reach out to trusted local organizations & those with renewable energy expertise
Provide support for a Solarize campaign run by a local organizationOfficially back the programAdvertise the programStreamline permittingEnsure financing is available to
participants
Solarize Next Steps
Streamline City’s Solar Permitting
Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize)
Program
Engaging Local Lenders
Performance Contracting
Policy & Program Recommendations
Work with local banks and credit unions to offer solar loans
Expands access to solar to those who do not have the cash upfront to pay for a system
Solarize campaigns often work with local lenders
Engaging Local Lenders
Municipal Loans– City of Pendleton, OR
Bank or Credit Union Loans– Home equity loans, unsecured loans– Admirals Bank, local credit unions
PACE Financing Solar Leases or PPAs (3rd Party
Ownership) Utility Loans
Engaging Local Lenders
Municipal Loans– City of Pendleton, OR
Bank or Credit Union Loans– Home equity loans, unsecured loans– Admirals Bank, local credit unions
PACE FinancingSolar Leases or PPAs (3rd Party
Ownership) Utility Loans
Engaging Local Lenders
ResourceInformation on types of solar financing and what local governments can do to make financing options available to customers
www.solaroutreach.org
Engaging Local Lenders
Connect with Michigan Saves and Lean and Green Michigan to identify and publicize existing financing options
Meet with local financial institutions to encourage additional financing options
Coordinate with Solarize organizers to offer financing for participants
Educate consumers on the options available to them
Engaging Local Lenders Next Steps
Streamline City’s Solar Permitting
Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize)
Program
Engaging Local Lenders
Performance Contracting
Policy & Program Recommendations
Incorporating solar into an energy services performance contract (ESPC)
Performance Contracting
Source: Integrating Solar PV Into Energy Services Performance Contracts: Options for Local Governments Nationwide (NC Solar Center, 2014)
Limited to no upfront capital required
Guaranteed long-term financial
savings May help stem further job losses and
enhance delivery of government services
Performance Contracting
Source: Integrating Solar PV Into Energy Services Performance Contracts: Options for Local Governments Nationwide (NC Solar Center, 2014)
Knoxville, TN: $1.1M/year shared savings
Cincinnati, OH: shared savings of $153,732/year (phase 1) and $324,819/year (phase 2)
Identify Energy Services Companies (ESCOs) in your area)
Consider issuing a Request for Proposals (RFP) to select an ESCO
Include ability to include a solar array in the RFP criteria
Network with other cities to learn more about their experiences with this option
Performance Contracting Next Steps
Streamline City’s Solar Permitting Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize)
Program
Engaging Local Lenders
Performance Contracting
Policy & Program Recommendations
Questions?
Program Overview and Local Policy Context
Soft Costs and Local Impacts
Break
Soft Cost Reduction Strategies
Policy and Program Recommendations
Lunch and Local Speaker Panel
Discussion and Next Steps
Agenda
09:15 – 09:55
09:55 – 10:25
10:25 – 10:40
10:40 – 11:40
11:40 – 12:25
12:25 – 1:10
1:10 – 2:00
Program Overview and Local Policy Context
Soft Costs and Local Impacts
Break
Soft Cost Reduction Strategies
Policy and Program Recommendations
Lunch and Local Speaker Panel
Discussion and Next Steps
Agenda
09:15 – 09:55
09:55 – 10:25
10:25 – 10:40
10:40 – 11:40
11:40 – 12:25
12:25 – 1:10
1:10 – 2:00
Activity: Solar in Your Community
Spend the next 10 minutes discussing next steps and potential obstacles with others at your table.
Integra
te solar in
plans
Address s
olar in
zoning c
ode
Adopt solar
read
y guidelines
Define permitti
ng proce
ss
Expedite
typica
l solar p
ermits
Implement fa
ir perm
it fees
Expand finan
cing o
ptions
Implement s
olarize
program
0% 0% 0% 0%0%0%0%0%
Which “best practice” should be pursued first?
A. Integrate solar in plansB. Address solar in zoning codeC. Adopt solar ready guidelinesD. Define permitting processE. Expedite typical solar
permitsF. Implement fair permit feesG. Expand financing optionsH. Implement solarize program
0%0%0%0%0%
Very easy Somewhat easy ModerateSomewhat difficult Very difficult
How difficult will it be to implement this policy/program? 1. Very easy2. Somewhat easy3. Moderate4. Somewhat
difficult5. Very difficult
DiscussionWhat obstacles stand in the way of implementation?
DiscussionWhat are possible strategies to overcome those obstacles?
Activity: Next Steps
What do you pledge to do when you leave today’s workshop? [Orange Card]