how ^ to bring community solar to your members mark vogt president & ceo wright-hennepin...
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How ^ to bring Community Solar to Your Members
Mark VogtPresident & CEO
Wright-Hennepin Cooperative Electric AssociationRockford, Minnesota
Prepared forOregon Rural Electric Cooperative Association Annual Meeting
December 5, 2013Salem, Oregon
and w
hy
Background about WH
• One of 44 distribution co-ops in Minnesota
• 40,321 members• 61,540 meters• Residential customers = 60%• Renewable Energy Standard
in 2007 – 25x25• Small solar carve out in 2013
Total Days With Sun
WH Service Territory:196 Days
(177-199 Days)
Total Days With Sun
WH Service Territory:196 Days
(177-199 Days)
Salem: 157 DaysPortland: 142 DaysEugene: 157 DaysPendleton: 192 DaysBurns: 214 Days
(142-214 Days)
Total Days With Sun
WH Service Territory:196 Days
(177-199 Days)
Salem: 157 DaysPortland: 142 DaysEugene: 157 DaysPendleton: 192 DaysBurns: 214 Days
(142-214 Days)
Total Days With Sun
179-292Days
WH Service Territory:196 Days
(177-199 Days)
Salem: 157 DaysPortland: 142 DaysEugene: 157 DaysPendleton: 192 DaysBurns: 214 Days
(142-214 Days)
Total Days With Sun
179-292Days
264-313 Days
WH Service Territory:196 Days
(177-199 Days)
Salem: 157 DaysPortland: 142 DaysEugene: 157 DaysPendleton: 192 DaysBurns: 214 Days
(142-214 Days)
Total Days With Sun
179-292Days
264-313 Days
Solar intensity is not anIndicator of solar participation
Oregon vs. Minnesota
• Top Solar Installation States – 20121. California
2. Arizona
3. New Jersey
4. Hawaii
5. Colorado
6. New York
7. Texas
8. Oregon9. Pennsylvania
10. Maryland
Source: Solar Energy International Association Annual Report
Oregon vs. Minnesota
• Top Solar Installation States – 20121. California
2. Arizona
3. New Jersey
4. Hawaii
5. Colorado
6. New York
7. Texas
8. Oregon9. Pennsylvania
10. Maryland
Source: Solar Energy International Association Annual Report
• 5 US Solar Markets to Watch
1. Minnesota2. Georgia
3. DC
4. Louisiana
5. Virginia
Reason:
6. Regulatory landscape
7. State incentives
8. Marketplace acceptance/fundamentals
Source: PV Solar Report 10/23/13
“A clear and present danger”
For the first time ever, a third party
can insert themselves
between our infrastructure and our members
Does this scare you or excite you?
Does this scare you or excite you?
“(Solar) power would give America the potential to challenge the utility monopolies, democratize energy generation and transform millions of homes and small businesses into energy generators.”
Does this scare you or excite you?
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
50,000
100,000
150,000
200,000
250,000
300,000
The Rapid Growth of Rooftop Solar Power
Customers
Does this scare you or excite you?
New Rooftop Solar Systems By Year
Price of power
has increased significantly
in the last decade
• 48% “worry a great deal”• 31% “worry a fair deal”
How much do you worry about affordability of energy?
Source: 2012 Gallup Poll
Lyndon Rive, CEO of Solar City
“We are an energy company. We install solar systems for free,
and we sell the electricity at a lower price
than you can buy it from the utility. More people,
when given the option of paying more for dirty power
or less for clean power
will take paying less for clean power.”
The public is hearing this message
• 82% believe solar will decrease electric energy costs Sharp Electronics
• 83% “strongly favor” or “favor” government mandated solar incentives Gallup
• 87% want home builders to start offering solar power as an alternative
Roper
Sebastopol: 8,000 citizens
Lancaster: 150,000 citizens
• “Based on falling costs of solar and rising electric rates, PG&E, one of the largest utilities in the country…may not be able to compete with residential solar soon.”
• “Once customers go solar, PG&E loses the sales forever, exacerbating the smaller sales/higher price cycle.”
Source: industry think tank The Energy Collective
“WH has to renew our mission with a renewable offering”
• How do we specifically help bring renewable energy into the mainstream for our members?
• How do we do solar without bankrupting the cooperative?– We lose kWh sales– Can we find “substitute revenues/margins”
• How do we make solar work for non participating members?
• How do we make solar work in harmony with the WH grid?
We needed first hand experience
• 2007: 20 KW wind• 2009: 2 KW solar • 2012: 2 KW tenKsolar• 2012: Battery storage• Explored business
models to provide renewables WH gives away the energy each month
WH’s demonstration projects
Community Solar
Win - Win
The Member Wins With Community Solar
• Best economies of scale• Quality control• “Modular” purchasing choices• We will introduce low or no up front cost entry• Optimal placement of panels for best production• Hassle free with tax application/credits built into purchase
process• Ownership moves with you• Available to all• Maintenance free• Long term equipment warranty
The Co-op Can Winwith the Community Solar model
• Opens a way for “substitute revenues/margins”• Non participating members don’t subsidize• No financial risk for co-op – projects are built
only after member commitment• Creates a viable alternative solution to offer
legislators• Best opportunity to make sense of solar
Solar Paired with Battery Storage
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
House Load (KW) Solar PV (KW) Net Usage with Battery
Excess PV when house load is low charges batteries
Batteries discharged during peak reduces total system demand
The Co-op Can Winwith the Community Solar Model
• Opens a way to “substitute revenues/margins”• Non participating members don’t subsidize• No financial risk for co-op - build projects only
after member commitment• Best opportunity to incorporate battery storage• The members view us as the trusted energy
experts• Best defense against third party solar providers
W-H 2013Member Interest
31% “very likely” if offered $0 down Financing
W-H 2013Member Interest
31% “very likely” if offered $0 down Financing31% “very likely” if offered solar through a solar community
W-H 2013Member Interest
31% “very likely” if offered $0 down Financing31% “very likely” if offered solar through a solar community
41% “very likely” if both options were offered.
WH Solar Community Project #1
• 171 panels• 32.5 kW of solar panels• 36 kw of battery storage• Meets MN 40 kW net metering rules• Cost: $4.83/watt with battery• 25 Members participated (1 to 30 panels)• Net $900+/ panel – produces avg 33 kWh credit/mo• Members are credited on electric bill• Payback ~ 20 years (ROI 5-20%/yr based on amount of sunshine)• Worked with Clean Energy Collective of Colorado
Dedication – September 9
• Good will & high compliments from members, legislators, regulators, press– Minneapolis Star Tribune– USA Today– Christian Science Monitor– National Geographic– Widespread industry press
• Unit 2 ready to go – 70% subscribed
Lesson’s Learned• Members want to
participate in solar.• Members would prefer to
be involved in it through their co-op.
• If we don’t offer it, they will take their kWh’s to another provider.
• Solar paired with batteries makes it work for utilities.
• Witnessed first hand the “romance” customers have with solar energy
The Romance With Solar
• Price/payback is not the first consideration
• “Democratization of energy”
• Striking back against the utility
• The independence/pride of ownership with solar
• Controlling your destiny• Doing what’s right for the
environment
Lesson’s Learned• The energy industry is
changing rapidly by forces we don’t control.
• We must act – now --to be prepared for a much different future.
How ^ to bring Community Solar to Your Members
Mark VogtPresident & CEO
Wright-Hennepin Cooperative Electric AssociationRockford, Minnesota
Prepared forOregon Rural Electric Cooperative Association Annual Meeting
December 5, 2013Salem, Oregon
and w
hy