2012 Solar Leadership SummitIndustry tipping points – Where do we go from here?Doug PayneCo-founder / Executive DirectorMa...
Day 1                                      Summit at-a-glance                                                             ...
U.S. Solar Market Growth Through 2015• 2012 – We face multiple challenges with fragmented solution paths                  ...
Average Installed System CostsContinue to Decline     SEIA/GTM Research: Q3 2011 Solar Market Insight                     ...
Tipping point - The event of apreviously rare phenomenon becomingrapidly and dramatically more common- Wikipedia
What is “Main St. USA” waiting for?•   Residential PV break-even                                      •     Residential PV...
The people who are crazy enough tothink they can change the world are theones who do.- Apple’s “Think Different” commercia...
The good old “S-curve”                               Addressable U.S. Rooftop Market for            142                   ...
“Solar3.0” - A National Platform for Process Innovation                                              Program Overview     ...
A Market Based approach to accelerate grid parity                  for 46,016,325 people    Solar 3.02012 Target States
Full Summit Report               “Executive Situation Desk”     Finance             Permitting     Installation I, II, III...
Summit Report / Recommendations                                                            FinanceSolution Paths          ...
Summit Report / Recommendations                                                       PerformanceSolution Paths           ...
Summit Report / Recommendations                              Installation I,II, IIISolution Paths                         ...
Summit Report / Recommendations                                         WorkforceSolution Paths                           ...
Summit Report / Recommendations                                        PermittingSolution Paths                           ...
Summit Report / Recommendations                                                 InterconnectSolution Paths                ...
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2012 U.S. solar market soft-cost reduction roadmap

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SolarTech is pleased to share the preliminary results of the 2012 Solar Leadership Summit - A framework aimed at reducing transaction costs for residential and commercial PV across the U.S.

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2012 U.S. solar market soft-cost reduction roadmap

  1. 1. 2012 Solar Leadership SummitIndustry tipping points – Where do we go from here?Doug PayneCo-founder / Executive DirectorMarch 7th, 8th 2012
  2. 2. Day 1 Summit at-a-glance Day 2 WHAT solutions WILL move the U.S. When, where, and how to drive adoption <2015? residential / commercial markets faster? Federal Energy Inside the #’s - Top U.S. Regulatory Commission markets poised for parity • How do we execute and drive adoption? Steps to a sustainable solar future Installation Finance Permitting I, II, III Performance Interconnect Workforce Conversations at the intersection of Energy, Politics, States, and Consumers Installation Finance Permitting I, II, III Scaling Capital to Scale an industry Performance Interconnect Workforce• Top priority issues, tools and markets?• What standards or best practices are ready to scale?• How will they reduce soft costs? Full Summit Report• Which local markets are the best tipping points? “Executive Situation Desk”• What’s missing? • How do we deploy best practices faster to support a Day 1 report out – “Town Hall Forum” subsidy-free / grid-parity distributed PV marketplace?
  3. 3. U.S. Solar Market Growth Through 2015• 2012 – We face multiple challenges with fragmented solution paths PV Installations Forecast 7000 6000 Market Uncertainty 5000 •1603 & Solyndra halos •Trade dispute •Election year POLITICS Megawatts (MWdc) 4000 •Confused Consumers 3000 •Fractured marketplace 2000 1000 0 2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e SEIA/GTM Research: Q3 2011 Solar Market Insight Year Q1 Solar3.0 / Summit Goal Inject stability & Market Direction •Efficient local markets through standards, best practices •Provide lower prices and more predictable transactions to consumers SolarTech Copyright 2012 - All rights reserved
  4. 4. Average Installed System CostsContinue to Decline SEIA/GTM Research: Q3 2011 Solar Market Insight 2012 Summit / Solar3.0 Tipping Points SolarTech Copyright 2012 - All rights reserved
  5. 5. Tipping point - The event of apreviously rare phenomenon becomingrapidly and dramatically more common- Wikipedia
  6. 6. What is “Main St. USA” waiting for?• Residential PV break-even • Residential PV break-even installed price in 2008 assuming installed price in 2015 assuming full retail net metering, state full retail net metering and 30% incentives and 30% ITC. ITC. Source: Denholm, Margolis, Ong, Roberts “Break-Even Cost for Residential Photovoltaics in the United States: Key Drivers and Sensitivities” NREL 12/2009 SolarTech Copyright 2012 - All rights reserved
  7. 7. The people who are crazy enough tothink they can change the world are theones who do.- Apple’s “Think Different” commercial, 1997 How will “Go Solar”? - SolarTech’s “4th Solar Leadership Summit”, 2012
  8. 8. The good old “S-curve” Addressable U.S. Rooftop Market for 142 Residential Customers(1) 250,000 35 30 200,000 MW Addressable for Residential Rooftop 25MegaWatts $27M to # of States with 150,000 20 States achieve Addressable Demand 100,000 scale 15 10 50,000 5 0 0 2012 2011 2010 2009 2008 Total System Price / Watt (1) The residential market sizing by ThinkEquity assumes that solar facilities are purchased by individual homeowners. We have modified the analysis to reflect additional federal subsidies worth $0.50/W from which commercial owners such as SunRun benefit. Source: ThinkEquity “Think Greentech” Feb 2010 SolarTech Copyright 2012 - All rights reserved
  9. 9. “Solar3.0” - A National Platform for Process Innovation Program Overview 1000+ Communities Phase 1 90+ Utilities, 500+ PV Installation Needs Analyses Companies 1600 electrical and code officials trained Phase 2 30,000 industry stakeholders Developmen 8 state target, organic adoption beyond t Phase 3 Implementati on Solar 3.0 Partners: Phase 4 Market ImpactNon-Hdwr BOS 2012 2013 2014costs as % of <30% <20% <10%Installed Costs SolarTech Copyright 2012 - All rights reserved
  10. 10. A Market Based approach to accelerate grid parity for 46,016,325 people Solar 3.02012 Target States
  11. 11. Full Summit Report “Executive Situation Desk” Finance Permitting Installation I, II, III Performance Interconnect Workforce•Top priority issues, tools and markets?•How do we deploy best practices faster to support a subsidy-free/ grid-parity distributed PV marketplace?•What standards or best practices are ready to scale?•How will they reduce soft costs?•Which local markets are the best tipping points?•What’s missing?Wade Crowfoot - Deputy Director, Governor’s Office of Planning & ResearchScott Clavenna - CEO, Greentech MediaNat Kreamer – CEO, Clean Power FinanceDanny Kennedy – President & Founder, SungevityNed Harvey - COO, Rocky Mountain InstituteJurgen Krehnke – President & GM, SMA North America
  12. 12. Summit Report / Recommendations FinanceSolution Paths Execution & Adoption• Working well – Just scale it • Highest priority markets – Existing tax equity sources are trained • C&I market – Debt financing on utility scale markets is • Residential market fairly efficient • Keys to adoption – Lending in residential space doing well • Standardize: Standardize criteria and• Market gaps rating methodology for assessing credit – Participation gap: Less than 5% of risk in Solar assets banks lending to solar plants • Simplify & Amplify: Simplify message to – Tax equity: Limited resource (2 own educate all parties; Take time to become 80%) & lack of transparency credible advocate with regulators and – C&I market: In no-mans land and hence educate utility commissioners scalability an issue • Train: Train banks and rating agencies in the space and increase participation from• Top priorities broader market – Close participation gap in banks; Create Green bank • What are the risks? – Expand scope of tax equity participation • Policy risk: ITC expiring in 2016;Low incentive for new banks to get into tax – Policy to stimulate C&I market (Example: equity market; REIT, Commercial PACE) • Net-metering: 5% cap issue• Impact on soft cost reduction • Scalability risk: Volume needs to – Cost of capital: 200-400 bps premium grow to attract more banks on solar assets (700 bps for tax equity)
  13. 13. Summit Report / Recommendations PerformanceSolution Paths Execution & Adoption• Working well – Just scale it • Highest priority markets – O&M risk manageable, but overlooked • C&I market• Market gaps • California, Texas and New Jersey – Transparency: Lack of transparent • Keys to adoption data in market • Performance data: Trusted 3rd party – Standardization: Need standardized needs to help create standards to build methods for assessing data to reduce transparent performance data from power solar resource risk; Takes long time to plants; Learn from other markets like develop standards Germany and/or require monitoring – Bankability: High degree of subjectivity • Standardization: Standardization of in defining “bankable” product Independent Engineer evaluations; Standardization of communication and• Top priorities monitoring methods – Open access to performance data • Securitization: Transparency needed to – Need to create “best practices” for eliminate technology risk and enable assessing performance of plants securitization of the market – Involve Independent Engineers to help standardize definition on bankability • What are the risks? • Policy risk: ITC uncertainty makes• Impact on soft cost reduction financing long term projects more difficult – $/W impact: Variation in energy yield • Perceived risk : Perceived risk higher leads to increase in system cost (10% than the actual risk of projects. We may over-prediction 10% increase in cost) be leaving money on the table
  14. 14. Summit Report / Recommendations Installation I,II, IIISolution Paths Execution & Adoption• Working well – Just scale it • Highest priority markets – A NEC and I Codes • Solar America cities – B Training • Common priority markets: – C German methods • Residential• Market gaps • Unique priority markets: Commercial rooftop – “Building code requirements” is known, must go faster • Keys to adoption – ‘Lack of ASTM Standard’ is • A Public awareness known, little is being done • B Use ASTM for systems standard – ‘Systems Approach” is over the • C Industry collaboration & horizon leadership• Top priorities – A Education & public awareness • What are the risks? – B Plug-n-Play systems • A Roof failures – C Certification (components & • B Bad PR installers) • C Bad/restricted policy• Impact on soft cost reduction – $0.50 / W, cost of capital (%)
  15. 15. Summit Report / Recommendations WorkforceSolution Paths Execution & Adoption• Working well – Just scale it • Highest priority markets – Industry Driven Workforce • Follow sales and economic Collaboratives demographic/PV demand statistics – State & Federal Certified • Residential market is leading now Programs (eg. Apprenticeships) – Energy Faculty Forum • Keys to adoption• Market gaps • Regional Industry-Driven – Need for training in Finance and Partnerships Sales for Energy Professionals – Miniature/Stackable Credentials • What are the risks? – Interdisciplinary Training • Profitability of “Best Practices” (can• Top priorities best practices sustain themselves?) – Integrate EE and PV/RE into Training Curricula • Impact on soft cost reduction – Standardize Learning Objectives • Quantify Value of Training to and Curricula Employers – Integrate Work Experience- OJT -Apprenticeships
  16. 16. Summit Report / Recommendations PermittingSolution Paths Execution & Adoption• Working well – Just scale it • Highest priority markets – Standardization in pockets • West – Certification—drive adoption • CA, AZ, MA, NJ – Streamlining—SolarABCS, etc. • Identify key cities across U.S.• Market gaps – Known (See Solar3.0 / SunShot) • Keys to adoption• Top priorities • Survey AHJs to gauge training – Training for Permitting Officials requirements – Permit Training for Installers • Survey Industry to identify key – Development of a Toolbox factors to expanding in AHJs – Third Party options as “battery • Utilize DOE leverage to backup” demonstrate viability of options and drive adoption• Impact on soft cost reduction • Utilize technology to expedite – $.50 - $1.00 / W, cost of capital and streamline permitting (10-25%) • What are the risks? • Pushback from jurisdictions • Success
  17. 17. Summit Report / Recommendations InterconnectSolution Paths Execution & Adoption• Working well – Just scale it • Highest priority markets – IREC Freeing the grid • Solar 3.0 top 100 cities – IREC interconnection and net • Regional (SMUD, LADWP, PG&E, SCE) metering best practices guideline • Keys to adoption – Online application SDGE and FLP • Communication - not just to utilities but• Market gaps to PUCs, munis’ and elected officials – Tariff vs. Process and/or sustainability rep – Utilities who have benefited using • Buy-In existing solutions vs. those who • Education - importance of doing it have not correctly, benefits of doing it correctly• Top priorities • Accountability & Transparency – Online application with Software • What are the risks? validation & transparency • Success – Educating applicants, identify people • Fallout from focus group (volunteers). who need help Must have incentive – Marketing campaign to PUCs and • Time is the enemy – need an achievable Munis demonstrating existing time line to achieve success solutions via webinars• Impact on soft cost reduction – Cycle time for on-line application submittals is <5 days, txn costs?

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