for Solar Brian Haug, P.E.

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1 Making a Stronger Business Case for Solar Brian Haug, P.E.

2 The Challenge for Illinois Corporations Companies want to be more sustainable Yet they also want sustainability to make financial sense Solar is desirable but uneconomic in Illinois i Lack of incentives like in other states Grid kilowatt pricing is low What if there were a way to make solar economic?

is desirable but uneconomic in Illinois i Lack of incentives like in other

3 Cheap power + Cheap SREC = Poor PV Market State Utility Power cost Solar credits Pure solar payback Avg. Cents/kWh SREC/MWh under 8 years California $0 New Jersey 13 $130 Massachusetts 14 $240 Hawaii 33 $0 Illinois 8 $13 Ohio 9 $41 Pennsylvania 10 $43 Texas 9 $0

Cents/kWh SREC/MWh under 8 years California 22 30 $0 New Jersey 13

4 Multi Service i Intelligent t Battery Btt Storage William Pentland, Forbes Magazine

5 Cost Effective Solar Needs a Systems Approach Tax benefits have long been solar s s only ally but may not work effectively with storage Demand charge reductions alone are not cost effective Reducing capacity demand charges requires storage for maximum effect but is not cost effective alone Fast Response Frequency Regulation requires storage and can create a revenue stream but alone is not always cost effective The combination in the correct proportion can unlock savings, generate revenues while reducing your energy spend without compromising performance

effective alone Fast Response Frequency Regulation requires storage and can create a revenue stream but alone is not always cost effective

6 Smart solar generates >twice the py payback than conventional solar Item Monetization Solar + Storage Conventional Solar Energy Bill reduction Capacity power Bill reduction Demand power Bill reduction Fast Response Frequency Regulation for the grid operator TOTAL BENEFITS Payments monthly with PJM Virtual Power Plant aggregation 2 to 3 X 1 X

reduction Demand power Bill reduction Fast Response Frequency Regulation for the grid

7 Conventional Solar PV Facility s power usage Utility

8 Smart Solar = Solar PV + Storage + Network Facility s power usage Solar inverter solar charge discharge Energy Storage System Utility Battery remote control

9 Smart solar generates >twice the py payback than conventional solar Item Monetization Solar + Storage Conventional Solar Energy Bill reduction Capacity power Bill reduction Demand power Bill reduction Fast Response Frequency Regulation for the grid operator TOTAL BENEFITS Payments monthly with PJM Virtual Power Plant aggregation 2 to 3 X 1 X

10 Load Profile Peak demands can be curtailed at pre determined setpoints Overall demand can be mitigated in summer months March 641 kw demand August 840 kw demand Every graph is one month, every line is one day. Every day is cut into 48 half hours.

800 600 700 500 600 500 400 400 300 300 200 200 100 100 0 1 11 21 31 41 0 1 11 21 31

11 Demand Power Consumption = the number that registers on your car s odometer to tell you how far you ve driven Demand is what is captured on your speedometer at the moment when you hit your max speed Consumption is your overall electricity use, and demand is your peak intensity, or maximum speed.

your speedometer at the moment when you hit your max speed Consumption is

12 Demand Power Demand charges are on highest capacity you required during the given billing period, typically a 15 minute interval during that billing cycle.

13 Smart Solar = Solar PV + Storage + Network Facility s power usage Solar inverter solar charge discharge Energy Storage System Utility Battery remote control

14 Smart solar generates >twice the py payback than conventional solar Item Monetization Solar + Storage Conventional Solar Energy Bill reduction Capacity power Bill reduction Demand power Bill reduction Fast Response Frequency Regulation for the grid operator TOTAL BENEFITS Payments monthly with PJM Virtual Power Plant aggregation 2 to 3 X 1 X

15 Peak Load Contribution (PLC) Capacity Charges PJM retroactively identifies top 5 capacity hours of the previous year Customer s s capacity identified on those peak times Basis for next 12 months PLC Usually occur during July September Usually occur during the hours of 3pm to 5pm

capacity identified on those peak times Basis for next 12 months PLC

16 Peak Load Contribution (PLC) Predict when top 5 capacity hours will occur Use stored energy in battery to reduce your demand during that period Top 20 hours are targeted to ensure top 5 are encompassed. Accounts for about 40 hours of battery usage

demand during that period Top 20 hours are targeted to ensure

18 Smart solar generates >twice the py payback than conventional solar Item Monetization Solar + Storage Conventional Solar Energy Bill reduction Capacity power Bill reduction Demand power Bill reduction Fast Response Frequency Regulation for the grid operator TOTAL BENEFITS Payments monthly with PJM Virtual Power Plant aggregation 2 to 3 X 1 X

19 Frequency Regulation h hlflif f i h h The shelf life of a watt is short very, very short. Electricity travels about 186,000 miles per second. As a result, it must be used more or less at the same time it is generated unless it can be stored. The challenges of matching supply and demand in real time have become significantly more complex with the increased deployment of intermittent or variable resources like wind power or solar photovoltaics on the electric grid.

As a result, it must be used more or less at the same time it is generated unless it can be stored.

20 Frequency Regulation with PJM Blue: PJM grid operator service area

21 Frequency Regulation Explained PJM pays to have an instant resource (like a battery) available for Frequency Regulation

22 Grid balancing (frequency regulation) 1) Grid always needs fast response injection and absorption of power 2) Software allocates requests to its virtual power plant every two seconds 3) PJM pays for the aggregate response, seen as a single plant

23 The Numbers PV installed cost Array Size Annual Production (kwh) Battery Size (kwh) Payback (years) Project IRR Project Cost (before 30% ITC) PV only $160, kw 62,328 N/A % $160,000 PV plus battery $160, kw 62, % $440,000

24 Results: ITC, Durability, Multiple Benefits 100 kw/kwh LiOn ESS ~$200, Capturing the tax benefits $280k cost becomes $196k after tax benefits but respecting IRS guidelines requires battery management of its own 3. Stack the benefits A valuable hierarchy but a complex alchemy 2. Shallow cycles Means long battery life Wear on usable bat ttery life cycle es Frequency Regulation Capacity Charge Reduction Demand Reduction 12.00% 10.00% 8.00% $4, % 4.00% 2.00% $15,000 $51,000 total annual benefits $32,000 >1 million 2.5% discharge 0.00% Hours of usage per year

25 Software Value Proposition Utilize battery btt to maximize i solar payback kby determining the best use for its stored energy on a continuous basis Peak Load Reduction Demand Reduction Frequency Regulation

26 Added Benefits Batterycan provide backupfor power outages allowing for proper shutdown of critical systems After payback period d(6 (<6 years), there is a steady revenue stream from Frequency Regulation PLUS owner continues to benefit fitfrom the PV energy for over 25 years No permanent changes to building or operations Batteries are designed for safety with +10 yr life Clean solar energy is good for the community and environment

27 Thank You! Brian Haug Continental Electrical Construction Company 630/

UNDERSTANDING YOUR ELECTRIC BILL

UNDERSTANDING YOUR ELECTRIC BILL A GUIDE FOR BUSINESSES IN North Carolina Duke Energy 550 South Tryon Street Charlotte, NC 28202 www.duke-energy.com 120633 10/12 2013 Duke Energy Corporation 12-1478LU