September 11 th, 2013 CEFIA Update on Key Initiatives and Programs for Solar Connecticut

Transcription

1 September 11 th, 2013 CEFIA Update on Key Initiatives and Programs for Solar Connecticut

2 Agenda General RSIP Update Solarize Connecticut SunShot Initiative, Rooftop Solar Challenge Financing Initiatives Residential: Smart-E Loan, CT Solar Loan, CT Solar Lease Commercial: C-PACE for Solar

3 RSIP Update Step 3 Incentives EPBB (Rebate) $1.75 /W for the 1 st 5 kwptc EPBB (Rebate) $.55 /W for kws over 5 kwptc up to 10 kwptc PBI $.225 /kwh Step 3 Race to the Roof Top (as of September 6 th ) Rebate is at 78% of goal (about 3.0 MWs of 3.8 MWs) PBI is at 48% of goal (about 1.3 MWs of 2.8 MWs) Step 3 Average system cost EPBB (Rebate) under $4.39 /Wstc PBI just over $4.93 /Wstc RSIP Key Total from its inception MWs of applications approved over 12.0 MWs Applications approved over 1,700 Total incentives over $18.3 million Total System Cost over $55.5 million

4 Solarize Connecticut Approximately 3 MW of solar PV contracted across 9 municipalities in Phase 1 and Phase 2 of Solarize Connecticut program (Bridgeport, Canton, Coventry, Durham, Fairfield, Mansfield/Windham, Portland and Westport) Solarize Connecticut is delivering low prices with an average installed cost of approximately $3.70/W in Phase 1 and approximately $3.95/W in Phase 2 Solarize is scaling up this fall 11 municipalities participating in Phase 3 of Solarize Connecticut (Ashford/Chaplin/Hampton/Pomfret, Easton/Redding/Trumbull, Greenwich, Manchester, Newtown and West Hartford) and 10 additional towns expected to participate in Solarize Choice and Solarize Express

5 Solarize Connecticut Solarize is expanding! Solarize Express and Solarize Choice: Solarize Express is a 10-week Solarize program rather than a 20-week Solarize program. Solarize Choice allows communities to select more than one installer with those installers offering a flat discounted base price (quoted as a not to exceed price) for solar. Announcement of Solarize Express and Solarize Choice towns as well as an updated Request for Proposals schedule are forthcoming. Next year, CEFIA hopes to solarize new types of communities including affinity groups or large employers Solarize campaigns for additional technologies, including solar hot water, are being developed CEFIA seeks to make the Solarize Connecticut model available to installers and communities in the coming year in a more open-market fashion Focus groups with solar PV installers to receive further feedback

6 Solarize Connecticut Greater potential with addition of new financing options, making solar more affordable and accessible to homeowners in Solarize communities Smart-E Loans CT Solar Loan CT Solar Lease Solarize Connecticut website, collateral, workshops and general messaging will include greater focus on affordability and accessibility of solar as a result of the availability of financing Solarize Choice, Solarize Express and future phases: Installers offering financing options to homeowners as part of a Solarize proposal should include any costs of offering such financing options in their base pricing and will not be able to include these as adders

7 DOE SunShot Initiative Rooftop Solar Challenge Sun Rise New England Open for Business A Go Solar Connecticut Initiative Reduce Non-Hardware/ Soft Costs and Eliminate Market Barriers; Design & Market Innovative Financing; Replicate & Scale Best Practices; EM&V Partners: CEFIA, Solar CT, Yale, UConn, Simply Civic, CL&P, UI, DEEP, solar PV installers, expert consultants, CT jurisdictions Bridgeport Cornwall Coventry Danbury Fairfield Greenwich Hampton Manchester Middletown Milford Stamford West Hartford

8 Sun Rise New England Residential Solar PV Soft Costs in Connecticut CEFIA 2012 CEFIA 2012 Non- Solarize CEFIA 2012 Solarize CEFIA 2013 CEFIA 2013 Non- Solarize CEFIA 2013 Solarize Germany 2011 SunShot Initiative 2020 Target Soft Cost Hardware Cost Total Cost

9 6 Sun Rise New England Residential Solar PV Cost Reduction Opportunity 5 Installation Cost and Cost Reduction Potential ($/W) Total Cost Non- Solarize 2013 Solarize Impact Permitting cost reduction Interconnection Workman's Comp Insurance Remaining cost Germany cost SunShot 2020 Target

10 Sun Rise New England Municipal Permitting Best Practices Make information available Streamline application submission Adopt the CT Standardized Solar PV Permit Application Simplify the application process one department responsible, reduce steps and unnecessary requirements Adopt online permitting (ViewPermit, CityView, Simply Civic, others) Waive or reduce fees and allow for payment electronically or by mail Streamline review and inspection train staff; remove excessive reviews; conduct single inspection at specific time Shorten permit approval times Adopt a solar friendly ordinance permitting; planning & zoning

11 Sun Rise New England State-level Recommendations Recommend permit fee waiver or cost recovery fee with cap for Class I renewable energy projects, with a $200 cap for residential solar PV Allow electronic wet stamps so that engineer or architect approved plans do not have to be delivered in person Consider reducing the mandatory permit decision deadline from 30 days to 14 days Develop and offer free solar PV training for building officials Improve the state building code to include a provision for solar-ready construction and allow for stretch codes Enact solar access laws PURA reconsider external disconnect switch requirement

12 Sun Rise New England Pilot and Implement Tools and Improvements We need your help to pilot and implement Sun Rise New England Project Report CT Rooftop Solar PV Permitting Guide CT Standardized Solar PV Permit Application, permitting recommendations, model ordinance, other resources Online permitting Online map rating solar readiness of CT towns State-level recommendations Financing products/programs For information or to contact us:

13 Reintroduction to Residential Financing Products

14 Which option is right for your customers? What Makes It Special? Own Your Solar? Down Payment? Smart-E Loan CT Solar Loan CT Solar Lease Quick and easy financing from your local bank Low monthly payment makes purchasing solar affordable Hassle- and worry-free, no money down Yes Yes No (option to purchase) Not required Minimum of 5% of installed cost Not required if installed cost $4.50/W Terms 5-12 years 15 years 20 years

15 Smart-E Loans Reintroduction to Smart-E Loans

16 What are Smart-E Loans? Smart-E is a residential loan product for CT homeowners with FICO scores 680* and DTI 45% to access long-term, low-interest financing for energy improvements through participating credit unions and community banks with no money down * Some participating credit unions and banks will lend to homeowners w/credit scores 640

17 Smart-E Loan Representative Cash Flow Term Length 12-year Not-to-Exceed Rate 6.99% Down Payment Required $0 Loan Amount (7 $4.40/W) $20,950 ITC Value $6,285 Est. Monthly Payment $215 Est. Net Cost (1 st Month) $110

18 (savings) Smart-E 12 Year Loan: Annual Cash Flows $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $1,000 $2,000 Value of ITC helps cover net payments due over 12 year term (25 years)

19 Smart-E Lenders CorePlus FCU Eastern Savings Bank Liberty Bank Naugatuck Savings Bank Nutmeg FCU Patriot National Bank Quinnipiac Bank & Trust Thomaston Savings Bank Union Savings Bank Note: Approx. availability date for Liberty Bank and Union Savings Bank is end of September 2013 LEGEND: Light green 1 Branch Medium green 2 Branches Dark green 3 Branches

20 Marketing the Smart-E Loan Quick, easy, flexible (can finance EE, too, and up to 20% non-energy measures like roof repair) Local lender, high touch Video online here: CEFIA calculator tool to determine best term/rate for each customer

21 Smart-E Interest Rate Promotion For Smart-E Loans, CEFIA is offering a promotional six-month, 0% interest deal for all customers who finance systems using this product As an example, for a 7 kw system priced at $4.40/W, this deal is equivalent to a discount of about $725 that you can offer your customers

22 Contractor Eligibility for Smart-E Properly licensed for eligible measures Proof of insurance coverage Have attended at least one Smart-E Training Maintain good standing via QA/QC process Contact to become eligible

23 CT Solar Loan Reintroduction to the CT Solar Loan

24 CT Solar Loan The CT Solar Loan is a residential loan product specifically designed for solar, serving homeowners with FICO scores 680 and DTI 45%* with the lowest monthly payments on the road to solar ownership and the greatest long-term return on investment *FICOs 720 no DTI limit/check 24

25 Overview of Solar Loan Loan Terms Interest Rate Term Down payment Terms and Conditions 6.49% per year (assuming tax credit pre-payment of 80% of ITC proceeds) 15 years Minimum down payment of 5% of gross system costs FICO Score 680 Re-amortization Assignability Yes, allowed once within first 18 months Yes, so long as new homeowner meets credit criteria of CT Solar Loan 25

26 CT Solar Loan Representative Cash Flow Term Length 15-year Interest Rate (assuming pre-payment using ITC proceeds) 6.49% Down Payment Required $1,615 Loan Amount (7 $4.40/W) $20,835 ITC Value $6,735 Est. Monthly Payment (1 st Month) $181 Est. Net Cost (1 st Month) $76 Est. Monthly Payment (at time of re-amortization) $119 Est. Net Cost (at time of re-amortization) $8 Note: assumes dealer fee of $1,500

27 CT Solar Loan: Annual Cash Flows $3,000 $2,000 (savings) $1,000 $0 $1,000 Effectively cash flow neutral by year 3 due to lower monthly payments and re-amortization of loan using ITC $2,000 $3,000 (25 years)

28 Marketing the CT Solar Loan Sungage Physical and On-line Assets Installer Training and Support Sungage.net Physical collateral On-boarding Solar Wealth Calculator Solar-Wealth.com Sales Training Weekly Sales Calls Social Media Earned media

29 Contractor Eligibility for CT Solar Loan Contact Sara Ross of Sungage: (617) ext. 706

30 CT Solar Lease Reintroduction to the CT Solar Lease

31 Overview of the CT Solar Lease Solar lease facility combining tax equity and leveraged bank debt $60 million fund overall The first solar lease facility for Residential solar PV (~11MWs, 1,600 systems) Residential solar hot water (~400 systems) Commercial solar PV (~3MWs / systems / kw / needs ZREC / C-PACE) Expected life - two years (if successful more to come) 31

32 Overview of the CT Solar Lease (Residential PV) Competitive solar lease program structure: 20-year lease for homeowners with credit scores 640 and DTI 45% Escalating payments (2.99% per year) or fixed lease available for higher monthly price No money down* Lease payments can be "bought down" or "pre-paid" * If total system cost $4.50/W 32

33 Overview of the CT Solar Lease (Residential PV) Additional benefit to homeowners: Bundled insurance and warranty management from Assurant One-call resolution for all issues Property and casualty coverage Multi-Year Warranty Management Program 33

34 Escalating CT Solar Lease Representative Cash Flow (Residential PV) Term Length 20-year Down Payment Required $0 Est. Monthly Payment (1 st Month) $88 Est. Monthly Savings (1 st Month) $17 Month of First Positive Cash Flow Immediate Note: assumes 7 kw system installed at $4.50/W (including $0.10/W for extended inverter warranty)

35 CT Solar Lease: Annual Cash Flow (Residential PV) $250 Immediately cash flow positive (savings) $200 $150 $100 $50 $0 (20 years)

36 Marketing the CT Solar Lease (Residential PV) The Pitch for CT Solar Lease Go Solar for no money down* Save on your electric bill from day one And lock in predictable bills for years to come Peace of mind through the life of your lease Insurance and warranty coverage bundled in, just one # to call Warranty coverage for full 20 years even if homeowner buys system Protection even if manufacturer or installer (God forbid!) goes out of business The affordable way to go solar Pay a low fixed or escalated monthly payment you choose With the CT Solar Lease it s never been easier to go solar! * No down payment require if total system cost $4.50/W

37 Contractor Eligibility for CT Solar Lease What s Required: CT Solar Lease PV Contractor Application Authorized Signers Form Authorization to Release Information Insurance Certification Workmanship Warranty 6 Year (3% / 1.75% hold-back) Remember: No Charge For Warranty Enhancement AFC First Approved Contractor Agreement Executed CEFIA Holdings LLC Contractor Agreement Registered C-PACE contractor (for commercial PV) AFC First will verify: Credit approval, business history, Better Business rating, customer and trade references 37

38 Comparison of Residential Financing Options (for a 7kW system installed at $4.40/W) Smart-E Loan CT Solar Loan CT Solar Lease Not-to-Exceed Rate 6.99% 6.49% N/A Down Payment Required $0 $1,615 $0 Loan Amount $20,950 $20,835 N/A Term (years) Est. 1 st Month Payment [after re-amortization] Est. 1 st Month Net Cost [after re-amortization] $215 $110 $181 [$119] Assignable No Yes Yes Re-amortization No Yes N/A System performance guarantee Insurance and warranty bundle + lifetime O&M $76 [$8] $88 $17 No Yes Yes No No Yes Note: for lease, assumes an extra $0.10/W for extended inverter warranty

39 CT Solar Hot Water Lease: Setting Expectations Driving demand ~400 installs financed over next two years (vs. 280 over past 4½ years) 2013 old 2013SL2 2014SL2 2015SL

40 CT Solar Hot Water Lease Value Proposition: Savings & "Peace of Mind" How? Marketing through EnergizeCT + compelling collateral "No Money Down" / hassle-free / worry-free lease means immediate savings Monthly lease rate ~$45 including $ for periodic maintenance & insurance Fixed Payment Lease or Escalating Payment Lease (+ option to buy) 15 Year "parts & labor" warranty Property/Casualty & Liability Insurance from Assurant means "no hassle" claims process AET "1-call" system "All-In-One" in Massachusetts $7,200 (2 collector install) - it can be done Lower cost + 15-year Solar Lease makes for attractive "value proposition" Drive larger volume of installs "re-build a market" 40

41 CT Solar Hot Water Lease: Contractor Features Low 15-year lease rates & no money down = SALES 15-year parts & labor plus insurance = no hassle / peace of mind No working capital required solar lease program buys package Multi-Year Warranty Management Program Integrated with 6-year contractor warranty 5% "hold-back" to ensure performance returned at end of 6 th year (with interest) 41

42 CT Solar Hot Water Lease: Contractor Eligibility Meet all CT Solar Lease eligibility requirements Hold appropriate licenses: Any of ST-1 / ST-2 / STC-1 license P-1 licensure encourage but not required Provide company financials Demonstrate training on and experience in installing SHW technology Attend CT Solar Lease equipment training

43 Overview of the CT Solar Lease (Commercial PV) Customers / hosts: Municipalities and schools Must be rated A3 (Moody s) or A- (S&P/Fitch) Commercial properties Must be rated Aa2 (Moody s) or AA (SP/Fitch) OR use C-PACE to secure the investment System Requirements 50 kw nameplate STC preferred smaller projects (particularly if bundled) may be considered on a case by case basis 350 kw nameplate STC larger projects may be considered, but are not preferred due to need for special approval from solar lease fund tax equity investor Only roof mounted systems no ground mount for environmental compliance reasons (possible exception if municipality indemnifies CEFIA) 43

44 Overview of the CT Solar Lease (Commercial PV) Pricing Considerations Must have a ZREC award CEFIA base case model assumes $3.00/W installed cost Pricing under base case: Combined ZREC / PPA income stream should equal $0.18 / kwh e.g. ZREC award of $100 requires PPA of $0.08 / kwh Insurance may affect this pricing contact CEFIA with your potential transactions Assumption of 2.9% escalator per year Higher / lower actual installed costs will get reflected in higher / lower required PPA rates Other Terms Lease / PPA term is 20 years 20-year inverter warranty required No prepaying the lease / PPA CEFIA potentially open to buyout terms on a case by case basis 44

45 Commercial Property Assessed Clean Energy (C-PACE) An innovative financing structure that enables commercial, industrial, and multi-family property owners to access financing for qualified energy upgrades and repay through a benefit assessment on their property tax Private capital provides 100% upfront, low-cost, long-term funding Repayment through property taxes A senior C-PACE lien is put on the property and stays regardless of ownership 45

46 C-PACE Advantage for Owners Near term plan to sell? Lack of funding? Cannot assume more debt? Insufficient payback/roi? Split incentives? Uncertain savings/technical expertise? Tax obligation fixed to property 100% upfront, 20 year financing Assessments may qualify as OPEX Positive cash flow in year 1 Assessment/savings pass to tenants Technical underwriting / SIR>1 46

47 Current C-PACE Municipalities 47

48 C-PACE Website 48

49 Next Steps Become a registered C-PACE installer Visit For commercial projects under the CT Solar Lease fund, CEFIA will work with installer to price individual projects Once installer gets to yes with a potential customer, installer should set up a meeting with CEFIA (and customer, if requested) to finalize documentation, final pricing and closing process benjamin.healey@ctcleanenergy.com or alexandra.lieberman@ctcleanenergy.com to begin the pricing/documentation process 49

50 Questions???

51 Dale Hedman Kerry O Neill Director of Statutory and Infrastructure Programs Director of Residential Programs (860) dale.hedman@ctcleanenergy.com (860) kerry.oneill@ctcleanenergy.com Robert Schmitt Selya Price Associate of Marketing and Outreach Manager, Technology Innovation (860) robert.schmitt@ctcleanenergy.com (860) selya.price@ctcleanenergy.com Ed Kranich Ben Healey Associate, Clean Energy Deployment Senior Manager, Clean Energy Finance (860) edward.kranich@ctcleanenergy.com (860) benjamin.healey@ctcleanenergy.com