How ^ to bring Community Solar to Your Members

How ^ to bring Community Solar to Your Members Rod Nikula COO Power Supply Wright-Hennepin Cooperative Electric Association Rockford, Minnesota Prepared for NRECA TechAdvantage Conference & Expo March 5, 2014 Nashville, TN

Background about WH One of 44 distribution co-ops in Minnesota 40,321 members 61,540 meters Residential customers = 60% Renewable Energy Standard in 2007 25x25 Small solar carve out in 2013 2 2

WH Service Territory: 196 Days (177 199 Days) 179 292 Days Total Days With Sun 3

Minnesota Top Solar Installation States 2012 1. California 2. Arizona 3. New Jersey 4. Hawaii 5. Colorado 6. New York 7. Texas 8. Oregon 9. Pennsylvania 10. Maryland Source: Solar Energy International Association Annual Report 5 US Solar Markets to Watch 1. Minnesota 2. Georgia 3. DC 4. Louisiana 5. Virginia Reason: 1. Regulatory landscape 2. State incentives 3. Marketplace acceptance/fundamentals Source: PV Solar Report 10/23/13 4 4

A clear and present danger For the first time ever, a third party can insert themselves between our infrastructure and our members 5

7 Does this scare you or excite you?

Does this scare you or excite you? (Solar) power would give America the potential to challenge the utility monopolies, democratize energy generation and transform millions of homes and small businesses into energy generators. 8

Does this scare you or excite you? New The Rapid Rooftop Growth Solar of Rooftop Systems Solar Power By Year 300,000 250,000 200,000 150,000 100,000 50,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Customers 9 9

Price of power has increased significantly in the last decade 10 10

How much do you worry about affordability of energy? 48% worry a great deal 31% worry a fair deal 11 Source: 2012 Gallup Poll 11

Lyndon Rive, CEO of Solar City We are an energy company. We install solar systems for free, and we sell the electricity at a lower price than you can buy it from the utility. More people, when given the option of paying more for dirty power or less for clean power will take paying less for clean power. 12 12

The public is hearing this message 82% believe solar will decrease electric energy costs Sharp Electronics 83% strongly favor or favor government mandated solar incentives Gallup 87% want home builders to start offering solar power as an alternative Roper 13 13

Sebastopol: 8,000 citizens Lancaster: 150,000 citizens 14 14

Based on falling costs of solar and rising electric rates, PG&E, one of the largest utilities in the country may not be able to compete with residential solar soon. Once customers go solar, PG&E loses the sales forever, exacerbating the smaller sales/higher price cycle. 15 Source: industry think tank The Energy Collective 15

WH has to renew our mission with a renewable offering How do we specifically help bring renewable energy into the mainstream for our members? How do we do solar without bankrupting the cooperative? We lose kwh sales Can we find substitute revenues/margins How do we make solar work for non participating members? How do we make solar work in harmony with the WH grid? 16 16

We needed first hand experience WH s demonstration projects 2007: 20 KW wind 2009: 2 KW solar 2012: 2 KW tenksolar 2012: Battery storage Explored business models to provide renewables WH gives away the energy each month 17 17

Community Solar 18 18

The Member Wins With Community Solar Best economies of scale Quality control Modular purchasing choices We will introduce low or no up front cost entry Optimal placement of panels for best production Hassle free with tax application/credits built into purchase process Ownership moves with you Available to all Maintenance free Long term equipment warranty 19 19

The Co-op Can Win with the Community Solar model Opens a way for substitute revenues/margins Non participating members don t subsidize No financial risk for co-op projects are built only after member commitment Creates a viable alternative solution to offer legislators Best opportunity to make sense of solar 20 20

Solar Paired with Battery Storage 4.0 3.5 Batteries discharged during peak reduces total system demand 3.0 2.5 Excess PV when house load is low charges batteries 2.0 1.5 1.0 0.5 0.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 House Load (KW) Solar PV (KW) Net Usage with Battery 21 21

The Co-op Can Win with the Community Solar Model Opens a way to substitute revenues/margins Non participating members don t subsidize No financial risk for co-op - build projects only after member commitment Best opportunity to incorporate battery storage The members view us as the trusted energy experts Best defense against third party solar providers 22 22

W-H 2013 Member Interest 31% very likely if offered $0 down Financing 23 31% very likely if offered solar through a solar community 41% very likely if both options were offered. 23

WH Solar Community Project #1 171 panels 32.5 kw of solar panels 36 kw of battery storage Meets MN 40 kw net metering rules Cost: $4.83/watt with battery 25 Members participated (1 to 30 panels) Net $900+/ panel produces avg 33 kwh credit/mo Members are credited on electric bill Payback ~ 20 years (ROI 5-20%/yr based on amount of sunshine) 24 Worked with Clean Energy Collective of Colorado 24

Dedication September 9, 2013 Good will & high compliments from members, legislators, regulators, press Minneapolis Star Tribune USA Today Christian Science Monitor National Geographic Widespread industry press Unit 2 ready to go 100% subscribed 25 25

Lesson s Learned Members want to participate in solar. Members would prefer to be involved in it through their co op. If we don t offer it, they will take their kwh s to another provider. Solar paired with batteries makes it work for utilities. Witnessed first hand the romance customers have with solar energy 26 26

The Romance With Solar Price/payback is not the first consideration Democratization of energy Striking back against the utility The independence/pride of ownership with solar Controlling your destiny Doing what s right for the environment 27 27

Lesson s Learned The energy industry is changing rapidly by forces we don t control. We must act now to be prepared for a much different future. 28 28