utility scale solar - kerinia cusick

0

Georgia Tech Clean Energy Speaker Series: SE Solar Project Development Incentives & Challenges

Kerinia CusickDirector, Government Affairs

May 26, 2010

1Sun Edison LLC - confidential & proprietary. Do not redistribute.

Today’s topics

� Three types of solar – three business models� Drivers and impediments for commercial solar project development� North Carolina case study: SunEdison’s Duke project


Three types of PV, three business models

Commercial/Industrial

UtilitySunEdison, Kohl’s Laguna Niguel, CA

SunEdison, Alamosa, CO

Standard Solar, Silver Spring, MD

Residential


Residential PV: Largely Cash Purchase Business

Residential:

� Historically cash purchase

� Alternative financing models just getting started: PACE and power purchase agreements

� Characterized by upfront incentives

� Higher installation costs, but offsetting highest electricity cost

� Net metered, grid tied systems most common

� Less cost sensitive customer� Key challenges: upfront investment, HOA, complexity for home owner

Standard Solar, Silver Spring, MD


Commercial/Industrial: Dominated by Power Purchase Agreements

Commercial/Industrial:

� 90% of commercial/industrial done via power purchase agreements (PPAs)

� Characterized by output based incentives (PBI, SREC)

� Economies of scale drop installation costs, but offsetting lower electricity rates

� Customer is very cost sensitive

� Provides the benefit of distributed generation

� Interconnected on customer side of the meter

� Roof or ground mount

� Key challenges: financing, net metering

Source: Greentech Media Research, “Solar Power Services: How PPAs are Changing the PV Value Chain”http://www.greentechmedia.com/GreentechMedia/Report/SolarPowerServicesHowPPAsareChangingthePVValueChain.html

SunEdison, Kohl’s Laguna Niguel, CA


Utility Scale: Power Purchase Agreements or Ownership

SunEdison, Alamosa, CO

Utility:

� Ownership models driven by state regulations� Competing against wholesale power rates

� Greatest economies of scale but incurring earthwork and foundation costs� Interconnected on the utility side of the meter� 100% ground mount

� Key challenges: land use, permitting, financing, utility interest, interconnection studies


Solar construction occurring all over the US

CA: 1,102 MWNJ: 128 MW

MA: 18 MWNV: 100 MW

Cumulative solar capacity: SEIA, US Solar Industry Year in Review 2009, April 2010

CO: 59 MW

AZ: 50 MW

FL: 39 MW

NY: 34 MW

HI: 27 MW

CT: 20 MW


MA

WA

OR

UT

MT

ID

CO

WY

ND

NE

KS

IA

MOKY

WV

SD

NV

AR

TX

FL

OK

MN

WI

IN OH

MS ALGA

SC

NC

TN

NH

VT

NJ

CTRI

MDDEIL

PAMI

DC

NM

CA

AK

HI

ME

Solar friendly states in 2010

Solar friendly states beyond 2010

VA

NY

LA

AZ

Solar friendly states on the rise

What makes a state “solar friendly?”

� Renewable Portfolio Standard (RPS): specifies amount of energy that must come from renewable sources by a target year. Some states have specific solar RPS requirements

� Net metering: allows electricity to flow back to the grid when a customer’s generation exceeds usage, offsetting electricity consumed at a different time

� Interconnection standards: set of technical, contractual, metering, and rate arrangement processes by which an electric customer connects an electricity-generating system to the grid


Solar financials driven by more than just insolation levels

Large peak load

Peak/Congestion Charges

Electricity Rates

Solar InsolationLevels

West USNorth East USSouth East US


Benefits of solar

1. Actual SunEdison production data from 200 kW Sun Edison solar installation– August 2008Source: SunEdison team analysis; Illustrative examp le

0

50

100

150

200

250

300

350

400

450

0:00 4:00 8:00 12:00 16:00 20:00

Host load1

Solar electric production

kWac

Time of day

Solar offsets peak power

500 MW Central power

500 MW Central power

800 kWSolar

2 MWSolar

1 MWSolar

400 kWSolar

6 MWSolar

Strained transmission lines

End customer

End customer

End customer

Distributed solar produces power where needed


0

5

10

15

20

25

30

35

Distributed solar supports more jobs than any other energy source

1. Includes upstream manufacturing jobs. Sources: New Enterprise Associates, INEEL, BC Sustainable Energy Association, Renewable Energy Policy Project, SunEdison

Coal Natural gas

Nuclear Tidal

Wind Geothermal Biomass

Solar PV

Num

ber

of jo

bs p

er M

W

Job Creation Potential of Various Electricity Generation Assets 1


Declaring a state open for solar business

Typical market signals required:• State incentive structure that encourages private financing

• Ability to secure long-term contracts

• Market demand (RPS)• Net metering

• Interconnection standards

• Appropriate tax structure• Zoning/permitting standards

• Incentives designed to meet three separate residential, commercial and utility-scale business models

• Allow 3rd party developers


Case study: Duke Energy Davidson County Project, North Carolina

Basic project information: • 17 MW Project/ 354 acres• RFP issued 8/2007• Contract award 5/2008• Broke ground summer 2009• Phase 1 (4 MW) completed 12/2009• Phase 2 – 4 will be complete 12/2010


Steps in getting Davidson County built

1. Permitting/legal2. Engineering3. Financing4. Construction & procurement5. Earthwork6. Foundations7. Electrical8. Interconnection


Davidson County Lessons Learned

• Large projects = long timelines• State tax incentive limits investment, doesn’t encourage it

• Anticipate market/legislative changes

• Utility/developer/legislative/PUC partnership is critical• Create repeatable template

• Maintain tight control over supply chain

• Non issues:– Technology

– Skilled labor


Thank you! Questions?

Kerinia Cusick

[email protected]

443-909-7200

utility scale solar - kerinia cusick

Documents

solar pv

solar financials

solar construction

solar power services

sunedison solar installation

state solar friendly

mw cumulative solar

mw800 kw1 mw solar