Opportunities for Residential PV Installers

1. Perfect Timing: The Upcoming Wave of
Opportunities for Residential PV Installers
FOCUSED ENERGY SUMMIT 2014
Charlie Gay
September 25, 2014
10 October 2014 Focused Energy Summit 2014 1

2. Agenda / Overview
• Unprecedented U.S. Utility Changes
• Growth in Residential Rooftop PV
• Opportunities for Expanding Customer Engagement
• Collaborating to Win
• Financing
• Software Optimization
• Hardware Optimization
• A New Product Approach: Continuously Customizable Optimization
10 October 2014 Focused Energy Summit 2014 2

3. The World is Using More and More Electricity
500 TWh / yr
11,300
12,600
14,500
1990 1995 2000 2005 2010 2015 2020
Source: US EIA, International Energy Outlook 2011
17,300
22,600
20,300
25,400 TWh
Global electricity
demand doubling
between 1995 and
2020 ~2-3% per year

4. The Old World Electric Utility
Generation Transmission Distribution
End
Customers
10 October 2014 Focused Energy Summit 2014 4

5. The Utility World
Yesterday, Today & Tomorrow
In the mainland US (outside of California), no utility has had their financial integrity
threatened by the amount of solar that their customers have installed.
10 October 2014 Focused Energy Summit 2014 5

6. California System
10 October 2014 Focused Energy Summit 2014 6

7. The “Duck”Curve
10 October 2014 Focused Energy Summit 2014 7

8. The Emerging Electric Utility
Generation Transmission Distribution
End
Customers
Demand
Response
Make money with
your smart phone
$$$$
10 October 2014 Focused Energy Summit 2014 8

9. Agenda / Overview
• Unprecedented U.S. Utility Changes
• Growth in Residential Rooftop PV
• Opportunities for Expanding Customer Engagement
• Collaborating to Win
• Financing
• Software Optimization
• Hardware Optimization
• A New Product Approach : Continuously Customizable Optimization
10 October 2014 Focused Energy Summit 2014 9

10. 2013 Average Prices for Residential Electricity
US Average Increase
2013-2014 = 3.2%
10 October 2014 Focused Energy Summit 2014 10

11. By 2017 More Than ½ of Residential Rooftop
PV Can be Less Than the Retail Price of Electricity
Now 1 -3
Years
4+
Years
“value of solar,” based
on a study conducted
by Clean Power
Research
The residential market is immense: In the U.S. there are more than 90 million single
family homes and as many as 50 million more households in multi-family structures.
Source: UCSUSA.org/solarrevolution
10 October 2014 Focused Energy Summit 2014 11

12. How Much Distributed Solar Will Be Installed in 2016?
Source: GTM
10 October 2014 Focused Energy Summit 2014 12

13. Projected U.S. Residential PV Market Value
10 October 2014 Focused Energy Summit 2014 13

14. Agenda / Overview
• Unprecedented U.S. Utility Changes
• Growth in Residential Rooftop PV
• Opportunities for Expanding Customer Engagement
• Collaborating to Win
• Financing
• Software Optimization
• Hardware Optimization
• A New Product Approach : Continuously Customizable Optimization
10 October 2014 Focused Energy Summit 2014 14

15. 10 October 2014 Focused Energy Summit 2014 15

16. Wide-ranging Demographic
Why lease, when you can own?
10 October 2014 Focused Energy Summit 2014 16

17. Emerging New “Utilities”
Generation Transmission Distribution
End
Customers
New Regulatory Tools
How to allocate costs between users?
How to ensure Backup generation ?
How to integrate new technologies ?
10 October 2014 Focused Energy Summit 2014 17

18. Telecom Examples
AT&T spent $20.6 billion on new plant and equipment in 2013,
leading all non-financial corporations in U.S. capital spending for the third straight year.
10 October 2014 Focused Energy Summit 2014 18

19. The Wild Card
Energy Information
Energy  Information Merge into New Businesses
10 October 2014 Focused Energy Summit 2014 19

20. Granular Information and Awareness
ZIPEnergyApp can also be used in customer
demonstrations to illustrate products, services and
energy use patterns in similar homes and zip codes.
10 October 2014 Focused Energy Summit 2014 20

21. The Smart Home
The Home Automation & Controls Market Will be Worth $48.02 Billion by 2018
August
Ecobee
EcoFactor
Haier
Honeywell
iDevices
iHome
Kwikset
Logitach
Lutron
Netatmo
PEQ
Philips
Schlage
Skybell
SmartThings
Sylvania
Yale
Zuli
10 October 2014 Focused Energy Summit 2014 21

22. The Smart Home : Philips Lighting
The Home Automation & Controls Market Will be Worth $48.02 Billion by 2018
Philips Hue Connected Bulbs
10 October 2014 Focused Energy Summit 2014 22

23. Recent Entrants : Google
The Home Automation & Controls Market Will be Worth $48.02 Billion by 2018
• Google nest
Acquired 2014
10 October 2014 Focused Energy Summit 2014 23

24. Recent Entrants : Apple
The Home Automation & Controls Market Will be Worth $48.02 Billion by 2018
10 October 2014 Focused Energy Summit 2014 24

25. Recent Entrants :Samsung
The Home Automation & Controls Market Will be Worth $48.02 Billion by 2018
Electric
Water Heater
Electric water heating
is ~18% of U.S.
residential electricity
use and consumes
~12 kWh/day
Steffes uses Microsoft’s
Azure cloud platform to
aggregate, creating a
“virtual power plant” out
of networked heating
units.
10 October 2014 Focused Energy Summit 2014 25

26. Recent Entrants : LG
The Home Automation & Controls Market Will be Worth $48.02 Billion by 2018
 Google Nest
 Apple HomeKit
 Samsung SmartThings
 LG HomNet
10 October 2014 Focused Energy Summit 2014 26

27. Added Value of PV
The Home Automation & Controls Market Will be Worth $48.02 Billion by 2018
 Google Nest
 Apple HomeKit
 Samsung SmartThings
 LG HomNet
A Lot More Than $50 Billion
Module Level
Power Electronics
Distribution
End
Smart
Phone
Customers
10 October 2014 Focused Energy Summit 2014 27

28. Agenda / Overview
• Unprecedented U.S. Utility Changes
• Growth in Residential Rooftop PV
• Opportunities for Expanding Customer Engagement
• Collaborating to Win
• Financing
• Software Optimization
• Hardware Optimization
• A New Product Approach : Continuously Customizable
Optimization
10 October 2014 Focused Energy Summit 2014 28

29. Finance
$$$
Loans
• Institutional
• Intermediaries
• Aggregation
• Referrals
Focused
Energy
Collaborating to Win
Installation
JIT Supply
• Adaptive
Standardization
• Quality
• Certification
Focused Energy
Partners
Support Operations
System Design
• Permitting
• Logistics
• Benchmarking
• Responsive BoM
Services
• Trade Assoc.
• Coop Marketing
• Training
• Accurate Costing
10 October 2014 Focused Energy Summit 2014 29

30. Referral
Lead Generation
Feasibility
Assessment
Customer
Engagement
Optimizing Business Processes
Detailed
Design
Proposal &
Financing
Customer
& AHJ
Approval
$$$
Customer
Fast
Response Feedback
Sign-Off &
Demand
Response
Sales
Unique
Conditions
LOI
Standardized
Contracts
Permitted &
Energized
Cash Flow
Analysis
Maintenance
& Monitoring
Operations
Prelim.
Design
Updated
Design
Costing &
Schedule
3G Remote
Management
Code Req. Sourcing
10 October 2014 Focused Energy Summit 2014 30

31. $$$ Debt Sources
10 October 2014 Focused Energy Summit 2014 31

32. HERO PACE Program Is a Solar Financing Hero in California
HERO works in partnership with municipalities
to administer and manage lending capital
provided by private sources, and payments are
collected by the municipalities along with a
resident's property taxes.
PACE (Property Assessed Clean Energy) just keeps on growing.
$$$
10 October 2014 Focused Energy Summit 2014 32

33. System Design Optimization
Start with Site Map and Climate Data
• Module Orientation
• Tilt / Azimuth
• Module Configuration
• Portrait/Landscape
• Spacing
• Shadowing
• Inverter Topology
• Module Level Power Electronics
• Wiring Direction
• Source Circuit Conductors
• Inverter Load Ratio
• Combiner Size
• Combiner Layout
• Home Run Conductor
Supplier Options Have Expanded
• 7341 Module Types
• 691 Inverter Options
• 556 Structure Suppliers
10 October 2014 Focused Energy Summit 2014 33

34. System Design Optimization
Proposal Ready Design (plus options)
• Delivers Bill of Materials and Drawings
• Bankable Model (e.g. PVSYST)
• Cloud-based accessibility
http://www.mapdwell.com/en/boston/building/654023
10 October 2014 Focused Energy Summit 2014 34

35. Permitting
September 21, 2014: Governor Jerry Brown
signed Assembly Bill 2188, making California
one of the first states in the U.S. to streamline
permitting and inspection for small residential
solar systems.
Aim for a long-term relationship – including the AHJ
The most valuable asset is experience and relationships.
Treasure customer participation and feedback.
Nudge people to take a home audit.
• One was marketed to the environmentally minded and
featured "green" iconography.
• The other was marketed to "energy-efficiency skeptics" and
focused on making sure that the home was not wasteful.
"The call to action” is the same.
10 October 2014 Focused Energy Summit 2014 35

36. Module Manufacturing Trends
⅓ of module
assembly is OEM
Solar City + Silevo
Upstream
Vertically Integrated : so, module cost reduction benefits stay with producer
10 October 2014 Focused Energy Summit 2014 36

37. $3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
$/W
Source: GTM; Solvida Energy Group
BOS Cost Roadmap, 5kW Residential Rooftop
SunPower Full 2014 Residential Price : ~ $4.15/W
2012 2013F 2014E 2015E 2016E
Misc.
EBOS
Labor
SBOS
Structure
Inverter
2012 2013F 2014E 2015E 2016E
Inverter $0.33 $0.30 $0.27 $0.25 $0.23
Structure $0.47 $0.43 $0.40 $0.36 $0.34
SBOS $0.04 $0.04 $0.04 $0.04 $0.04
Labor $0.50 $0.44 $0.42 $0.39 $0.36
EBOS $0.55 $0.53 $0.52 $0.50 $0.49
Misc. $0.65 $0.63 $0.61 $0.59 $0.58
Total, $/W $2.54 $2.37 $2.26 $2.13 $2.04
Electrical BOS
•DC optimizer (if any)
•Wire
•Monitoring
•Combiner Boxes
•Wire Mgmt
•Disconnects
10 October 2014 Focused Energy Summit 2014 37

38. Residential PV System : Sensitivity Analysis
10 October 2014 Focused Energy Summit 2014 38

39. Shade Happens….
Example of variable shading and orientation
10 October 2014 Focused Energy Summit 2014 39

40. Shade Happens….
Trees
10 October 2014 Focused Energy Summit 2014 40

41. Shade Happens….
Inter-row shading
10 October 2014 Focused Energy Summit 2014 41

42. Overview of Module Level Electronics
High Value
Distributed Max
Power Point Trackers
μInverters
Expensive Inexpensive Control
Low Value
10 October 2014 Focused Energy Summit 2014 42

43. Global PV Electronics Supplier Taxonomy : 2014
10 October 2014 Focused Energy Summit 2014 43

44. Commercial Rooftop DC-DC Optimizer Cost/Benefit
10 October 2014 Focused Energy Summit 2014 44

45. Residential Rooftop Microinverter Cost/Benefit
$0.55
$0.27
$0.05
$0.04
$0.02
$0.06
$0.08
$0.04
$0.02
10 October 2014 Focused Energy Summit 2014 45

46. Complex Arrangements
10 October 2014 Focused Energy Summit 2014 46

47. Surface Mount Panelization
SURFACE MOUNT
SILICON INGOT WAFER CELL MODULE SYSTEM
PANEL
10 October 2014 Focused Energy Summit 2014 47

48. FlexStrap
Bonded Straps
~1.1 m
End View
.
.
.
.
~1.6 m
Module With
Front Side Loading
End View
Adhesive
Module
FlexStrap
Module allowed to flex –
eliminating high stresses
FlexStrap carries load in tension, while allowing module to Flex
10 October 2014 Focused Energy Summit 2014 48

49. Vertical Mounting Rail
Additional Cost Savings
Vertical rails reduced from
.
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2/module
1/module
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to
10 October 2014 Focused Energy Summit 2014 49
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FlexStrap
Clamps
Module Module

50. Surface Mount Panelization
SURFACE MOUNT
SILICON INGOT WAFER CELL MODULE SYSTEM
PANEL
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Total Cost Savings
Module: $10.82/ea
Rail: $8.54
TOTAL: $0.21/W
10 October 2014 Focused Energy Summit 2014 50

51. Surface Mount Panelization
SURFACE MOUNT
SILICON INGOT WAFER CELL MODULE SYSTEM
PANEL
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Now We Install the Brains
MLPE
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10 October 2014 Focused Energy Summit 2014 51

52. Site Specific BoM Delivered by Pod
10 October 2014 Focused Energy Summit 2014 52
p

53. Agenda / Overview
• Unprecedented U.S. Utility Changes
• Growth in Residential Rooftop PV
• Opportunities for Expanding Customer Engagement
• Collaborating to Win
• Financing
• Software Optimization
• Hardware Optimization
• A New Product Approach : Continuously Customizable Optimization
10 October 2014 Focused Energy Summit 2014 53

54. Surface Mount Product Strategy
HUBCO : Customized Standardization
• Distributed BoM Packaging for Each Job Site
• Fulfillment Centers:
– e.g. Foxconn (Ciudad Juárez), Flextronics (Fremont, CA) or Jabil
• Module producer to ship unframed laminates without J-Boxes
• Higher packing density = lower transportation costs
• Optimize Module Level Power Electronics and Inverter for each site
• Truck a pod with an installation-ready system to the job site
• Evolve upstream to buying cells and extract additional cost benefits
• Annealed glass
• Meet new UL 2703 standard ahead of the industry for maximum insurability
• Anti-soiling AR Coated Glass
• Integrate Uniquely Branded Utility Interactive Metering and Controls
10 October 2014 Focused Energy Summit 2014 54

55. "A pessimist sees the difficulty in
every opportunity; an optimist sees
the opportunity in every difficulty."
-- Winston Churchill
10 October 2014 Focused Energy Summit 2014 55