Considerations for Interconnecting with Renewable Generators September 30, 2015 Andrew Fusco Vice President, Member Services and Corporate Planning
Agenda for Solar Discussion Why is solar so popular today? Incentives available for solar Review of solar rules and regulations Issues and options for utilities to consider 2
Agenda for Solar Discussion Why is solar so popular today? Incentives available for solar Review of solar rules and regulations Issues and options for utilities to consider 3
Why is Solar So Popular Today? Financial incentives Solar panel prices continue to fall Public opinion 4
Why is Solar So Popular Today? Financial Incentives Federal tax credit 30% of the cost of the project North Carolina tax credit (expires 12/31/2015) 35% of the cost of the project over 5 years 5-year modified accelerated depreciation NC Renewable Energy Portfolio Standard (REPS) solar energy carve-out requirement 5
Why is Solar So Popular Today? Solar Panel Prices Falling Solar panel prices continue to fall 6
Why is Solar So Popular Today? Public Opinion 2014 NC Sustainable Energy Association Poll: 55% NC residents say electric rates too high 39% (highest %) say rates are high because utilities want to increase their profits 2 nd highest (15%) blame electric prices on inflation 68% NC residents support tax incentives for solar 90% NC residents support 3 rd party sales of renewable energy to the retail electric market in NC 7
Why is Solar So Popular Today? Public Opinion Public support by generation type Support Oppose Unsure Coal 48.4% 43.2% 8.3% Nuclear 51.2% 38.6% 10.2% Wind ~80% ~14% ~6% Natural Gas 80.9% 13.7% 5.4% Solar 90.4% 7.2% 2.9% 8
Agenda for Solar Discussion Why is solar so popular today? Incentives available for solar Review of solar rules and regulations Issues and options for utilities to consider 9
State and Federal Incentives Federal tax credit: 30% of project cost taken in year 1 Expires 12/31/16; extension of credit expected NC Solar tax credit: 35% of project cost Expires 12/31/15 Renewable Energy Portfolio Standard (REPS): Creates market for solar energy through mandate for solar energy production in NC Proposed changes to REPS, but no proposals curtail solar energy requirements 10
11 State and Federal Incentives
Agenda for Solar Discussion Why is solar so popular today? Incentives available for solar Review of solar rules and regulations Issues and options for utilities to consider 12
Solar Rules and Legislation Public Utility Regulatory Policy Act ( PURPA ) Requires electric utilities to interconnect with and provide for the purchase energy from Qualifying Facilities (QFs) The definition of a QF includes renewable generators QF output shall be purchased at the supplying utility s avoided cost All incremental costs associated with interconnecting with the QF shall be borne by the generator 13
Solar Rules and Legislation Net metering: There are no federal or state laws that require small municipalities to offer net metering to their customers REPS requires utilities to derive a % of retail energy sales from renewable generation Includes solar carve-out requirement 14
Agenda for Solar Discussion Why is solar so popular today? Incentives available for solar Review of solar rules and legislation Issues and options for utilities to consider 15
Issues and Options for Utilities Interconnection Process Establish an interconnection process Documents: contract form, application, standard process and instructions for generators Utilize templates developed by ElectriCities Ensure that you have engineering support Professional engineers on staff Retain a consultant Ensure that you have legal support Staff attorney Outside attorney Obtain necessary Council approvals Make documents available to public 16
Issues and Options for Utilities Rate Policies Prepare appropriate rate policies Anticipate rate needs and obtain Council approval Buy all, sell all Two different rates Net metering rate Same rate buy and sell Time of use: rate changes based on time of day CP rate: energy rate and demand rate Added facilities charge Consider performing a rate study 17
Issues and Options for Utilities Rate Policies Residential Solar Customer Summer Usage Profile 18
Issues and Options for Utilities Other Issues Technology and modernization Meter requirements and AMI Ability of billing system to handle solar Possibility of third party sales Customer communications Consumer information and literature Promote the fact that NCMPA1 is carbon neutral 19
20 Questions and Discussion