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California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
California solar pres
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California solar pres

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  • 1. CALIFORNIA PV MARKET July 2010 Prepared by: Marc Arza
  • 2. CALIFORNIA PV MARKET US market info (1) PV installed.capacity evolution PV market by state
  • 3. CALIFORNIA PV MARKET US market info (2) PV capacity additions per type PV installed costs evolution Source: US Solar Industry year in review 2009 (SEIA)
  • 4. CALIFORNIA PV MARKET US market info (3) Source: Global PV market outlook until 2014 (EPIA)
  • 5. CALIFORNIA PV MARKET Irradiation info Yearly irradiation Irradiation map
  • 6. CALIFORNIA PV MARKET California market info (1) Renewable Portfolio Standards: — 2010: Electric utilities must generate 20 percent of their electricity from renewable resources. — 2020: Electric utilities must generate 33 percent of their electricity from renewable resources*. *No solar or PV minimums in California.
  • 7. CALIFORNIA PV MARKET California market information (2)
  • 8. CALIFORNIA PV MARKET California market info (3) Yearly PV installed capacity PV market segmentation
  • 9. CALIFORNIA PV MARKET Utilities map California main utilities: - Pacific Gas and Electric Company (PG&E) - Southern California Edison (SCE), - San Diego Gas & Electric (SDG&E). Source: California Public Utilities Commission (CPUC)
  • 10. CALIFORNIA PV MARKET PG&E Average Bundled Rates by Class 2000-10 18,0 17,0 16,0 h 15,0 Residential W k 14,0 Sm/Med Commercial r e 13,0 Lg Commercial/Ind p s t 12,0 Agricultural n 11,0 e Street Lighting C 10,0 System Average 9,0 8,0 7,0 6,0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Residential 10,7 12,8 13,3 13,2 12,7 12,9 14,3 15,2 15,0 16,3 16,3 Sm/Med Commercial 10,2 14,2 15,6 15,7 14,3 14,1 14,5 15,1 14,7 16,4 16,9 Lg Commercial/Ind 7,1 10,6 12,6 12,5 11,3 11,2 11,7 11,5 10,7 12,4 12,6 Agricultural 11,1 13,1 13,7 13,8 11,7 11,8 12,2 12,4 13,2 14,2 14,2 Street Lighting 12,3 16,0 17,6 17,0 15,1 15,0 15,9 17,2 15,6 16,5 16,2 System Average 9,7 12,7 14,0 14,0 12,9 12,9 13,8 14,0 13,7 15,2 15,3 Source: California Public Utilities Commission (CPUC)
  • 11. CALIFORNIA PV MARKET SCE Average Bundled Rates by Class 2000-10 20,0 19,0 18,0 h 17,0 Residential W 16,0 k Sm/Med Commercial r 15,0 e p 14,0 Lg Commercial/Ind s t 13,0 Agricultural n 12,0 e Street Lighting C 11,0 System Average 10,0 9,0 8,0 7,0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Residential 11,5 13,0 13,5 12,8 12,5 12,9 14,8 14,8 15,0 15,5 15,9 Sm/Med Commercial 10,4 13,7 15,8 14,4 13,5 13,6 15,6 15,6 14,6 15,0 15,3 Lg Commercial/Ind 7,7 10,6 12,6 11,2 9,9 10,0 12,3 11,9 10,9 10,7 10,8 Agricultural 8,7 10,6 11,1 9,9 9,4 9,5 10,7 11,3 11,1 10,9 11,5 Street Lighting 13,9 15,8 17,3 15,5 14,7 14,0 15,4 16,9 19,5 19,2 19,2 System Average 10,0 12,5 14,0 12,9 12,2 12,4 14,3 14,3 13,8 14,0 14,3 Source: California Public Utilities Commission (CPUC)
  • 12. CALIFORNIA PV MARKET SDG&E Average Bundled Rates by Class 2000-10 19,0 18,0 17,0 h Residential W 16,0 Small Commercial k r e 15,0 Medium & Large C&I p s t 14,0 Agricultural n Street Lighting e 13,0 C System Average 12,0 11,0 10,0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Residential 11,3 13,7 14,3 14,6 14,3 14,6 15,4 16,0 15,6 18,1 17,7 Small Commercial 11,7 14,0 16,5 16,9 17,2 16,8 15,8 16,8 16,0 18,5 17,7 Medium & Large C&I 11,8 12,1 12,6 12,3 11,8 11,7 11,8 13,2 13,6 15,4 14,2 Agricultural 16,5 15,2 15,5 14,9 14,0 13,8 14,3 15,9 15,6 17,9 17,2 Street Lighting 11,0 12,9 14,9 15,3 16,4 16,1 14,2 15,2 14,7 15,9 15,5 System Average 11,4 12,8 13,6 13,5 13,2 13,3 13,5 14,5 14,5 16,7 15,9 Source: California Public Utilities Commission (CPUC)
  • 13. CALIFORNIA PV MARKET Forecast of electricity consumption Source: California Energy Demand 2010-2020 (California Energy Commissin)
  • 14. CALIFORNIA PV MARKET Energy price forecast - Since 2000 prices have increased on average 6-7% a year. - Future estimations foresee a similar increase in the 2010-2020 period because of three factors: > New infraestructure development > Increase in gas & oil prices > Renewable energy requirements Source: Understanding California Enery Prices (Bloomenergy)
  • 15. CALIFORNIA PV MARKET CAL, NJ & ONT PROMOTION PROGRAMS SUMMARY ELECTRICAL TARIFF PHOTOVOLTAICS PROMOTION PROGRAMS (Average approximation*) (United States) US FEDERAL 30% INVESTMENT 5 YEAR ACCELERATED PROGRAMS TAX CREDIT (GRANT) AMORTIZATION TIME CALIFORNIA CALIFORNIA SOLAR INITIATIVE (0,05$* per Kwh for 5 years) STATE 16,63 cents per kWh. CALIFORNIA FIT (from 0,08 to 0,10 per Kwh in 2010) PROGRAMS SALES TAX EXEMPTION PROPERTY TAX EXEMPTION NEW JERSEY REIP INCENTIVES (<50kW) 1$ per W. STATE 13,35 cents per Kwh. RENEWABLE ENERGY CREDITS (1 per Mwh) ave. Value 588,96$ PROGRAMS SALES TAX EXEMPTION PROPERTY TAX EXEMPTION CAN FEDERAL EcoENERGY REBATES 1 CAN CENT per kWh. PROGRAMS ACCELERATED CAPITAL COST ALLOWANCE (amortization) ONTARIO STATE 7,5 CAN cents per kWh. ONTARIO FIT (from 53,9 to 71,3 CAN cents per kWh on rooftop PV) PROGRAM * Average commercial rates.
  • 16. CALIFORNIA PV MARKET Federal support programs (1) - Business Energy Investment Tax Credit (ITC): - Corporate Tax Credit for 30% of the investment. Credits are available for eligible systems placed in service on or before December 31, 2016: - The credit is equal to 30% of expenditures, with no cap. Eligible solar energy property includes equipment that uses solar energy to generate electricity. - The energy property must be operational in the year in which the credit is first taken. - The American Recovery and Reinvestment Act of 2009 allows taxpayers eligible for the federal renewable electricity production tax credit (PTC) to take the federal business energy investment tax credit (ITC) or to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. The new law also allows taxpayers eligible for the business ITC to receive a grant from the U.S. Treasury Department instead of taking the business ITC for new installations. Source: http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US02F&re=1&ee=0
  • 17. CALIFORNIA PV MARKET Federal support programs (2) - Modified Accelerated Cost-Recovery System (MACRS): - Five year time accelerated amortization period for photovoltaic installacions. - The 5 year amortization will be as follows: Year 1: 30% Year 2: 32% Year 3: 19,2% Year 4: 11,52 Year 5: 11,42% Year 6: 5,76 - Amortization starts when turning on the PV system. Source: http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US06F&re=1&ee=0
  • 18. CALIFORNIA PV MARKET California Solar Initiative (CSI) - Program overseen by CPUC and providing incentives to customers in investor-owned utility (IOU) territories of Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E). - These three utilities represent about 68 percent of California’s electric load. The CSI provides cash back for solar energy systems for existing homes, as well as existing and new commercial, industrial, government, non-profit, and agricultural properties – within the service territories of the three above-listed IOUs. - The CSI has a budget of $2,167 million over 10 years, and the goal is to reach 1,940 megawatts (MW) of installed solar capacity by 2016. - The incentive levels available through the GM CSI Program are divided into 10 "steps". Each step is for a targeted amount of MWs. As the program receives reservations in each step, it works towards the "trigger" when the next step (i.e., a lower incentive l level) is offered. The incentive levels available reduce automatically over the duration of the program based on the volume of MW of solar reservations issued. Source: http://gosolarcalifornia.ca.gov
  • 19. CALIFORNIA PV MARKET California Solar Initiative targets & steps Source: California Solar Initiative Handbook
  • 20. CALIFORNIA PV MARKET California Solar Initiative current step Source: http://csi-trigger.com
  • 21. CALIFORNIA PV MARKET California Solar Initiative incentive structure Source: California Solar Initiative Handbook
  • 22. CALIFORNIA PVMARKET California Solar Initiative incentives Source: California Solar Initiative Handbook
  • 23. CALIFORNIA PV MARKET California Solar Initiative limitations - No project can receive total incentives (CSI plus other programs) that exceed total eligible project costs. Total project costs include: equipment, engineering, construction, interconnection, building permits, maintenance and warranty costs. - Funding will be reserved to applicants for commecial projects for a maximum of 18 months. - Maximum 1MW installations (up to 5MW if prorated). - Funding reservation requires payment of an application fee (non refundable):. Source: California Solar Initiative Handbook
  • 24. CALIFORNIA PV MARKET PV & utilities information
  • 25. CALIFORNIA PV MARKET California Solar Initiative administrative process - CSI works through a five step process: a) Energy efficiency self-audit b) Select solar contractor c) Apply for incentives d) Install the system e) Claim incentives
  • 26. CALIFORNIA PV MARKET Feed-in tariff (FIT) - Due to the low rates offered most PV installations in California are for self-consumption or use net-metering. The California FIT program has not had a real market impact. - All investor-owned utilities and publicly-owned utilities with 75,000 or more customers must make a standard feed-in tariff available to their customers. - Up to 3MW projects for the major utilities (SCE, PG&E and SDG&E). - Contract terms: 10 / 15 / 20 years. - Not compatible with California Solar Initiative (CSI) or any other similar program. - Requires automatic transmition of Renewable Energy Credits (REC).
  • 27. CALIFORNIA PV MARKET Feed-in tariff rates - Prices will be adjusted to Market Price Referent at time of contract and Time of Delivery of the energy* (not inflation indexed). *http://docs.cpuc.ca.gov/PUBLISHED/FINAL_RESOLUTION/111386.htm
  • 28. CALIFORNIA PV MARKET Feed-in tariff rates (PG&E* TOD adjustment table) *http://www.pge.com/includes/docs/pdfs/b2b/wholesaleelectricsuppliersolicitation/Feedin_Tariffs_FAQs.pdf
  • 29. CALIFORNIA PV MARKET PACE (Property-Asessed Clean Energy) - A locally managed program allowing a loan for PV investments (up to 20 years and low interest rate) to be repayed through a property tax increase. The loan is attached to the property and will stay with it in case of a sale. - Any futher specification depends on local government (counties & municipalities). - Available at: *All PACE programs have been temporarily suspended after a statement by the Federal Housing Financial Agency on July 2010.
  • 30. CALIFORNIA PV MARKET Sales tax exemption for solar energy systems - SB 71 of 2010 established an exclusion from the state's sales and use tax for expenses related to the design, manufacture, production, or assembly of renewable energy equipment, in California. - The legislation defines renewable and energy broadly to include "solar, biomass, wind, geothermal, hydroelectricity under 30 megawatts, or any other source of energy, the efficient use of which will reduce the use of fossil and nuclear fuels."
  • 31. CALIFORNIA PV MARKET Property tax exclusion for solar energy systems - Section 73 of the California Revenue and Taxation Code allows a property tax exclusion for certain types of solar energy systems installed between January 1, 1999, and December 31, 2016. - Qualifying active solar energy systems are defined as those that "are thermally isolated from living space or any other area where the energy is used, to provide for the collection, storage, or distribution of solar energy." These include photovoltaic (PV) systems. - System owners should contact the applicable county assessor's office for further information.
  • 32. CALIFORNIA PV MARKET Competitors & business models - A quick look at competitors shows different business models present in the commercial rooftop photovoltaics market. - Analized competitors: > Akeena Solar: http://akeena.com > Borrego Solar: http://borregosolar.com > K2 Solar: http://k2solar.com - Most strong competitors have permanent alliances with both a financial and a roofing contractor partner to boost their operations (Example: K2Solar graphic). - Two basic business models*: a) Full site-host ownership (through lease or other financial tools) c) Power Purchasing Agreement (PPA) *Tax benefits being the main issue.
  • 33. CALIFORNIA PV MARKET Full site-host ownership model
  • 34. CALIFORNIA PV MARKET Business model: Power Purchase Agreement (1)
  • 35. CALIFORNIA PV MARKET Business model: Power Purchase Agreement (2)
  • 36. CALIFORNIA PV MARKET Business model: Power Purchase Agreement (3) - The site host neither owns nor leases the PV system, but instead agrees to buy all of the electricity generated by the system for a specified term, through what is known as a power purchase agreement (PPA). - The project developer either owns (in partnership with it stax investors) or leases (from its tax investors) the system, and is responsible for operating and maintaining it throughout the entire PPA term. - The project developer (and its tax investors) take on the risk that the project does not perform as expected – i.e., the site host only pays for power that is actually generated. As the owners of the project, the project developer and/or its tax investors take all of the project’s tax benefits (and, in effect, pass a monetized portion of them through to the site host in the form of a lower PPA price). - From the site host’s perspective, a PPA feels very much like an operating lease: The primary difference – which reportedly is a major selling point for the PPA10 – is that, under a PPA, the site host is not required to operate and maintain the system, and likewise faces no performance risk. In short, the PPA model effectively provides the site host what it presumably really wants – solar power at an affordable price, rather than solar equipment that it must operate and maintain.
  • 37. CALIFORNIA PV MARKET Business model: Power Purchase Agreement (4) Source: The Solar Group
  • 38. CALIFORNIA PV MARKET Integrated solar company: a model More info at: http://www.k2solar.com/index.php/our-partnerships.html
  • 39. CALIFORNIA PV MARKET Contractors license - Solar contractors need a valid contractors license administered by the California Contractors State License Board. - The C-46 Solar Contractor license covers active solar water and space heating systems, solar pool heating systems, and photovoltaic systems. C-46 requirements include four years of experience and passing the business and law exam and the trade exam. Independent license schools offer courses to prepare for license exams. - Application time: Any application requiring an exam depends on exam scheduling. - A C-39 Roofing Contractor license could also be required for photovoltaic systems installed in roofs. More information: http://www.cslb.ca.gov http://www.cslb.ca.gov/Resources/GuidesAndPamphlets/BlueprintForGettingLicensed.pdf
  • 40. CALIFORNIA PV MARKET Timeline for coming months - Contact Diego Belmonte (consultant) to lear about the market SEP - Prepare an agenda of California contacts to meet during Solar Power - Confirm assistance to Spanish networking breakfast during Solar Power - Meet with California PV market contacts during Solar Power to learn about the market - Attend Spanish networking breakfast during Solar Power OCT - Define a strategy for market penetration - Look for potential partners - Contact potential partners (PV installer/PV professional to start joint venture with) NOV - Prepare a trip to meet potential partners DEC - Visit California and meet potential partners JAN-FEB - Close agreement with partner and start landing MAR-APR - Start operations. Be successful!
  • 41. CALIFORNIA PV MARKET PV industry associations & resources - Solar Energy Industries Association (SEIA): http://seia.org - Solar Electric Power Ass. (SEPA): http://solarelectricpower.org - California Solar Electric Industries Assoc.: http://calseia.org - California Solar Initiative (CSI): http://gosolarcalifornia.org - California Public Utilities Commission: http://cpuc.ca.gov - Database of Solar Incentives for Renewables: http://dsireusa.org - Roofing Contractors Ass. of California: http://rcacal.com

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