American Nuclear Society

Massachusetts Clean Energy Center

November 28, 2012

2

MassCEC Statutory Mandate

Advance Clean Energy Technology

Create Jobs

Develop a Trained Workforce

Accelerate Deployment of Clean Energy

3

Source of funding is a Systems Benefits Change on ratepayers’ electric bill Available for customers of IOUs and MLPs that opt-in

MassCEC Eligible Customers

4

Agenda• Solar PV Basics• Solar PV Incentives• Solarize Massachusetts• Solar Hot Water Basics and Incentives

5

$18B Energy Dollars Flow Out of MA Annually

Oil & Natural Gas - Canada

Oil - Venezuela

Oil & Natural Gas - Middle East

Coal – Colombia

MA Energy Imports 2008

$B

Fuel Oil (heating, diesel) $5.0Gasoline $9.2Jet Fuel $1.4Other Petroleum $0.9Natural Gas $5.2Coal $0.3 Total $22 BPer Household Average ~ $4,600

Natural Gas - Caribbean

Natural Gas - U.S. Gulf Coast

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Massachusetts Retail Electricity Prices

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HI

CT

NY AK

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MA RI

CA

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VT

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FL

PA

MI

US

NV WI

AZ

TX

CO

OH IL AL

GA

VA

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MS SC

NM

M

N

KS

MO

M

T LA

SD

IN

IA

OR

OK NE

WV AR

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D UT

KY

WA ID

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2010 Average Retail Electricity Price c/kWh

Mass. is 7th Highest

U.S.

Source: EIA Form 826 19901992

19941996

19982000

20022004

20062008

2010

$- $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 $0.20

Residential Electricity Rates

$/kW

h

7

Residential Project Trends

2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

2

4

6

8

10

12

14

0

200

400

600

800

1000

1200

1400

1600

1800

2000

# ProjectsAverage Project Cost

Aver

age

Cost

($/W

att)

8

Is There Enough Sun In MA?

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Installed Solar in MA• 174 MW of solar installed (as of 10/31/12)

• Produces about ~198,151 MWh per year

• This is equivalent to:

• Removing 136,636 MT of CO2

• Removing annual emissions of over 26,000 cars

• Visit EPA Greenhouse Gas Calculator http://

www.epa.gov/cleanenergy/energy-resources/calculator.html

10

How do solar PV panels work?• NEED DIRECT SUNLIGHT!

• Sunlight dislodges electrons in a layer of silicon

• Electrons flow to layer that needs electrons

• Metal contacts direct electricity from panel to wires

11

How Does Solar PV work on my house?

Grid-connected projects can apply for Net Metering (utility meter spins backwards)

Power outage: Inverter shuts down, unless a battery-back up system is installed

Cour

tesy

of N

REL

1212

What is Net Metering?

• Credits generated when system is producing more than is being used– “Meter runs backwards”

• Excess credits are carried over month-to-month indefinitely

• Receive credits at almost full retail rate

13

How big a system do I need?• Avg. MA residence uses ~8,000

kWh/year

• Electricity bill shows summary of prior year’s consumption

• Incentives are designed for systems sized ≤ load

• Efficiency or lower energy use allows for a smaller system!

Back of the Envelope Calculation: 1 kW PV = approximately 1,200 kWh/year

14

What makes a good site?

http://energy.ltgovernors.com/solar-energy-pv-systems-self-generation-make-your-own-power.html

• Southern exposure

•PV panels angled 30˚ – 45˚

• At least 4-6 hours of direct sunlight

• Open roof area of ~100 sq ft per 1 kW

• Open space for a ground or pole mounted system

15

Shading of Solar PV Systems• Initial site feasibility can be

determined online through aerial images

• Shading can significantly reduce the output of a system, changing the financials of a project

• Installer is the expert in determining feasibility

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What to do with a Non-Feasible Site

• Consider energy efficiency– www.MassSave.com

• Other renewable energy technologies– Solar Hot Water (

www.masscec.com/solarhotwater)

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Agenda• Solar PV Basics• Solar PV Incentives• Solarize Massachusetts• Solar Hot Water Basics and Incentives

18

Solar Incentives in Massachusetts

IncentivesTax Incentives:Federal (30%)

State (15% up to $1,000) Accelerated Depreciation

Rebates from MassCEC

Net Metering

SREC Sales

Low/No money down optionswww.house-power.com/blog/wp-content/uploads/2009/12/iStock_000009001180XSmall.jpg

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• Any eligible PV system ≤ 15kW, rebate paid on first 5kW

• Rebate ranges from $2,000 to $4,250 for 5kW system

• Average rebate covers ~7% of installed cost

MassCEC RebatesBlock 12 Rebate Levels ($ per watt (DC @ STC))

Base Incentive $0.40

PLUS:

Massachusetts Company Component Adder $0.05

Moderate Home Value Adder OR Moderate Income Adder ≤ 120% of MA median income (only residential projects eligible)

$0.40

Natural Disaster Relief Adder $1.00

Go to www.MassCEC.com/solar to learn more.

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MassCEC Rebates (cont.)

County Property ValueBerkshire, Franklin, Hampden, and Hampshire ≤ $300,000Bristol, Suffolk, Worcester ≤ $350,000Barnstable, Duke, Essex, Middlesex, Nantucket, Norfolk, and Plymouth

≤ $400,000

Income Category Income Levels

Individual Income ≤ $75,810*

Domestic Unit Income ≤ $95,420*

Moderate Home Value Adder Criteria

* 120% of median household income as determined by the US Census Bureau

Moderate Income Adder Criteria

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MassCEC Rebates (cont.)• Minimum Technical Requirements

– Equipment must meet certain standards– Required warranties

• Panels have 20 year warranties• Inverters have 10 year warranties• 5 year workmanship warranty

– 80% of optimal system production

• Insurance– Incumbent on host customer to verify Installer insurance

• Tax Questions– MassCEC will issue 1099s to all System Owners– Consult tax advisor with any questions about rebate taxability or other

incentives

22

Solar Renewable Energy Certificates (SRECs)

Electricity Pathway

• Electrons from all generation sources are physically the same

• Cannot be tracked independently on the grid

SRECs Pathway

• SRECs represent the “green” attributes of the renewable generation source

• Utilities are required to purchase SRECs every year

• 1 SREC = 1,000 kWh

• Verified SRECs ensure that only one buyer can claim each SREC

Electricity and SRECs can be, and often are, sold

separately

23

SRECs (cont)

• Small-scale project owners will work with SREC aggregators or brokers to sell SRECs to utilities

• Projects installed in 2012 will be eligible to sell SRECs for 10 years

• SRECs generally sell between $285 - $550/SREC

• Monthly production reported to MassCEC’s Production Tracking System (PTS)

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Assumptions: Simple Solar Ownership Model

* Assumes qualification for the base rebate incentive and is eligible for federal and state tax incentives.

Disclaimer: This financial analysis is only an estimate. Actual installed costs, savings, and revenues are subject tochange and will be specific to individual projects.

Assumptions

Size: 5 kW (5,000 watts)

Panel Degradation: 1% Annually

Electricity Price: $0.15/kWh

Electricity Price Escalator: 3% Annually

Life of System: 20 years

SREC Value: $285.00

Timeline for SREC Sales: 10 years

Income Tax Rate: 28%

Discount Rate: 7.5%

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Simple Solar Ownership ModelState Average Price

Dollar Per Watt Cost $ 5.00

Total Installation Cost $ 25,000.00

CSII Rebate (base of $0.40/watt) $ (2,000.00)

Total Upfront Cost $ 23,000.00 Federal Tax Credit (30% of cost) $ (6,900.00)

MA Tax Credit $ (1,000.00)

Total After Tax Credits $ 15,100.00 NPV SREC Income (over 10 yrs) $ (7,714.24)

NPV Electricity Savings (over 20 yrs) $ (10,073.75)

Net Project Cost $ (2,687.99)

Payback after rebate & tax credits 7-8 yearsDisclaimer: This financial analysis is only an estimate. Actual installed costs, savings, and revenues are subject to change and will be specific to individual projects.

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Levelized Cost of Solar PV (w/o Financing)

Years

Cost

of E

lect

ricity

($/k

Wh)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 $-

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

3rd Party Ownership

Electricity Prices

PV after Incentives

PV before Incentives

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Levelized Cost of Solar PV (w/ 5% Financing)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 $-

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

Cost

of E

lect

ricity

($/k

Wh)

Years

Electricity Prices

PV after Incentives

PV before Incentives

3rd Party Ownership

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Agenda• Solar PV Basics• Solar PV Incentives• Solarize Massachusetts• Solar Hot Water Basics and Incentives

29

Goals of Solarize Mass

• Increase education through community outreach

• Introduce model to simplify process

• Reduce installation costs• Reduce time to contract Equipment

Costs

“Soft” Costs

Sales

Installation

Average

Equipment Costs

“Soft” Costs

Installation

Solarize Mass

Drive down the cost stack

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2012 Solarize Massachusetts Basics• 17 Green Communities • 8 Installers • Tier Pricing (based on contracted capacity)

• Limited time offer – Sign Ups through Nov 4, 2012

Tier 1 Tier 2 Tier 3 Tier 4 Tier 5

1 kW-25 kW >25 kW-50 kW >50 kW-150 kW >150 kW-250 kW 250 kW+

31

Solarize Mass Pricing

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

$6.00 Avg. PV Cost in MA @ Begin-

ning

Avg. 2012 So-larize Cost*

Pric

e ($

/watt

)

Tier Pricing versus Average Price in Massachusetts

* Price does not include any cost adders that may apply.

32

Solarize 2012 Final Metrics

Total Number Of:

Leads Generated 5,405

Contracts Signed 803

Contracted Capacity (kW) 5,146

Communities at Tier 5 Pricing 10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 210

1000

2000

3000

4000

5000

6000

Cont

ract

ed C

apac

ity (k

W)

Week of the Program

Cumulative Contracted Capacity

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Total number of Projects more than DOUBLED

Acton

Arlingto

n

Boston

Hopkinton

Melrose

Mendon

Montague

Newburyport

Palmer

Shirley

Lenox/P

ittsfi

eld

Millbury/S

utton

Lin/W

ay/Sud

0

50

100

150

200

250Total number of PV Projects

During Solarize

Pre-Solarize

34

Agenda• Solar PV Basics• Solar PV Incentives• Solarize Massachusetts• Solar Hot Water Basics and Incentives

Solar Thermal ApplicationsWhat can a SHW system be used for? • Domestic Hot Water • Pool Heating• Process Hot Water• Space Heating• Solar Assisted Cooling

What makes a good SHW application? • High hot water load • Minimal shading• Structure capable of supporting

collectors• Space available for storage tank

Urban Edge, Jamaica Plain

How does solar thermal work?

37

• For any residential, multi-family or commercial building Displace ANY fuel type

• Two types of incentives offered: Feasibility Study Grants (Commercial Projects Only)

• Help building owners assess the potential benefits of installing a solar thermal system

Construction Rebates • Help system owners with the upfront capital costs of

installing the solar thermal system

• www.MassCEC.com/SolarHotWater

Commonwealth Solar Hot Water Program

38

Thank you!

Elizabeth KennedyProgram Director, Solar Programs

MassCEC55 Summer St., 9th Floor

Boston, MA 02110

EKennedy@MassCEC.com