The document discusses the cost-effectiveness of solar energy in the Commonwealth of the Northern Mariana Islands, highlighting potential savings for both residential and commercial customers through the adoption of solar technology. Key findings indicate significant annual savings for individuals installing solar systems, with options for net metering and feed-in tariffs. The document also addresses barriers to local solar generation and the necessity for updated utility regulations to enhance solar adoption.

1. S O L A R F O R S A I PA N
A N I N C R E D I B LY C O S T- E F F E C T I V E E N E R G Y P O L I C Y
John Farrell
Director of Democratic Energy
May 20, 2014

2. COSTLY IMPORTED POWER

3. Fuel cost: $60 million per year (2010)
$1100 per person per year
Commonwealth of the Northern Mariana Islands Initial Technical Assessment Report, NREL 2011

4. C O S T O F E L E C T R I C I T Y ( P E R
K I L O WAT T- H O U R )
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
Residential Commercial
$0.33
$0.26
Diesel
L O W E S T I M AT E
Source: CUC rates

5. S O L A R S AV I N G S

6. C O S T O F E L E C T R I C I T Y ( P E R
K I L O WAT T- H O U R )
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
Residential Commercial Solar $4/W
$0.33
$0.26
C O S T O F E L E C T R I C I T Y ( P E R
K I L O WAT T- H O U R )
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
Residential Commercial
$0.19
L O W E S T I M AT E
Customers save at least $0.07 to
$0.14 per kWh with solar

7. C O S T O F
E L E C T R I C I T Y
( P E R K I L O WAT T-
H O U R )
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
CUC diesel cost
$0.30
The utility saves $0.30 for every
kWh avoided with solar
KEMA Renewable Energy Integration Study, 2013

8. For every customer that installs 5 kW of solar…
Saves $1,600 per year Saves $350 per year
Net metering @ $0.26 per kWh

9. For every customer that installs 500 kW of solar…
Saves $195,000 per year Breaks even
Feed-In Tariff@ $0.30 per kWh

10. N O R E A S O N T O WA I T

11. KEMA Renewable Energy Integration Study, 2013
U T I L I T Y ( C U C ) C O S T S AV I N G S F R O M S O L A R + W I N DMilliondollars
$0
$3
$6
$9
$12
% of peak energy use from solar
20% 40% 69%
$11.9 million
$6.8 million
$3.3 million

12. 2 0 % R E N E WA B L E E N E R G Y
Solar
19%
Wind
1%
Diesel
80%
Technology Capacity
Solar + Wind 7,000 kW
Energy Storage 3,400 kW
Annual Balance
Renewables Cost -$2.1 million
Fuel + Operations Cost
Savings
$2.8 million
Net Benefit $0.7 million
See final slide for assumptions

13. 4 0 % R E N E WA B L E E N E R G Y
Solar
38%
Wind
2%
Diesel
60%
Technology Capacity
Solar + Wind 14,000 kW
Energy Storage 6,800 kW
Annual Balance
Renewables Cost -$4.2 million
Fuel + Operations Cost
Savings
$5.6 million
Net Benefit $1.4 million
See final slide for assumptions

14. Technology Capacity
Solar + Wind 24,150 kW
Energy Storage 11,700 kW
6 9 % R E N E WA B L E E N E R G Y
Solar
66%
Wind
4%
Diesel
31%
Annual Balance
Renewables Cost -$7.3 million
Fuel + Operations Cost
Savings
$9.7 million
Net Benefit $2.4 million
See final slide for assumptions

15. N O T T H E F I R S T

16. Energy Storage: The Next
Charge for Distributed Energy
(2014, ILSR)
K A U A’ I C O O P E R AT I V E
E L E C T R I C I T Y, %
R E N E WA B L E
0%
10%
20%
30%
40%
50%
2006 2013 2015

17. S O L A R S E R V I N G H A L F
O F D AY T I M E D E M A N D
( 2 0 1 5 )
Other
50%
Solar
50%
Energy Storage: The Next
Charge for Distributed Energy
(2014, ILSR)

18. K I U C E N E R G Y M I X
Energy Storage: The Next
Charge for Distributed Energy
(2014, ILSR)
2 0 1 3
Non-renewable
85%
3%
Utility solar
3%Hydro
9%
2 0 1 3 & U N D E R
D E V E L O P M E N T
Biomass
12%
Non-renewable
58%
Customer sola
6%
Utility solar
14%
Hydro
9%
Customer solar

19. 6 MW of battery storage
installed at substations
Energy Storage: The Next
Charge for Distributed Energy
(2014, ILSR)

20. S U R M O U N TA B L E
B A R R I E R S

21. S U R M O U N TA B L E
B A R R I E R S

22. ≤
?
1. A Limit on Local Power Generation!
Utilities always want local power generation to be less
than local minimum electricity demand so that
electricity will not flow out of neighborhoods and back
onto the grid.*
!
!
2. A Guesstimate of Minimum Demand!
Whoops! Utilities assume minimum demand
is about 30% of peak demand, because they
don’t measure minimum demand.
!
!
3. An Arbitrary Safety Margin!
Utilities take this 30% threshold and
divide by 2 to get a 15% cap on local solar.
!
!
!
*Also addressed with 2-way electrical equipment
How Local Solar Gets Capped
15%
Peak use
“Minimum”(30%)
÷2
Percent of peak power allowed from local solar
Default cap of
÷2

23. !
1. A Daytime Minimum!
How much solar power is produced at 4 AM?
None. But that’s the time of day utilities used
for their minimum demand calculation.
!
Hawaii solar advocates negotiated a change: to
estimate minimum demand when the sun is
up (Sundays at noon).
!
Even though utilities maintain the arbitrary
“division by 2” safety margin, this change
could allow nearly twice as much local solar
on the grid.
How States Can Raise the Cap (Hawaii)
“Daytime min.”
÷2
~25%
Hawaii’s Update (2011)
Hawaii estimates the minimum
demand during daytime.
Cap is raised to
Percent of peak power allowed from local solar

24. Daytime minimum
~50%Cap is raised to
Percent of peak power allowed from local solar
÷
California’s Update (2012)
Measured daytime demand
No “division by 2”
How States Can Raise the Cap (California)
!
1. A Measured Daytime Minimum!
Utilities must actually measure the minimum
demand on a power line between 9 AM and 4 PM
and no longer use peak demand as a proxy.
!
2. No “Division by 2”!
Utilities can’t arbitrarily divide the cap by 2,
now that the power line capacity is actually
measured.
!
The result could nearly triple the original
15% cap on local solar power.
2

25. S O U R C E S
• Renewable Energy Integration Study
(KEMA, 2013): http://cl.ly/0c0e0E0E0G05
• Northern Mariana Islands Quick Facts (EIA,
2014): http://1.usa.gov/1giOmLV
• Commonwealth of the Northern Mariana
Islands Initial Technical Assessment Report:
http://cl.ly/0D1r370i3t3y
• Energy Storage: The Next Charge for
Distributed Energy (ILSR, 2014): http://
bit.ly/1sPXFTV
jfarrell@ilsr.org

26. C O S T A N A LY S I S A S S U M P T I O N S
• Installed costs
• Solar: $3200/kW; Wind: $4000/kW
• Storage: $480/kW + $565/kWh
• Finance terms: 6% interest over 20 years
• Installed capacity
• Solar = 95% of total nameplate capacity
• Storage
• kW = 50% of solar nameplate + 20% of wind nameplate
• kWh = time to allow diesel plant to ramp @ 30 kW per second
• Avoided energy costs: $0.30/kWh
Most assumptions from KEMA Renewable Energy Integration Study, 2013; those in blue from ILSR