Us Market Barriers   Permitting Et Al (7 13 11)
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A comprehensive look at the past, present, and future state of solar non-hardware soft cost reduction. "Cutting $500MM of Red-Tape by 2014"

A comprehensive look at the past, present, and future state of solar non-hardware soft cost reduction. "Cutting $500MM of Red-Tape by 2014"

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Us Market Barriers Permitting Et Al (7 13 11) Presentation Transcript

  • 1. Overcoming US Market Barriers to PVPermitting, Interconnection and other soft costs in betweenIntersolar, 7/13/2011
    Doug Payne, SolarTech Executive Director
  • 2. Our Board
    Entire Value Chain
    Systems Approach
    Collaborative Consortium
    Our InitiativesLocal best practices Scalable National impact
    Performance`
    Installation
    Workforce
    Permitting
    Financing
    Interconnect
  • 3. Process + Speed = Scale
    SolarTech Mission– Local Gov’ts, Utilities, Customers, Banks, and Developers grow the market 3x faster through standardization to achieve economies of scale.
    Customer Acquisition
    & Finance
    Permitting, Inspection,
    Interconnection
    Strategy
    • Standardize “Best in Class” processes in customer and project transactions, permitting/inspection interconnection
    Metrics
    • # of Cities, Utilities, Customers, and Banks are using “Best in Class” tools
    • 4. “Think Velocity”  Total project cycle time
    < 60days (Res)
    < 90days (Comm)
  • 5. “To solve a problem,
    one must first understand it”
  • 6. The Industry Pillars – Each play a critical role in achieving Market Evolution
    Policy
    Create Markets
    Products
    Innovation
    Speed, Scale, Efficiency
    Process
    Process efficiencies enable scale
    Get here
    We are here
    Relative % of market share
    Rogers Diffusion of Innovation (1962)
    5
  • 7. Permitting, Inspection, Interconnection: Everyone’s problem, no-one’s problem
    6
    1
    Federal
    National Electrical Code (NEC, article 690)
    50+ x 3
    State Building Codes (Electrical, Structural, Fire)
    State
    18,443 “AHJs” + 3,273 Utilities
    City Building Codes, Policies, FERC (Electrical, Structural, Fire, Fees)
    Local
    AHJs = Authorities Having Jurisdiction
    Forms, Fees, Rates, are ALL different
    $
    $
    Impact extends beyond PV into solar thermal, EE, wind, biomass, etc.
  • 8. “The U.S. vs Germany comparison as an argument for reducing permitting/interconnection costs is flawed.
    The root of these costs can be traced to the inherent structural differences in separation of jurisdictional authority at federal, state, and local government in place since Dec 15, 1791”
    (10th Amendment to the US Constitution, Bill of Rights)
  • 9. The 21st Century US Permitting story…
    The Market
    2006
    Macro-Policy runways
    We’re so busy, what Permit costs?
    2007
    Macro-Policy reigns
    Red-Tape starts to hurt
    2008
    Hey look at GDE!
    Where did all this paper work come from?
    2011
    Message delivered
    It’s all about execution
    2009
    Hard costs decline,
    Process Matters
    Be like “Them”
    2010
    Real market pain
    3-5% lost gross margin
    Fix it now!
    The
    Mess(age)
  • 10. 2010 Installed Capacity (SEIA / GTM)
    So what?
    Distributed PV market was 6-600+MW in 2010
    Permitting, Inspection, Interconnection costs +/- $1.00 / W on average
    $600MM of market friction
    Feb ‘11 SolarTech survey
    75 companies, 74% residential
  • 11. Opportunity Cost of Red-Tape to date(installed MW x $/W soft BoS cost)
  • 12. Lower Permitting / Inspection / Interconnection costs expand the Market, Creates Jobs faster
    Addressable U.S. Rooftop Market for
    Residential Customers(2)
    Tipping point
    $4.25 per Watt
    More Jobs
    Lower Cost
    Avg. res. PV cost in Germany today
    US Today
    Source: ThinkEquity “Think Greentech” Feb 2010. Modified by SunRun (2)
    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 SunRunbenefit.
    11
  • 13. “You don’t know where you’re going until you know where you’ve been”
    - Hitch
  • 14. 2011 “Current State – National Leadership”
    1
    National Electrical Code (NEC, article 690)
    Federal
    Balance of System Costs - up to $15 million over three years
    Codes, Standards and Processes –
    Software Design Tools and Databases
    Regulatory and Utility Solutions
    Rooftop Solar Challenge - up to $12.5 million
    (Local and regional government teams of local governments innovating across)
    Standardizing permitting processes;
    Updating planning and zoning codes;
    Improving interconnection and net metering standards; and
    Increasing access to financing
    State Building Codes (Electrical, Structural, Fire)
    50+ x 3
    State
    18,443 “AHJs” + 3,273 Utilities
    City Building Codes, Policies, FERC (Electrical, Structural, Fire, Fees)
    Local
    AHJs = Authorities Having Jurisdiction
    $
    $
    Forms, Fees, Rates, are ALL different
  • 15. 2011 “Current State of the States – Thought Leaders”
    • DOE’ - Solar Powering Your Community: A Guide for Local Governments.
    • 16. Network for New Energy Choices 2010: Freeing the Grid –State Net Metering Policies,Interconnection Best Practices
    • 17. SunRun - The Impact of Local Permitting on the Cost of Solar Power.
    • 18. Colorado’sFair Permit Act (HB-1199)limits gov’t permit fees, plan review fees and other fees to install a solar system.
    • 19. OregonSolar Installation Specialty Code (OSISC, 10/2010) “Checklist for Prescriptive Photovoltaic Installations”- Model code development, associated checklists
    • 20. Vermont Energy Act of 2011 (H.56) - net metered solar power in Vermont, as well as implementing a pioneering permitting process for small solar systems (< 5 kW)
    • 21. The Center for Sustainable Energy (CSE) - New York City’s Solar Energy Future – Solar Energy Policies and Barriers in NY City)
    1
    National Electrical Code (NEC, article 690)
    Federal
    State Building Codes (Electrical, Structural, Fire)
    50+ x 3
    State
    18,443 “AHJs” + 3,273 Utilities
    City Building Codes, Policies, FERC (Electrical, Structural, Fire, Fees)
    Local
    AHJs = Authorities Having Jurisdiction
    $
    $
    Forms, Fees, Rates, are ALL different
  • 22. 2011 “Current State of a State - CA”
    • The East Bay Green Corridor (EBGC)
    • 23. Mayors of 8 cities (800,000+ residents), Lawrence Berkeley National Lab Director, Chancellor of the UC (Berkeley) - uniform solar energy permitting collaboration w/industry and utilities.
    • 24. Sacramento’s Solar Access
    • 25. Design guidelines, best practices, and education re. solar-friendly zoning, access rights
    • 26. Solar Sonoma County
    • 27. Solar ImplementationPlan across a52 members, nine jurisdictions and the county of Sonoma
    • 28. City of San Diego / CCSE- Progressive fee review, cost-recovery in collaboration w/industry
    VoteSolar “Project Permit”
  • 29. “A little visioning exercise”
    Vision. Action. Destiny.
  • 30. Customer Acquisition, Permitting, Inspection, and Interconnection costs are <10% of DG PV system costs. BoS Process cost reduction curves expand the market 3xby 2017Industry processes achieve scalability to deploy solar without incentives
    17
    “Solar 3.0”TM
    A National Platform for
    Process Innovation
  • 31. Process Efficiency = The last frontier
    A
    B
    Solar1.0
    Solar2.0
    Solar3.0 TM
    Policy (macro)
    Fed Policy
    RES/RPS
    REC’s
    SB1
    CSI
    AB32
    Products
    Technology Innovation
    Maturity
    Processes
    Productivity
    Scale
    “Total Cost of Ownership”
    “Best in Class” tools
    Lower Costs
    Reduced Risk
    Faster Projects
    Better Bottom Line
  • 32. A path towards “Solar3.0”TM
    Phase 2
    Business Innovation
    Phase 1
    Policy Innovation
    Phase 3
    Technical Innovation
  • 33. Phase 1 – Policy Innovation
    Phase 1
    Local Policy Innovation
    Exists. Scale it.
    Improve, then scale
    New
    • Scale, standardize, and drive adoption of initial policysolutions (eg. VoteSolar Project Permit guidelines)
    • 34. Scale adoption of SolarABCs Expedited Permit Standards work to 50% of US <2 yrs
    • 35. Uniform inspection standards for authorities having jurisdiction (AHJ) (example Brooks Engineering checklist)
    • 36. Adopt, Implement, Jointly develop standards at local level
    • 37. A balanced approach to permitting fees
    • 38. Processes for Commercialization, New Technologies
    20
  • 39. Phase 2 – Business Innovation
    One-Stop-Shop for municipal rules, regulations, and building codes, including changes
    Improve consistency in pass/fail criteria, guidance on requirements to ensure approval, industry held accountable. Set standards where:
    Permitting Pass/Fail
    = Inspection Pass/Fail
    = Interconnection Pass/Fail criteria
    Wherever possible, for std systems
    Cost recovery “plus” model
    Industry adheres to State or National standards
    AHJs implement consistent requirements, and better visibility
    Resource gaps covered through incremental fees above current level
    Phase 2
    Business Innovation
    Exists. Scale it.
    Improve, then scale
    New
    21
  • 40. Phase 3 and beyond… Technical Innovation
    • Online Portals – NEC code versions, Fees, etc can inform / drive Federal, State, Local policy
    • 41. Use technology, enterprise S/W, IT to integrate Permitting, Inspection, Interconnection requirements into 1-step, pass/fail criteria
    • 42. Automation to MOVE information
    • 43. Software tools, applications, and systems based on open architectures across Cities, Utilities, Industry
    • 44. Off the shelf solutions, on-line, paperless submittals
    Phase 3
    Technical Innovation
    Exists. Scale it.
    Improve, then scale
    New
    22
    22
  • 45. www.solartech.org/thechallenge
    Regional/Local Governments 
    Utilities 
    Industry 
    Technology 
    Finance
    23
  • 46. CA Solar Challenge -“Google 20%’ers”
    Technology Category – Create a platform for open access to aggregated information related to Permitting, Inspection, and Interconnection requirements at Local levels. Leverage technology to enable process automation through software tools, applications, and IT systems based on open architectures that share and move solar project information between industry, cities, and utilities during the project lifecycle.
    https://sites.google.com/site/solperpublic/
    “Inspired by ”
    24
  • 47. So how does this all fit together?
    National
    DOE / Challenge
    The CA Solar Challenge
    Where local governments, utilities, and industry work on real projects, with less paperwork, at lower prices, and at faster speeds.
    25
  • 48. A National Roadmap for BoS ‘soft’ cost reduction
    • Collaboration through standardization
    • 49. Scalable Permitting, Inspection, Interconnection processes
    • 50. Accelerates Private/Public workflow driven cost reductions for PV
    • 51. Best In Class tools, reduce cycle time and soft costs
    Non-Hdwr BOS
    costs as % of
    Installed Costs
    2012
    2013
    2014
    $27MM / 1,991 = $13,561 per City
    ~1.7% Cost Recovery to date
    <20%
    <30%
    <10%
  • 52. Everyone Benefits
    Cities & Counties
    U.S. Solar Companies
    Utilities
    Create lasting, local jobs
    Economic Development
    A Greener Community
    Revenue grows with volume & tax base
    • Customer service
    • 53. Responsiveness
    • 54. Inspire loyalty
    • 55. Reduce administrative costs, less paperwork
    • 56. Cut red tape by $0.50 / W
    • 57. More lasting local jobs, faster
    • 58. Validate best practices, costs
    • 59. Increase market size
  • Turn the page. A new story going forward.
    Stop comparing US vs. Germany.
    We’re not going to re-write the US constitution, at least not before <$1/Wpmods
    The “Solar3.0 Story” TM
    Chapter 1 - $27MM DOE catalystdrives down BoS soft costs, Challenges Cities
    Chapter 2 - Jobs. Jobs. Jobs.
    Chapter 3 – Leadership – DOE, Cities/States, Utilities, Industry (ALL of us!)
    Chapter 4 – Education – solarabcs.org, solartech.org/thechallenge, votesolar.org
    Chapter 5 – Tell the story, start using the tools, carry the message.
    Chapter 6 - KISS principle – Ex: Start with homes <15kW / 13.44 Wp inv rating,
    <4 strings, code compliant comp roofs, NEC2008, <5lbs/sq ft
    Chapter 7 – Love your NGO(s), State Campaigns, Local Advocates
    Chapter 8 – Investment- Time, treasure, talent and US “Process Infrastructure”
    Standardization isn’t free. Market based solutions are needed NOW!
    Chapter 9 – Innovation (PV+IT<C)
    Chapter 10 – Wealth Creation (A $600M problem becomes a $Billion solution)
  • 60. The bottom line
    US solar market is 18,000 little markets, get over it.
    $600MM of market friction needs to simply go away
    Assuming 1,570MW of Res PV by 2014 (Navigant, conservative est.)
    Permitting is a $1,155MM headache even if it improves 10% / yr
    $27MM of FY11 DOE funding is 10X less than needed
    DC is in budget & political gridlock going into an election
    Cities and States are not going to fund “standardization”
    Market funded “Process / Delivery Systems” barely exist
    Are we so enamored by the need for policy, and our thirst for technology, that we’re losing sight of funding our ability to deliver?
    Is there enough innovation in this space to keep pace with demand?
  • 61. Thank you!
    Doug Payne
    Executive Director, SolarTech
    www.solartech.org
    www.solartech.org/thechallenge
    permitting@solartech.org
    Other resources
    http://www.solarabcs.org/about/publications/reports/expedited-permit/
    http://votesolar.org/city-initiatives/project-permit/