Energy Savings through Solar Energy for Municipalities

Transcription

1 Energy Savings through Solar Energy for Municipalities May Sunvestment Group

2 Solar Market Growth U.S. US Capacity and Generation: Solar Source: National Renewable Energy Lab, Renewable Energy Data Book 2013

3 Solar Market Growth NY Source: NYSERDA Power Clerk, Cumulative Capacity

4 Solar Market Pricing Trends

5 Why Now - Solar Incentives Incentives Cover the Majority of the Costs of Solar Energy Projects NY incentives contribute 15-20% of project costs (Cash) Federal incentives contribute 30% of project costs (Tax Credit) Accelerated Depreciation benefits provide ~ 30% of costs

6 Why Now - Solar Incentives Incentives Cover the Majority of the Costs of Solar Energy Projects NY incentives contribute approximately 15-20% of project costs: NYSERDA Grant (New York State Energy Research and Development Authority) Megawatt Block Grant - Less than 200 kw system $0.60 per watt up to 50 kw, $0.40 per watt 50 kw to 200 kw 35% of MW Block 5 Distributed Megawatt Block Grant - Greater than 200 kw system Over $175 Million already distributed in previous programs Application Submissions Started May 4, 2015 First-Come, First-Served Declining Grant Amounts Must be installed by a NABCEP Certified Solar PV Installer Funds reserved pre-project

7 Solar Opportunities in New York NY-Sun Solar Incentive Program, <200 kw

8 Why Now - Solar Incentives Incentives Cover the Majority of the Costs of Solar Energy Projects Federal Incentives contribute 30% of project costs: Investment Tax Credit - 30% Solar system must be in service by 12/31/2016 Credit available Year 1, can be carried forward 20 years Currently scheduled to be reduced to 10% at end of 2016 Includes equipment generating electricity from solar energy, storage devices, power conditioning equipment, transfer equipment, and installation

9 Why Now - Solar Incentives Incentives Cover the Majority of the Costs of Solar Energy Projects Accelerated Depreciation benefits provide approx. 30% of costs: Modified Accelerated Cost Recovery System (MACRS) Business equipment usually depreciated over useful life Solar property depreciable on accelerated basis over five years (actual useful life is approximately years) More heavily weighted in the earlier years of the five years

10 Why Now - Solar Incentives Significantly Reduced Net Effective Project Cost Site Host Proposed Project Size kw Solar Array Incentives & Benefits based on Investor Tax Rates Turn-key Solar Project Cost Before Incentives $480,000 Less: Incentives & Benefits After Taxes Over the First 5 Years (2) NYSERDA BLOCK 5 Grant - Construction Progress Payments $90,000 NYSERDA Grant Tax Impact ($42,030) Federal Tax Credit - 30% of Eligible Project Costs, Available Year 1 $144,000 Accelerated Depreciation Savings - 5 Year MACRS Schedule (3) $195,648 Total Incentives & Depreciation Benefits Over First 5 Years $387,618 Net Effective Project Cost After First 5 Years of Incentives $92,382 Total Incentives & Depreciation Benefits as % of Turn-key Cost 80.8% (1) Assumes 39.6% Federal Tax Rate and 7.1 % State Tax Rate

11 PPA Financing Structure Power Purchase Agreement Provider Pays for and owns solar array Collects payments from host site only for power generated Collects incentives: Federal Tax Credit: 30% Depreciation Benefits NYSERDA Grants Pays for operations & maintenance Energy Host Site Solar PPA LLC Investment funds Payments for Energy Tax Credits Depreciation Free Cash Flow Investors

12 PPA Financing Structure PPA Illustrative Terms & Assumptions Significant Energy Savings Through Power Purchase Agreement Current Energy Rate or Monetary Credit Per kwh $0.11 PPA Energy Rate Cost Per kwh $0.08 PPA Savings Per kwh $0.03 Monetary Credit Remote Net Metering Provisions Available for new meters Monetary credits can be applied to all utility bill costs Available through June 1, 2015

13 Solar Opportunities in New York Why Now? What Would One Lose by Waiting? NYSERDA grant - money available now Federal 30% ITC drops to 10% if system not installed by Takes a year for planning, financing, permitting, other Cost of borrowing money is at historically low rates Modules prices dropped 80%+ over last 5 years, now rising Monetary Credits for Remote Net Metering Available through 6/1/15

14 Example Project - Madison County, NY A.R.E. Park 2.44 MW Approx. 12 acres 8,424 PV modules Est. Annual Output 2,866,000 kwh Annual Energy Offset ~ 70% Funded in part with Local Community Investor Funds

15 Next Steps Provide twelve months of utility bills RER or others can perform preliminary evaluation at no cost to you If interested in moving forward, consider Conduct RFP before 6/1/15 Pursue Professional Services Agreement RER can submit NYSERDA Grant Application Piggyback in coordination with Madison County process Complete 3 week+ Interconnection Application process ASAP

16 Why is Solar Energy Attractive? Abundant Long Term Source of Power Global energy consumption is growing at a rapid rate: 50% by 2035 Traditional fuel sources are depleting and can have damaging environmental consequences The rest of the world is ahead of the US in developing renewable energy The sun provides 10,000 times more energy than we consume yearly "I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that." --Thomas Edison

17 Where s The Sunshine? The Entire U.S. Has Sufficient Solar Exposure For Solar Systems. Germany has Alaska equivalent sun exposure levels, and more solar (on absolute and per capita basis) than any other country in the world.

18 Why Would We Use Solar In The Northeast? Solar modules work by producing both Current and Voltage Voltage = ƒ(temperature) V as T Current = ƒ(light) I as Light Lots of Sunny, Clear and Cold Days Best time to harvest sunlight for electricity = Sunny, Clear, and Cold days

19 Technology PV System Overview

20 Technology Solar Modules Largest single cost in system Up to 30% of system cost Typically Silicon based cells Single crystal, multi-crystal, or amorphous Amorphous less efficient Glass encapsulate Aluminum frame Requires grounding Available with black frames 25-year warranty is standard

21 Technology Inverters Convert DC power to AC power Efficiencies % conversion Battery backup power not standard Inverter limits production of system Inverter selection is very important Inverter failures are more common than module failures

22 Technology Roof Mount Racking Standing Seam Roof Mount Ballasted Roof Mount Corrugated Roof Mount Shingle Roof Mount

23 Technology Ground Mount Racking

24 Design Considerations How Much Electricity Do We Need?

25 Design Considerations Site Evaluation Age and condition of roof Obstructions Vents, HVAC, pipes, etc. Shade from trees or buildings Roofing material (TPO, BUR, EPDM, PVC, Asphalt, SSR, Metal) Support structure Attachment method Topography and soil conditions Ground mounts

26 Design Considerations A Solar PV Array Should Maximize Sun Exposure Southwest to Southeast are acceptable orientations South face produces most energy West face produces more late day energy Flat roofs work well with low tilt angles Modules should be tilted at least 10 degree pitch to for proper water runoff

27 NREL* Production Estimate *NREL- National Renewable Energy Laboratory

28 Production Tracking Monitoring

29 Production Tracking Production Annual Report

30 Additional Benefits Good For The Environment And The Economy Reduce your electric bill today Protection from inflationary energy prices tomorrow Increase the value of your property The sun s rays are always free and clean Completely sustainable and renewable we have 4,500 million years in reserve No byproducts of solar energy, no pollution Reduce carbon dioxide emissions produced by burning fossil fuels On average 80% of a solar project cost stays in America Reduce dependence on foreign oil Reduces the electricity demand on the electrical grid during peak times

31 Company Backgrounds Reading Electric founded in employees 2000 moved to a 40,000 square foot facility 2009 installed 143 kw solar array on own facility 2009 formed RER Energy Group solar developer 2013 formed Sunvestment Group financing platform NABCEP Certified Solar Installers Serving markets of CT, DE, MD, NJ, NY and PA

32 Sample Systems Previous Three Years Focus on Quality Equipment and Efficient Energy Production Over 20 megawatts (MW) of cost effective energy systems Over $22 MM in grants obtained for 75 clients Energy produced tracking at 103% of projected generation

33 Thank you for this opportunity. If you have any questions, please contact: Jim Kurtz President, Sunvestment Group Walt Pieschke Solar Project Developer Mike Roach Solar Project Developer