SlideShare a Scribd company logo
1 of 72
Download to read offline
Andy Black
          “Economics of Solar:                                  Solar Financial Analyst
                                                                      (408) 428 0808x1
        Making The Financial Case”                                     andy@ongrid.net




                         Check-in (15 minutes before listed start time)

                         Introductions

                         Solar Financial Payback - Overview of the Variables
                                    Economics

                         Break, Q & A, Networking

                         Overview of the Variables (con’t)
                                    Rate Structures

            ~12:00       Lunch, Q & A, Networking (~45 minutes)

                         Overview of the Variables (con’t)
                                    System Performance

                         Financial Analysis Methods

                         Break, Q & A, Networking

                         Tools: Solar Financial Analysis, Sales, and Other Tools

            ~4:30        Formal Conclusion, Break, Q & A

                         Interactive Examples (for those who wish to stay)
                               Using the OnGrid Solar Financial Tool



Diligence:
       Heights by great men reached and kept were not obtained by sudden flight, but
       they, while their companions slept, were toiling upward in the night.
                                 - Henry Wadsworth Longfellow
Andy Black
            “Economics of Solar:                                                Solar Financial Analyst
                                                                                      (408) 428 0808x1
          Making The Financial Case”                                                   andy@ongrid.net


Abstract:
This class helps PV dealers, installers, and salespeople make the best and most accurate financial case to
their customers to help them make more sales and open more eyes to the value of solar systems.
Andy Black will provide an overview of solar electric (PV) system costs and approximate savings for
residential systems. He will provide detailed information on state & federal incentives available and
how to apply and use them. These include rebates, performance based incentives, and tax credits. He
will explain the choices for electric rate structures and the advantages of each relative to building load
profile, system design, and site specifics (shading, orientation, etc). Andy will discuss the various
methods of performing financial analyses in conjunction with the savings realized. Financial analysis
methods presented will include Simple Payback, Total Lifecycle Payback, Internal Rate of Return
(IRR), Cash Flow analysis, and Appraisal Resale Value. Interactive examples of residential sites will be
provided, including discussion of the salient differences and advantages of each method. The
assumptions and variables that affect each analysis will also be presented including inflation,
maintenance expenses, and interest rates.
An overview of the various tools available on the market for assisting the dealer, installer or salesperson
in making the case and the sale to a customer will conclude with an in depth look at the OnGrid Tool
that Andy created for use by the industry. If time allows, group exercises using OnGrid will be available
to try cases and see how a powerful presentation can be created.
All students will receive a copy of the demo version of the OnGrid Tool (licensing agreement will be
required). Focused on residential, serves as a prerequisite for “Commercial Solar Economics &
Financing with PPAs and Leases.”

Biography:
Andy Black is a Solar Financial Analyst and the owner of OnGrid Solar. OnGrid Solar provides
financial analysis and sales education & software to solar installers to help them make a strong sales
case for solar electricity to their customers. Andy has more than a dozen years of design, consulting,
teaching, sales, and research experience in solar. He specializes in demonstrating the financial payback
of solar electricity systems. He is a former NABCEP certified solar installer.
Andy Black is a recent member of the Board of Directors of the American Solar Energy Society and
served as Chapters Representative. He is also a member of the Advisory Board of the Northern
California Solar Energy Association.
Andy’s formal education includes a Bachelor’s in Electrical Engineering from Penn State University, a
Master’s in Electrical Engineering from University of Southern California, and a Marketing Certificate
at the University of California. His training in solar electricity includes Solar Energy International’s
intensive photovoltaic coursework and more than a dozen specialty courses in solar electric and related
fields. He presents regularly on the financial analysis of solar electricity to audiences nationwide.
Andy is also the groundskeeper and servant for a cat at his home in San Jose, CA.
Contact Info:    Andy Black, CEO
                 OnGrid Solar
                 4175 Renaissance Dr #4, San Jose, CA 95134
                 (408) 428 0808x1     andy@ongrid.net      www.ongrid.net
SOLAR ECONOMICS:                                                                                        Introductions & Thanks
         MAKING THE FINANCIAL CASE
                                                                                                      !    Solar Power International ‘10
                                            Andy Black                                                !    Solar Electric Power Association
                                    Solar Financial Analyst                                                  "    Stuart Raper & Julia Hamm
                                    & Sales Software Creator
                                                                                                      !  Yennie Solheim
                                                                                                      !  Andy Black, OnGrid Solar
                                                                                                             "    Solar Financial Analyst & OnGrid Tool Creator
                           Solar Power International 2010
                                                                                                      !    You for coming!
                                                                                             © 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   2




                                                                                                                                         NIMBY
                           A Volunteer Please?                                                        !    Who’s hear of NIMBY?
         !    You are BANANAs!                                                                               "    Plague to many large or public projects from
                                                                                                                  garbage dumps & oil refineries to
                                                                                                                  renewables such as wind farms
         !    You are all BANANAs!




© 2010 OnGrid Solar, All Rights Reserved.                      Economics of Solar PV -   3   © 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   4



                                                      Add picture of classroom full of bananas



                                                                                                    Quick Survey – What
                                            BANANA                                           Variety of Good Bananas Are Here?
         !    Anyone know what BANANA means?                                                          !  Existing dealer / installers
                "    Build Absolutely Nothing Anywhere Near                                           !  Salesperson for dealer / installer
                     Anything                                                                                "    Including owners if you do sales
         !    You are good BANANAs                                                                    !  New or hopeful dealer / installers
                "  Small & rooftop solar is exempt from                                               !  New or hopeful salespeople
                   BANANA scrutiny                                                                    !  Government, Utility
                "  Your future is more secure because the
                                                                                                      !  Customers / end users
                   public supports and doesn’t protest this kind
                   of renewable energy                                                                !  Manufacturers

                                         ….so, go BANANAs!                                            !  Others?
© 2010 OnGrid Solar, All Rights Reserved.                      Economics of Solar PV -   5   © 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   6
Quick Survey -                                                                        Instructor Background
                       Your Goals for Today?                                                 !  Electrician’s Helper 3 summers
         !  Learn about payback for general knowledge                                        !  M.S. Electrical Engineering

         !  Want to use payback in selling / grow                                            !  SEI graduate

            business                                                                         !  NABCEP Certified Solar PV Installer Emeritus

         !  Want to learn about / have the OnGrid Tool                                       !  Involved with Solar since 1991

         !  Want to increase your knowledge to develop                                       !  Studying, writing, & presenting about Solar

            your own tool                                                                       Financial Issues since 2000
         !  Other goals?                                                                     !  Solar Salesperson 2001-2006

         !  Networking list?                                                                 !  Now a Solar Financial Analyst &

                                                          Economics of Solar PV -   7
                                                                                                 Creator of the “OnGrid Tool” solar sales software8
                                                                                                                                                 -
                                                                                                                                               Economics of Solar PV
© 2010 OnGrid Solar, All Rights Reserved.                                               © 2010 OnGrid Solar, All Rights Reserved.




                                            Resources                                                                               Decorum
         Resources available at www.ongrid.net                                                    !  Questions: Please focus on Solar Economics &
                                                                                                     Payback
         !  Articles & papers on solar “Payback”
                                                                                                  !  Good environment:
         !  Upcoming classes & events
                                                                                                        "  Cell phones to fun mode
                "  Financing Solar PV including PPAs & Leases
                                                                                                        "  Side conversations: Yes or No?
                "  Sales & Marketing for Solar
                                                                                                        "  Please help each other
         !    Slides from past classes                                                            !    Site Logistics & Breaks
         !    Free demos of the OnGrid Tool                                                             "    Facilities
                                                                                                        "    Lunch & 2 breaks: Networking
© 2010 OnGrid Solar, All Rights Reserved.                 Economics of Solar PV -   9   © 2010 OnGrid Solar, All Rights Reserved.             Economics of Solar PV -   10




                                             Agenda                                                Prepare Interactive Examples
         !  Overview of the Variables                                                             !  Examples in Solar Financial Analysis Tool
         !  Financial Analysis Methods                                                            !  Please prepare some cases

                                                                                                  !  Parameters:
         !  Solar Tools

         !  Interactive Examples
                                                                                                        "  Usage, System Size, Price
                                                                                                        "  Inflation

         Handouts & Acronyms                                                                            "  Starting & Ending rate schedule

         Questions preferred at points marked:                                                          "  % on-peak usage

                "    Please focus on Payback            Questions?                                !    Free Demo - License Agreements
© 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   11   © 2010 OnGrid Solar, All Rights Reserved.             Economics of Solar PV -   12
Financial Payback
                                                                                                 !    Payback on solar isn’t the most important
                                                                                                      thing…
                                    Solar
                              Financial Payback                                                  !    … it’s the only thing the vast majority of
                                                                                                      potential solar purchasers care about



© 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   13   © 2010 OnGrid Solar, All Rights Reserved.            Economics of Solar PV -   14




                                     Right or Wrong                                                               Attractive Economics
                                                                                                 PV systems can be financially attractive to
         !  95% see energy as a commodity
                                                                                                  customers using enough electricity:
         !  Few will pay more
                                                                                                              > $80/mo in CA
         !  Must meet them on their terms:                                                                    > $60/mo in NJ
                                                                                                              > $90/mo in CT
                          $$ FINANCIAL! $$                                                       Attractive defined as:
                                                                                                        "  Rate of Return > 10%
                                                                                                        "  Property Value Increase > System Cost
                                                                                                        "  Bill Savings > Loan Cost

© 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   15   © 2010 OnGrid Solar, All Rights Reserved.            Economics of Solar PV -   16




                               Payback Analysis
                                                                                                                                    Agenda
                               Why is it Needed?
                                                                                                 !    Overview of the Variables
        If we’re going                                                                                  "  Costs & Incentives
        to put solar on                                                                                 "  Rate Structures

        every roof, it                                                                                  "  System Performance

        needs to make                                                                            !  Financial Analysis Methods
        $ense.                                                                                   !  Solar Tools

                                                      Courtesy Sharp Electronics                 !  Interactive Examples


© 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   17   © 2010 OnGrid Solar, All Rights Reserved.            Economics of Solar PV -   18
Agenda                                                                                               Incentives Pre-Exercise
         !    Overview of the Variables                                                                                           !    Common “up-front” incentives (2):
                "  Costs & Incentives                                                                                                  _________________________________________
                "  Rate Structures

                "  System Performance
                                                                                                                                  !    Common incentives received when taxes are filed (3):
                                                                                                                                       _________________________________________
         !  Financial Analysis Methods
         !  Solar Tools
                                                                                                                                  !    Common incentives received over time (3):
         !  Interactive Examples                                                                                                       _________________________________________

© 2010 OnGrid Solar, All Rights Reserved.                                                      Economics of Solar PV -   18   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   19




                                         System Costs                                                                                                     System Costs - Size
         Depend on:                                                                                                                    !    Typical range $7-$11/ CEC AC watt thru 10/2008
                                                                                                                                              "  = $6-$9/ STC DC watt (1 W DC ! .83 W AC)
         !  System size (per watt)                                                                                                            "  Includes parts, installation labor, profit, warranty
                                                                                                                                              "  Simplest composition shingle roofs: Doesn’t include
         !  Mounting: roof, ground, trellis                                                                                                      “adders” for harder jobs (tile, steep, etc).
         !  Special factors                                                                                                            !    Commercial & Municipal: $5-$8 /CEC AC watt
                                                                                                                                              "    $4.00-$6.50/Watt STC DC (1 W DC =~ .83 W AC)
                                                                                                                                              "    $4.00/W STC is typical for 500kW+
                                                                                                                                       !  Most residential now: $6-$9/CEC AC watt
                                                                                                                                       !  Some economies of scale
© 2010 OnGrid Solar, All Rights Reserved.                                                      Economics of Solar PV -   20   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   21




                                 California Price
                                Trends 2000-2010                                                                                                System Costs - Ongoing?
                         $14.00

                         $12.00

                         $10.00                                Top Line Average Price
                                                                                                                                       !    Maintenance: 0.25% of system gross cost per year,
   $ / CEC Watt           $8.00                                                                                                             increasing with inflation
                          $6.00                                        Net Cost to Consumer after                                             "    It’s in there one way or the other (cost of cleaning,
                                                                         Rebate (excluding ITC)
                          $4.00                                                                                                                    vs. loss in performance from dirty system)
                          $2.00
                                               Rebate
                                                                                                                                       !  Inverter Replacement: ~$700/kW at year ~15
                           $-                                                                                                          !  Property Tax
                                  2000      2002        2004       2006         2008         2010
                                                                                                                                              "    Often exempt for original purchaser
       !    Price Trends 2003-2008
              "    Germany & Spain                                                        Questions?                                   !    Fire/Loss Insurance
       !    Price Declines Since 11/2008 and Predictions                                                                                      "    Ask your insurer, sometimes = $0
              "    Down ~$1 by 5/2009; Down ~$1.50-$2 by 12/2009, but varies                                                                                                             Questions?
© 2010 OnGrid Solar, All Rights Reserved.                                                      Economics of Solar PV -   22   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   23
Incentives                                         Performance Related Incentives
         !  Feed-In Tariffs                                                                    !    Types of Performance Related Incentives:
         !  PBIs & RECs                                                                               "  FITs – Feed-In Tariffs
                                                                                                      "  PBIs – Performance Based Incentives
         !  Rebates
                                                                                                      "  SRECs – Solar Renewable Energy Certificates
         !  Tax Benefits & Issues
                                                                                               !    Incentives paid for actual kWh produced
         !  Net Metering (in Electric Rates section)
                                                                                                      "  Missed production reduces incentive received
                                                                                                      "  Motivates attention on the system
         !    For incentives in other states see the
                                                                                                      "  Monitoring – A Must!
              DSIRE database: www.dsireusa.org
© 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   24   © 2010 OnGrid Solar, All Rights Reserved.             Economics of Solar PV -   25




                                                                                                                    Residential Incentives
                           FITs: Feed-In Tariffs
       !    FITs are the only ongoing payment for owning
            the system
              "  No Net Metering savings (no savings on the electric
                 bill, which makes FITs different from PBIs and
                 SRECs)
              "  FITs do combine with the Federal Investment Tax
                 Credit
       !  Very popular in Europe, Ontario. Becoming popular
          in U.S. (FL,VT, … national?)
       !  Risk losing Net Metering

© 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   26   © 2010 OnGrid Solar, All Rights Reserved.             Economics of Solar PV -   27




                           Commercial Incentives
                                                                                                                                PBIs & RECs
                                                                                               !    PBI: Performance Based Incentive
                                                                                               !    REC: Renewable Energy Credits (Green Value -
                                                                                                    more later), usually called SRECs

                                                                                               !    Paid in addition to Net Metering savings on the bill
                                                                                                    (which makes them different from FITs)




© 2010 OnGrid Solar, All Rights Reserved.                Economics of Solar PV -   28   © 2010 OnGrid Solar, All Rights Reserved.             Economics of Solar PV -   29
Residential Incentives




© 2010 OnGrid Solar, All Rights Reserved.            Economics of Solar PV -   1




                           Commercial Incentives




© 2010 OnGrid Solar, All Rights Reserved.            Economics of Solar PV -   2
SRECs, Green Tags, TRCs                                                                            REC / SREC Value
 !  SRECs = Solar Renewable Energy Credits/Certificates
 !  TRC = Tradable Renewable Certificates                                                          !    SRECs have value to other consumers
 !  Green Tags = RECs = TRCs = SRECs
                                                                                                          "    Those who can’t/won’t get solar directly
                                                                                                                #    Green-e Certified RECs: www.green-e.org
 !  What are these?
                                                                                                          "    Utilities who need to get into compliance with
        "    The green value part of a solar kWh
                                                                                                               government RPS requirements
        "    The legal rights to greenness       Electricity (kWh)                                              #    Programs or government authorized trading boards

                          Generating Plant                                                         !    Value ranges from 1¢ to 68¢/kWh
                              (kWh)                                                                       "    Depends on location, type & term
                                                                                                          "    Depends on state mandate for S-RECs
                                                      Green Tags (kWh)
© 2010 OnGrid Solar, All Rights Reserved.                  Economics of Solar PV -   30   © 2010 OnGrid Solar, All Rights Reserved.                      Economics of Solar PV -   31




                                                                                                                      Residential Incentives
                                            Rebates
        !  Up-Front Reductions in System Cost
        !  Rebates are paid in addition to savings on the bill

               "    Typically received 30-120 days after inspection




© 2010 OnGrid Solar, All Rights Reserved.                  Economics of Solar PV -   32   © 2010 OnGrid Solar, All Rights Reserved.                      Economics of Solar PV -   33




                                                                                                              CSI PBI:
                               CSI EPBB Rebate
                                                                                                     Performance Based Incentive
   !    EPBB: Expected Performance Based Buydown
          "  Adjusted for Expected Performance:                                                    !    Paid for all kWh produced for first 5 years
              #  Tilt, Orientation, Shading, Location, Module                                             "    Actual performance (risk)
                 Temperature (due to lack of air flow)                                             !    Does not reduce upfront cost (in lieu of rebate)
              #  EPBB Design Factor Calculator: www.csi-epbb.com

              #  Design Factor allows up to 100% of base incentive
                                                                                                          "    Still get savings on electric bill
          "  Upfront payment to reduce initial cost
                                                                                                   !    Monitoring requirements: Add’l 2% accurate
          "  Popular option for systems under 30kW
                                                                                                          "    Add’l cost ~$30/mo + $1,000-$2000 for meter
   !  Energy Efficiency Audit required                                                             !  Option for systems up to 30kW
                                                                                                   !  Only CSI incentive for systems over 30kW
   !  Meter Required: Inverter built-in (5% accurate) is ok
                                                                                                                                                       Questions?
© 2010 OnGrid Solar, All Rights Reserved.                  Economics of Solar PV -   34   © 2010 OnGrid Solar, All Rights Reserved.                      Economics of Solar PV -   35
CSI Trigger Tracker
   Step
           Statewide
           MW in Step
                                   EPBB Payments (per Watt)

                            Residential  Commercial
                                                      Government
                                                           /
                                                                           PBI Payments (per kWh)

                                                                          EPBB Payments (per Watt)
                                                                    Residential  Commercial
                                                                                              Government
                                                                                                   /
                                                                                                                                              Tax Benefit Overview
                                                                                                                                                    PBI Payments (per kWh)
                                                       Non-Profit                              Non-Profit
    1           50              n/a            n/a        n/a          n/a   n/a     n/a     Government                                                                          Government
    2           70             $2.50        Statewide
                                              $2.50      $3.25        $0.39 $0.39   $0.50
                        Step                                        Residential   Commercial      /                                                Residential   Commercial           /
                                                                                                   !  State                       Tax Credits
    3           100            $2.20          $2.20      $2.95        $0.34 $0.34   $0.46
    4           130            $1.90        MW in Step
                                              $1.90      $2.65        $0.26 $0.26   $0.37
    5
    6
                160
                190
                               $1.55
                               $1.10
                                              $1.55
                                              $1.10
                                                         $2.30
                                                         $1.85
                                                                      $0.22
                                                                      $0.15
                                                                            $0.22
                                                                            $0.15
                                                                                    $0.32
                                                                                    $0.26
                                                                                              Non-Profit                                                                          Non-Profit
    7
    8
                215
                250
                        1      $0.65
                               $0.35
                                          50  $0.65
                                              $0.35
                                                         $1.40
                                                         $1.10
                                                                 n/a  $0.09
                                                                      $0.05
                                                                                   $0.09
                                                                                   $0.05
                                                                                                  $0.19
                                                                                                  $0.15
                                                                                                       n/a               n/a Federal Investment Tax Credit (ITC) & 1603
                                                                                                                          !             n/a            n/a            n/a
    9           285
                        2      $0.25
                                          70  $0.25      $0.90
                                                                $2.50 $0.03        $0.03
                                                                                                     $2.50
                                                                                                  $0.12
                                                                                                                        $3.25          $0.39          $0.39          $0.50
    10          350

                        3
                               $0.20

                                          100
                                              $0.20      $0.70

                                                                $2.20
                                                                      $0.03

                                                                     Issued
                                                                                   $0.03          $0.10

                                                                                                     $2.20              $2.95Treasury Grant
                                                                                                                                       $0.34          $0.34          $0.46
                                              Unused MW Revised                                        MW
                        4 Step in Step130 Previous Total MW in Reservation Remaining
                Customer Current Initial MW
                                                                $1.90
                                                                   Conditional  MW
                                                                                                     $1.90              $2.65          $0.26          $0.26          $0.37
                                                                                                                          !  Federal & State Depreciation
  Administrator                              from                                                     Under
                 Class *
                                                 Steps   Step                                        Review
                        5 7
                Residential         31.00 160 0.99       31.99  $1.55 (MW)
                                                                  Letters
                                                                      27.38    4.61                  $1.55
                                                                                                       6.40             $2.30          $0.22          $0.22          $0.32
      PGE         Non-
                        6 8
                Residential
                                    73.20 190 2.18       75.38 $1.10  14.61    60.76                 $1.10
                                                                                                      12.85             $1.85          $0.15taxable entities (not schools,
                                                                                                                          !  Only apply to            $0.15          $0.26
                  Non- 7                  215 1.89              $0.65                                $0.65              $1.40          $0.09          $0.09          $0.19
                Residential 5       24.30         0.37   24.67        11.78    12.89                   1.49
      SCE
                Residential
                        8 7
                Residential
                            7       66.30
                                    7.30 250 0.20
                                                         68.19
                                                         7.50 $0.35
                                                                      37.96
                                                                       5.53
                                                                               30.23
                                                                               1.96
                                                                                                      21.99
                                                                                                     $0.35
                                                                                                       0.81             $1.10non-profits, gov’t, etc) $0.05
                                                                                                                                       $0.05                         $0.15
     CCSE
                        9 7         14.80 285 3.22       18.02 $0.25                                 $0.25              $0.90             $0.03          $0.03             $0.12
                  Non-
                                                                      15.90    2.12                    1.59
                Residential

     Trigger Tracker website: 350
                       10                 http://www.csi-trigger.com As of 10/9/10
                                                                $0.20                                $0.20                Disclaimer: I’m $0.03CPA or lawyer, and am not providing
                                                                                                                        $0.70             not a          $0.03             $0.10
         Program Data & Statistics: http://csi.powerclerk.com                                                                     tax advice. Seek qualified professional help
© 2010 OnGrid Solar, All Rights Reserved.                                            Economics of Solar PV -   36   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   37




                                                                                                                                                Residential Incentives
                                       State & Local
                                       Tax Incentives
          !    Tax Credit vs. Tax Deduction
                "     E.g.. HI: 35% State ITC
                NY: 25% State ITC up to $5K or 10kW
                " 

          !  In practice, worth about 65-80% of face value due
             to reduced federal deduction of the now reduced
             state taxes
                "     Effectively “federally taxed”
          !    Property Tax Exemption: CA - Com & Res to 2016


© 2010 OnGrid Solar, All Rights Reserved.                                            Economics of Solar PV -   38   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   39




               Federal Investment                                                                                                          Federal Investment
          Tax Credit - Residential 2009+                                                                                                 Tax Credit - Commercial
          !  30% Investment Tax Credit (ITC), Sect 25D                                                                       !    30% Investment Tax Credit - Extended 10/2008
              "  No Cap (unlimited)                                                                                                 "    Must be “placed in service” during 2006-2016
              "  Residential not eligible for conversion to
                                                                                                                                    "    10% if installed 2017+
                 “Section 1603 Treasury Grant” treatment                                                                        “There is no feast which does not come to an end.”
                                                                                                                                - Chinese proverb !
          !  Systems “placed in service” in 2009-2016
                                                                                                                             !  IRS Form 3468 (Sect 48 of Internal Revenue Code)
          !  IRS Form 5695
                                                                                                                             !  Unused credit can be carried forward 20 years
          !  Received on “next year’s” tax return (1 year delay)
                                                                                                                             !  Commercial
          !    Unused credit can be carried forward thru at least 2016                                                              "    Including home businesses > 20% sqf - with caution
          !  Not limited by AMT (Alternative Minimum Tax)                                                                    !  Not limited by AMT (Alternative Minimum Tax)
          !  Important negative tax interaction with Rebates                                                                 !  Vests at 20% per year (over 5 years)
© 2010 OnGrid Solar, All Rights Reserved.                                            Economics of Solar PV -   40   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   41
CSI Trigger Tracker
                                  EPBB Payments (per Watt)                PBI Payments (per kWh)

   Step
           Statewide
           MW in Step
                            Residential Commercial
                                                     Government
                                                          /                EPBB Payments (per Watt)
                                                                   Residential  Commercial
                                                                                             Government
                                                                                                  /
                                                      Non-Profit                              Non-Profit
    1           50              n/a            n/a       n/a          n/a     n/a     n/a     Govern
    2           70             $2.50        Statewide
                                              $2.50  $3.25           $0.39   $0.39   $0.50
    3           100     Step   $2.20          $2.20  $2.95         Residential
                                                                     $0.34   $0.34 Commercial
                                                                                     $0.46         /
    4           130            $1.90        MW in Step
                                              $1.90  $2.65           $0.26   $0.26   $0.37
    5
    6
                160
                190
                               $1.55
                               $1.10
                                              $1.55
                                               $1.10
                                                     $2.30
                                                        $1.85
                                                                     $0.22
                                                                     $0.15
                                                                             $0.22
                                                                             $0.15
                                                                                     $0.32
                                                                                     $0.26
                                                                                               Non-P
    7
    8
                215
                250
                        1      $0.65
                               $0.35
                                           50
                                       $0.65
                                       $0.35
                                                     $1.40
                                                     $1.10
                                                                    n/a $0.09
                                                                $0.09
                                                                $0.05           $0.05
                                                                                            $0.19 n/a
                                                                                            $0.15
                                                                                                                     n/
    9
    10
                285
                350
                        2      $0.25
                               $0.20
                                           70
                                       $0.25
                                       $0.20
                                                     $0.90
                                                     $0.70
                                                                   $2.50 $0.03
                                                                $0.03
                                                                $0.03           $0.03
                                                                                               $2.50
                                                                                            $0.12
                                                                                            $0.10
                                                                                                                    $3.
                        3                 100                      $2.20 Issued
                                                                                               $2.20                $2.
                                              Unused MW    Revised                                MW
  Administrator
                 Class *4 Step in Step130 Previous Total MW in Reservation Remaining $1.90
                Customer Current Initial MW
                                             from                  $1.90
                                                                       Conditional     MW
                                                                                                Under               $2.
                                                 Steps      Step                                Review
                        5 7
                Residential         31.00 160 0.99          31.99 $1.55
                                                                      Letters (MW)
                                                                          27.38       4.61     $1.55
                                                                                                  6.40              $2.
      PGE         Non-
                        6 8
                Residential
                                    73.20 190 2.18          75.38 $1.10   14.61       60.76    $1.10
                                                                                                 12.85              $1.
                  Non- 7                  215 0.37                 $0.65                       $0.65                $1.
                Residential 5       24.30                   24.67         11.78       12.89       1.49
      SCE
                            7       66.30         1.89      68.19         37.96       30.23      21.99
                Residential
                        8 7
                Residential         7.30 250 0.20           7.50 $0.35     5.53       1.96     $0.35
                                                                                                  0.81              $1.
     CCSE
                        9           14.80 285 3.22          18.02 $0.25                        $0.25                $0.
                  Non-
                            7                                             15.90       2.12        1.59
                Residential

     Trigger Tracker website: 350
                       10                 http://www.csi-trigger.com As of 10/9/10 $0.20
                                                                   $0.20                                            $0.
         Program Data & Statistics: http://csi.powerclerk.com
© 2010 OnGrid Solar, All Rights Reserved.                                             Economics of Solar PV -   3




                                   Residential Rates




     * Best Rate for Solar if PV is large enough compared to load and depending on
     consumption and production patterns
© 2010 OnGrid Solar, All Rights Reserved.                                             Economics of Solar PV -   4
1603 Federal Treasury Grant                                                                 1603 Treasury Grant Limitations
                                                                                                          !    Commercial systems only
         !    2009-2010 ITC can be converted to Treasury Grant
                                                                                                                 "    Limited to IRC Sec 48 and some Sec 45
         !    Section 1603 Grant in ARRA (Recovery Act)
         !    Same general features and intended functionality as the                                     !    Pass-thru entities (partnerships, LLCs, S-corps) can
              ITC, but better:                                                                                 use grant, as long as none of the recipients is non-
                "    Paid < 60 days of “placed in service” or application                                      taxable (and therefore disqualified)
                "    Usable even if no tax appetite (effectively a refundable ITC                                "    I.e. One disqualifies all, regardless of small %
                     or Federal Rebate)                                                                          "    ‘Blocker’ C-Corporations can allow
         !    Commercial systems only                                                                     !  Allows transfer of ownership
         !    “Placed in service” in 2009-2010 only, or                                                   !  Recapture of Grant or ITC on permanent cessation
                "    Construction Initiated 2009-10, completed by 2016
                                                                                                          !  May be state taxable in certain cases, see:
                      #  5% non-refundable cost spent by 2010
                                                                                                               http://www.reznickgroup.com/sites/reznickgroup.com/files/
         !    Treasury application: https://treas1603.nrel.gov/                                                papers/rg1078_section1603_state_matrix.pdf
© 2010 OnGrid Solar, All Rights Reserved.                         Economics of Solar PV -   42   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   43




                              “Placed In Service”                                                                     Rebate Tax Interactions
         SEIA “Guide to Federal Tax Incentives for Solar Energy”
                                                                                                          Sec 136(b) - No “Double Benefit”
            Available free to SEIA members at: www.seia.org!
                                                                                                          !  If the rebate is non-taxable, the federal ITC is on
         !  Equipment delivered and construction / installation
                                                                                                             amount after rebate
            completed!
             "  Minor tasks like painting need not be finished !
                                                                                                          !    If rebate is taxable, then federal ITC is on amount
         !  Taxpayer has taken legal title and control !
                                                                                                               before rebate
         !  Pre-operational tests demonstrate the equipment
            functions as intended !
                                                                                                          !    CA PV Rebates are not state taxable in CA, not
         !  Taxpayer has licenses, permits, and PTO (permission
                                                                                                               sure about other states; check w/ enacting law, local
            to operate)!                                                                                       SEIA chapter, state energy office
© 2010 OnGrid Solar, All Rights Reserved.                         Economics of Solar PV -   44   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   45




   Rebate May Be Federally Taxable                                                                     Rebate Tax Residential Exercise
         !    1099 tax forms have been issued to recipients
         !    Section 136(a) of IRS Code:                                                                 !  Is it better to have a taxable or non-taxable
                "    ‘Utility (ratepayer funded) direct or indirect rebates                                  residential rebate?
                     for energy conservation for dwellings (i.e..
                     residential) are not taxable’                                                        !  Why?
                      #    PV is ‘energy conservation’ by precedent
                                                                                                          !  What does it depend on?
         !    IRS hasn’t publicly ruled on PV rebates for:
                "    CCSE & CEC
                "    Oregon private letter ruling isn’t precedent
         !    Many residential rebates may be tax exempt
              because of Section 136, but not necessarily all
         Info courtesy Mark Bolinger, LBL
© 2010 OnGrid Solar, All Rights Reserved.                         Economics of Solar PV -   46   © 2010 OnGrid Solar, All Rights Reserved.                    Economics of Solar PV -   47
What If: Non-Taxable Rebate?                                                                       What If: Taxable Rebate?
                   (Residential)                                                                                   (Residential)
                $100K System Cost                                                                          $100K System Cost
                -$20K Rebate                                                                               -$20K Rebate
                 $80K Net Cost After Rebate                                                                  +6K Rebate Tax ($20K * 30% Fed Tax)*
                -$24K Tax Credit Value (30% of $80K)**                                                     -$30K Tax Credit Value (30% of $100K)**
                =$56K Net Cost                                                                             =$56K Net Cost
                                                                                                Rebate Tax Due even if rebate goes to the installer
     *30% federal marginal tax rate (30% tax bracket)
                                                                                                *30% federal marginal tax rate (30% tax bracket)
     **30% federal ITC rate
                                                                                                **30% federal ITC rate
© 2010 OnGrid Solar, All Rights Reserved.                   Economics of Solar PV -   48   © 2010 OnGrid Solar, All Rights Reserved.                 Economics of Solar PV -   49




             Tax Credit Example 1                                                                       Tax Credit Example 2
          30% Tax Bracket (Residential)                                                              20% Tax Bracket (Residential)
         Non-Taxed Rebate                          Taxed Rebate                                     Non-Taxed Rebate                      Taxed Rebate

     $100K System Cost                        $100K System Cost                                 $100K System Cost                      $100K System Cost
     -$20K Rebate                             -$20K Rebate                                      -$20K Rebate                           -$20K Rebate
                                               +$6K Rebate Tax*                                                                         +$4K Rebate Tax*
      $80K Net Cost After Rebate                                                                 $80K Net Cost After Rebate
     -$24K Tax Credit Value**                 -$30K Tax Credit Value**                          -$24K Tax Credit Value**               -$30K Tax Credit Value**
     =$56K Net Cost                           =$56K Net Cost                                    =$56K Net Cost                         =$54K Net Cost
     *30% federal marginal tax rate (30% tax bracket)                                           *20% federal marginal tax rate (20% tax bracket)
     **30% federal ITC rate                               Questions?                            **30% federal ITC rate
© 2010 OnGrid Solar, All Rights Reserved.                   Economics of Solar PV -   50   © 2010 OnGrid Solar, All Rights Reserved.                 Economics of Solar PV -   51




             Tax Credit Example 3
                                                                                                PBI & REC Taxation: Residential
          40% Tax Bracket (Residential)
          Non-Taxed Rebate                         Taxed Rebate                                     !    PBI probably taxable*
                                                                                                           "  Would prefer non-taxed PBI, but get full ITC
     $100K System Cost                        $100K System Cost                                            "  Otherwise IRS would require NPV of future
     -$20K Rebate                             -$20K Rebate                                                    PBI payments to calculate reduction in ITC
                                               +$8K Rebate Tax*                                               basis?
      $80K Net Cost After Rebate                                                                                 #   Unknown - How to calculate?
     -$24K Tax Credit Value**                 -$30K Tax Credit Value**
     =$56K Net Cost                           =$58K Net Cost
                                                                                                    !    RECs probably also taxable
     *40% federal marginal tax rate (40% tax bracket)
                                                                                                    *Suggested by Mark Bolinger, LBL
     **30% federal ITC rate                                                                                                                        Questions?
                          Each 1% in tax bracket is worth 1% of the rebate
© 2010 OnGrid Solar, All Rights Reserved.                   Economics of Solar PV -   52   © 2010 OnGrid Solar, All Rights Reserved.                 Economics of Solar PV -   53
PBI & REC Taxation: Commercial                                                                       Depreciation - Federal
                                                                                        !    Depreciation = Commercial tax deduction spread over time
                                                                                             MACRS 5-Year Accelerated Depreciation (1/2 yr conv.)
         !  PBI & RECs probably taxable                                                 ! 
                                                                                               MACRS: Modified Accelerated Cost Recovery System
                                                                                               " 

         !  Section 136 is residential only                                                    IRS Form 4562
                                                                                               " 

                                                                                             Equivalent of tax deducting system’s ‘basis’ over 5.5 years
         !  No known commercial exemptions
                                                                                        ! 

                                                                                             Net Value = Basis * Tax Rate
                                                                                             Net Value = (System ITC basis - 1/2 ITC) * Tax Rate
                                                                                             Net Value = System ITC basis * 85% * Tax Rate
                                                                                        !    Regular Schedule: 20%, 32%, 19.2%, 11.52%, 11.52%, 5.76%
                                                                                        !    2008-10 Schedule: 60%, 16%, 9.6%, 5.76%, 5.76%, 2.88%
                                                                                               "    2008-10 Gets 50% “Bonus Acceleration of Depreciation”
                                                                                        !    Commercial only (including home businesses >50% by sqf)
                                                                                        !    Up to 20 year carry-forward
© 2010 OnGrid Solar, All Rights Reserved.         Economics of Solar PV -   54   © 2010 OnGrid Solar, All Rights Reserved.                     Economics of Solar PV -   55




                      Depreciation - CA State                                                Financial Hazards & Gotchas
         !  Corporate: 12 Year Straight Line method                                       !  Federal Tax on Rebate
         !  Non-Corporate: MACRS 5-Year
                                                                                          !  1099 tax forms have been issued to
            "  (Sole-Proprietors, LLP, etc)
                                                                                             recipients
                                                                                          !  Section 136 applies only to residential
         !    State Depr Basis is Top Line Cost minus
              Rebate & State Tax Credit
         !    Commercial only (including home businesses)

                                                Questions?
© 2010 OnGrid Solar, All Rights Reserved.         Economics of Solar PV -   56   © 2010 OnGrid Solar, All Rights Reserved.                     Economics of Solar PV -   57




    Rebate Tax Commercial Exercise                                                      Tax Credit & Depr. Example
                                                                                      Non-Taxed Rebate (Commercial)
         !  Is it better to have a taxable or non-taxable                                       $150K System Cost
            commercial rebate?                                                                  -$50K Rebate
         !  Why?                                                                                $100K Net Cost After Rebate
         !  What does it depend on?                                                             -$30K Tax Credit Value (30% of $100K)
                                                                                                -$35K Depr Value (85% of $100K * 41%)
                                                                                                =$35K Net Cost

                                                                                                41% = combined net federal & state tax rate
                                                                                                  (35% Federal, 8.84% CA State)

© 2010 OnGrid Solar, All Rights Reserved.         Economics of Solar PV -   58   © 2010 OnGrid Solar, All Rights Reserved.                     Economics of Solar PV -   59
Commercial
                Tax Credit & Depr. Example                                                                        Tax Credit & Depr. Example
                Taxed Rebate (Commercial)                                                                    Non-Taxed Rebate                               Taxed Rebate
                $150K System Cost
                                                                                                        $150K System Cost                            $150K System Cost
                -$50K Rebate                                                                            -$50K Rebate                                 -$50K Rebate
                +17.5K Rebate Tax ($50K * 35% Fed Tax)                                                                                               +17.5K Rebate Tax
                                                                                                        $100K Net Cost After Rebate
                -$45K Tax Credit Value (30% of $150K)
                                                                                                        -$30K Tax Credit Value                       -$45K Tax Credit Value
                -$52K Depr Value (85% of $150K * 41%)                                                   -$35K Depr Value (85K * 41%)                 -$52K Depr Value (127.5K * 41%)
                =$20.5K Net Cost                                                                        =$35K Net Cost                               =$20.5K Net Cost
                                                                                                       If commercial, want rebate taxable (no choice)
                                                                                                              Then tax credit and depreciation are on amount before rebate
                                                                                                             " 

                                                                                                              Worth more to pay tax on rebate, then get 30% credit and
                                                                                                             " 
                                                                                                             depreciation on rebate
© 2010 OnGrid Solar, All Rights Reserved.                           Economics of Solar PV -   60   © 2010 OnGrid Solar, All Rights Reserved.                             Economics of Solar PV -   61




                          Section 179 Expense                                                                       Section 179 Not in OnGrid
!  Section 179 converts some small business depreciable                                                     !  Conflicting language, not 100% clear if available
   property into 1st year expense (deduction)                                                                  with ITC or Treasury Grant
!  Deduction limit: $500K for 2010 & 2011                                                                   !  Few project & customers qualify

      "    Enhanced in 2010 Small Business Jobs & Credit Act of 2010                                               "    Must fit within limits &
      "    Drops to $25K in 2012 (unless extended)                                                                 "    Aren’t already using it for other property
!    Phase-out begins at 4x limit: ~$2,000,000 in 2010-11                                                   !  Can hurt customer too – could cause loss of Sec.
      "  $1 for $1 reduction, so at 5x, Sect. 179 has no value                                                 179 on other eligible property
      "  Phase-out basis is sum of all 179 eligible property put in                                         !  Examples that don’t qualify:
         service in that year                                                                                      "  Already using for other purchases
      "  If sum > 5x (>$2.5million), then can’t use 179 at all                                                     "  Projects over $500K depending are limited
!   Can including PV in Home Businesses if >50%                                                                    "  Phased out if total of all is >$2,500,000

    business Rights Reserved.
© 2010 OnGrid Solar, All
                         use of asset (ie > 50% of sqf is for Economics of Solar PV - 62
                                                               business)                                    !     Kept out of OnGrid to stay conservative
                                                                                                   © 2010 OnGrid Solar, All Rights Reserved.            Economics of Solar PV - 63




 Small Business Carry-Back of NOL                                                                                                              Tax Benefits
           !    In 2009(+?), small businesses can carry                                                     !  ITC & MACRS reduce customer cost, but not
                back Net Operating Losses up to 5 years                                                        up-front
                "    $15 Million Gross Receipts limitation                                                  !  Not available to all customers – MACRS
                                                                                                               Depr. is affected by AMT
                "    Normally only 2 year carry-back
                                                                                                                   "    Ask about customers “tax appetite”
           !    2009 Economic Stimulus                                                                             "    More in Lease & PPA section
                                                                                                            !     Customers - beware of optimistic sales claims

© 2010 OnGrid Solar, All Rights Reserved.                           Economics of Solar PV -   64   © 2010 OnGrid Solar, All Rights Reserved.                             Economics of Solar PV -   65
Agenda
         !    Overview of the Variables
                "  Costs & Incentives                           Questions?
                "  Electric Rate Structures                                                                                      Electric Rate Structures
                "  System Performance

         !  Financial Analysis Methods
         !  Solar Tools

         !  Interactive Examples


© 2010 OnGrid Solar, All Rights Reserved.                                  Economics of Solar PV -   66   © 2010 OnGrid Solar, All Rights Reserved.                                         Economics of Solar PV -   67




    Electric Rate Structures Overview                                                                                                                 Net Metering

         !  Options for Solar - Net Metering                                                                    Sell Power to the
                                                                                                                 Utility by Day
         !  3 Customer Classes (Res, Com, Ag)

         !  2 Types of Rate (Flat, TOU)

                "    TOU: Time of Use                                                                            Buy Power at
                                                                                                                Night and Winter
                                                                                                                                                                                  .




         !    Demand Charges for Commercial                                                                • Exchange at Retail
                                                                                                           • 100% Efficient Battery
                                                                                                           • Annual Cycle
                                                                                                           • $0 minimum bill*
© 2010 OnGrid Solar, All Rights Reserved.                                  Economics of Solar PV -   68   © 2010 OnGrid Solar, All Rights Reserved.
                                                                                                                                                      *Different with Calif. AB 920         Economics of Solar PV -   69




                                                                     Average monthly usage                                                                                            Average monthly usage

    kWh/mo                                                           PV system production                       kWh/mo                                                                PV system production


                                                                                                            $/mo
                                                                                                                                                  The surplus covers the shortfall,
        750                                        Roll over                                                      750                             and your yearly bill is zero.



        500                                                                                                       500




        250                                                                                                       250




               May                              October                       April                                      May                                  October                          April
                                “SUMMER”                       “WINTER”                                                                   “SUMMER”                            “WINTER”

                                                                                                                 Gets more complicated with TOU and Net Metering and AB920
                                  Slide courtesy Pete Shoemaker, PG&E Pacific Energy Center                                       Slide courtesy Pete Shoemaker, PG&E Pacific Energy Center
© 2010 OnGrid Solar, All Rights Reserved.                                  Economics of Solar PV -   70   © 2010 OnGrid Solar, All Rights Reserved.                                         Economics of Solar PV -   71
Electric Rate Structures Overview                                                                                                                                         Residential Tiered Rates
                       !       Three Customer Classes                                                                                                                    Residential only (in
                                                                                                                                                                        ! 
                                                                                                                                                                        general)
                               "    Residential, Commercial, Agricultural
                       !       Types of Rate                                                                                                                             Penalizes larger
                                                                                                                                                                        ! 
                                                                                                                                                                        residential users
                               "  Flat: Simple rate, not time or usage dependent
                               "  Tiered: Rates increase with usage                                                                                                      Excellent motivator
                                                                                                                                                                        ! 
                                                                                                                                                                        of efficiency,
                               "  Time of Use (TOU): Rate varies during day -                                                                                           conservation & PV
                                  depends on when energy is used
                               "  Tiered-TOU: Varies with usage & time of day                                                                                           ! Tiers cause Tears
                                                                                                                                                                              - of Joy!
                               "  Demand
         © 2010 OnGrid Solar, All Rights Reserved.                                                                                    Economics of Solar PV -   72   © 2010 OnGrid Solar, All Rights Reserved.                   Economics of Solar PV -   73




                                        !                                                        !
                !
"#$%&'()!*+,-.#()-+!/0-1#)!             !                     2'3-1'0!    *+,4!56*!"&''%!7#4     89:99;/!
2#1'<'+0=!*+,-.#()-+!!!!!!!>6!??:;/@!   !        *+)A',,-)B   2'3-1'0!    *+,4!56*!"&''%!7#4     :?C8;/!
!                                       !                     !                                                       !

!                                          DE5!"FGHI7J!                               "&''%!C!           !            !
    !                                    KE"/LI7/!2/JIG7"!                                                   !             !


                                                         SCE Baseline
    !                           MG2!N/O/2DI7I7J!KE"/LI7/!P6E7OIOI/"!                                         !             !
                                                 !




                                                          Territories                                                                                                        PG&E Residential Tiered Rates
                                                                                                             !    Variations:
                                                                                                                   " Locations: 5-10, 13-16                                                                          29¢/kWh
                                                                                                                                                                                                                     surcharge
                                                                                                                                Coast to High Desert
                                                                                                                               # 

                                                                                                                   Season: Summer or
                                                                                                                          " 

                                                                                                                  Winter                                                                                             11¢/kWh
                                                                                                                 " Type: Electric Only or                                                                              base
                                                                                                                                                                                                                      charge
                                                                                                                  Both Electric & Gas
                                                                                                             !  Baseline = Tier 1 = 70% of
                                                                                                                average user’s usage                                               Tiered Rates:
                                                                                                                                                                                  ! 
                                                                                                             !  Tier 1 + Tier 2 = Avg                                              "  Base is 11¢/kWh                           Examples
         http://www.sce.com/CustomerService/billing/tiered-rates/baseline-chart-map.htm
                                                                                                                                                                                   "  Top is 40¢/kWh (Surcharge currently +29¢/kWh for Tier 4)
         http://www.sce.com/NR/rdonlyres/02FE720D-956D-44C7-B204-D48F830B79CC/0/Baseline.pdf
         © 2010 OnGrid Solar, All Rights Reserved.                                                                                    Economics of Solar PV -   74   © 2010 OnGrid Solar, All Rights Reserved.                   Economics of Solar PV -   75

                                                                                                     !
    !
                   !                               !                                    !                             !
!
>O#!Q'!-)1'(%'0!QR!$%-,-%R@!                  I11$'0!QR!                 >O#!Q'!-)1'(%'0!QR!*+,4!56*@!
E03-A'!!   S?:T;/!                          EUQ+(!V+W+R'(-!              N+%'!M-,'0! "'X!?Y=!SYYZ!                !
N'A-1-#)!! YZ;Y:;YS:!                       [-A'!5('1-0')%!              /..'A%-3'!    !                          !
!"!#$      !                                       !                     2'1#,$%-#)! !                            !
!




                               NJ Residential Tiered Rates                                                                                                                                                  Reverse Tiers
                                                                                                                                                                                !  PA – Allegheny Power : !"#$%&'!"#"(&'!"#")''
                                                                                                                                                                                         Commercial rate
                                                                                                                                                                                        " 

                                                                                                                                                                                ! PA – PECO: !"#%*&'!"#$+&'!"#",&'!"#"-''
                                                                                                                                                                                ! NY – ConEd: !"#%$&'!"#$.''


                       ! JCP&L
                           "  Base is 16.7¢/kWh

                           "  Top is 22.5¢/kWh

                       ! PSE&G and ACE are also tiered on Residential                                                                 Examples
         © 2010 OnGrid Solar, All Rights Reserved.                                                                                    Economics of Solar PV -   76   © 2010 OnGrid Solar, All Rights Reserved.                   Economics of Solar PV -   77
CSI Trigger Tracker
                                  EPBB Payments (per Watt)                PBI Payments (per kWh)

   Step
           Statewide
           MW in Step
                            Residential Commercial
                                                     Government
                                                          /                EPBB Payments (per Watt)
                                                                   Residential  Commercial
                                                                                             Government
                                                                                                  /
                                                      Non-Profit                              Non-Profit
    1           50              n/a            n/a       n/a          n/a     n/a     n/a     Govern
    2           70             $2.50        Statewide
                                              $2.50  $3.25           $0.39   $0.39   $0.50
    3           100     Step   $2.20          $2.20  $2.95         Residential
                                                                     $0.34   $0.34 Commercial
                                                                                     $0.46         /
    4           130            $1.90        MW in Step
                                              $1.90  $2.65           $0.26   $0.26   $0.37
    5
    6
                160
                190
                               $1.55
                               $1.10
                                              $1.55
                                               $1.10
                                                     $2.30
                                                        $1.85
                                                                     $0.22
                                                                     $0.15
                                                                             $0.22
                                                                             $0.15
                                                                                     $0.32
                                                                                     $0.26
                                                                                               Non-P
    7
    8
                215
                250
                        1      $0.65
                               $0.35
                                           50
                                       $0.65
                                       $0.35
                                                     $1.40
                                                     $1.10
                                                                    n/a $0.09
                                                                $0.09
                                                                $0.05           $0.05
                                                                                            $0.19 n/a
                                                                                            $0.15
                                                                                                                     n/
    9
    10
                285
                350
                        2      $0.25
                               $0.20
                                           70
                                       $0.25
                                       $0.20
                                                     $0.90
                                                     $0.70
                                                                   $2.50 $0.03
                                                                $0.03
                                                                $0.03           $0.03
                                                                                               $2.50
                                                                                            $0.12
                                                                                            $0.10
                                                                                                                    $3.
                        3                 100                      $2.20 Issued
                                                                                               $2.20                $2.
                                              Unused MW    Revised                                MW
  Administrator
                 Class *4 Step in Step130 Previous Total MW in Reservation Remaining $1.90
                Customer Current Initial MW
                                             from                  $1.90
                                                                       Conditional     MW
                                                                                                Under               $2.
                                                 Steps      Step                                Review
                        5 7
                Residential         31.00 160 0.99          31.99 $1.55
                                                                      Letters (MW)
                                                                          27.38       4.61     $1.55
                                                                                                  6.40              $2.
      PGE         Non-
                        6 8
                Residential
                                    73.20 190 2.18          75.38 $1.10   14.61       60.76    $1.10
                                                                                                 12.85              $1.
                  Non- 7                  215 0.37                 $0.65                       $0.65                $1.
                Residential 5       24.30                   24.67         11.78       12.89       1.49
      SCE
                            7       66.30         1.89      68.19         37.96       30.23      21.99
                Residential
                        8 7
                Residential         7.30 250 0.20           7.50 $0.35     5.53       1.96     $0.35
                                                                                                  0.81              $1.
     CCSE
                        9           14.80 285 3.22          18.02 $0.25                        $0.25                $0.
                  Non-
                            7                                             15.90       2.12        1.59
                Residential

     Trigger Tracker website: 350
                       10                 http://www.csi-trigger.com As of 10/9/10 $0.20
                                                                   $0.20                                            $0.
         Program Data & Statistics: http://csi.powerclerk.com
© 2010 OnGrid Solar, All Rights Reserved.                                             Economics of Solar PV -   3




                                   Residential Rates




     * Best Rate for Solar if PV is large enough compared to load and depending on
     consumption and production patterns
© 2010 OnGrid Solar, All Rights Reserved.                                             Economics of Solar PV -   4
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus
Economics of Solar: Western Focus

More Related Content

Viewers also liked

Feasibility Study of Solar Power in India
Feasibility Study of Solar Power in IndiaFeasibility Study of Solar Power in India
Feasibility Study of Solar Power in IndiaiData Insights
 
Crowdfunded solar feasiblity study
Crowdfunded solar feasiblity study Crowdfunded solar feasiblity study
Crowdfunded solar feasiblity study Joy Hughes
 
5 s & Visual management training-iAcademy @Intertek
5 s & Visual management training-iAcademy @Intertek5 s & Visual management training-iAcademy @Intertek
5 s & Visual management training-iAcademy @IntertekSabrina Chowdhury
 
A Praposal For Installation of 10 mw solar thermal power plant.
A Praposal For Installation of 10 mw solar thermal power plant.A Praposal For Installation of 10 mw solar thermal power plant.
A Praposal For Installation of 10 mw solar thermal power plant.Saurabh Biswas
 
Sensors in Everyday Life
Sensors in Everyday LifeSensors in Everyday Life
Sensors in Everyday LifeKamlesh Kumar
 
Solar product business plan
Solar product business planSolar product business plan
Solar product business planKamlesh Kumar
 
Design & estimation of rooftop grid tied solar pv system
Design & estimation of rooftop grid tied solar pv systemDesign & estimation of rooftop grid tied solar pv system
Design & estimation of rooftop grid tied solar pv systemSabrina Chowdhury
 
Solar Sales & Marketing
Solar Sales & MarketingSolar Sales & Marketing
Solar Sales & MarketingOnGrid
 
Financial Feasibility of Solar Power Plant in India
Financial Feasibility of Solar Power Plant in IndiaFinancial Feasibility of Solar Power Plant in India
Financial Feasibility of Solar Power Plant in IndiaAkash Jauhari
 
Marketing Plan - Solar Company
Marketing Plan - Solar CompanyMarketing Plan - Solar Company
Marketing Plan - Solar Companymytra
 
A Business Model for Solar Energy - SunEdison
A Business Model for Solar Energy - SunEdisonA Business Model for Solar Energy - SunEdison
A Business Model for Solar Energy - SunEdisonAlexander Osterwalder
 
Project Proposal on 10 MW Solar PV Power Plant
Project Proposal on 10 MW Solar PV Power PlantProject Proposal on 10 MW Solar PV Power Plant
Project Proposal on 10 MW Solar PV Power PlantVignesh Sekar
 
Solar product business plan
Solar product business planSolar product business plan
Solar product business planIndrajith Nair
 

Viewers also liked (15)

Feasibility Study of Solar Power in India
Feasibility Study of Solar Power in IndiaFeasibility Study of Solar Power in India
Feasibility Study of Solar Power in India
 
Crowdfunded solar feasiblity study
Crowdfunded solar feasiblity study Crowdfunded solar feasiblity study
Crowdfunded solar feasiblity study
 
5 s & Visual management training-iAcademy @Intertek
5 s & Visual management training-iAcademy @Intertek5 s & Visual management training-iAcademy @Intertek
5 s & Visual management training-iAcademy @Intertek
 
A Praposal For Installation of 10 mw solar thermal power plant.
A Praposal For Installation of 10 mw solar thermal power plant.A Praposal For Installation of 10 mw solar thermal power plant.
A Praposal For Installation of 10 mw solar thermal power plant.
 
Apostila Fundamentos Energia Solar Fotovoltaica,
Apostila Fundamentos Energia Solar Fotovoltaica,Apostila Fundamentos Energia Solar Fotovoltaica,
Apostila Fundamentos Energia Solar Fotovoltaica,
 
Sensors in Everyday Life
Sensors in Everyday LifeSensors in Everyday Life
Sensors in Everyday Life
 
Solar product business plan
Solar product business planSolar product business plan
Solar product business plan
 
Design & estimation of rooftop grid tied solar pv system
Design & estimation of rooftop grid tied solar pv systemDesign & estimation of rooftop grid tied solar pv system
Design & estimation of rooftop grid tied solar pv system
 
Solar Sales & Marketing
Solar Sales & MarketingSolar Sales & Marketing
Solar Sales & Marketing
 
Financial Feasibility of Solar Power Plant in India
Financial Feasibility of Solar Power Plant in IndiaFinancial Feasibility of Solar Power Plant in India
Financial Feasibility of Solar Power Plant in India
 
Marketing Plan - Solar Company
Marketing Plan - Solar CompanyMarketing Plan - Solar Company
Marketing Plan - Solar Company
 
A Business Model for Solar Energy - SunEdison
A Business Model for Solar Energy - SunEdisonA Business Model for Solar Energy - SunEdison
A Business Model for Solar Energy - SunEdison
 
Project Proposal on 10 MW Solar PV Power Plant
Project Proposal on 10 MW Solar PV Power PlantProject Proposal on 10 MW Solar PV Power Plant
Project Proposal on 10 MW Solar PV Power Plant
 
Burn Your Business Plan
Burn Your Business PlanBurn Your Business Plan
Burn Your Business Plan
 
Solar product business plan
Solar product business planSolar product business plan
Solar product business plan
 

Similar to Economics of Solar: Western Focus

Solar3.0 Roadmap From Policy To Profitability
Solar3.0 Roadmap From Policy To ProfitabilitySolar3.0 Roadmap From Policy To Profitability
Solar3.0 Roadmap From Policy To ProfitabilitySolarTech
 
How Solar Inverter Works-Presentation at Zane State College, Ohio
How Solar Inverter Works-Presentation at Zane State College, OhioHow Solar Inverter Works-Presentation at Zane State College, Ohio
How Solar Inverter Works-Presentation at Zane State College, OhioSusanna Huang
 
2016 Solar Business Opportunity
2016 Solar Business Opportunity2016 Solar Business Opportunity
2016 Solar Business OpportunityJohnMFreeborn
 
Life in the Trenches: How Wind and Solar Projects Really Work (or Don't)
Life in the Trenches: How Wind and Solar Projects Really Work (or Don't)Life in the Trenches: How Wind and Solar Projects Really Work (or Don't)
Life in the Trenches: How Wind and Solar Projects Really Work (or Don't)Derek Satnik
 
Rahus Solar PPA Customers Guide V20081005 Lr
Rahus Solar PPA Customers Guide V20081005 LrRahus Solar PPA Customers Guide V20081005 Lr
Rahus Solar PPA Customers Guide V20081005 LrAlexander von Welczeck
 
The Good, Bad, and Ugly Truth about Ontario's Energy Sector
The Good, Bad, and Ugly Truth about Ontario's Energy SectorThe Good, Bad, and Ugly Truth about Ontario's Energy Sector
The Good, Bad, and Ugly Truth about Ontario's Energy SectorDerek Satnik
 
How to Get a Job in the Solar Industry
How to Get a Job in the Solar IndustryHow to Get a Job in the Solar Industry
How to Get a Job in the Solar IndustryYoni Binstock
 
Mobidemics final NSF I-Corps presentation
Mobidemics final NSF I-Corps presentationMobidemics final NSF I-Corps presentation
Mobidemics final NSF I-Corps presentationStanford University
 
Solar Energy Investment & Finance US
Solar Energy Investment & Finance USSolar Energy Investment & Finance US
Solar Energy Investment & Finance USCSP Today
 
Trendwatching: Minitrends Aug 2012 (EN)
Trendwatching: Minitrends Aug 2012 (EN)Trendwatching: Minitrends Aug 2012 (EN)
Trendwatching: Minitrends Aug 2012 (EN)Brian Crotty
 
trendwatching.com’s MINI TRENDS
trendwatching.com’s MINI TRENDStrendwatching.com’s MINI TRENDS
trendwatching.com’s MINI TRENDSTrendWatching
 
MINI TRENDS AUG 2012
MINI TRENDS AUG 2012MINI TRENDS AUG 2012
MINI TRENDS AUG 2012Siv Næss
 
Jugaad Innovation - UXPA 2013 Keynote from Navi Radjou
Jugaad Innovation - UXPA 2013 Keynote from Navi RadjouJugaad Innovation - UXPA 2013 Keynote from Navi Radjou
Jugaad Innovation - UXPA 2013 Keynote from Navi RadjouUXPA International
 
SunFunder deck
SunFunder deckSunFunder deck
SunFunder decksunfunder
 
OCR Pilot Geography Revision notes 2010
OCR Pilot Geography Revision notes 2010OCR Pilot Geography Revision notes 2010
OCR Pilot Geography Revision notes 2010TonyCassidy
 

Similar to Economics of Solar: Western Focus (20)

Solar3.0 Roadmap From Policy To Profitability
Solar3.0 Roadmap From Policy To ProfitabilitySolar3.0 Roadmap From Policy To Profitability
Solar3.0 Roadmap From Policy To Profitability
 
Solarize Northwest Indiana
Solarize Northwest IndianaSolarize Northwest Indiana
Solarize Northwest Indiana
 
How Solar Inverter Works-Presentation at Zane State College, Ohio
How Solar Inverter Works-Presentation at Zane State College, OhioHow Solar Inverter Works-Presentation at Zane State College, Ohio
How Solar Inverter Works-Presentation at Zane State College, Ohio
 
2016 Solar Business Opportunity
2016 Solar Business Opportunity2016 Solar Business Opportunity
2016 Solar Business Opportunity
 
Life in the Trenches: How Wind and Solar Projects Really Work (or Don't)
Life in the Trenches: How Wind and Solar Projects Really Work (or Don't)Life in the Trenches: How Wind and Solar Projects Really Work (or Don't)
Life in the Trenches: How Wind and Solar Projects Really Work (or Don't)
 
New york city case study lidar and the power of solar
New york city case study   lidar and the power of solarNew york city case study   lidar and the power of solar
New york city case study lidar and the power of solar
 
Rahus Solar PPA Customers Guide V20081005 Lr
Rahus Solar PPA Customers Guide V20081005 LrRahus Solar PPA Customers Guide V20081005 Lr
Rahus Solar PPA Customers Guide V20081005 Lr
 
The Good, Bad, and Ugly Truth about Ontario's Energy Sector
The Good, Bad, and Ugly Truth about Ontario's Energy SectorThe Good, Bad, and Ugly Truth about Ontario's Energy Sector
The Good, Bad, and Ugly Truth about Ontario's Energy Sector
 
Bob Gibson | SEPA
Bob Gibson | SEPABob Gibson | SEPA
Bob Gibson | SEPA
 
How to Get a Job in the Solar Industry
How to Get a Job in the Solar IndustryHow to Get a Job in the Solar Industry
How to Get a Job in the Solar Industry
 
Mobidemics final NSF I-Corps presentation
Mobidemics final NSF I-Corps presentationMobidemics final NSF I-Corps presentation
Mobidemics final NSF I-Corps presentation
 
Solar Energy Investment & Finance US
Solar Energy Investment & Finance USSolar Energy Investment & Finance US
Solar Energy Investment & Finance US
 
2012 08minitrends-120902201452-phpapp02
2012 08minitrends-120902201452-phpapp022012 08minitrends-120902201452-phpapp02
2012 08minitrends-120902201452-phpapp02
 
Trendwatching: Minitrends Aug 2012 (EN)
Trendwatching: Minitrends Aug 2012 (EN)Trendwatching: Minitrends Aug 2012 (EN)
Trendwatching: Minitrends Aug 2012 (EN)
 
trendwatching.com’s MINI TRENDS
trendwatching.com’s MINI TRENDStrendwatching.com’s MINI TRENDS
trendwatching.com’s MINI TRENDS
 
MINI TRENDS AUG 2012
MINI TRENDS AUG 2012MINI TRENDS AUG 2012
MINI TRENDS AUG 2012
 
Jugaad Innovation - UXPA 2013 Keynote from Navi Radjou
Jugaad Innovation - UXPA 2013 Keynote from Navi RadjouJugaad Innovation - UXPA 2013 Keynote from Navi Radjou
Jugaad Innovation - UXPA 2013 Keynote from Navi Radjou
 
SunFunder deck
SunFunder deckSunFunder deck
SunFunder deck
 
Product development assignment help
Product development assignment helpProduct development assignment help
Product development assignment help
 
OCR Pilot Geography Revision notes 2010
OCR Pilot Geography Revision notes 2010OCR Pilot Geography Revision notes 2010
OCR Pilot Geography Revision notes 2010
 

Recently uploaded

Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfAdnet Communications
 
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxSlideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxOffice for National Statistics
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023SkillCircle
 
20240315 _E-Invoicing Digiteal. .pptx
20240315 _E-Invoicing Digiteal.    .pptx20240315 _E-Invoicing Digiteal.    .pptx
20240315 _E-Invoicing Digiteal. .pptxFinTech Belgium
 
The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...Antonis Zairis
 
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...mwangimwangi222
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingHenry Tapper
 
What Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AIWhat Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AI360factors
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Commonwealth
 
Stock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfStock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfMichael Silva
 
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an EntrepreneurIntroduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an Entrepreneurabcisahunter
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklosbeduinpower135
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESKumarJayaraman3
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismBrian Lin
 
MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.Arifa Saeed
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.KumarJayaraman3
 
LIC PRIVATISATION its a bane or boon.pptx
LIC PRIVATISATION its a bane or boon.pptxLIC PRIVATISATION its a bane or boon.pptx
LIC PRIVATISATION its a bane or boon.pptxsonamyadav7097
 
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoRWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoCoinGecko
 

Recently uploaded (20)

Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
 
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptxSlideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
Slideshare - ONS Economic Forum Slidepack - 18 March 2024.pptx
 
India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023India Economic Survey Complete for the year of 2022 to 2023
India Economic Survey Complete for the year of 2022 to 2023
 
20240315 _E-Invoicing Digiteal. .pptx
20240315 _E-Invoicing Digiteal.    .pptx20240315 _E-Invoicing Digiteal.    .pptx
20240315 _E-Invoicing Digiteal. .pptx
 
The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...The unequal battle of inflation and the appropriate sustainable solution | Eu...
The unequal battle of inflation and the appropriate sustainable solution | Eu...
 
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...Solution manual for  Intermediate Accounting, 11th Edition by David Spiceland...
Solution manual for Intermediate Accounting, 11th Edition by David Spiceland...
 
Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB funding
 
What Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AIWhat Key Factors Should Risk Officers Consider When Using Generative AI
What Key Factors Should Risk Officers Consider When Using Generative AI
 
Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]Monthly Market Risk Update: March 2024 [SlideShare]
Monthly Market Risk Update: March 2024 [SlideShare]
 
Stock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdfStock Market Brief Deck for March 19 2024.pdf
Stock Market Brief Deck for March 19 2024.pdf
 
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an EntrepreneurIntroduction to Entrepreneurship and Characteristics of an Entrepreneur
Introduction to Entrepreneurship and Characteristics of an Entrepreneur
 
Commercial Bank Economic Capsule - March 2024
Commercial Bank Economic Capsule - March 2024Commercial Bank Economic Capsule - March 2024
Commercial Bank Economic Capsule - March 2024
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklos
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
 
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for TourismTaipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
Taipei, A Hidden Jewel in East Asia - PR Strategy for Tourism
 
MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.MARKET FAILURE SITUATION IN THE ECONOMY.
MARKET FAILURE SITUATION IN THE ECONOMY.
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
 
LIC PRIVATISATION its a bane or boon.pptx
LIC PRIVATISATION its a bane or boon.pptxLIC PRIVATISATION its a bane or boon.pptx
LIC PRIVATISATION its a bane or boon.pptx
 
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGeckoRWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
RWA Report 2024: Rise of Real-World Assets in Crypto | CoinGecko
 
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
New Monthly Enterprises Survey. Issue 21. (01.2024) Ukrainian Business in War...
 

Economics of Solar: Western Focus

  • 1. Andy Black “Economics of Solar: Solar Financial Analyst (408) 428 0808x1 Making The Financial Case” andy@ongrid.net Check-in (15 minutes before listed start time) Introductions Solar Financial Payback - Overview of the Variables Economics Break, Q & A, Networking Overview of the Variables (con’t) Rate Structures ~12:00 Lunch, Q & A, Networking (~45 minutes) Overview of the Variables (con’t) System Performance Financial Analysis Methods Break, Q & A, Networking Tools: Solar Financial Analysis, Sales, and Other Tools ~4:30 Formal Conclusion, Break, Q & A Interactive Examples (for those who wish to stay) Using the OnGrid Solar Financial Tool Diligence: Heights by great men reached and kept were not obtained by sudden flight, but they, while their companions slept, were toiling upward in the night. - Henry Wadsworth Longfellow
  • 2. Andy Black “Economics of Solar: Solar Financial Analyst (408) 428 0808x1 Making The Financial Case” andy@ongrid.net Abstract: This class helps PV dealers, installers, and salespeople make the best and most accurate financial case to their customers to help them make more sales and open more eyes to the value of solar systems. Andy Black will provide an overview of solar electric (PV) system costs and approximate savings for residential systems. He will provide detailed information on state & federal incentives available and how to apply and use them. These include rebates, performance based incentives, and tax credits. He will explain the choices for electric rate structures and the advantages of each relative to building load profile, system design, and site specifics (shading, orientation, etc). Andy will discuss the various methods of performing financial analyses in conjunction with the savings realized. Financial analysis methods presented will include Simple Payback, Total Lifecycle Payback, Internal Rate of Return (IRR), Cash Flow analysis, and Appraisal Resale Value. Interactive examples of residential sites will be provided, including discussion of the salient differences and advantages of each method. The assumptions and variables that affect each analysis will also be presented including inflation, maintenance expenses, and interest rates. An overview of the various tools available on the market for assisting the dealer, installer or salesperson in making the case and the sale to a customer will conclude with an in depth look at the OnGrid Tool that Andy created for use by the industry. If time allows, group exercises using OnGrid will be available to try cases and see how a powerful presentation can be created. All students will receive a copy of the demo version of the OnGrid Tool (licensing agreement will be required). Focused on residential, serves as a prerequisite for “Commercial Solar Economics & Financing with PPAs and Leases.” Biography: Andy Black is a Solar Financial Analyst and the owner of OnGrid Solar. OnGrid Solar provides financial analysis and sales education & software to solar installers to help them make a strong sales case for solar electricity to their customers. Andy has more than a dozen years of design, consulting, teaching, sales, and research experience in solar. He specializes in demonstrating the financial payback of solar electricity systems. He is a former NABCEP certified solar installer. Andy Black is a recent member of the Board of Directors of the American Solar Energy Society and served as Chapters Representative. He is also a member of the Advisory Board of the Northern California Solar Energy Association. Andy’s formal education includes a Bachelor’s in Electrical Engineering from Penn State University, a Master’s in Electrical Engineering from University of Southern California, and a Marketing Certificate at the University of California. His training in solar electricity includes Solar Energy International’s intensive photovoltaic coursework and more than a dozen specialty courses in solar electric and related fields. He presents regularly on the financial analysis of solar electricity to audiences nationwide. Andy is also the groundskeeper and servant for a cat at his home in San Jose, CA. Contact Info: Andy Black, CEO OnGrid Solar 4175 Renaissance Dr #4, San Jose, CA 95134 (408) 428 0808x1 andy@ongrid.net www.ongrid.net
  • 3. SOLAR ECONOMICS: Introductions & Thanks MAKING THE FINANCIAL CASE !  Solar Power International ‘10 Andy Black !  Solar Electric Power Association Solar Financial Analyst "  Stuart Raper & Julia Hamm & Sales Software Creator !  Yennie Solheim !  Andy Black, OnGrid Solar "  Solar Financial Analyst & OnGrid Tool Creator Solar Power International 2010 !  You for coming! © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 2 NIMBY A Volunteer Please? !  Who’s hear of NIMBY? !  You are BANANAs! "  Plague to many large or public projects from garbage dumps & oil refineries to renewables such as wind farms !  You are all BANANAs! © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 3 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 4 Add picture of classroom full of bananas Quick Survey – What BANANA Variety of Good Bananas Are Here? !  Anyone know what BANANA means? !  Existing dealer / installers "  Build Absolutely Nothing Anywhere Near !  Salesperson for dealer / installer Anything "  Including owners if you do sales !  You are good BANANAs !  New or hopeful dealer / installers "  Small & rooftop solar is exempt from !  New or hopeful salespeople BANANA scrutiny !  Government, Utility "  Your future is more secure because the !  Customers / end users public supports and doesn’t protest this kind of renewable energy !  Manufacturers ….so, go BANANAs! !  Others? © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 5 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 6
  • 4. Quick Survey - Instructor Background Your Goals for Today? !  Electrician’s Helper 3 summers !  Learn about payback for general knowledge !  M.S. Electrical Engineering !  Want to use payback in selling / grow !  SEI graduate business !  NABCEP Certified Solar PV Installer Emeritus !  Want to learn about / have the OnGrid Tool !  Involved with Solar since 1991 !  Want to increase your knowledge to develop !  Studying, writing, & presenting about Solar your own tool Financial Issues since 2000 !  Other goals? !  Solar Salesperson 2001-2006 !  Networking list? !  Now a Solar Financial Analyst & Economics of Solar PV - 7 Creator of the “OnGrid Tool” solar sales software8 - Economics of Solar PV © 2010 OnGrid Solar, All Rights Reserved. © 2010 OnGrid Solar, All Rights Reserved. Resources Decorum Resources available at www.ongrid.net !  Questions: Please focus on Solar Economics & Payback !  Articles & papers on solar “Payback” !  Good environment: !  Upcoming classes & events "  Cell phones to fun mode "  Financing Solar PV including PPAs & Leases "  Side conversations: Yes or No? "  Sales & Marketing for Solar "  Please help each other !  Slides from past classes !  Site Logistics & Breaks !  Free demos of the OnGrid Tool "  Facilities "  Lunch & 2 breaks: Networking © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 9 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 10 Agenda Prepare Interactive Examples !  Overview of the Variables !  Examples in Solar Financial Analysis Tool !  Financial Analysis Methods !  Please prepare some cases !  Parameters: !  Solar Tools !  Interactive Examples "  Usage, System Size, Price "  Inflation Handouts & Acronyms "  Starting & Ending rate schedule Questions preferred at points marked: "  % on-peak usage "  Please focus on Payback Questions? !  Free Demo - License Agreements © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 11 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 12
  • 5. Financial Payback !  Payback on solar isn’t the most important thing… Solar Financial Payback !  … it’s the only thing the vast majority of potential solar purchasers care about © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 13 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 14 Right or Wrong Attractive Economics PV systems can be financially attractive to !  95% see energy as a commodity customers using enough electricity: !  Few will pay more > $80/mo in CA !  Must meet them on their terms: > $60/mo in NJ > $90/mo in CT $$ FINANCIAL! $$ Attractive defined as: "  Rate of Return > 10% "  Property Value Increase > System Cost "  Bill Savings > Loan Cost © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 15 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 16 Payback Analysis Agenda Why is it Needed? !  Overview of the Variables If we’re going "  Costs & Incentives to put solar on "  Rate Structures every roof, it "  System Performance needs to make !  Financial Analysis Methods $ense. !  Solar Tools Courtesy Sharp Electronics !  Interactive Examples © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 17 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 18
  • 6. Agenda Incentives Pre-Exercise !  Overview of the Variables !  Common “up-front” incentives (2): "  Costs & Incentives _________________________________________ "  Rate Structures "  System Performance !  Common incentives received when taxes are filed (3): _________________________________________ !  Financial Analysis Methods !  Solar Tools !  Common incentives received over time (3): !  Interactive Examples _________________________________________ © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 18 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 19 System Costs System Costs - Size Depend on: !  Typical range $7-$11/ CEC AC watt thru 10/2008 "  = $6-$9/ STC DC watt (1 W DC ! .83 W AC) !  System size (per watt) "  Includes parts, installation labor, profit, warranty "  Simplest composition shingle roofs: Doesn’t include !  Mounting: roof, ground, trellis “adders” for harder jobs (tile, steep, etc). !  Special factors !  Commercial & Municipal: $5-$8 /CEC AC watt "  $4.00-$6.50/Watt STC DC (1 W DC =~ .83 W AC) "  $4.00/W STC is typical for 500kW+ !  Most residential now: $6-$9/CEC AC watt !  Some economies of scale © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 20 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 21 California Price Trends 2000-2010 System Costs - Ongoing? $14.00 $12.00 $10.00 Top Line Average Price !  Maintenance: 0.25% of system gross cost per year, $ / CEC Watt $8.00 increasing with inflation $6.00 Net Cost to Consumer after "  It’s in there one way or the other (cost of cleaning, Rebate (excluding ITC) $4.00 vs. loss in performance from dirty system) $2.00 Rebate !  Inverter Replacement: ~$700/kW at year ~15 $- !  Property Tax 2000 2002 2004 2006 2008 2010 "  Often exempt for original purchaser !  Price Trends 2003-2008 "  Germany & Spain Questions? !  Fire/Loss Insurance !  Price Declines Since 11/2008 and Predictions "  Ask your insurer, sometimes = $0 "  Down ~$1 by 5/2009; Down ~$1.50-$2 by 12/2009, but varies Questions? © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 22 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 23
  • 7. Incentives Performance Related Incentives !  Feed-In Tariffs !  Types of Performance Related Incentives: !  PBIs & RECs "  FITs – Feed-In Tariffs "  PBIs – Performance Based Incentives !  Rebates "  SRECs – Solar Renewable Energy Certificates !  Tax Benefits & Issues !  Incentives paid for actual kWh produced !  Net Metering (in Electric Rates section) "  Missed production reduces incentive received "  Motivates attention on the system !  For incentives in other states see the "  Monitoring – A Must! DSIRE database: www.dsireusa.org © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 24 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 25 Residential Incentives FITs: Feed-In Tariffs !  FITs are the only ongoing payment for owning the system "  No Net Metering savings (no savings on the electric bill, which makes FITs different from PBIs and SRECs) "  FITs do combine with the Federal Investment Tax Credit !  Very popular in Europe, Ontario. Becoming popular in U.S. (FL,VT, … national?) !  Risk losing Net Metering © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 26 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 27 Commercial Incentives PBIs & RECs !  PBI: Performance Based Incentive !  REC: Renewable Energy Credits (Green Value - more later), usually called SRECs !  Paid in addition to Net Metering savings on the bill (which makes them different from FITs) © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 28 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 29
  • 8. Residential Incentives © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 1 Commercial Incentives © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 2
  • 9. SRECs, Green Tags, TRCs REC / SREC Value !  SRECs = Solar Renewable Energy Credits/Certificates !  TRC = Tradable Renewable Certificates !  SRECs have value to other consumers !  Green Tags = RECs = TRCs = SRECs "  Those who can’t/won’t get solar directly #  Green-e Certified RECs: www.green-e.org !  What are these? "  Utilities who need to get into compliance with "  The green value part of a solar kWh government RPS requirements "  The legal rights to greenness Electricity (kWh) #  Programs or government authorized trading boards Generating Plant !  Value ranges from 1¢ to 68¢/kWh (kWh) "  Depends on location, type & term "  Depends on state mandate for S-RECs Green Tags (kWh) © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 30 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 31 Residential Incentives Rebates !  Up-Front Reductions in System Cost !  Rebates are paid in addition to savings on the bill "  Typically received 30-120 days after inspection © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 32 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 33 CSI PBI: CSI EPBB Rebate Performance Based Incentive !  EPBB: Expected Performance Based Buydown "  Adjusted for Expected Performance: !  Paid for all kWh produced for first 5 years #  Tilt, Orientation, Shading, Location, Module "  Actual performance (risk) Temperature (due to lack of air flow) !  Does not reduce upfront cost (in lieu of rebate) #  EPBB Design Factor Calculator: www.csi-epbb.com #  Design Factor allows up to 100% of base incentive "  Still get savings on electric bill "  Upfront payment to reduce initial cost !  Monitoring requirements: Add’l 2% accurate "  Popular option for systems under 30kW "  Add’l cost ~$30/mo + $1,000-$2000 for meter !  Energy Efficiency Audit required !  Option for systems up to 30kW !  Only CSI incentive for systems over 30kW !  Meter Required: Inverter built-in (5% accurate) is ok Questions? © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 34 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 35
  • 10. CSI Trigger Tracker Step Statewide MW in Step EPBB Payments (per Watt) Residential Commercial Government / PBI Payments (per kWh) EPBB Payments (per Watt) Residential Commercial Government / Tax Benefit Overview PBI Payments (per kWh) Non-Profit Non-Profit 1 50 n/a n/a n/a n/a n/a n/a Government Government 2 70 $2.50 Statewide $2.50 $3.25 $0.39 $0.39 $0.50 Step Residential Commercial / Residential Commercial / !  State Tax Credits 3 100 $2.20 $2.20 $2.95 $0.34 $0.34 $0.46 4 130 $1.90 MW in Step $1.90 $2.65 $0.26 $0.26 $0.37 5 6 160 190 $1.55 $1.10 $1.55 $1.10 $2.30 $1.85 $0.22 $0.15 $0.22 $0.15 $0.32 $0.26 Non-Profit Non-Profit 7 8 215 250 1 $0.65 $0.35 50 $0.65 $0.35 $1.40 $1.10 n/a $0.09 $0.05 $0.09 $0.05 $0.19 $0.15 n/a n/a Federal Investment Tax Credit (ITC) & 1603 !  n/a n/a n/a 9 285 2 $0.25 70 $0.25 $0.90 $2.50 $0.03 $0.03 $2.50 $0.12 $3.25 $0.39 $0.39 $0.50 10 350 3 $0.20 100 $0.20 $0.70 $2.20 $0.03 Issued $0.03 $0.10 $2.20 $2.95Treasury Grant $0.34 $0.34 $0.46 Unused MW Revised MW 4 Step in Step130 Previous Total MW in Reservation Remaining Customer Current Initial MW $1.90 Conditional MW $1.90 $2.65 $0.26 $0.26 $0.37 !  Federal & State Depreciation Administrator from Under Class * Steps Step Review 5 7 Residential 31.00 160 0.99 31.99 $1.55 (MW) Letters 27.38 4.61 $1.55 6.40 $2.30 $0.22 $0.22 $0.32 PGE Non- 6 8 Residential 73.20 190 2.18 75.38 $1.10 14.61 60.76 $1.10 12.85 $1.85 $0.15taxable entities (not schools, !  Only apply to $0.15 $0.26 Non- 7 215 1.89 $0.65 $0.65 $1.40 $0.09 $0.09 $0.19 Residential 5 24.30 0.37 24.67 11.78 12.89 1.49 SCE Residential 8 7 Residential 7 66.30 7.30 250 0.20 68.19 7.50 $0.35 37.96 5.53 30.23 1.96 21.99 $0.35 0.81 $1.10non-profits, gov’t, etc) $0.05 $0.05 $0.15 CCSE 9 7 14.80 285 3.22 18.02 $0.25 $0.25 $0.90 $0.03 $0.03 $0.12 Non- 15.90 2.12 1.59 Residential Trigger Tracker website: 350 10 http://www.csi-trigger.com As of 10/9/10 $0.20 $0.20 Disclaimer: I’m $0.03CPA or lawyer, and am not providing $0.70 not a $0.03 $0.10 Program Data & Statistics: http://csi.powerclerk.com tax advice. Seek qualified professional help © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 36 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 37 Residential Incentives State & Local Tax Incentives !  Tax Credit vs. Tax Deduction "  E.g.. HI: 35% State ITC NY: 25% State ITC up to $5K or 10kW "  !  In practice, worth about 65-80% of face value due to reduced federal deduction of the now reduced state taxes "  Effectively “federally taxed” !  Property Tax Exemption: CA - Com & Res to 2016 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 38 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 39 Federal Investment Federal Investment Tax Credit - Residential 2009+ Tax Credit - Commercial !  30% Investment Tax Credit (ITC), Sect 25D !  30% Investment Tax Credit - Extended 10/2008 "  No Cap (unlimited) "  Must be “placed in service” during 2006-2016 "  Residential not eligible for conversion to "  10% if installed 2017+ “Section 1603 Treasury Grant” treatment “There is no feast which does not come to an end.” - Chinese proverb ! !  Systems “placed in service” in 2009-2016 !  IRS Form 3468 (Sect 48 of Internal Revenue Code) !  IRS Form 5695 !  Unused credit can be carried forward 20 years !  Received on “next year’s” tax return (1 year delay) !  Commercial !  Unused credit can be carried forward thru at least 2016 "  Including home businesses > 20% sqf - with caution !  Not limited by AMT (Alternative Minimum Tax) !  Not limited by AMT (Alternative Minimum Tax) !  Important negative tax interaction with Rebates !  Vests at 20% per year (over 5 years) © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 40 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 41
  • 11. CSI Trigger Tracker EPBB Payments (per Watt) PBI Payments (per kWh) Step Statewide MW in Step Residential Commercial Government / EPBB Payments (per Watt) Residential Commercial Government / Non-Profit Non-Profit 1 50 n/a n/a n/a n/a n/a n/a Govern 2 70 $2.50 Statewide $2.50 $3.25 $0.39 $0.39 $0.50 3 100 Step $2.20 $2.20 $2.95 Residential $0.34 $0.34 Commercial $0.46 / 4 130 $1.90 MW in Step $1.90 $2.65 $0.26 $0.26 $0.37 5 6 160 190 $1.55 $1.10 $1.55 $1.10 $2.30 $1.85 $0.22 $0.15 $0.22 $0.15 $0.32 $0.26 Non-P 7 8 215 250 1 $0.65 $0.35 50 $0.65 $0.35 $1.40 $1.10 n/a $0.09 $0.09 $0.05 $0.05 $0.19 n/a $0.15 n/ 9 10 285 350 2 $0.25 $0.20 70 $0.25 $0.20 $0.90 $0.70 $2.50 $0.03 $0.03 $0.03 $0.03 $2.50 $0.12 $0.10 $3. 3 100 $2.20 Issued $2.20 $2. Unused MW Revised MW Administrator Class *4 Step in Step130 Previous Total MW in Reservation Remaining $1.90 Customer Current Initial MW from $1.90 Conditional MW Under $2. Steps Step Review 5 7 Residential 31.00 160 0.99 31.99 $1.55 Letters (MW) 27.38 4.61 $1.55 6.40 $2. PGE Non- 6 8 Residential 73.20 190 2.18 75.38 $1.10 14.61 60.76 $1.10 12.85 $1. Non- 7 215 0.37 $0.65 $0.65 $1. Residential 5 24.30 24.67 11.78 12.89 1.49 SCE 7 66.30 1.89 68.19 37.96 30.23 21.99 Residential 8 7 Residential 7.30 250 0.20 7.50 $0.35 5.53 1.96 $0.35 0.81 $1. CCSE 9 14.80 285 3.22 18.02 $0.25 $0.25 $0. Non- 7 15.90 2.12 1.59 Residential Trigger Tracker website: 350 10 http://www.csi-trigger.com As of 10/9/10 $0.20 $0.20 $0. Program Data & Statistics: http://csi.powerclerk.com © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 3 Residential Rates * Best Rate for Solar if PV is large enough compared to load and depending on consumption and production patterns © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 4
  • 12. 1603 Federal Treasury Grant 1603 Treasury Grant Limitations !  Commercial systems only !  2009-2010 ITC can be converted to Treasury Grant "  Limited to IRC Sec 48 and some Sec 45 !  Section 1603 Grant in ARRA (Recovery Act) !  Same general features and intended functionality as the !  Pass-thru entities (partnerships, LLCs, S-corps) can ITC, but better: use grant, as long as none of the recipients is non- "  Paid < 60 days of “placed in service” or application taxable (and therefore disqualified) "  Usable even if no tax appetite (effectively a refundable ITC "  I.e. One disqualifies all, regardless of small % or Federal Rebate) "  ‘Blocker’ C-Corporations can allow !  Commercial systems only !  Allows transfer of ownership !  “Placed in service” in 2009-2010 only, or !  Recapture of Grant or ITC on permanent cessation "  Construction Initiated 2009-10, completed by 2016 !  May be state taxable in certain cases, see: #  5% non-refundable cost spent by 2010 http://www.reznickgroup.com/sites/reznickgroup.com/files/ !  Treasury application: https://treas1603.nrel.gov/ papers/rg1078_section1603_state_matrix.pdf © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 42 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 43 “Placed In Service” Rebate Tax Interactions SEIA “Guide to Federal Tax Incentives for Solar Energy” Sec 136(b) - No “Double Benefit” Available free to SEIA members at: www.seia.org! !  If the rebate is non-taxable, the federal ITC is on !  Equipment delivered and construction / installation amount after rebate completed! "  Minor tasks like painting need not be finished ! !  If rebate is taxable, then federal ITC is on amount !  Taxpayer has taken legal title and control ! before rebate !  Pre-operational tests demonstrate the equipment functions as intended ! !  CA PV Rebates are not state taxable in CA, not !  Taxpayer has licenses, permits, and PTO (permission sure about other states; check w/ enacting law, local to operate)! SEIA chapter, state energy office © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 44 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 45 Rebate May Be Federally Taxable Rebate Tax Residential Exercise !  1099 tax forms have been issued to recipients !  Section 136(a) of IRS Code: !  Is it better to have a taxable or non-taxable "  ‘Utility (ratepayer funded) direct or indirect rebates residential rebate? for energy conservation for dwellings (i.e.. residential) are not taxable’ !  Why? #  PV is ‘energy conservation’ by precedent !  What does it depend on? !  IRS hasn’t publicly ruled on PV rebates for: "  CCSE & CEC "  Oregon private letter ruling isn’t precedent !  Many residential rebates may be tax exempt because of Section 136, but not necessarily all Info courtesy Mark Bolinger, LBL © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 46 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 47
  • 13. What If: Non-Taxable Rebate? What If: Taxable Rebate? (Residential) (Residential) $100K System Cost $100K System Cost -$20K Rebate -$20K Rebate $80K Net Cost After Rebate +6K Rebate Tax ($20K * 30% Fed Tax)* -$24K Tax Credit Value (30% of $80K)** -$30K Tax Credit Value (30% of $100K)** =$56K Net Cost =$56K Net Cost Rebate Tax Due even if rebate goes to the installer *30% federal marginal tax rate (30% tax bracket) *30% federal marginal tax rate (30% tax bracket) **30% federal ITC rate **30% federal ITC rate © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 48 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 49 Tax Credit Example 1 Tax Credit Example 2 30% Tax Bracket (Residential) 20% Tax Bracket (Residential) Non-Taxed Rebate Taxed Rebate Non-Taxed Rebate Taxed Rebate $100K System Cost $100K System Cost $100K System Cost $100K System Cost -$20K Rebate -$20K Rebate -$20K Rebate -$20K Rebate +$6K Rebate Tax* +$4K Rebate Tax* $80K Net Cost After Rebate $80K Net Cost After Rebate -$24K Tax Credit Value** -$30K Tax Credit Value** -$24K Tax Credit Value** -$30K Tax Credit Value** =$56K Net Cost =$56K Net Cost =$56K Net Cost =$54K Net Cost *30% federal marginal tax rate (30% tax bracket) *20% federal marginal tax rate (20% tax bracket) **30% federal ITC rate Questions? **30% federal ITC rate © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 50 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 51 Tax Credit Example 3 PBI & REC Taxation: Residential 40% Tax Bracket (Residential) Non-Taxed Rebate Taxed Rebate !  PBI probably taxable* "  Would prefer non-taxed PBI, but get full ITC $100K System Cost $100K System Cost "  Otherwise IRS would require NPV of future -$20K Rebate -$20K Rebate PBI payments to calculate reduction in ITC +$8K Rebate Tax* basis? $80K Net Cost After Rebate #  Unknown - How to calculate? -$24K Tax Credit Value** -$30K Tax Credit Value** =$56K Net Cost =$58K Net Cost !  RECs probably also taxable *40% federal marginal tax rate (40% tax bracket) *Suggested by Mark Bolinger, LBL **30% federal ITC rate Questions? Each 1% in tax bracket is worth 1% of the rebate © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 52 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 53
  • 14. PBI & REC Taxation: Commercial Depreciation - Federal !  Depreciation = Commercial tax deduction spread over time MACRS 5-Year Accelerated Depreciation (1/2 yr conv.) !  PBI & RECs probably taxable !  MACRS: Modified Accelerated Cost Recovery System "  !  Section 136 is residential only IRS Form 4562 "  Equivalent of tax deducting system’s ‘basis’ over 5.5 years !  No known commercial exemptions !  Net Value = Basis * Tax Rate Net Value = (System ITC basis - 1/2 ITC) * Tax Rate Net Value = System ITC basis * 85% * Tax Rate !  Regular Schedule: 20%, 32%, 19.2%, 11.52%, 11.52%, 5.76% !  2008-10 Schedule: 60%, 16%, 9.6%, 5.76%, 5.76%, 2.88% "  2008-10 Gets 50% “Bonus Acceleration of Depreciation” !  Commercial only (including home businesses >50% by sqf) !  Up to 20 year carry-forward © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 54 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 55 Depreciation - CA State Financial Hazards & Gotchas !  Corporate: 12 Year Straight Line method !  Federal Tax on Rebate !  Non-Corporate: MACRS 5-Year !  1099 tax forms have been issued to "  (Sole-Proprietors, LLP, etc) recipients !  Section 136 applies only to residential !  State Depr Basis is Top Line Cost minus Rebate & State Tax Credit !  Commercial only (including home businesses) Questions? © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 56 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 57 Rebate Tax Commercial Exercise Tax Credit & Depr. Example Non-Taxed Rebate (Commercial) !  Is it better to have a taxable or non-taxable $150K System Cost commercial rebate? -$50K Rebate !  Why? $100K Net Cost After Rebate !  What does it depend on? -$30K Tax Credit Value (30% of $100K) -$35K Depr Value (85% of $100K * 41%) =$35K Net Cost 41% = combined net federal & state tax rate (35% Federal, 8.84% CA State) © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 58 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 59
  • 15. Commercial Tax Credit & Depr. Example Tax Credit & Depr. Example Taxed Rebate (Commercial) Non-Taxed Rebate Taxed Rebate $150K System Cost $150K System Cost $150K System Cost -$50K Rebate -$50K Rebate -$50K Rebate +17.5K Rebate Tax ($50K * 35% Fed Tax) +17.5K Rebate Tax $100K Net Cost After Rebate -$45K Tax Credit Value (30% of $150K) -$30K Tax Credit Value -$45K Tax Credit Value -$52K Depr Value (85% of $150K * 41%) -$35K Depr Value (85K * 41%) -$52K Depr Value (127.5K * 41%) =$20.5K Net Cost =$35K Net Cost =$20.5K Net Cost If commercial, want rebate taxable (no choice) Then tax credit and depreciation are on amount before rebate "  Worth more to pay tax on rebate, then get 30% credit and "  depreciation on rebate © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 60 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 61 Section 179 Expense Section 179 Not in OnGrid !  Section 179 converts some small business depreciable !  Conflicting language, not 100% clear if available property into 1st year expense (deduction) with ITC or Treasury Grant !  Deduction limit: $500K for 2010 & 2011 !  Few project & customers qualify "  Enhanced in 2010 Small Business Jobs & Credit Act of 2010 "  Must fit within limits & "  Drops to $25K in 2012 (unless extended) "  Aren’t already using it for other property !  Phase-out begins at 4x limit: ~$2,000,000 in 2010-11 !  Can hurt customer too – could cause loss of Sec. "  $1 for $1 reduction, so at 5x, Sect. 179 has no value 179 on other eligible property "  Phase-out basis is sum of all 179 eligible property put in !  Examples that don’t qualify: service in that year "  Already using for other purchases "  If sum > 5x (>$2.5million), then can’t use 179 at all "  Projects over $500K depending are limited !  Can including PV in Home Businesses if >50% "  Phased out if total of all is >$2,500,000 business Rights Reserved. © 2010 OnGrid Solar, All use of asset (ie > 50% of sqf is for Economics of Solar PV - 62 business) !  Kept out of OnGrid to stay conservative © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 63 Small Business Carry-Back of NOL Tax Benefits !  In 2009(+?), small businesses can carry !  ITC & MACRS reduce customer cost, but not back Net Operating Losses up to 5 years up-front "  $15 Million Gross Receipts limitation !  Not available to all customers – MACRS Depr. is affected by AMT "  Normally only 2 year carry-back "  Ask about customers “tax appetite” !  2009 Economic Stimulus "  More in Lease & PPA section !  Customers - beware of optimistic sales claims © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 64 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 65
  • 16. Agenda !  Overview of the Variables "  Costs & Incentives Questions? "  Electric Rate Structures Electric Rate Structures "  System Performance !  Financial Analysis Methods !  Solar Tools !  Interactive Examples © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 66 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 67 Electric Rate Structures Overview Net Metering !  Options for Solar - Net Metering Sell Power to the Utility by Day !  3 Customer Classes (Res, Com, Ag) !  2 Types of Rate (Flat, TOU) "  TOU: Time of Use Buy Power at Night and Winter . !  Demand Charges for Commercial • Exchange at Retail • 100% Efficient Battery • Annual Cycle • $0 minimum bill* © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 68 © 2010 OnGrid Solar, All Rights Reserved. *Different with Calif. AB 920 Economics of Solar PV - 69 Average monthly usage Average monthly usage kWh/mo PV system production kWh/mo PV system production $/mo The surplus covers the shortfall, 750 Roll over 750 and your yearly bill is zero. 500 500 250 250 May October April May October April “SUMMER” “WINTER” “SUMMER” “WINTER” Gets more complicated with TOU and Net Metering and AB920 Slide courtesy Pete Shoemaker, PG&E Pacific Energy Center Slide courtesy Pete Shoemaker, PG&E Pacific Energy Center © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 70 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 71
  • 17. Electric Rate Structures Overview Residential Tiered Rates !  Three Customer Classes Residential only (in !  general) "  Residential, Commercial, Agricultural !  Types of Rate Penalizes larger !  residential users "  Flat: Simple rate, not time or usage dependent "  Tiered: Rates increase with usage Excellent motivator !  of efficiency, "  Time of Use (TOU): Rate varies during day - conservation & PV depends on when energy is used "  Tiered-TOU: Varies with usage & time of day ! Tiers cause Tears - of Joy! "  Demand © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 72 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 73 ! ! ! "#$%&'()!*+,-.#()-+!/0-1#)! ! 2'3-1'0! *+,4!56*!"&''%!7#4 89:99;/! 2#1'<'+0=!*+,-.#()-+!!!!!!!>6!??:;/@! ! *+)A',,-)B 2'3-1'0! *+,4!56*!"&''%!7#4 :?C8;/! ! ! ! ! ! DE5!"FGHI7J! "&''%!C! ! ! ! KE"/LI7/!2/JIG7"! ! ! SCE Baseline ! MG2!N/O/2DI7I7J!KE"/LI7/!P6E7OIOI/"! ! ! ! Territories PG&E Residential Tiered Rates !  Variations: " Locations: 5-10, 13-16 29¢/kWh surcharge Coast to High Desert #  Season: Summer or "  Winter 11¢/kWh " Type: Electric Only or base charge Both Electric & Gas !  Baseline = Tier 1 = 70% of average user’s usage Tiered Rates: !  !  Tier 1 + Tier 2 = Avg "  Base is 11¢/kWh Examples http://www.sce.com/CustomerService/billing/tiered-rates/baseline-chart-map.htm "  Top is 40¢/kWh (Surcharge currently +29¢/kWh for Tier 4) http://www.sce.com/NR/rdonlyres/02FE720D-956D-44C7-B204-D48F830B79CC/0/Baseline.pdf © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 74 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 75 ! ! ! ! ! ! ! >O#!Q'!-)1'(%'0!QR!$%-,-%R@! I11$'0!QR! >O#!Q'!-)1'(%'0!QR!*+,4!56*@! E03-A'!! S?:T;/! EUQ+(!V+W+R'(-! N+%'!M-,'0! "'X!?Y=!SYYZ! ! N'A-1-#)!! YZ;Y:;YS:! [-A'!5('1-0')%! /..'A%-3'! ! ! !"!#$ ! ! 2'1#,$%-#)! ! ! ! NJ Residential Tiered Rates Reverse Tiers !  PA – Allegheny Power : !"#$%&'!"#"(&'!"#")'' Commercial rate "  ! PA – PECO: !"#%*&'!"#$+&'!"#",&'!"#"-'' ! NY – ConEd: !"#%$&'!"#$.'' ! JCP&L "  Base is 16.7¢/kWh "  Top is 22.5¢/kWh ! PSE&G and ACE are also tiered on Residential Examples © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 76 © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 77
  • 18. CSI Trigger Tracker EPBB Payments (per Watt) PBI Payments (per kWh) Step Statewide MW in Step Residential Commercial Government / EPBB Payments (per Watt) Residential Commercial Government / Non-Profit Non-Profit 1 50 n/a n/a n/a n/a n/a n/a Govern 2 70 $2.50 Statewide $2.50 $3.25 $0.39 $0.39 $0.50 3 100 Step $2.20 $2.20 $2.95 Residential $0.34 $0.34 Commercial $0.46 / 4 130 $1.90 MW in Step $1.90 $2.65 $0.26 $0.26 $0.37 5 6 160 190 $1.55 $1.10 $1.55 $1.10 $2.30 $1.85 $0.22 $0.15 $0.22 $0.15 $0.32 $0.26 Non-P 7 8 215 250 1 $0.65 $0.35 50 $0.65 $0.35 $1.40 $1.10 n/a $0.09 $0.09 $0.05 $0.05 $0.19 n/a $0.15 n/ 9 10 285 350 2 $0.25 $0.20 70 $0.25 $0.20 $0.90 $0.70 $2.50 $0.03 $0.03 $0.03 $0.03 $2.50 $0.12 $0.10 $3. 3 100 $2.20 Issued $2.20 $2. Unused MW Revised MW Administrator Class *4 Step in Step130 Previous Total MW in Reservation Remaining $1.90 Customer Current Initial MW from $1.90 Conditional MW Under $2. Steps Step Review 5 7 Residential 31.00 160 0.99 31.99 $1.55 Letters (MW) 27.38 4.61 $1.55 6.40 $2. PGE Non- 6 8 Residential 73.20 190 2.18 75.38 $1.10 14.61 60.76 $1.10 12.85 $1. Non- 7 215 0.37 $0.65 $0.65 $1. Residential 5 24.30 24.67 11.78 12.89 1.49 SCE 7 66.30 1.89 68.19 37.96 30.23 21.99 Residential 8 7 Residential 7.30 250 0.20 7.50 $0.35 5.53 1.96 $0.35 0.81 $1. CCSE 9 14.80 285 3.22 18.02 $0.25 $0.25 $0. Non- 7 15.90 2.12 1.59 Residential Trigger Tracker website: 350 10 http://www.csi-trigger.com As of 10/9/10 $0.20 $0.20 $0. Program Data & Statistics: http://csi.powerclerk.com © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 3 Residential Rates * Best Rate for Solar if PV is large enough compared to load and depending on consumption and production patterns © 2010 OnGrid Solar, All Rights Reserved. Economics of Solar PV - 4