Energy Savings through Solar Energy for Municipalities · [email protected] Mike Roach...

www.sunvestmentgroup.com © 2014 Sunvestment Group

May 2015

Energy Savings through Solar Energy

for Municipalities

© 2014 Sunvestment Group www.sunvestmentgroup.com

Solar Market Growth – U.S.

US Capacity and Generation: Solar

Source: National Renewable Energy Lab, Renewable Energy Data Book 2013


Source: NYSERDA Power Clerk, Cumulative Capacity 2003 - 2015

Solar Market Growth – NY


Solar Market Pricing Trends


Why Now - Solar Incentives

• NY incentives contribute 15 - 20% of project costs (Cash)

• Federal incentives contribute 30% of project costs (Tax Credit)

• Accelerated Depreciation benefits provide ~ 30% of costs

Incentives Cover the Majority of the Costs of Solar Energy Projects



NY incentives contribute approximately 15 - 20% of project costs:

• NYSERDA Grant (New York State Energy Research and Development Authority)

Megawatt Block Grant - Less than 200 kW system

– $0.60 per watt up to 50 kW, $0.40 per watt 50 kW to 200 kW

– 35% of MW Block 5 Distributed

Megawatt Block Grant - Greater than 200 kW system

– Over $175 Million already distributed in previous programs

– Application Submissions Started May 4, 2015

– First-Come, First-Served Declining Grant Amounts

Must be installed by a NABCEP Certified Solar PV Installer

Funds reserved pre-project



Solar Opportunities in New York

NY-Sun Solar Incentive Program, <200 kW



Federal Incentives contribute 30% of project costs:

• Investment Tax Credit - 30%

Solar system must be in service by 12/31/2016

Credit available Year 1, can be carried forward 20 years

Currently scheduled to be reduced to 10% at end of 2016

• Includes “equipment generating electricity from solar energy, storage devices, power conditioning equipment, transfer equipment, and installation”




Accelerated Depreciation benefits provide approx. 30% of costs:

• Modified Accelerated Cost Recovery System (MACRS)

Business equipment usually depreciated over useful life

Solar property depreciable on accelerated basis over five years (actual useful life is approximately 30-40 years)

More heavily weighted in the earlier years of the five years




Significantly Reduced Net Effective Project Cost

(1) Assumes 39.6% Federal Tax Rate and 7.1 % State Tax Rate

Site Host Proposed Project Size - 200.0 kW Solar Array

Incentives & Benefits based on Investor Tax RatesTurn-key Solar Project Cost Before Incentives $480,000

Less: Incentives & Benefits After Taxes Over the First 5 Years (2)NYSERDA BLOCK 5 Grant - Construction Progress Payments $90,000NYSERDA Grant Tax Impact ($42,030)Federal Tax Credit - 30% of Eligible Project Costs, Available Year 1 $144,000Accelerated Depreciation Savings - 5 Year MACRS Schedule (3) $195,648 Total Incentives & Depreciation Benefits Over First 5 Years $387,618

Net Effective Project Cost After First 5 Years of Incentives $92,382

Total Incentives & Depreciation Benefits as % of Turn-key Cost 80.8%


• Pays for and owns solar array

• Collects payments from host site only for power generated

• Collects incentives:

– Federal Tax Credit: 30%

– Depreciation Benefits

– NYSERDA Grants

• Pays for operations & maintenance

Power Purchase Agreement Provider

Host Site

Solar PPA LLC

Investors

Energy Payments for Energy

Investment funds

Tax Credits Depreciation Free Cash Flow

PPA Financing Structure


Significant Energy Savings Through Power Purchase Agreement

PPA Financing Structure

PPA Illustrative Terms & Assumptions

Current Energy Rate or Monetary Credit Per kWh $0.11

PPA Energy Rate Cost Per kWh $0.08

PPA Savings Per kWh $0.03

Monetary Credit Remote Net Metering Provisions

Available for new meters

Monetary credits can be applied to all utility bill costs

Available through June 1, 2015


Solar Opportunities in New York

• NYSERDA grant - money available now

• Federal 30% ITC drops to 10% if system not installed by 2016. Takes a year for planning, financing, permitting, other

• Cost of borrowing money is at historically low rates

• Modules prices dropped 80%+ over last 5 years, now rising

• Monetary Credits for Remote Net Metering Available through 6/1/15

Why Now? What Would One Lose by Waiting?


Example Project - Madison County, NY

A.R.E. Park

• 2.44 MW • Approx. 12 acres • 8,424 PV modules • Est. Annual Output 2,866,000 kWh • Annual Energy

Offset ~ 70% • Funded in part

with Local Community Investor Funds


Next Steps

• Provide twelve months of utility bills

• RER or others can perform preliminary evaluation at no cost to you

• If interested in moving forward, consider

• Conduct RFP before 6/1/15

• Pursue Professional Services Agreement

• RER can submit NYSERDA Grant Application

• Piggyback in coordination with Madison County process

• Complete 3 week+ Interconnection Application process ASAP


Why is Solar Energy Attractive?

Abundant Long Term Source of Power

– Global energy consumption is growing at a rapid rate: 50% by 2035

– Traditional fuel sources are depleting and can have damaging environmental consequences

– The rest of the world is ahead of the US in developing renewable energy

– The sun provides 10,000 times more energy than we consume yearly

"I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that." --Thomas Edison


Where’s The Sunshine?

The Entire U.S. Has Sufficient Solar Exposure For Solar Systems.

Germany has

Alaska equivalent

sun exposure

levels, and

more solar

(on absolute and

per capita basis)

than any other

country in the

world.


Why Would We Use Solar In The Northeast?

• Solar modules work by producing both Current and Voltage

• Voltage = ƒ(Temperature)

• V as T

• Current = ƒ(Light)

• I as Light

• Best time to harvest sunlight for electricity = Sunny, Clear, and Cold days

Lots of Sunny, Clear and Cold Days


Technology

PV System Overview


Technology

Solar Modules

• Largest single cost in system

• Up to 30% of system cost

• Typically Silicon based cells

• Single crystal, multi-crystal, or amorphous

• Amorphous less efficient

• Glass encapsulate

• Aluminum frame

Requires grounding

Available with black frames

• 25-year warranty is standard

http://us.sanyo.com/solar/index.cfm?productID=1555


Technology

• Convert DC power to AC power

• Efficiencies 94.5-98% conversion

• Battery backup power not standard

• Inverter limits production of system

Inverter selection is very important

Inverter failures are more common than module failures

Inverters


Technology

Roof Mount Racking

Ballasted Roof Mount Standing Seam Roof Mount

Shingle Roof Mount Corrugated Roof Mount


Technology

Ground Mount Racking


Design Considerations

How Much Electricity Do We Need?



• Age and condition of roof

• Obstructions

Vents, HVAC, pipes, etc.

Shade from trees or buildings

• Roofing material (TPO, BUR, EPDM, PVC, Asphalt, SSR, Metal)

• Support structure

• Attachment method

• Topography and soil conditions

– Ground mounts

Site Evaluation


• Southwest to Southeast are acceptable orientations

• South face produces most energy

• West face produces more late day energy

• Flat roofs work well with low tilt angles

• Modules should be tilted at least 10 degree pitch to for proper water runoff


A Solar PV Array Should Maximize Sun Exposure


NREL* Production Estimate

*NREL- National Renewable Energy Laboratory


Monitoring

Production Tracking


Production Tracking

Production Annual Report


• Reduce your electric bill today

• Protection from inflationary energy prices tomorrow

• Increase the value of your property

• The sun’s rays are always free and clean

• Completely sustainable and renewable we have 4,500 million years in reserve

• No byproducts of solar energy, no pollution

• Reduce carbon dioxide emissions produced by burning fossil fuels

• On average 80% of a solar project cost stays in America

• Reduce dependence on foreign oil

• Reduces the electricity demand on the electrical grid during peak times

Additional Benefits

Good For The Environment And The Economy


Company Backgrounds

• Reading Electric founded in 1956

• 55+ employees

• 2000 moved to a 40,000 square foot facility

• 2009 installed 143 kW solar array on own facility

• 2009 formed RER Energy Group – solar developer

• 2013 formed Sunvestment Group – financing platform

• NABCEP Certified Solar Installers

• Serving markets of CT, DE, MD, NJ, NY and PA


Sample Systems Previous Three Years

● Over 20 megawatts (MW) of cost effective energy systems

● Over $22 MM in grants obtained for 75 clients

● Energy produced tracking at 103% of projected generation

Focus on Quality Equipment and Efficient Energy Production


Thank you for this opportunity. If you have any questions, please contact:

Jim Kurtz President, Sunvestment Group

917-304-0762 [email protected]

Walt Pieschke

Solar Project Developer 716-796-1518

[email protected]

Mike Roach Solar Project Developer

315-247-8494 [email protected]

mailto:[email protected]



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