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Saving Big On Solar
AN INTELLIGENT APPROACH
ROD
IPM
33%+
Savings
Increase
Know How
Rate Optimized Design (ROD) ensures
that a planned PV system is properly
sized in accordance with customer’s
electricity demand, local electricity
tariffs, and location.
Integrated Project Management (IPM)
minimizes capital requirements for the
PV system, particularly, by cutting the
cost of Balance of System (BoS) or so
called “Soft Cost”.
Together these two result in more
than 33% total savings increase
compared to unoptimized
conventional “turn key” installations.
3/6/2015 ADDINSOLAR.COM
Saving Big On Solar
Tariffs Matter
Cost of solar generated kWh is $0.10-
$0.12, which is less than cost of on-peak
APS tariff ($0.22-$0.27)/kWh but more
than off-peak APS tariff $0.07 kWh.
Intraday period of solar generation differs
from the APS on-peak Time Of Use (TOU),
and APS allows to off-set the on-peak
power only by solar kWhs generated
during the APS on-peak period.
Thus, optimization is to size-position a PV
system so it would supply enough power
for on-peak demand while keeping off-
peak capacity at minimum (Area A = Area
B, Area C → 0 on the Chart).
3/6/2015 ADDINSOLAR.COM
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
0 4 8 12 16 20 24
El.Power,kWh
Time, hour
Net Metered PV System Design Optimization
Solar Power Consumed Power Net Power
A
BC
Off Peak On Peak
Rate Optimized Design
Rate Optimized Design (continued)
COST OF ELECTRICITY DEPENDING ON TARIFF AND
SYSTEM SIZE VARIES BY 53%
COST OF ELECTRICITY DEPENDING ON TARIFF AND
SYSTEM SIZE VARIES BY 126%
3/6/2015 ADDINSOLAR.COM
$3.84
$3.59
$3.20
$2.66 $2.51
32 kWh Daily Electricity Costs
Winter 2014
$9.09
$6.74
$5.05
$4.29 $4.02
51 kWh Daily Electricity Costs
Summer 2014
Rate Optimized Design (continued)
WINTER OPTIMAL ORIENTATION: SW
27% OF SYSTEM CAPACITY IS WORTHLESS
SUMMER OPTIMAL ORIENTATION: W
35% OF SYSTEM CAPACITY IS WORTHLESS
3/6/2015 ADDINSOLAR.COM
15.5
30.5 31.2
25.7
17.4
20.3
11.8
7.7
EAST SOUTH SOUTHWEST WEST
Solar kWh
Generated In A Winter Day
On-peak Solar kWh, save money Off-peak Solar kWh, do not save money
29.3
34.8
38.8 39.4
32.9
27.7 22.6 21.1
EAST SOUTH SOUTHWEST WEST
Solar kWh
Generated In A Summer Day
On-peak Solar kWh, save money Off-peak Solar kWh, do not save money
Maximum Savings
Vs.
Highest Return
A 9-10 kW dc rated system will provide
the highest return on invested capital
(ROI in 15 and 25 years, respectively).
A 13-16 kW dc rated system will
provide maximum savings (NPV in 15
and 25 years, respectively).
Any additional money spent on the
system rated over 13-16 kWdc will be
wasted.
Practically, a 12 kW dc rated system
would be the choice to satisfy more or
less both NPV and ROI criteria.
3/6/2015 ADDINSOLAR.COM
Rate Optimized Design (continued)
15000
10000
5000
0
5000
10000
15000
20000
0 5 10 15 20 25 30
DISCOUTEDSAVINGS,$$
SYSTEM DC RATING, KW
Savings Vs System Rating
Savings in 15 years, discounted $ Savings in 25 years, discounted $
Economic Effect
In 25 years, an optimized PV system
will ensure at least 33% more total
savings from the system cost and
electricity bill than unoptimized one.
The difference is even greater for
shorter terms.
Payout of the optimized system is 9
years vs. 16 years for the unoptimized
one, which is a 44% improvement.
3/6/2015 WWW.ADDINSOLAR.COM
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
$10,000
$20,000
$30,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
npv,dicounted@4%annually
Years
Discounted Cash Flow Projections
Optimized vs Unoptimized PV System
Net Present Value (NPV), $ Optimized System NPV, $
Unoptimized PV System
DC Rating 16 kW
Total Cost $57300
Cost per kWdc $3.60
Cost of kWh $0.13
Optimized PV System
DC Rating 12 kW
Total Cost $33500
Cost per kWdc $2.79
Cost of kWh $0.11
Total Savings Estimate
System Cost
Effect
The cost of electricity generated by a
solar PV system is the most significant
factor affecting system’s economic
output. In turn, solar electricity cost
is determined by the cost of the
installed system.
For instance, APS customers would
need a rate optimized design for any
PV system, cost of which is more than
$1.7 per kWdc.
Systems installed for more than $3.5
per kWdc are unlikely to be
economical for APS customers.
3/6/2015 WWW.ADDINSOLAR.COM
0
5
10
15
20
25
30
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
CostofkWh,cent
Cost of Installed Solar System, $/kWdc
Cost Of Solar Power vs Solar System Cost
6 kWdc 12 kWdc 18 kWdc
APS On-Peak Summer Rate
APS On-Peak Winter Rate
APS Flat Winter Rate
APS Flat Summer Rate
APS Off-Peak Rate
Rate Optimized Design (continued)
Integrated Project Management
DESPITE 15% HIGHER COST OF HARDWARE
AND INSTALLATION LABOR,
ADDIN’ SOLAR IPM SAVES APPX. 30% OF THE
TOTAL SYSTEM COST IN BOTH CASES
3/6/2015 WWW.ADDINSOLAR.COM
7500 8625
2400 0
2750
3162.5
500
500
1500
0
2350
0
2300
0
3050
0
0
3500
0
5000
10000
15000
20000
25000
Median 2014 Price * Addin' Solar Price
COST,$
Cost Structure of a 5 kW System
Total Hardware Cost Customer acquisition
Installation labor Permitting, inspection, intercon.
Transaction cost Indirect corporate cost
Profit Supply chain cost
$4.47/kW *
$3.16/kW
18000 20700
3840 0
6600 7590
1200 1200
3600
0
4560
0
4800
0
5400
0
0
4000
0
10000
20000
30000
40000
50000
60000
Median 2014 Price * Addin' Solar Price
COST,$
Cost Structure of a 12 kW System
Total Hardware Cost Customer acquisition
Installation labor Permitting, inspection, intercon.
Transaction cost Indirect corporate cost
Profit Supply chain cost
$4.00/kW *
$2.79/kW
* Adjusted for Arizona for 2014 NREL and Berkeley Lab data
Addin’ Solar LLC
6424 E Greenway Pkwy Ste 100
Scottsdale AZ 85254
Phone: 480-296-0223
Fax: 480-296-0225
Email: contact@addinsolar.com
www.addinsolar.com

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Saving Big On Solar

  • 1. Saving Big On Solar AN INTELLIGENT APPROACH
  • 2. ROD IPM 33%+ Savings Increase Know How Rate Optimized Design (ROD) ensures that a planned PV system is properly sized in accordance with customer’s electricity demand, local electricity tariffs, and location. Integrated Project Management (IPM) minimizes capital requirements for the PV system, particularly, by cutting the cost of Balance of System (BoS) or so called “Soft Cost”. Together these two result in more than 33% total savings increase compared to unoptimized conventional “turn key” installations. 3/6/2015 ADDINSOLAR.COM Saving Big On Solar
  • 3. Tariffs Matter Cost of solar generated kWh is $0.10- $0.12, which is less than cost of on-peak APS tariff ($0.22-$0.27)/kWh but more than off-peak APS tariff $0.07 kWh. Intraday period of solar generation differs from the APS on-peak Time Of Use (TOU), and APS allows to off-set the on-peak power only by solar kWhs generated during the APS on-peak period. Thus, optimization is to size-position a PV system so it would supply enough power for on-peak demand while keeping off- peak capacity at minimum (Area A = Area B, Area C → 0 on the Chart). 3/6/2015 ADDINSOLAR.COM -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 0 4 8 12 16 20 24 El.Power,kWh Time, hour Net Metered PV System Design Optimization Solar Power Consumed Power Net Power A BC Off Peak On Peak Rate Optimized Design
  • 4. Rate Optimized Design (continued) COST OF ELECTRICITY DEPENDING ON TARIFF AND SYSTEM SIZE VARIES BY 53% COST OF ELECTRICITY DEPENDING ON TARIFF AND SYSTEM SIZE VARIES BY 126% 3/6/2015 ADDINSOLAR.COM $3.84 $3.59 $3.20 $2.66 $2.51 32 kWh Daily Electricity Costs Winter 2014 $9.09 $6.74 $5.05 $4.29 $4.02 51 kWh Daily Electricity Costs Summer 2014
  • 5. Rate Optimized Design (continued) WINTER OPTIMAL ORIENTATION: SW 27% OF SYSTEM CAPACITY IS WORTHLESS SUMMER OPTIMAL ORIENTATION: W 35% OF SYSTEM CAPACITY IS WORTHLESS 3/6/2015 ADDINSOLAR.COM 15.5 30.5 31.2 25.7 17.4 20.3 11.8 7.7 EAST SOUTH SOUTHWEST WEST Solar kWh Generated In A Winter Day On-peak Solar kWh, save money Off-peak Solar kWh, do not save money 29.3 34.8 38.8 39.4 32.9 27.7 22.6 21.1 EAST SOUTH SOUTHWEST WEST Solar kWh Generated In A Summer Day On-peak Solar kWh, save money Off-peak Solar kWh, do not save money
  • 6. Maximum Savings Vs. Highest Return A 9-10 kW dc rated system will provide the highest return on invested capital (ROI in 15 and 25 years, respectively). A 13-16 kW dc rated system will provide maximum savings (NPV in 15 and 25 years, respectively). Any additional money spent on the system rated over 13-16 kWdc will be wasted. Practically, a 12 kW dc rated system would be the choice to satisfy more or less both NPV and ROI criteria. 3/6/2015 ADDINSOLAR.COM Rate Optimized Design (continued) 15000 10000 5000 0 5000 10000 15000 20000 0 5 10 15 20 25 30 DISCOUTEDSAVINGS,$$ SYSTEM DC RATING, KW Savings Vs System Rating Savings in 15 years, discounted $ Savings in 25 years, discounted $
  • 7. Economic Effect In 25 years, an optimized PV system will ensure at least 33% more total savings from the system cost and electricity bill than unoptimized one. The difference is even greater for shorter terms. Payout of the optimized system is 9 years vs. 16 years for the unoptimized one, which is a 44% improvement. 3/6/2015 WWW.ADDINSOLAR.COM $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 $10,000 $20,000 $30,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 npv,dicounted@4%annually Years Discounted Cash Flow Projections Optimized vs Unoptimized PV System Net Present Value (NPV), $ Optimized System NPV, $ Unoptimized PV System DC Rating 16 kW Total Cost $57300 Cost per kWdc $3.60 Cost of kWh $0.13 Optimized PV System DC Rating 12 kW Total Cost $33500 Cost per kWdc $2.79 Cost of kWh $0.11 Total Savings Estimate
  • 8. System Cost Effect The cost of electricity generated by a solar PV system is the most significant factor affecting system’s economic output. In turn, solar electricity cost is determined by the cost of the installed system. For instance, APS customers would need a rate optimized design for any PV system, cost of which is more than $1.7 per kWdc. Systems installed for more than $3.5 per kWdc are unlikely to be economical for APS customers. 3/6/2015 WWW.ADDINSOLAR.COM 0 5 10 15 20 25 30 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 CostofkWh,cent Cost of Installed Solar System, $/kWdc Cost Of Solar Power vs Solar System Cost 6 kWdc 12 kWdc 18 kWdc APS On-Peak Summer Rate APS On-Peak Winter Rate APS Flat Winter Rate APS Flat Summer Rate APS Off-Peak Rate Rate Optimized Design (continued)
  • 9. Integrated Project Management DESPITE 15% HIGHER COST OF HARDWARE AND INSTALLATION LABOR, ADDIN’ SOLAR IPM SAVES APPX. 30% OF THE TOTAL SYSTEM COST IN BOTH CASES 3/6/2015 WWW.ADDINSOLAR.COM 7500 8625 2400 0 2750 3162.5 500 500 1500 0 2350 0 2300 0 3050 0 0 3500 0 5000 10000 15000 20000 25000 Median 2014 Price * Addin' Solar Price COST,$ Cost Structure of a 5 kW System Total Hardware Cost Customer acquisition Installation labor Permitting, inspection, intercon. Transaction cost Indirect corporate cost Profit Supply chain cost $4.47/kW * $3.16/kW 18000 20700 3840 0 6600 7590 1200 1200 3600 0 4560 0 4800 0 5400 0 0 4000 0 10000 20000 30000 40000 50000 60000 Median 2014 Price * Addin' Solar Price COST,$ Cost Structure of a 12 kW System Total Hardware Cost Customer acquisition Installation labor Permitting, inspection, intercon. Transaction cost Indirect corporate cost Profit Supply chain cost $4.00/kW * $2.79/kW * Adjusted for Arizona for 2014 NREL and Berkeley Lab data
  • 10. Addin’ Solar LLC 6424 E Greenway Pkwy Ste 100 Scottsdale AZ 85254 Phone: 480-296-0223 Fax: 480-296-0225 Email: contact@addinsolar.com www.addinsolar.com