NYC Solar Summit 2013: Breaking Solar Barriers in NYC

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NYC Solar Summit 2013: Breaking Solar Barriers in NYC

  1. 1. NYC Solar SummitJune 4, 2013David Gilford, Assistant DirectorBreaking Solar Barriers in NYC:From Finance to Hot Water
  2. 2. 2 Why solar matters to NYC Financing remains a key barrier Solar thermal in NYC: opportunities and challengesCredit: NYC Mayor’s Office of Long-term Planning and SustainabilityBreaking Solar Barriers in NYCFrom Finance to Hot Water
  3. 3. 3 Clean, distributed energy– Helps reach NYC’s 2030 goal of800MW of new clean DG– Can target particular areas andneighborhoods (e.g., SolarEmpowerment Zones) Economic development– ~$116M economic impact,growing at ~80% per year– Not just panels: labor costs canbe ~50% of the total Looking ahead, other benefits– Resiliency and disaster recovery– Software and data innovationWhy solar matters to NYCBenefits go far beyond sustainability
  4. 4. 4Despite progress in many areas, financing remains a key barrierUpfront costs are a major impediment to solar market growth Capital expense vs. operating expense– Building owners face high upfrontcosts for a long-term return For SunShot Rooftop Solar Challenge,Mayor’s Office and EDC co-chairingFinancing Options working group“Generating reliable and affordable solar energy is both a publicgood and a national goal.A necessary component to achieve this vision is the availability ofscalable, low-cost financing.”(US Department of Energy, SunShot Grand Challenge)
  5. 5. 55A multitude of mechanisms help finance solar PV nationallyType Offered byLoans andcreditenhance-mentCrowd-fundingIssue addressed Description Individual projects gather equity fromcooperative investors for small shares ofownership Investors receive low-yield and do not off-take energy Various programs offer low cost debtfinancing with long term payback periodsfor certain PV projects42CommunitySolar1 Access to low cost equityfinancing Decoupling of systemlocation, ownership andpower off-taking Lower installed cost throughaggregation/economies ofscale Utility or Special Purpose Entity offers aprogram to retail customers to own orpurchase energy/RECs from a locallysited PV system for a premium This program allows customers whowould otherwise be unable a way to“power” their homes with PV Solar Mosaic AbundanceGeneration SunFunder Kickstarter Kiva Sacramento United Power(CO) University Park(MD) Clean EnergyCollective (CO) Solar for Sakai MunicipalCredit Unions PublicinstitutionsSources: 1. BNEF, Extraordinary popular solutions: funding from the crowds, 06/15/122. NREL, A Guide to Community Solar: Utility, Private, and Non-profit Project Development, 11/2012On-billfinancing Several utilities nationwide administerlow-interest loans which are repaidthrough utility bills3 Access to low cost debtfinancing System ownership tied toutility account Publicinstitutions Utilities Access to low cost debtfinancingPPA’s andSolar Leasing Third party companies offer the electricityproduced or leasing of the PV system5  High up-front capital cost Maintenance and service VariousDirectOwnership3rdPartyOwnership
  6. 6. 6Financing solar in NYC has unique challengesStakeholder interviews identified NYC-specific paths forward Nature of NYC projects often makes them more difficult to finance– Many small-to-medium-sized, unique projects– Multiple tenants or owners (e.g., condos) adds complexity, as poweroff-taker is often not the owner To help solve these challenges, existing financing options include:– Reducing customer acquisition costs, by aggregating purchasing (e.g.,“Solarize”)– Bundling projects together, or targeting multi-building projects foreconomies of scale and consistency Emerging options include crowdfunding and community solar– Allows renters and others to make small investments can expand thepool of capital and reduce financing costs Next phase of SunShot Rooftop Solar Challenge will identify opportunitiesto pilot new mechanisms to address these barriers
  7. 7. 7One of the most promisingrenewable energytechnologies: High energy production, lowcapital costs relative to PV Mature, efficient technology Shorter payback period thansolar PV, excluding incentivesNYC is the most favorablemarket in the state for solarthermal: High solar radiation High energy savings potential:DHW accounts for 19% ofenergy consumption Potential to provide up to 75%of hot water needs for anaverage familyA great opportunity… …still poised for takeoff…New York has traileddomestic and global marketsfor solar thermal: Installed capacity per capita inthe United States is 24Wthwhile in New York State it isonly 0.3Wth NYS has 6% of the USpopulation but only 0.008% ofthe solar thermal installedcapacityAlthough arguably morepromising, solar thermalsignificantly lags PV growth: ~50 systems commissioned inNYC vs. 687 PV systems…if barriers are addressed.Obstacles to growth include: Financial− High upfront capital costs− Lack of financing− Limited incentives Technical− Insufficient performancedata− Limited awareness oftechnology and potential− Lack of certifiedprofessionals Regulatory− Complex regulation andhigh transaction costsThe “Other” Solar: Solar ThermalDespite a strong opportunity, solar hot water has lagged PV locally
  8. 8. 8NYCEDC Solar Thermal Pilot set out to identify market potentialGrants led to white paper on opportunities and challenges Announced in 2009, grant programoffered incentives (up to $50K persystem) to commercial and multi-family residential installations Installations took place from 2010-2012, with performance datacollected from diverse projects White paper released June 2013,available for download atwww.nycedc.com/cleantech
  9. 9. 9Key findings show opportunities to scale deployment Pilot suggests strong viability forscaling solar thermal citywide,identifying 4,565 highest-potentialbuildings– Over 20 years, these could yield$200M in energy savings;– Create 1,200 new jobs; and– Reduce emissions by 6 billionpounds Key takeaways from pilot include:– Hot water load matters– Siting and orientation are critical– Incentives are important– Data increases transparency anddrives deployment
  10. 10. 10Thank youDavid GilfordAssistant Director, NYCEDCwww.nycedc.com/cleantechTwitter: @dgilford and @nycedc

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