Solar Energy: The Higher Power



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Solar Energy: The Higher Power A Look at Emerging Models for Bringing Climate-Friendly Energy to Communities and Congregations Michael Vickerman March 12, 2014

About RENEW Wisconsin Advocates for state-level sustainable energy policies since 1991 One of the architects of the state s Renewable Energy Standard and ratepayer-funded public benefits program Founded in 1991 Nonprofit funding comes from grants, members Sunny morning (10-21-11) Aldo Leopold Legacy Center Baraboo Installer: H&H Solar Over 250 members (businesses and individual) An organized voice for renewable energy producers and purchasers Please join!

Outline of Presentation Solar development in Wisconsin Clean Energy Choice (a/k/a 3 rd party financing) Attributes Policy landscape City of Monona case study Community solar

Why Solar Energy? Clean, local, widely available and scalable (from a customer s perspective) No fuel cost Only energy resource that turns itself off at night Can be placed anywhere on a utility s distribution system High correlation between daytime peak load conditions and sunshine

My house Solar Is Versatile

Epic Systems, Verona 1.8 MW solar field January 2012 Largest solar array in Wisconsin

This Church Has a Long-Term Future Church of the Resurrection, Pewaukee Installed in 2011 System designer and installer: Sunvest, Solar Possibly a leased system

So Does this House of Worship Lake Country Unitarian Universalist Church Hartland System designer and installer: Sunvest Possibly a leased system

Holy Wisdom Monastery, Middleton 19.7 kw installed by Full Spectrum Solar in 2009 Platinum LEED building http://benedictinewomen.org/care-for-the-earth/leed-certifiedbuilding/green-building-tours/

Why Now? Installed cost has dropped in half since 2008 Federal tax credit in place through 2016 Easiest energy resource to site and scale

Utilities Have Finished Building Required Amount of Renewables, Especially Windpower Left: Butler Ridge Right: Glacier Hills Both projects are along Highway 33 about 40 miles apart

Wisconsin Annual Installations US Annual Installations Wisconsin vs. US History of Success Solar PV Installation Trends 600 500 Annual Solar PV Installations USA 60000 50000 400 40000 300 30000 200 100 WI 20000 10000 0 1998 2000 2002 2004 2006 2008 2010 2012 0 Data from LBNL; Graphic courtesy Jesse Durst, RENEW WI intern

Tougher Sledding in Wisconsin Cuts to Focus on Energy Incentives Discontinuation of special utility tariffs + incentives Harsher net metering service Significant drop in installed costs Unclear picture w/r/t 3rd party financing

Pathways for Advancing Solar Energy Utility-centric Solar carve-out in RES Customer-centric Net metering Clean Energy Choice Partnership w/ utilities Special buyback rates Community Solar

Solar Behind the Meter Host customer continues to receive service from the electric provider Energy from the solar system flows initially into the host customer s building If not consumed on-site, electricity from the solar system may be exported to the grid and sold to the local utility under an approved tariff

What Is Clean Energy Choice? Clean Energy Choice is an arrangement allowing an individual or business to contract with another entity to supply renewable energy from equipment located behind the meter at that customer s premises. Clean Energy Choice is a form of self-generation that involves third-party ownership of the renewable energy production equipment for a defined period of time.

How Customers Benefit from Clean Energy Choice No up-front capital required from host customers Allows nonprofit entities to partner w/ for-profit companies that can use the 30% federal tax credit Helps customers manage energy costs and possibly reduce them over the contract life Third-party owner is 100% responsible for system operation Hugely successful in states that allow it (e.g., California and Colorado) It s your premises, after all

Other Considerations Contracts often allow system host to buy the generating equipment after six years. Third party owner assumes 100% of the installation s financial risk Organic Valley, LaFarge

What Would Legislation Do? Answer: Would allow 3 rd party owners of RE systems located on a customer s premises to sell output directly to legal occupant of that property w/out being regulated as a public utility

3 rd -Party Solar PV Power Purchase Agreements (PPAs) www.dsireusa.org / April 2012 UT: limited to certain sectors VA: see notes AZ: limited to certain sectors At least 21 states + PR authorize or allow 3 rd -party solar PV PPAs Authorized by state or otherwise currently in use, at least in certain jurisdictions within in the state Apparently disallowed by state or otherwise restricted by legal barriers Status unclear or unknown Puerto Rico Note: This map is intended to serve as an unofficial guide; it does not constitute legal advice. Seek qualified legal expertise before making binding financial decisions related to a 3rd-party PPA. See following slides for additional important information and authority references.

Iowa Supreme Court Case Eagle Point Solar v. Iowa Utilities Board Will settle the question of whether energy sales from a behind-the-meter installation to the host customer constitutes utility service. Petitioner says no, IUB + utilities say yes Ruling expected 2Q 2014 If Court finds for the petitioner, Clean Energy Choice becomes policy. Good news for Iowa Interfaith Power & Light! Wisconsin law similar to Iowa on this point

City of Monona PV Arrays City Hall Public Library

Monona s Objectives Meet its energy independence goals (25% renewables by 2025) in a cost-effective manner Avoid ownership, installation, and financial risks Note: Monona could have reached its objectives by participating in MGE s Green Power Tomorrow program, but it would have added costs ($90K in 2014).

The Players Principals: Developer: Solar Connections (Madison) Installer: Full Spectrum Solar (Madison) Equipment: TenKSolar (MN) System owner: Falcon Energy Services (CO) Internal champion: Janine Glaeser (Project Manager) Other key participants: Monona Corporation Counsel: William Cole Monona Mayor: Bob Miller

Project Details Four rooftop arrays 156 kilowatts total, 224,000 kwh/year Buildings: City Hall, Public Library, public service garage, water pumping station Panels will produce 48% of expected electricity demand at the four sites 10% expected demand at all City facilities All four arrays installed in 4Q 2013

Contract Details Structured as a Renewable Energy Credit Service Agreement, not a Solar Power Purchase Agreement Monona buys Renewable Energy Certificates (REC s) from project owner (1 MWh apiece) Electricity is supplied to buildings, but is not paid for 25-year term, but Monona has option to buy equipment after six years Levelized cost of REC is less than present-day cost of electricity from MGE (~11/kWh cents)

Interconnection Hiccups Interface is between utility (MGE) and customer (Monona) MGE s initial position was ownership question not our concern However, high-profile nature of this project triggered increased utility scrutiny On interconnection form, Monona checked the box marked Other MGE delayed interconnection process met w/ Monona + project officials several times MGE reluctantly concluded that under current rules it couldn t deny interconnection to Monona

Lessons Learned Keep a low profile on the project until installation has been interconnected Can t count on utility to allow individual 3 rd -party financed projects w/out a fight Submit interconnection form as early as possible Until Clean Energy Choice becomes official policy, service agreements are preferable to PPA s

Other Potential Hosts for 3 rd Party- Financed Systems Milwaukee County (at MKE airport) City of Madison (at a city park)

Community Solar

Why Community Solar? A 2008 study by the National Renewable Energy Laboratory found that only 22-27% of residential rooftop area is suitable for hosting an onsite photovoltaic (PV) system after adjusting for structural, shading, or ownership issues. Common barriers to installing solar include: Site barriers -- shady roof, structural integrity, zoning restrictions Cost Roof ownership -- maybe you rent your home or business, Ongoing maintenance Community Solar allows people to pool their resources into a shared system that delivers financial payback and educational value, without having to host an installation on their own property.

Midwest Community Solar projects of note Wright Hennepin CEA (MN) 32 kw Partnering w/ Clean Energy Collective Placed in service Sept. 2013 Cherryland Electric Cooperative (MI) 32 kw Members ante in for $470 Receive $2 credit each month (5% return) http://detroit.cbslocal.com/2013/06/09/community-solar-concept-abig-hit-at-michigan-energy-fair/

Clean Energy Grows In Community Solar Gardens By Nora Caley Wright Hennepin Solar Community, Rockford MN Putney Community Solar Array, Putney VT Community solar is a relatively new option for consumers who want to participate in solar energy production but cannot install their own solar panels. The concept is comparable to a community garden, advocates say, in that people who don't have the resources for a garden on their own property can instead buy a share of a plot of land. In a community garden, participants get fruits and vegetables, and in a solar garden, utility customers receive a credit on their electric bills. http://www.solarindustrymag.com/e107_plugins/content/conte nt.php?content.13510

Breaking News!!!! La Crosse, WI - Dairyland Power Cooperative announces new commercial solar project in Westby. 520 kw Operational by June 1, 2014 Owned by Clean Energy Collective (CO) More details at Vernon Electric Cooperative annual meeting (3/22/14) could have elements of community solar

The oldest co-op in Iowa, Farmers Electric Cooperative has a total solar energy capacity of 300 kw with 20 customer-owned solar electric systems from 2 kw to 100 kw connected to its grid. Rendering of FEC s new 750 kw array

Prospects for Solar Gardens in the Midwest Minnesota Required in Xcel territory, voluntary elsewhere; some rural electric co-ops are receptive (two exist) Iowa Voluntary (one exists) Wisconsin Voluntary Likelier in municipal and co-op territory (none exists) Illinois Voluntary (none exists)

What s in the New Minnesota Solar Law Most provisions applicable to IOU s only Solar Standard: 1.5% by 2020 Net metering ceiling: 1 MW (Note: system cannot supply more than 120% of load) Community Solar: Xcel must implement solar gardens program; 3 rd parties can expressly own solar gardens Incentives: Requires Xcel to provide 5 million/yr ($25 million $25 million total) toward customer-owned <20kW systems

A Side-by-Side Comparison PV Capacity (in MW) State 2013 2020 (projected) Minnesota 14 450 (30-fold increase) Wisconsin 14 30 (doubling 11% increase per annum)

Michael Vickerman Program and Policy Director 608.255.4044 mvickerman@renewwisconsin.org www.renewwisconsin.org