DF
Uploaded byDaniel Fetner
PDF, PPTX285 views

Alpaca Solar Energy Field Study Presentation

The document provides an overview of rooftop solar energy trends in Q3 2022. It begins with introductions to solar technologies and industry terminology. It then discusses trends in the residential, commercial & industrial, and community solar sectors in the US. Key points covered include the significant growth in solar capacity over the past decade, with the US now having over 120GW of installed capacity. Much of this growth has been driven by declining solar prices. The document also notes that community solar is gaining popularity beyond early adopting states and that solar capacity growth is expected to continue rapidly through 2027.

Embed presentation

Download as PDF, PPTX
Field Study: Rooftop solar energy Q3 2022
alpaca vc 1 2 3 5 Solar 101 Solar industry trends Solar for multi-family and C&I assets Company profiles Table of contents 4 Case studies 2
alpaca vc SOLAR 101 3
Sources: US Department of Energy (Office of Energy Efficiency & Renewable Energy) alpaca vc There are two main technologies that can harness the sun’s energy and convert it into electricity Photovoltaics (PVs) / solar panels Concentrated solar power (CSP) Focus of this field study Photovoltaic cells (PVs) convert sunlight directly into electricity. PV cells can be connected to form solar panels, and solar panels in turn can be linked together to form solar arrays. Used in both small-scale and utility-scale generation. Concentrated solar power (CSP) uses mirrors to concentrate sunlight onto a receiver, which heats up a fluid and creates steam, and this in turn can be used to spin a turbine. Used almost exclusively for utility-scale generation. 4
Sources: US Energy Information Administration alpaca vc Solar panels are made from semiconductor material; sunlight excites the electrons within and generates a current • The sun’s photons hit a solar panel and either (1) pass through, (2) are reflected, or (3) are absorbed – only this absorbed energy can generate electricity • Once enough solar energy is absorbed by the semiconductor material, electrons are dislodged and migrate to the front surface of the panel • This movement of electrons creates an imbalance (front = negative, back = positive), which results in voltage potential and allows electricity to flow into a circuit • Solar panel efficiency is defined as the percentage of sunlight that a panel can convert into electricity; it depends on the PV technology used, the semiconductor material, and a number of other key factors • Efficiency has steadily improved over time; it averaged <10% in the 1980s, increased to ~15% in the 2010s, and now some commercially available PVs are >20% 5
Sources: US Department of Energy (Office of Energy Efficiency & Renewable Energy), OE Solar, SolarReviews alpaca vc There are several different types of solar panel, each of which has its own advantages and limitations Silicon PVs Monocrystalline Polycrystalline Thin film Most efficient Efficiency Least efficient Least affordable Affordability Most affordable Non-Silicon PVs • High performance at high price point • Monocrystalline silicon wafers are made of only one crystal structure • There are now different varieties of monocrystalline PVs, such as Passivated Emitter and Rear Contact (PERC) cells • Mid-tier performance at mid-tier price point • Polycrystalline silicon wafers are made of multiple crystal structures • Low performance at low price point • Thin film cells are made by coating a layer of a highly absorptive semiconductor material (a substrate) on a sheet of glass, plastic, or metal • Typically use either cadmium telluride (CdTe), copper indium gallium diselenide (CIGS), or amorphous thin-film silicon (a-Si) 6 All three types have a lifespan of 25+ years
Sources: Solar Power World alpaca vc Solar panels can be installed in a wide variety of environments, depending on the space available Rooftop Ground-mounted Floating Water • Installed on residential, commercial, or industrial / warehouse rooftops • Affixed to the roof using rail mounts or ballasted footing mounts • Less expensive, but solar generation is limited by the space and slope of a given rooftop • Installed on farmland, vineyards, landfills, or other brownfield sites • Affixed to the ground using pole mounts, foundation mounts, or ballasted footing mounts • More expensive, but panels are often more productive since the angle can be optimized • Installed on lakes, reservoirs, or other suitable bodies of water • Typically more expensive to install compared to land, but ‘floatovoltaics’ do not occupy useful land and also reduce water evaporation • Most popular in Asia (e.g., Singapore, Thailand), where dry land is scarce Land 7
Sources: Federal Energy Management Program (FEMP) alpaca vc All solar installations are classified as either “front-of-the-meter” (FTM) or “behind-the-meter” (BTM) Front-of-the-meter (FTM) Utility-scale installations • Any solar generation and/or storage system that sits offsite and feeds energy into the utility grid; the energy must pass through the end customer’s meter and be counted before it can be consumed Behind-the-meter (BTM) Residential and C&I installations • Any solar generation and/or storage system that sits onsite (on the premises of a home or business); the energy is only meant to power that location and thus does not need to pass through a meter • Despite the name, BTM solar systems are generally still connected to the grid so that they can feed excess energy back into the grid in return for credits – an arrangement known as net metering 8
Sources: US Department of Energy (Office of Energy Efficiency & Renewable Energy) alpaca vc Solar installations can be further categorized into one of three types; community solar is considered a hybrid Residential Commercial & Industrial (C&I) Utility-scale Behind-the-meter (BTM) Front-of-the-meter (FTM) Community While residential by definition, multi-family buildings can closely resemble C&I depending on the size Multi-family Office Single-family Retail • Community solar is a hybrid concept because while they are generally offsite, front-of-the-meter installations, they are not limited to one asset type – a community solar project can be hosted on a multi-family building, a big-box retailer, a warehouse rooftop, or built as a ground-mounted solar farm • Individuals and businesses in the area who cannot host solar systems themselves are able to buy a stake in these projects and receive an electric bill credit for the electricity generated by their share in the solar array Industrial / warehouse 9
alpaca vc SOLAR INDUSTRY TRENDS 10
Sources: Solar Energy Industry Association (SEIA) alpaca vc Solar capacity has grown significantly over the past decade – the US now has over 120 GW of solar capacity nationwide • Solar capacity has grown at a 33% CAGR over the past 10 years, primarily driven by residential and utility installations; there are now >120 GW of installed capacity, enough to power ~23M homes • As solar becomes increasingly cost-competitive, its share of total US electrical generation has climbed from ~0.1% in 2010 to about ~4% today • For the past 3 years, solar has been the #1 source of new electric capacity added to the grid; in 2021, nearly half (46%) of all new electric capacity added to the grid came from solar, the highest level in history Cumulative US solar installations 11
Sources: Solar Energy Industry Association (SEIA) alpaca vc Much of this growth in solar capacity has been fueled by rapidly falling PV prices • In addition to government incentives and new regulations, the growth in solar capacity has been driven in large part by declining prices; the cost of solar PVs has dropped by roughly 60% over the past decade • Before incentives, the price of an average residential PV system has fallen from ~$40K in 2010 to ~$20K today; utility-scale prices now range from $16/MWh - $35/MWh, similar to other forms of generation • That said, over the past 12 months, COVID manufacturing disruptions and supply chain challenges have temporarily pushed up prices US solar PV pricing trend & installation growth 12
Sources: Solar Energy Industry Association (SEIA) alpaca vc Residential: California accounts for the bulk of residential solar capacity in the US, but other states are quickly gaining ground Annual US residential solar installations Cumulative US solar installations by state • California currently has ~1.3M homes with residential solar systems, and this number is set to grow further as all newly constructed homes in CA will have solar • States like New York, Texas, and Florida have introduced policies to make residential solar more attractive to homeowners 13
Sources: Solar Energy Industry Association (SEIA) alpaca vc C&I: C&I solar has begun to take off as large companies seek to meet their ambitious emission-cutting goals Commercial solar capacity by company Commercial solar PV installations & penetration growth • C&I solar is accelerating now that companies have unlocked new financing options; two-thirds of all commercial solar capacity in place today was installed only after 2015 • Tech giants (e.g., Apple, Amazon, Google, Facebook) and mass retailers (e.g., Walmart, Target) have been leaders in corporate solar adoption; data center operators (e.g., Prologis, Switch) are also rapidly installing solar 14
Sources: US Department of Energy (Office of Energy Efficiency & Renewable Energy), Solar Energy Industry Association (SEIA) alpaca vc Community: Community solar is gaining popularity as it spreads beyond NY, MA, and MN • Community solar brings the benefits of solar energy to individuals and businesses who are unable to host a solar system – either because they rent, live in a multi- tenant building, live in an unsuitable location, or have a small roof • Although there are 41 states with at least 1 community solar project today, just 3 states (i.e., NY, MA, and MN) make up three-quarters of the market • As of December 2021, 22 states (plus DC) now have policies on the books to formally support community solar, either through mandates or incentives • Experts believe community solar will open up previously ineligible sites and drive future solar adoption; according to forecasts, the US will add over 4.3 GW of community solar over the next 5 years Cumulative US community solar installations 15
Sources: Solar Energy Industry Association (SEIA) alpaca vc Solar capacity is poised for continued rapid growth through 2027 and beyond • 2021 proved to be a record year for solar installations; we are going to see a YoY decline in 2022 due to ongoing procurement issues • In 2023, solar capacity growth is expected to rebound strongly as supply chains normalize • As a result of the Inflation Reduction Act and ITC extension, the US is projected to install nearly 200 GW of new solar capacity, about 2x the current installed base Forecasted US solar installations 16
Sources: Solar Energy Industry Association (SEIA) alpaca vc Solar energy generation is increasingly being coupled with solar battery storage • Homeowners and businesses alike are increasingly looking for a solar generation + storage solution • In 2021, ~10% of behind-the-meter solar systems were paired with battery storage, but by 2025, this % is projected to rise to ~29% • Batteries are viewed as a hedge against changing net metering policies; if net metering rates fall, homeowners can consume their solar energy at night rather than selling excess energy back to the grid • This trend is also playing out in the utility-scale market, where there has been over 45 GW of commissioned or announced projects involving storage 17
alpaca vc SOLAR FOR MULTI-FAMILY AND C&I ASSETS 18
Sources: World Economic Forum alpaca vc Real estate accounts for ~40% of global emissions and energy usage; solar can play a critical role in decarbonization 19
Sources: Greystar images alpaca vc Residential Commercial & Industrial (C&I) Conventional Multi-family Office Industrial / warehouse Life sciences / labs Student Senior (55+) Single-family Retail Historically, solar panels were mainly installed on single-family homes, but they are now becoming popular on other asset types Red boxes indicate primary field study focus areas Includes garden, mid-rise, and high-rise formats 20
Sources: McKinsey & Company, Industry participant interviews alpaca vc Multi-family Commercial & industrial (C&I) Operating cost savings • A landlord can use solar energy to power common areas (e.g., elevators, hallways); if units are individually metered, a landlord can potentially allocate solar savings to tenants too • Rooftop solar arrays can power some or all of a warehouse’s operations New revenue stream • If a building has a net metering arrangement with the local utility, the owner can receive income for energy put back into the grid; alternatively, a building can ‘rent’ their rooftop to an owner/operator Government incentives • Tax credits, deductions, and other incentives are available at both the federal and state level (specific programs vary by state) Regulatory compliance • Many states and cities have regulations on the books – or have regulations going in effect shortly – that will force buildings to consider solar (e.g., NYC Local Law 97) Energy hedging • Reduces exposure to rising oil & gas prices predicted over the next 15-20+ years Capital raising • Capital allocators are increasingly making real estate investments that align with ESG goals Tenant demand • Certain renters, particularly Millennials and Gen-Zs, may factor solar installations into their rental decisions • Many companies have made public sustainability commitments and are actively looking to reduce their warehouse emissions Generous incentives, stricter regulations, and ESG concerns are making solar more attractive for multi-family and C&I assets 1 2 3 4 5 6 7 21
Sources: Solar Energy Industry Association (SEIA), DSIRE alpaca vc 40 states have mandatory net metering rules that require owners to be compensated for energy put back into the grid 2 22
Sources: US Department of Energy (Office of Energy Efficiency & Renewable Energy), Solar Energy Industry Association (SEIA), DSIRE, EnergySage, Sunrun alpaca vc A broad range of government incentives exist to lower the upfront capital investment and boost ROI Federal State / Local • As of July, the ITC stood at 26% and was scheduled to step down to 22% in 2023 before finally expiring in 2024 • However, as part of the Inflation Reduction Act passed in August, the ITC was increased from 26% to 30% and extended for another decade (runs through 2032) • The ITC is based on the tax basis of the solar system and only applies in the year in which it was placed into service • In addition to the ITC, the owner can also take advantage of accelerated depreciation • Many states offer Property Assessed Clean Energy (PACE) financing to reduce the upfront burden • State-specific programs vary widely – some examples include: • New York • NY State Solar Energy System Equipment Tax Credit: 25% tax credit ($5K max) • Solar Electric Generating System Tax Abatement (SEGS): exempt from any added home value • Solar Project State Sales Tax Exemption: exempt from 4% state sales tax • New Jersey • Solar Investment Property Tax Exemption: exempt from any added home value • Solar Panel System Sales Tax Exemption: exempt from 6.625% state sales tax Resources like DSIRE and EnergySage can help real estate owners identify the specific incentives for which they qualify 3 The DOE has published a comprehensive guide to better understand how the ITC applies to commercial solar installations 23
Sources: McKinsey, The New York Times, Building Design & Construction, NYC.gov, PV Magazine alpaca vc In addition to these ‘carrots’, state governments are introducing mandates and other rules to hasten solar adoption 4 In March 2022, the SEC proposed a new rule that would “enhance and standardize climate-related disclosures for investors”; in its current form, it will drive demand for solar installations as public companies push their landlords to put forth concrete plans to reduce emissions. Since 2020, California has required all newly built single-family homes (as well as multi-family buildings up to three stories) to have PVs installed; it is currently considering a new law that would expand this requirement to commercial buildings and high-rise residential projects. Massachusetts is currently considering a bill (S2165) that is modeled after California’s policy; it would require rooftop solar panels on most residential and commercial buildings, with some exceptions. Part of the Climate Mobilization Act, NYC’s Local Law 97 will require most buildings over 25K square feet to meet rigorous energy efficiency and greenhouse house gas limits by 2024. In 2022, in response to the Russian invasion of Ukraine, the European Commission proposed a rooftop solar requirement for all commercial and public buildings starting in 2027, and for all residential buildings by 2029. In 2021, New Jersey passed a law requiring all newly built warehouses to have “solar-ready rooftops” – that is, they must reserve up to 40% of their roof space for solar arrays. 24
Sources: Industry participant interviews alpaca vc For multi-family and small C&I solar installations, high single-digit / low double-digit unlevered returns are typical • Rooftop solar returns can vary significantly from project to project, even in the same asset class • Exact return profile is dependent on the size of the system, state in which it’s located, current energy consumption, creditworthiness of the offtaker, structure of the transaction, and a variety of other factors • Average unlevered IRR for a typical multi-family or small C&I project (100 KW) is in the ~8-10% range • This represents the return on the installation overall, and will be divided up between cash equity investors, tax equity investors, and debt holders • Utility-scale developments have unlevered IRRs in the ~3-5% range while residential might be ~12%+; ~8-10% reflects the moderate degree of risk • Payback period can be anywhere from ~2-10 years depending on the state, but ~4-5 years is most common • For instance, in NY, the incentives are heavily front-loaded so you reach breakeven earlier • Conversely, in NJ, the incentives are more evenly distributed over time which pushes breakeven further out ~8-10% Average unlevered IRR ~4-5 years Average payback period 25 IRR likely to increase as interest rates in the US rise
Sources: The New York Times alpaca vc Despite these tailwinds, two recent developments could potentially reduce the ROI and slow solar’s momentum • Since 2012, the US has imposed tariffs on Chinese-made solar panels to prevent China’s state-subsidized industry from “flooding the US market” • As a result, most US installers buy solar panels from Southeast Asia (i.e., Cambodia, Malaysia, Thailand, and Vietnam); together, these four countries account for about 80% of the most popular type of solar panel used in the US • In early 2022, Auxin Solar, a small US-based manufacturer, claimed that these panels in fact use Chinese-made wafers and accused China of circumventing anti-dumping laws, prompting the Department of Commerce to open an investigation • The threat of retroactive tariffs has effectively frozen all Asian imports, and forced installers to cancel or postpone more than 300 solar projects nationwide • Fortunately, in June 2022, the Biden administration announced a 2-year pause on any new solar tariffs to prevent further disruption; it also invoked the Defense Production Act to stimulate domestic manufacturing That said, the investigation is ongoing and the resulting uncertainty could continue to dampen demand for solar panels Ongoing US federal investigation Potential changes to net metering • Currently, 40 states (plus DC) have mandatory net metering rules, which require utilities to compensate solar rooftop owners for the excess electricity they put back into the grid • However, several US states (e.g., California, North Carolina) are under pressure from local utilities to alter net metering policies and reduce their payouts • For instance, in California, the Public Utilities Commission is considering a plan that would charge customers a ~$50 monthly “grid participation charge” and reduce net metering credits by as much as 80% • Florida was recently considering a similar bill, which aimed to significantly reduce the value of net metering, but Governor Ron DeSantis vetoed the bill citing inflation concerns If these plans ultimately pass, they will hurt the ROI of rooftop solar and deter behind-the-meter installations 26
Sources: Company websites, Industry participant interviews alpaca vc Solar consultancies exist to guide clients through the end-to-end process from initial feasibility through to implementation Company Description Sample clients / case studies Environmental consultancies • Bright Power is a provider of both energy and water management services for real estate owners, operators, and investors – from utility bill analytics to physical improvements • Within solar, it offers a full suite of services from early-stage feasibility to ‘turnkey design-build project implementation’ • Bozzuto Management, Equity Residential, John Rose Companies, Nuveen Real Estate, RDC Development, Related Specialist solar consultancies • Founded as part of the Rocky Mountain Institute (RMI), Black Bear Energy is a ‘buyer representative’ that helps commercial, industrial, and multi-family owners with the full solar value chain • Serving as commercial advocate, it has completed 600+ solar projects (450K+ MW) and claims $5-50 in solar value creation per sq. ft. • AEW, AMC, Clarion Partners, Equity Residential, Iron Mountain, LaSalle Investment Management, Link Industrial, STAG Industrial • SolarKal is a B2B marketplace that connects organizations to 150+ pre-vetted solar providers; each company also has a dedicated human advisor to provide expert guidance • The platform has facilitated >$200M in closed deals with “30% cost savings, on average, compared to traditional solar energy procurement” • Bergen Logistics, Cornell University, Halpern Real Estate, New Jersey Motorsports Park Turnkey solar developers • Wunder was initially focused only on C&I solar financing; with backing from Ares, Blackstone, Keyframe, and other institutional investors, it was able to offer fast and flexible financing options to clients • It has since expanded beyond financing to provide an all-in-one turnkey solution, including permitting, design, installation, and ongoing operations • Sample C&I projects include a CA shopping center, DC charter school, NJ warehouse, and HI homeowners' association, among many others Utility-owned consultancies • Powerflex (fka EnterSolar prior to EDF acquisition and re-branding) advises clients on onsite solar, battery storage, EV charging, microgrids, and energy management systems • In addition to its advisory work, it also sells several software products that provides real-time data and insights into a client’s energy assets • ACME, Amazon, BJ’s, Bloomberg, Fordham University, Honeywell, Pepsico, Regeneron, Swiss Re, Target, UNFI, USAA 27
alpaca vc CASE STUDIES 28
alpaca vc Sources: The New York Times, StuyTown.com Multi-family case study: Stuyvesant Town (New York, NY) • Stuyvesant Town-Peter Cooper Village (“StuyTown”) is a 110-building complex on the east side of Manhattan; completed in 1947, it remains the largest multi-family development in the US (27K residents) • Blackstone, the current owner, installed more than 9,600 panels (3.6MW) across the site’s 22 acres of rooftop in 2019, making it the largest private residential array in the country • StuyTown sends the solar energy back into the electrical grid and receives a credit from ConEdison against its electricity bills • Residents do not see direct benefits because units are not separately metered for electricity (utilities are included in monthly rent) • Blackstone spent nearly $10M in the project – “nearly a quarter of that — $2.3 million — was offset by incentives provided by the New York State Energy Research & Development Authority, through its $1B NY-Sun program” 29
alpaca vc Sources: Solar Power World Senior housing case study: Villa Catalina (Tucson, AZ) • Villa Catalina Apartment Homes is an 80-unit 55+ community in the heart of Tucson, AZ • It partnered with financial firm Solaris Energy and installer Solar Gain to add solar power (152 kW) on top of the senior living complex • Installation produces about half of the energy consumed and significantly reduces the HOA’s electricity rate • Solaris provided the upfront capital, and Villa Catalina pays for the solar electricity as a service on a monthly basis; the complex has the opportunity to own the solar system outright after a 6-year period 30
alpaca vc Sources: Cornell University website Student housing case study: Cornell University (Ithaca, NY) • Cornell University has invested heavily in rooftop solar systems and solar farms in order to achieve its goal of carbon neutrality by 2035 • To date, Cornell has completed 15 solar projects, which provide ~20% of its campus electricity needs • Rooftop solar projects include: • 2007: Cornell Campus Store Solar Array (2.2 KW) • 2012: Human Ecology Solar Array (76 KW) • 2014: Fernow Hall Solar Skylight (2.2 KW) • 2014: Snee Hall Solar Array (3.5 KW) • 2015: Klarman Hall Solar Array (20 KW) • 2021: North Campus Housing (Phase 1) • 2022: North Campus Housing (Phase 2) • The North Campus solar installation will be the largest campus project to date; once completed in 2022, it will generate roughly 1.1MW of electricity 31
alpaca vc Sources: The New York Times, Power Grid International Industrial case study: STAG warehouse (Hampstead, MD) • STAG Industrial, a Boston-based real estate investment trust, owns a 1.1M sq ft warehouse in Hampstead, MD that it leases to Penguin Random House, a book publisher • STAG leases the 23-acre roof to Summit Ridge Energy, a solar developer, which installed a 9.2 MW solar array; it is thought to be the largest rooftop community solar project in the US • The rooftop system sends its energy back into the grid, lowering utility bills for ~1,300 homes and businesses in the local area; the warehouse itself still runs on power from the grid • This is the first of three solar projects STAG is working on in the state of Maryland – they are all part of Maryland’s community solar program to provide low-cost renewable energy to surrounding homes and businesses 32
alpaca vc Sources: Solar Industry Magazine Industrial case study: Anheuser Busch (various locations) • Anheuser Busch partnered with ForeFront Power, a leading solar developer and advisor, to install solar systems at 8 of its craft breweries across the country • ForeFront has completed solar installations at the following locations: • Goose Island Beer Co. in Chicago, IL • Blue Point Brewing Co. in Patchogue, NY • Virtue Cider in Fennville, MI • Breckenridge Brewery in Littleton, CO • Devils Backbone Brewing Co. in Lexington, VA • Four Peaks Brewing Co., in Tempe, AZ • Karbach Brewing Co. in Houston, TX • 10 Barrel Brewing Co. in Bend, OR • Combined, these systems will generate 2.4 megawatt-DC (MWdc), and in doing so, will reduce AB’s carbon footprint by ~2M lbs of CO2 annually 33
alpaca vc Sources: Company websites Industrial case study: Link Logistics (various locations) • In 2021, Blackstone announced it would take part in New Jersey’s Community Solar Pilot Program by bringing together two of its portfolio companies – Link Logistics, a warehouse operator, and Altus Power, a clean electrication company • Under the agreement, Altus and Link will install solar arrays on warehouse rooftops across the state; the systems are expected to generate 35 MW and will lower energy bills for approximately 6K customers in the area, including underserved populations • The initiative supports Altus’s revenue growth, while also helping Link achieve its ESG goal of becoming carbon neutral by 2025 34

More Related Content

PPTX
Solar-101-workshop-midwest-2018-small (1).pptx
byM. Muzammil Ejaz .
 
PPTX
Selling Solar
byaquamaureen
 
PPTX
Solar investment-case-mac-solar
bymacsolar77
 
PDF
Solar investment-case-mac-solar
bymacsolar77
 
PPT
Njatc Pv Powerpoint Acte Naae
byrvb1019
 
PDF
Rahus Solar PPA Customers Guide V20081005 Lr
byAlexander von Welczeck
 
PPTX
Selling Solar Abridged Boyce
byjboyce71
 
PPTX
Resch - Solar Vision Forum
byGW Solar Institute
 
Solar-101-workshop-midwest-2018-small (1).pptx
byM. Muzammil Ejaz .
 
Selling Solar
byaquamaureen
 
Solar investment-case-mac-solar
bymacsolar77
 
Solar investment-case-mac-solar
bymacsolar77
 
Njatc Pv Powerpoint Acte Naae
byrvb1019
 
Rahus Solar PPA Customers Guide V20081005 Lr
byAlexander von Welczeck
 
Selling Solar Abridged Boyce
byjboyce71
 
Resch - Solar Vision Forum
byGW Solar Institute
 

Similar to Alpaca Solar Energy Field Study Presentation

PDF
Solarcentury Africa Hybrid Brochure 0216
byDaniel Davies
 
PDF
Investment Case for Solar Energy
bymacsolar77
 
PDF
Energy & Climate Market Map.pdf
byEmmanuelHamilton1
 
PPT
Solar Basics Core (System Design & Technology)
byAdamSunusiHaruna1
 
PPTX
Rhone Resch | Trends in Solar Energy Technology and Costs | 2014 Solar Symposium
byGW Solar Institute
 
PDF
Solar investment-case-mac-solar
bymacsolar77
 
PDF
Irec solar market_trends_report_2009
bymoeshahram
 
PPTX
20161006 Szaro Power Matters Conference all slides
byJennifer Szaro
 
PDF
Solarize Syracuse workshop
bybriandominick
 
PPT
PVAmerica-2013-Presentation-FINAL
byRobert Potter
 
PPT
Solarize 101
bySolarizeCT
 
PDF
Emerging Solar Strategies: How Innovative Companies are Using Solar to Reduce...
bySustainable Brands
 
PDF
Solar investment-case-mac-solar
bymacsolar77
 
PDF
Going-Solar-in-America-A-Customer-Guide-FINAL_V2
byJim Kennerly
 
PPT
Solar Across the U.S. - From AZ to NC
byLaPlaca & Associates LLC
 
PPT
TSF | Solar on Schools Presentation
byThe Solar Foundation
 
PPT
Solar across-the-us-oct-2016
byLaPlaca & Associates LLC
 
PDF
The disruptive potential of solar power
byPeter Loh
 
PDF
49930
byDr. VIJAY ARUMUGAM
 
PPT
Solar Power
byCarol Case
 
Solarcentury Africa Hybrid Brochure 0216
byDaniel Davies
 
Investment Case for Solar Energy
bymacsolar77
 
Energy & Climate Market Map.pdf
byEmmanuelHamilton1
 
Solar Basics Core (System Design & Technology)
byAdamSunusiHaruna1
 
Rhone Resch | Trends in Solar Energy Technology and Costs | 2014 Solar Symposium
byGW Solar Institute
 
Solar investment-case-mac-solar
bymacsolar77
 
Irec solar market_trends_report_2009
bymoeshahram
 
20161006 Szaro Power Matters Conference all slides
byJennifer Szaro
 
Solarize Syracuse workshop
bybriandominick
 
PVAmerica-2013-Presentation-FINAL
byRobert Potter
 
Solarize 101
bySolarizeCT
 
Emerging Solar Strategies: How Innovative Companies are Using Solar to Reduce...
bySustainable Brands
 
Solar investment-case-mac-solar
bymacsolar77
 
Going-Solar-in-America-A-Customer-Guide-FINAL_V2
byJim Kennerly
 
Solar Across the U.S. - From AZ to NC
byLaPlaca & Associates LLC
 
TSF | Solar on Schools Presentation
byThe Solar Foundation
 
Solar across-the-us-oct-2016
byLaPlaca & Associates LLC
 
The disruptive potential of solar power
byPeter Loh
 
49930
byDr. VIJAY ARUMUGAM
 
Solar Power
byCarol Case
 

More from Daniel Fetner

PDF
Alpaca ESG Data & Reporting Field Study_EXTERNAL PUBLISHING_2.12.23.pdf
byDaniel Fetner
 
PDF
Field Study - Tech Solutions for Rent Collections - External_FINAL.pdf
byDaniel Fetner
 
PDF
The Intersection of Construction & FinTech
byDaniel Fetner
 
PDF
ALPACA VC - SENIOR LIVING TECHNOLOGY
byDaniel Fetner
 
PDF
Alpaca VC Field Study: EV & Mobility Tech
byDaniel Fetner
 
PDF
Corigin Construction Tech
byDaniel Fetner
 
PDF
Alpaca Field Study: Virtual Real Estate & The Metaverse
byDaniel Fetner
 
PDF
The State of Real Estate Crowdfunding - April 2018
byDaniel Fetner
 
Alpaca ESG Data & Reporting Field Study_EXTERNAL PUBLISHING_2.12.23.pdf
byDaniel Fetner
 
Field Study - Tech Solutions for Rent Collections - External_FINAL.pdf
byDaniel Fetner
 
The Intersection of Construction & FinTech
byDaniel Fetner
 
ALPACA VC - SENIOR LIVING TECHNOLOGY
byDaniel Fetner
 
Alpaca VC Field Study: EV & Mobility Tech
byDaniel Fetner
 
Corigin Construction Tech
byDaniel Fetner
 
Alpaca Field Study: Virtual Real Estate & The Metaverse
byDaniel Fetner
 
The State of Real Estate Crowdfunding - April 2018
byDaniel Fetner
 

Recently uploaded

PDF
Strengthening cybern resilience for a leading indian Financial Services group
bypandeydevika621
 
PDF
Achieving Interoperability in Healthcare IT: A Strategic Guide
byHart, Inc.
 
PDF
What is Voice User Interface (VUI) Definition & Examples.pdf
byDesign Studio UI UX
 
PDF
The map to conquer linear algebra for IT engineer
byakipii ogaoga
 
PPTX
AN Introduction to UNIX File System—An Approach
bysonjuktaweb
 
PDF
Xemelgo - RFID Industry Predictions for 2026
byRich Rogers
 
PPTX
Spacecraft Guidance Quick Research Guide by Arthur Morgan
byArthur Morgan
 
PDF
Benefits of Using the IAC 500 Sensor for Ambient Conditions
byCS Instruments
 
PDF
IAC 500 Sensor - Humidity Measurement Device
byCS Instruments
 
PPTX
Introduction to Computer Network Concepts.pptx
byAnacrissa Soriano
 
PDF
Small Business Automation: A Comprehensive Cost and ROI Guide
byAmelia Swank
 
PDF
“Lessons from Yesterday's Tomorrowland” by Scott M. Graffius
byScott M. Graffius
 
PPTX
Large Language Model. LLM Audit Artificial Intelligence
byMANASCHOUDHARY22
 
PDF
AI Driven & AI Native Development AI native development
byZainKarim7
 
PDF
IAI-Unit1-notes useful.............................
bydinesh620610
 
PPTX
Cesium formate brine - A brief history - prepared by John Downs in May 2011
byJohn Downs
 
PDF
Video Infrastructure_ Streaming Architecture and Delivery Systems.pdf
byTenbyte Limited
 
PPTX
Document Reconstruction using AI & Deep Learning
bysonjuktaweb
 
PPTX
UNIT III TYPOLOGY OF CRIME AND CRIMINAL BEHAVIOUR (1).pptx
bybloodyhumanoid
 
PDF
Ai In Courts Ai in courts AI in court AI in court
byZainKarim7
 
Strengthening cybern resilience for a leading indian Financial Services group
bypandeydevika621
 
Achieving Interoperability in Healthcare IT: A Strategic Guide
byHart, Inc.
 
What is Voice User Interface (VUI) Definition & Examples.pdf
byDesign Studio UI UX
 
The map to conquer linear algebra for IT engineer
byakipii ogaoga
 
AN Introduction to UNIX File System—An Approach
bysonjuktaweb
 
Xemelgo - RFID Industry Predictions for 2026
byRich Rogers
 
Spacecraft Guidance Quick Research Guide by Arthur Morgan
byArthur Morgan
 
Benefits of Using the IAC 500 Sensor for Ambient Conditions
byCS Instruments
 
IAC 500 Sensor - Humidity Measurement Device
byCS Instruments
 
Introduction to Computer Network Concepts.pptx
byAnacrissa Soriano
 
Small Business Automation: A Comprehensive Cost and ROI Guide
byAmelia Swank
 
“Lessons from Yesterday's Tomorrowland” by Scott M. Graffius
byScott M. Graffius
 
Large Language Model. LLM Audit Artificial Intelligence
byMANASCHOUDHARY22
 
AI Driven & AI Native Development AI native development
byZainKarim7
 
IAI-Unit1-notes useful.............................
bydinesh620610
 
Cesium formate brine - A brief history - prepared by John Downs in May 2011
byJohn Downs
 
Video Infrastructure_ Streaming Architecture and Delivery Systems.pdf
byTenbyte Limited
 
Document Reconstruction using AI & Deep Learning
bysonjuktaweb
 
UNIT III TYPOLOGY OF CRIME AND CRIMINAL BEHAVIOUR (1).pptx
bybloodyhumanoid
 
Ai In Courts Ai in courts AI in court AI in court
byZainKarim7
 

Alpaca Solar Energy Field Study Presentation

  • 1.
  • 2.
    alpaca vc 1 2 3 5 Solar 101 Solar industrytrends Solar for multi-family and C&I assets Company profiles Table of contents 4 Case studies 2
  • 3.
  • 4.
    Sources: US Departmentof Energy (Office of Energy Efficiency & Renewable Energy) alpaca vc There are two main technologies that can harness the sun’s energy and convert it into electricity Photovoltaics (PVs) / solar panels Concentrated solar power (CSP) Focus of this field study Photovoltaic cells (PVs) convert sunlight directly into electricity. PV cells can be connected to form solar panels, and solar panels in turn can be linked together to form solar arrays. Used in both small-scale and utility-scale generation. Concentrated solar power (CSP) uses mirrors to concentrate sunlight onto a receiver, which heats up a fluid and creates steam, and this in turn can be used to spin a turbine. Used almost exclusively for utility-scale generation. 4
  • 5.
    Sources: US EnergyInformation Administration alpaca vc Solar panels are made from semiconductor material; sunlight excites the electrons within and generates a current • The sun’s photons hit a solar panel and either (1) pass through, (2) are reflected, or (3) are absorbed – only this absorbed energy can generate electricity • Once enough solar energy is absorbed by the semiconductor material, electrons are dislodged and migrate to the front surface of the panel • This movement of electrons creates an imbalance (front = negative, back = positive), which results in voltage potential and allows electricity to flow into a circuit • Solar panel efficiency is defined as the percentage of sunlight that a panel can convert into electricity; it depends on the PV technology used, the semiconductor material, and a number of other key factors • Efficiency has steadily improved over time; it averaged <10% in the 1980s, increased to ~15% in the 2010s, and now some commercially available PVs are >20% 5
  • 6.
    Sources: US Departmentof Energy (Office of Energy Efficiency & Renewable Energy), OE Solar, SolarReviews alpaca vc There are several different types of solar panel, each of which has its own advantages and limitations Silicon PVs Monocrystalline Polycrystalline Thin film Most efficient Efficiency Least efficient Least affordable Affordability Most affordable Non-Silicon PVs • High performance at high price point • Monocrystalline silicon wafers are made of only one crystal structure • There are now different varieties of monocrystalline PVs, such as Passivated Emitter and Rear Contact (PERC) cells • Mid-tier performance at mid-tier price point • Polycrystalline silicon wafers are made of multiple crystal structures • Low performance at low price point • Thin film cells are made by coating a layer of a highly absorptive semiconductor material (a substrate) on a sheet of glass, plastic, or metal • Typically use either cadmium telluride (CdTe), copper indium gallium diselenide (CIGS), or amorphous thin-film silicon (a-Si) 6 All three types have a lifespan of 25+ years
  • 7.
    Sources: Solar PowerWorld alpaca vc Solar panels can be installed in a wide variety of environments, depending on the space available Rooftop Ground-mounted Floating Water • Installed on residential, commercial, or industrial / warehouse rooftops • Affixed to the roof using rail mounts or ballasted footing mounts • Less expensive, but solar generation is limited by the space and slope of a given rooftop • Installed on farmland, vineyards, landfills, or other brownfield sites • Affixed to the ground using pole mounts, foundation mounts, or ballasted footing mounts • More expensive, but panels are often more productive since the angle can be optimized • Installed on lakes, reservoirs, or other suitable bodies of water • Typically more expensive to install compared to land, but ‘floatovoltaics’ do not occupy useful land and also reduce water evaporation • Most popular in Asia (e.g., Singapore, Thailand), where dry land is scarce Land 7
  • 8.
    Sources: Federal EnergyManagement Program (FEMP) alpaca vc All solar installations are classified as either “front-of-the-meter” (FTM) or “behind-the-meter” (BTM) Front-of-the-meter (FTM) Utility-scale installations • Any solar generation and/or storage system that sits offsite and feeds energy into the utility grid; the energy must pass through the end customer’s meter and be counted before it can be consumed Behind-the-meter (BTM) Residential and C&I installations • Any solar generation and/or storage system that sits onsite (on the premises of a home or business); the energy is only meant to power that location and thus does not need to pass through a meter • Despite the name, BTM solar systems are generally still connected to the grid so that they can feed excess energy back into the grid in return for credits – an arrangement known as net metering 8
  • 9.
    Sources: US Departmentof Energy (Office of Energy Efficiency & Renewable Energy) alpaca vc Solar installations can be further categorized into one of three types; community solar is considered a hybrid Residential Commercial & Industrial (C&I) Utility-scale Behind-the-meter (BTM) Front-of-the-meter (FTM) Community While residential by definition, multi-family buildings can closely resemble C&I depending on the size Multi-family Office Single-family Retail • Community solar is a hybrid concept because while they are generally offsite, front-of-the-meter installations, they are not limited to one asset type – a community solar project can be hosted on a multi-family building, a big-box retailer, a warehouse rooftop, or built as a ground-mounted solar farm • Individuals and businesses in the area who cannot host solar systems themselves are able to buy a stake in these projects and receive an electric bill credit for the electricity generated by their share in the solar array Industrial / warehouse 9
  • 10.
  • 11.
    Sources: Solar EnergyIndustry Association (SEIA) alpaca vc Solar capacity has grown significantly over the past decade – the US now has over 120 GW of solar capacity nationwide • Solar capacity has grown at a 33% CAGR over the past 10 years, primarily driven by residential and utility installations; there are now >120 GW of installed capacity, enough to power ~23M homes • As solar becomes increasingly cost-competitive, its share of total US electrical generation has climbed from ~0.1% in 2010 to about ~4% today • For the past 3 years, solar has been the #1 source of new electric capacity added to the grid; in 2021, nearly half (46%) of all new electric capacity added to the grid came from solar, the highest level in history Cumulative US solar installations 11
  • 12.
    Sources: Solar EnergyIndustry Association (SEIA) alpaca vc Much of this growth in solar capacity has been fueled by rapidly falling PV prices • In addition to government incentives and new regulations, the growth in solar capacity has been driven in large part by declining prices; the cost of solar PVs has dropped by roughly 60% over the past decade • Before incentives, the price of an average residential PV system has fallen from ~$40K in 2010 to ~$20K today; utility-scale prices now range from $16/MWh - $35/MWh, similar to other forms of generation • That said, over the past 12 months, COVID manufacturing disruptions and supply chain challenges have temporarily pushed up prices US solar PV pricing trend & installation growth 12
  • 13.
    Sources: Solar EnergyIndustry Association (SEIA) alpaca vc Residential: California accounts for the bulk of residential solar capacity in the US, but other states are quickly gaining ground Annual US residential solar installations Cumulative US solar installations by state • California currently has ~1.3M homes with residential solar systems, and this number is set to grow further as all newly constructed homes in CA will have solar • States like New York, Texas, and Florida have introduced policies to make residential solar more attractive to homeowners 13
  • 14.
    Sources: Solar EnergyIndustry Association (SEIA) alpaca vc C&I: C&I solar has begun to take off as large companies seek to meet their ambitious emission-cutting goals Commercial solar capacity by company Commercial solar PV installations & penetration growth • C&I solar is accelerating now that companies have unlocked new financing options; two-thirds of all commercial solar capacity in place today was installed only after 2015 • Tech giants (e.g., Apple, Amazon, Google, Facebook) and mass retailers (e.g., Walmart, Target) have been leaders in corporate solar adoption; data center operators (e.g., Prologis, Switch) are also rapidly installing solar 14
  • 15.
    Sources: US Departmentof Energy (Office of Energy Efficiency & Renewable Energy), Solar Energy Industry Association (SEIA) alpaca vc Community: Community solar is gaining popularity as it spreads beyond NY, MA, and MN • Community solar brings the benefits of solar energy to individuals and businesses who are unable to host a solar system – either because they rent, live in a multi- tenant building, live in an unsuitable location, or have a small roof • Although there are 41 states with at least 1 community solar project today, just 3 states (i.e., NY, MA, and MN) make up three-quarters of the market • As of December 2021, 22 states (plus DC) now have policies on the books to formally support community solar, either through mandates or incentives • Experts believe community solar will open up previously ineligible sites and drive future solar adoption; according to forecasts, the US will add over 4.3 GW of community solar over the next 5 years Cumulative US community solar installations 15
  • 16.
    Sources: Solar EnergyIndustry Association (SEIA) alpaca vc Solar capacity is poised for continued rapid growth through 2027 and beyond • 2021 proved to be a record year for solar installations; we are going to see a YoY decline in 2022 due to ongoing procurement issues • In 2023, solar capacity growth is expected to rebound strongly as supply chains normalize • As a result of the Inflation Reduction Act and ITC extension, the US is projected to install nearly 200 GW of new solar capacity, about 2x the current installed base Forecasted US solar installations 16
  • 17.
    Sources: Solar EnergyIndustry Association (SEIA) alpaca vc Solar energy generation is increasingly being coupled with solar battery storage • Homeowners and businesses alike are increasingly looking for a solar generation + storage solution • In 2021, ~10% of behind-the-meter solar systems were paired with battery storage, but by 2025, this % is projected to rise to ~29% • Batteries are viewed as a hedge against changing net metering policies; if net metering rates fall, homeowners can consume their solar energy at night rather than selling excess energy back to the grid • This trend is also playing out in the utility-scale market, where there has been over 45 GW of commissioned or announced projects involving storage 17
  • 18.
  • 19.
    Sources: World EconomicForum alpaca vc Real estate accounts for ~40% of global emissions and energy usage; solar can play a critical role in decarbonization 19
  • 20.
    Sources: Greystar images alpaca vc ResidentialCommercial & Industrial (C&I) Conventional Multi-family Office Industrial / warehouse Life sciences / labs Student Senior (55+) Single-family Retail Historically, solar panels were mainly installed on single-family homes, but they are now becoming popular on other asset types Red boxes indicate primary field study focus areas Includes garden, mid-rise, and high-rise formats 20
  • 21.
    Sources: McKinsey &Company, Industry participant interviews alpaca vc Multi-family Commercial & industrial (C&I) Operating cost savings • A landlord can use solar energy to power common areas (e.g., elevators, hallways); if units are individually metered, a landlord can potentially allocate solar savings to tenants too • Rooftop solar arrays can power some or all of a warehouse’s operations New revenue stream • If a building has a net metering arrangement with the local utility, the owner can receive income for energy put back into the grid; alternatively, a building can ‘rent’ their rooftop to an owner/operator Government incentives • Tax credits, deductions, and other incentives are available at both the federal and state level (specific programs vary by state) Regulatory compliance • Many states and cities have regulations on the books – or have regulations going in effect shortly – that will force buildings to consider solar (e.g., NYC Local Law 97) Energy hedging • Reduces exposure to rising oil & gas prices predicted over the next 15-20+ years Capital raising • Capital allocators are increasingly making real estate investments that align with ESG goals Tenant demand • Certain renters, particularly Millennials and Gen-Zs, may factor solar installations into their rental decisions • Many companies have made public sustainability commitments and are actively looking to reduce their warehouse emissions Generous incentives, stricter regulations, and ESG concerns are making solar more attractive for multi-family and C&I assets 1 2 3 4 5 6 7 21
  • 22.
    Sources: Solar EnergyIndustry Association (SEIA), DSIRE alpaca vc 40 states have mandatory net metering rules that require owners to be compensated for energy put back into the grid 2 22
  • 23.
    Sources: US Departmentof Energy (Office of Energy Efficiency & Renewable Energy), Solar Energy Industry Association (SEIA), DSIRE, EnergySage, Sunrun alpaca vc A broad range of government incentives exist to lower the upfront capital investment and boost ROI Federal State / Local • As of July, the ITC stood at 26% and was scheduled to step down to 22% in 2023 before finally expiring in 2024 • However, as part of the Inflation Reduction Act passed in August, the ITC was increased from 26% to 30% and extended for another decade (runs through 2032) • The ITC is based on the tax basis of the solar system and only applies in the year in which it was placed into service • In addition to the ITC, the owner can also take advantage of accelerated depreciation • Many states offer Property Assessed Clean Energy (PACE) financing to reduce the upfront burden • State-specific programs vary widely – some examples include: • New York • NY State Solar Energy System Equipment Tax Credit: 25% tax credit ($5K max) • Solar Electric Generating System Tax Abatement (SEGS): exempt from any added home value • Solar Project State Sales Tax Exemption: exempt from 4% state sales tax • New Jersey • Solar Investment Property Tax Exemption: exempt from any added home value • Solar Panel System Sales Tax Exemption: exempt from 6.625% state sales tax Resources like DSIRE and EnergySage can help real estate owners identify the specific incentives for which they qualify 3 The DOE has published a comprehensive guide to better understand how the ITC applies to commercial solar installations 23
  • 24.
    Sources: McKinsey, TheNew York Times, Building Design & Construction, NYC.gov, PV Magazine alpaca vc In addition to these ‘carrots’, state governments are introducing mandates and other rules to hasten solar adoption 4 In March 2022, the SEC proposed a new rule that would “enhance and standardize climate-related disclosures for investors”; in its current form, it will drive demand for solar installations as public companies push their landlords to put forth concrete plans to reduce emissions. Since 2020, California has required all newly built single-family homes (as well as multi-family buildings up to three stories) to have PVs installed; it is currently considering a new law that would expand this requirement to commercial buildings and high-rise residential projects. Massachusetts is currently considering a bill (S2165) that is modeled after California’s policy; it would require rooftop solar panels on most residential and commercial buildings, with some exceptions. Part of the Climate Mobilization Act, NYC’s Local Law 97 will require most buildings over 25K square feet to meet rigorous energy efficiency and greenhouse house gas limits by 2024. In 2022, in response to the Russian invasion of Ukraine, the European Commission proposed a rooftop solar requirement for all commercial and public buildings starting in 2027, and for all residential buildings by 2029. In 2021, New Jersey passed a law requiring all newly built warehouses to have “solar-ready rooftops” – that is, they must reserve up to 40% of their roof space for solar arrays. 24
  • 25.
    Sources: Industry participantinterviews alpaca vc For multi-family and small C&I solar installations, high single-digit / low double-digit unlevered returns are typical • Rooftop solar returns can vary significantly from project to project, even in the same asset class • Exact return profile is dependent on the size of the system, state in which it’s located, current energy consumption, creditworthiness of the offtaker, structure of the transaction, and a variety of other factors • Average unlevered IRR for a typical multi-family or small C&I project (100 KW) is in the ~8-10% range • This represents the return on the installation overall, and will be divided up between cash equity investors, tax equity investors, and debt holders • Utility-scale developments have unlevered IRRs in the ~3-5% range while residential might be ~12%+; ~8-10% reflects the moderate degree of risk • Payback period can be anywhere from ~2-10 years depending on the state, but ~4-5 years is most common • For instance, in NY, the incentives are heavily front-loaded so you reach breakeven earlier • Conversely, in NJ, the incentives are more evenly distributed over time which pushes breakeven further out ~8-10% Average unlevered IRR ~4-5 years Average payback period 25 IRR likely to increase as interest rates in the US rise
  • 26.
    Sources: The NewYork Times alpaca vc Despite these tailwinds, two recent developments could potentially reduce the ROI and slow solar’s momentum • Since 2012, the US has imposed tariffs on Chinese-made solar panels to prevent China’s state-subsidized industry from “flooding the US market” • As a result, most US installers buy solar panels from Southeast Asia (i.e., Cambodia, Malaysia, Thailand, and Vietnam); together, these four countries account for about 80% of the most popular type of solar panel used in the US • In early 2022, Auxin Solar, a small US-based manufacturer, claimed that these panels in fact use Chinese-made wafers and accused China of circumventing anti-dumping laws, prompting the Department of Commerce to open an investigation • The threat of retroactive tariffs has effectively frozen all Asian imports, and forced installers to cancel or postpone more than 300 solar projects nationwide • Fortunately, in June 2022, the Biden administration announced a 2-year pause on any new solar tariffs to prevent further disruption; it also invoked the Defense Production Act to stimulate domestic manufacturing That said, the investigation is ongoing and the resulting uncertainty could continue to dampen demand for solar panels Ongoing US federal investigation Potential changes to net metering • Currently, 40 states (plus DC) have mandatory net metering rules, which require utilities to compensate solar rooftop owners for the excess electricity they put back into the grid • However, several US states (e.g., California, North Carolina) are under pressure from local utilities to alter net metering policies and reduce their payouts • For instance, in California, the Public Utilities Commission is considering a plan that would charge customers a ~$50 monthly “grid participation charge” and reduce net metering credits by as much as 80% • Florida was recently considering a similar bill, which aimed to significantly reduce the value of net metering, but Governor Ron DeSantis vetoed the bill citing inflation concerns If these plans ultimately pass, they will hurt the ROI of rooftop solar and deter behind-the-meter installations 26
  • 27.
    Sources: Company websites,Industry participant interviews alpaca vc Solar consultancies exist to guide clients through the end-to-end process from initial feasibility through to implementation Company Description Sample clients / case studies Environmental consultancies • Bright Power is a provider of both energy and water management services for real estate owners, operators, and investors – from utility bill analytics to physical improvements • Within solar, it offers a full suite of services from early-stage feasibility to ‘turnkey design-build project implementation’ • Bozzuto Management, Equity Residential, John Rose Companies, Nuveen Real Estate, RDC Development, Related Specialist solar consultancies • Founded as part of the Rocky Mountain Institute (RMI), Black Bear Energy is a ‘buyer representative’ that helps commercial, industrial, and multi-family owners with the full solar value chain • Serving as commercial advocate, it has completed 600+ solar projects (450K+ MW) and claims $5-50 in solar value creation per sq. ft. • AEW, AMC, Clarion Partners, Equity Residential, Iron Mountain, LaSalle Investment Management, Link Industrial, STAG Industrial • SolarKal is a B2B marketplace that connects organizations to 150+ pre-vetted solar providers; each company also has a dedicated human advisor to provide expert guidance • The platform has facilitated >$200M in closed deals with “30% cost savings, on average, compared to traditional solar energy procurement” • Bergen Logistics, Cornell University, Halpern Real Estate, New Jersey Motorsports Park Turnkey solar developers • Wunder was initially focused only on C&I solar financing; with backing from Ares, Blackstone, Keyframe, and other institutional investors, it was able to offer fast and flexible financing options to clients • It has since expanded beyond financing to provide an all-in-one turnkey solution, including permitting, design, installation, and ongoing operations • Sample C&I projects include a CA shopping center, DC charter school, NJ warehouse, and HI homeowners' association, among many others Utility-owned consultancies • Powerflex (fka EnterSolar prior to EDF acquisition and re-branding) advises clients on onsite solar, battery storage, EV charging, microgrids, and energy management systems • In addition to its advisory work, it also sells several software products that provides real-time data and insights into a client’s energy assets • ACME, Amazon, BJ’s, Bloomberg, Fordham University, Honeywell, Pepsico, Regeneron, Swiss Re, Target, UNFI, USAA 27
  • 28.
  • 29.
    alpaca vc Sources: The NewYork Times, StuyTown.com Multi-family case study: Stuyvesant Town (New York, NY) • Stuyvesant Town-Peter Cooper Village (“StuyTown”) is a 110-building complex on the east side of Manhattan; completed in 1947, it remains the largest multi-family development in the US (27K residents) • Blackstone, the current owner, installed more than 9,600 panels (3.6MW) across the site’s 22 acres of rooftop in 2019, making it the largest private residential array in the country • StuyTown sends the solar energy back into the electrical grid and receives a credit from ConEdison against its electricity bills • Residents do not see direct benefits because units are not separately metered for electricity (utilities are included in monthly rent) • Blackstone spent nearly $10M in the project – “nearly a quarter of that — $2.3 million — was offset by incentives provided by the New York State Energy Research & Development Authority, through its $1B NY-Sun program” 29
  • 30.
    alpaca vc Sources: Solar PowerWorld Senior housing case study: Villa Catalina (Tucson, AZ) • Villa Catalina Apartment Homes is an 80-unit 55+ community in the heart of Tucson, AZ • It partnered with financial firm Solaris Energy and installer Solar Gain to add solar power (152 kW) on top of the senior living complex • Installation produces about half of the energy consumed and significantly reduces the HOA’s electricity rate • Solaris provided the upfront capital, and Villa Catalina pays for the solar electricity as a service on a monthly basis; the complex has the opportunity to own the solar system outright after a 6-year period 30
  • 31.
    alpaca vc Sources: Cornell Universitywebsite Student housing case study: Cornell University (Ithaca, NY) • Cornell University has invested heavily in rooftop solar systems and solar farms in order to achieve its goal of carbon neutrality by 2035 • To date, Cornell has completed 15 solar projects, which provide ~20% of its campus electricity needs • Rooftop solar projects include: • 2007: Cornell Campus Store Solar Array (2.2 KW) • 2012: Human Ecology Solar Array (76 KW) • 2014: Fernow Hall Solar Skylight (2.2 KW) • 2014: Snee Hall Solar Array (3.5 KW) • 2015: Klarman Hall Solar Array (20 KW) • 2021: North Campus Housing (Phase 1) • 2022: North Campus Housing (Phase 2) • The North Campus solar installation will be the largest campus project to date; once completed in 2022, it will generate roughly 1.1MW of electricity 31
  • 32.
    alpaca vc Sources: The NewYork Times, Power Grid International Industrial case study: STAG warehouse (Hampstead, MD) • STAG Industrial, a Boston-based real estate investment trust, owns a 1.1M sq ft warehouse in Hampstead, MD that it leases to Penguin Random House, a book publisher • STAG leases the 23-acre roof to Summit Ridge Energy, a solar developer, which installed a 9.2 MW solar array; it is thought to be the largest rooftop community solar project in the US • The rooftop system sends its energy back into the grid, lowering utility bills for ~1,300 homes and businesses in the local area; the warehouse itself still runs on power from the grid • This is the first of three solar projects STAG is working on in the state of Maryland – they are all part of Maryland’s community solar program to provide low-cost renewable energy to surrounding homes and businesses 32
  • 33.
    alpaca vc Sources: Solar IndustryMagazine Industrial case study: Anheuser Busch (various locations) • Anheuser Busch partnered with ForeFront Power, a leading solar developer and advisor, to install solar systems at 8 of its craft breweries across the country • ForeFront has completed solar installations at the following locations: • Goose Island Beer Co. in Chicago, IL • Blue Point Brewing Co. in Patchogue, NY • Virtue Cider in Fennville, MI • Breckenridge Brewery in Littleton, CO • Devils Backbone Brewing Co. in Lexington, VA • Four Peaks Brewing Co., in Tempe, AZ • Karbach Brewing Co. in Houston, TX • 10 Barrel Brewing Co. in Bend, OR • Combined, these systems will generate 2.4 megawatt-DC (MWdc), and in doing so, will reduce AB’s carbon footprint by ~2M lbs of CO2 annually 33
  • 34.
    alpaca vc Sources: Company websites Industrialcase study: Link Logistics (various locations) • In 2021, Blackstone announced it would take part in New Jersey’s Community Solar Pilot Program by bringing together two of its portfolio companies – Link Logistics, a warehouse operator, and Altus Power, a clean electrication company • Under the agreement, Altus and Link will install solar arrays on warehouse rooftops across the state; the systems are expected to generate 35 MW and will lower energy bills for approximately 6K customers in the area, including underserved populations • The initiative supports Altus’s revenue growth, while also helping Link achieve its ESG goal of becoming carbon neutral by 2025 34