going solar in america - solar outreach...
TRANSCRIPT
Going Solar in America: Demonstrating Rooftop Solar PV’s “Dollars and Cents”
Value in America’s 50 Largest Cities
February 18, 2015
2
Take your local climate,
energy, and sustainability
initiatives to the next level
Tap the power of ICLEI and
our network of over 450
U.S. Cities, towns, and
counties, and over 1,100
local governments
worldwide
ICLEI U.S.A.
www.icleiusa.org
SunShot Solar Outreach Partnership
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.
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
6
Technical
Resources
One to One
Assistance
Strategy
Session
Regional
Workshops
Complimentary Services
Email [email protected] to request a 20 minute consultation
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Technical
Resources
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Assistance
Strategy
Session
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Helping Policymakers
Understand Best Practices:
• Case Studies
• Fact Sheets
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• Toolkits
www.solaroutreach.org
Complimentary Services
Email [email protected] to request a 20 minute consultation
8
Technical
Resources
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Assistance
Strategy
Session
Regional
Workshops
Quickly get up to speed on
key solar policy issues:
• Solar 101
• Planning for Solar
• Implementing an Ordinance
• Streamlining Solar Permits
• Growing your Market
Complimentary Services
Email [email protected] to request a 20 minute consultation
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Technical
Resources
One to One
Assistance
Strategy
Session
Regional
Workshops
Develop an
implementation
strategy for smart
solar policy
Complimentary Services
Email [email protected] to request a 20 minute consultation
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Technical
Resources
One to One
Assistance
Strategy
Session
Regional
Workshops
Complimentary Services
Receive customized
technical support on
implementation of
smart solar policy
Email [email protected] to request a 20 minute consultation
Jim Kennerly
NC Clean Energy Technology Center
College of Engineering
NC State University
The NC Clean Energy Technology Center
(NC State University)
12
Home of
Technical Expert Partners In
The “Going Solar in America” Reports
Source: SEIA/GTM Research – 2009/2010/2011/2012 Year in Review Report
http://www.seia.org/research-resources/us-solar-market-insight 13
Going Solar in America: Ranking Solar’s Value
to Consumers in America’s Largest Cities.
Available here.
Going Solar in America: A Guide for
Homeowners Considering Solar PV in
America’s 50 Largest Cities.
Available here.
Featured In/By…
14
Declining
hardware costs
New financing
options
Net metering
incentives
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 15
$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
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 )
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
US Solar Cost German Solar Cost
$ p
er
Watt
Comparison of US and German Solar Costs
Non-Hardware Cost
Hardware Cost
The Cost of Solar in the US
$-
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US Solar Cost German Solar Cost
$ p
er
Watt
Comparison of US and German Solar Costs
Non-Hardware Cost
Hardware Cost
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 )
$-
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US Solar Cost German Solar Cost
$ p
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Watt
Comparison of US and German Solar Costs
Column1
Non-Hardware Cost
Hardware Cost
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 )
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
US Solar Cost German Solar Cost
$ p
er
Watt
Comparison of US and German Solar Costs
Column1
Non-Hardware Cost
Hardware Cost
The Cost of Solar in the US
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Other Paperwork
Permitting & Inspection
Financing Costs
Customer Acquisition
Installation Labor
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 )
Closing the Customer Acquisition Gap:
“Mythbusting” Rooftop Solar PV
The Mythbusters. Photo Credit: The Discovery Channel.
Source: http://www.discovery.com/tv-shows/mythbusters/about-this-show/mythbusters-about/
The Need: A Clear, Simple and Effective Approach
We realized we needed to: Identify the likeliest degree to which utility rates
will increase, as well as the
The degree to which a typically-sized (5 kW)
solar PV system on an average home would offset
energy usage,
Using consensus, industry standard tools (NREL’s
System Advisor Model (SAM)), in order to:
Establish the savings and investment value of a
customer investment in solar PV with and without
financing.
How We Did It: Our Approach, In Brief
Estimates of Solar’s Financial Value (With and Without
Financing) in America’s 50 Largest Cities
Current and Forecasted
Utility Rates (by EIA Grid Region)
DSIRE-Generated Incentive
information
NREL-Simulated “Base”
Electricity Usage and Solar Output
Data
For more technical
information on how we
did this, please visit:
(INSERT LINK) to find
the Going Solar in
America Technical
Appendix
25-Year Residential Rate Growth by Grid Region
(Based on EIA 2012-2040 Annual Estimates)
Source: Going Solar in America Reports, 2015.
DSIRE Policy & Incentive Information By City
Our Scoring System
The value score, derived by reversing the savings, net present
value and levelized cost of energy (LCOE) percentile rank by
city.
Ranking is based on city total scores, from highest to lowest.
Source: Going Solar in America Reports, 2015.
America’s 50 Largest Cities: The Final Rankings
Source: Going Solar in America Reports, 2015.
Myth #1: “Solar only makes sense in sunny places”
Common assumption: solar
is only viable in areas with
greatest solar insolation.
The reality: the degree to
which customers with net
metered systems can offset
their total electricity usage
(tied to the degree to
which they use gas to heat
their homes) drives the
economics.
Selected Examples of Solar PV's Monthly Energy Usage
(kWh) Offset Potential by City
City Avg. Solar
Production Avg. Usage
% "Offset"
by Solar
Raleigh 598 1,073 56%
Fresno 660 832 79%
Chicago 536 775 69%
Boston 567 761 75%
Phoenix 735 1,077 68%
Source: Calculations Using a 5 kW System on a "base" electricity usage home
in each area using the NREL System Advisor Model
Source: Going Solar in America Reports, 2015.
Myth #2: “It’s too expensive”
Quoted Costs For A 5 kilowatt (kW) Solar PV System
During Q3 2014 (July-September 2014, Before
Rebates & Incentives) vs. A New Toyota Corolla™
Region
Estimated
Installed
$/W at 5
kW
Implied 5 kW
System Cost (Pre-
Incentives)
US Avg. Prices
Paid, 2015
Toyota
Corolla™*
United States $3.95 $19,765
$16,959 -
$22,871
United States (exc.
California) $3.96 $19,778
$16,959 -
$22,871
California $3.97 $19,865
$16,959 -
$22,871
West (Southwest &
Northwest) $3.92 $19,603
$16,959 -
$22,871
Mountain
West/Midwest $3.72 $18,578
$16,959 -
$22,871
Northeast $4.25 $21,228
$16,959 -
$22,871
Southeast/Mid-
Atlantic $3.70 $18,501
$16,959 -
$22,871 Source: Derived from real quotes to interested solar customers from 3rd Quarter
(July-September 2014) installers through the online solar marketplace EnergySage.
ZIP code level pricing data was regressed against ZIP code level average system
sizes to determine the price at 5 kW. *Source for Corolla all-in sale price data: US
News and World Report’s “Best Cars” report.
Regional variation occurs in
the cost and pricing of
typically-sized (5 kW) solar
PV systems.
Solar PV is cost-
competitive, even without
incentives, with the upfront
cost of best-selling cars, a
longtime staple of the
American economy (not
including full car cost of
ownership).
Myth #3: “It takes a long time before you can get
any benefit from installing solar, if at all”
While customers with a 5
kW system could expect to
save a substantial amount of
money on their monthly bills,
customers in cities where
they can offset more of their
usage can immediately
expect savings up to
$100-$200/month before
a PPA or loan payment.
Source: Going Solar in America Reports, 2015.
Myth #4: “It’s not a good investment”
Overall, net present value
analysis shows that if a
customer finances a system
at a 5% interest rate for 25
years, a 5 kW solar PV
system could perform
better than a 25-year
investment in the S&P 500
stock index in 46 of
America’s 50 largest
cities.
Source: Going Solar in America Reports, 2015.
Myth #5: “It’s not cost-competitive with energy
from the grid…is it?”
(With Financing) 42 of
50 cities at parity
(With Financing) 21
million single family
homeowners at
parity
Myth #6: “If rates are too low, residential PV
won’t pencil out”
While high utility rates do
tend to point to an
improved solar value
proposition…
The cost of solar (as
reduced by incentives and
supportive policies) can
make solar competitive
even in locations with
extremely low utility
rates.
Myth #7: “If it’s Not at Grid Parity, It’s Not Worth It”
250 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
25
0
2
4
6
8
10
12
14
16
18
20
22
Years of Economic System Life
En
erg
y C
ost
(Ce
nts
/k
Wh
)
Utility Rates (@ 13 cents/ kWh + 2%/ yr. for 25 Years)
"Levelized" Lifet ime Solar Cost (10 cents/ kWh)
Savings
Functional Savings Visualizat ion (Present Day Grid Parity)
250 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
25
0
2
4
6
8
10
12
14
16
18
20
22
Years of Economic System Life
En
erg
y C
ost
(Ce
nts
/k
Wh
)
Utility Rates (@ 13 cents/ kWh + 2%/ yr. for 25 Years)
"Levelized" Lifet ime Solar Cost (10 cents/ kWh)
Savings
Functional Savings Visualization of Future Grid Parity
Net "Cost" Relative to Utility Rates
Even if the ranking is
lower because the NPV
isn’t positive, or it costs
more than the grid right
now…
“Grid parity” only really
means that it is at grid
parity now (top right), not
that it won’t be at grid
parity in the future
(bottom right) as utility
rates rise.
How Has This Been Possible?
Source: Modified from DSIRE.’s 2013 Net Metering Map. (2014).
Virtual net metering
Standard Offer Net Metering
Available in 43 States (Soon to
be 44, Likely due to SC)
What Could Make This All Disappear?
Precipitous changes to largely volumetric residential rates (through increases in “standby” and fixed charges) could largely eliminate solar’s value proposition
33 states & DC made modifications to key distributed solar policy in Q4
Source: “The 50 States of Solar” (NC Clean Energy Technology Center, 2015)
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$ p
er
Wat
t
Other Paperwork
Permitting & Inspection
Financing Costs
Customer Acquisition
Installation Labor
Changes to NEM could:
– Impact customer
acquisition & marketing
costs
• Charges reduced payback
• Increased customer
education
– Increase Financing costs
• Greater perceived risk by
investors
• Reliance on taxpayer
funded or volatile
incentives
Impact of Precipitous NEM Changes on “Going
Solar in America” Results
Rethinking Standby and
Fixed Cost Charges:
Regulatory and Rate
Design Pathways to
Deeper Solar PV Cost
Reductions
Available here
Resource for Net Metering/Rate Design Questions
Questions?
Archived Sessions:
07/31/13 - Solar Powering Your Community Association: Updating Design Guidelines for Solar
08/14/13 – Commercial PACE: Program Development and Implementation
09/18/13 – Maximum Solar at the Heart of Urban Forests
11/26/13 – Solarize North Carolina
03/12/14 – Utility Community Solar
04/16/14 – Job and Economic Impact of Solar
05 – 08/14 – Solar Permitting & Inspection Webinar Series
09/17/14 – Solar For All: Minimum Costs to Local Governments and Maximum Solar for Their
Community
11/05/14 – Getting to A Win-Win: Distributed Solar and Utility Cost Recovery
Upcoming Sessions:
02/26/15 – Using Solar Energy to Enhance Community Resilience
03/04/15 – Solar Outreach Partnership’s Free Technical Assistance for Local Governments
Archived & Upcoming Webinars