Gainesville s Solar Feed-In-Tariff Update and Pricing Objectives. Scott Schlossman Utility Analyst Gainesville Regional Utilities

Transcription

1 Gainesville s Solar Feed-In-Tariff Update and Pricing Objectives September 20, 2010 Scott Schlossman Utility Analyst Gainesville Regional Utilities

2 GRU Background 5 th largest municipal-owned utility in state of Florida Electric, water/ww, gas & telecom services Approx 90,000 electric retail customers Summer Peak of 481MW Conservation-driven & fuel-mix diversification conscious 100MW Biomass PPA in works Healthy-funded rebate programs to encourage energy efficiency Solar Feed-In-Tariff Program Commitment through

3 What is Feed-In-Tariff (FIT)? Fixed price contract to purchase all energy produced from PV system over 20 years Not the same as net metering All energy feeds into distribution grid and no energy consumed on site Requires separate grid interconnection point and supply-oriented meter for system output measurement GRU has implemented European style FIT Offers rate of return for investors Effective Date: March 1, 2009 Capped Capacity at 4MW per year Funded d through h standard d fuel cost recovery charge GRU must monitor cost trends for future price setting 3

4 Why Municipals i Might Prefer FIT IOU s motive is profit for shareholders IOU s earn returns by building power plants and recouping in base rates Munis generally have more liberty to consider other factors when setting rates Munis have fewer regulatory stakeholders to please 4

5 GRU FIT Price Setting Framework- Shift in Perspective 5

6 FIT Program Composition Dynamics 6

7 What are GRU s FIT goals? Accelerate deployment of solar in Gainesville Encourage early private investment/ innovation Promote job growth Achieve renewable energy and carbon reduction goals Balance solar PV as a good investment t for both investors and our ratepayers 7

8 Assumptions Used in Solar Financial Modeling Federal/State Incentives 30% Investment Tax Credit Other Factors Considered Capacity Factor 17% MACRS Accelerated Annual Degradation of 0.60%/yr Depreciation Inverter Replacement-YR 10 Florida state rebate-assumed to be unavailable Annual O&M & Insurance costs ** Base Reference Case for Installed Cost/Watt 8

9 Review of Existing FIT Pricing 2009 & 2010 Roof-Top Systems & Ground (<25kW) Ground-Mount Systems(>25kW) $0.32/kWh Reference Case: Based on Average $7.50 Installed Cost per Watt 1 $0.26/kWh Reference Case: Based on Average $6.10 Installed Cost per Watt 1 1 Installed Cost/Watt Data include all materials, labor and direct costs associated with construction 9

10 $/Watt $8.60 $8.40 $8.20 $8.00 $7.80 $7.60 $7.40 $7.20 $7.00 $6.80 $6.60 $6.40 $6.20 $6.00 $5.80 $5.60 $5.40 $5.20 $5.00 $4.80 $4.60 $4.40 $4.20 $4.00 GRU SOLAR INSTALLED COST DATA Statistically Significant Weighted Average - Removed any outliers falling outside +/- 2 std deviations from mean $8.42 $7.57 $7.81 O 2 O L 0 L D 0 D E 9 E R R SMALL PROJECTS (<10kW) $ LARGE PROJECTS (>10kW) 10

11 Resulting 2011 FIT Pricing i ROOF MOUNTS AND GROUND MOUNTS < 25 kw Break Out Based on System Size Less Than 10kW No Change - $0.32/kWh - based on $7.50/watt Greater Than 10kW Tempered degression at half of observed local cost drop - $0.29/kWh based on $6.75/watt GROUND MOUNTS >25kW National data indicate price trend similar to roof mount systems Tempered degression in proportion with systems >10kW Less Than National Trend $0.24/kWh based on $5.55/watt 11

12 Policy Direction from City Commission GRU customers want more solar Over 70 percent of residential customers surveyed willing to pay $1/month to increase amount of solar Cap of 4MW solar capacity adds approx $0.75 cents/month to average-use residential customer s s bill Must maintain balance between FIT rate paid to solar investors & rate impact on existing GRU electric customers 12

13 FIT s Economic Development & Community Involvement Impact 1,100 MWh solar energy generated since program inception Cost to GRU of $320, disbursed d to 25 different project owners Over $6 million of capital investment made by FIT project owners Increased number of solar contractors in area from one in 2006 to five in

14 2,500 Growth in GRU Solar Capacity Figures represent both GRU Net Metering & FIT Programs Kilo- -watts Inst talled 2,000 1,500 1,000 GRU Installed Solar Capacity After October 2008 GRU Installed Solar Capacity Before October ,185 kw Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct kw Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 14

15 Contact Information: Scott Schlossman Gainesville Regional Utilities (352)