Below is the text version of the EECLP Webinar 6: Solar Program Overview, presented in January 2015.
Odette Mucha:
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Hello, everyone, and welcome to the webinar. Today is the sixth and final webinar in the series about the Energy Efficiency and Conservation Loan Program. This series is cohosted by the Department of Energy and the Department of Agriculture. And we've had a lot of help, too, from the Environmental and Energy Study Institute, as well as our speakers from across the electric cooperative community. And thank-you all for participating. Today we'll be discussing solar.
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And under the EECLP, eligible borrowers are able to relend money to customers to support residential, commercial, and industrial solar. Our first speaker is Gerry Moore from the Rural Utilities Service at USDA, and he'll provide a brief explanation of the EECLP. Next we'll hear from Bill Vecchio from the New Hampshire Electric Cooperative, and he'll tell us about their solar program that they're running in New Hampshire. And finally, we'll hear from Chad Laurent from the Meister Consultants Group. After our presenters, we'll take your questions. And so if you have a question, you can type it into the webinar dashboard under "Questions." And we will get to as many as we can at the end of the presenters. Finally, this webinar is being recorded and will be available online, and we can email out a link. That will come out sometime tomorrow.
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And with that -- and also, the recordings of the previous webinars are available on these websites. And if you have any questions, you can always email me at se@ee.doe.gov. And that email will come up again in the end. Alright. With that, on to our first speaker, Gerry Moore.
Gerry Moore:
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Thanks, Odette. Hello. My name is Gerry Moore. I'm with the U.S. Department of Agriculture. I work in the Rural Utilities Service, called RUS. Specifically, I'm in the Electric Program. I want to remind you that we recently added energy efficiency as a new, eligible activity for RUS loan funds: the Energy Efficiency and Conservation Loan Program, also called the EECLP. These loan funds just became available in February 2014. This new purpose allows eligible RUS borrowers to relend RUS loan funds to their consumers. This relending is for the purpose of helping consumers realize energy efficiency in their homes and businesses. Here are a few facts about the new EECLP to keep in mind, as well. Efficiency upgrades must be within the borrower's service territory. These upgrades are to be located on the consumer side of the electric meter. RUS borrowers can charge an interest rate to their consumers for these loans. Start-up costs to the utility are available in up to 5 percent of the loan amount, to help get the EE program under way. Loan terms are based on the useful life of the upgrades. Please keep in mind that one of the eligible purposes for EECLP is small-scale renewables such as solar. RUS loan funds are available to utilities for solar projects through our regular loan program, or through the EECLP. Using EECLP, the utility can relend RUS money for on-site solar projects. Also, utilities could structure their solar programs using an on-bill financing method. Now, many of us know electric cooperatives have an excellent relationship with their consumers. In fact, cooperative consumers are members of the co-op. They already have an established financial relationship with the co-op through their monthly electric bill. This unique relationship makes for a natural fit for cooperatives to provide their members access to energy efficiency and small-scale renewables. Now, this series of webinars was designed to help the potential RUS borrower to understand efficiency programs in rural areas and get exposure to some of the best practices associated with energy efficiency and small-scale renewables. We hope the information provided here helps you, and we look forward to your feedback. Next slide, please.
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I've just given you just a very brief overview of EECLP. There is so much more to discuss. If you have a chance, please take a look at our website for more information, and consider applying for an EECLP loan. We'd love to talk to you about it. Thank-you. And now back to you, Odette.
Odette Mucha:
Great. Thanks, Gerry.
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OK, here's our next speaker, Bill Vecchio from the New Hampshire Electric Cooperative.
Bill Vecchio:
Thank-you, Odette. Good afternoon. This is Bill Vecchio. I'm in business development including key accounts at New Hampshire Electric Cooperative. Along with me is Scott McNeil. He is our solar PV program coordinator. And thanks, all, for the opportunity to share with you information on our solar PV program. Next slide.
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First, where we are. New Hampshire Electric Cooperative is located in New Hampshire, one of six New England states. You'll see our area shaded in green with a red star denoting our headquarters in Plymouth, New Hampshire. And as you see, we serve primarily the middle of the state, but we also have a district office in far northern New Hampshire, near the Canadian border, and as far south as the seaport, the sea coast area. Next slide, please.
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Alright. I showed you where we are, and now who we are. We're headquartered in New Hampshire's lakes and mountains. We're the second largest utility in New Hampshire by meter. We're among the top 30 co-ops nationally. We have over 80,000 meters.
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Home Performance with ENERGY STAR®, Home Energy Assistance for income-qualified members, another loan program, heat pump water heaters, heat pumps, ENERGY STAR Homes, lighting, appliances, and finally, renewable energy. Next slide.
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Alright. Back in 2007, our board of directors initiated the Social and Environmental Responsibility programs, one of which I mentioned in the previous slide. That's fossil fuel programs. If a measure saves fossil fuel consumption, we'll provide incentives for those projects. But we're going to be concentrated on the solar programs today. And two of the programs we offer is solar hot water or thermal, and residential and commercial solar photovoltaic, or solar PV. And you're seeing a page from our website. Next slide, please.
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And here is the page from our website that is for solar PV. Note in the green square section on the web page, you'll see downloads, and if you click on that link, you will go to a number of forms. It begins with our program overview, so our members will click on this and read through and / or print this information. So the first they'll see is program overview. The next will be the application checklist. So they can go through and make sure they don't miss any of the steps so that when their application comes to the co-op, they will have all the necessary information. We'll also have on there the application form, our terms and conditions, specifications, renewable energy credits or RECs, which I'll get to in a moment, and finally, the completed or post-inspection form. Next slide, please.
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Here's a quick look at our solar PV incentives for 2015. For residential, it's available on a first-come, first-served basis. There are a limited number of incentives available in 2015. This year, the incentive is 25 cents per DC watt, up to $1,375. Commercial, also first-come, first-served and a limited number of incentives are available. The incentive is 25 cents per DC watt, up to 15 percent of the system cost, capped at the lesser of 15 percent of the system cost or $10,000. The incentives are lower in 2015 than in previous years. Since the original intent of the program was to influence members to install PV systems, and now with the PV material costs dropping, the need for the higher incentive levels to transform the market is not as critical. Also, we're on a fixed budget, so our rebate dollars or incentive dollars are limited. Next slide, please.
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Rules and regulations for PV systems. We have our own terms and conditions at the co-op for solar PV installations. Also must abide by the New Hampshire Public Utilities Commission rules. The NHPUC has the 900 NET metering rules, and also the 2,500 REC -- renewable energy credit -- metering rules. All systems must be installed by licensed -- by New Hampshire-licensed electricians that naturally abide by the National Electric Code. Next slide, please.
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Alright, so the process begins. The member has read through the information and prepared to fill out the forms. They have questions, they'll call into the co-op and they'll speak with Scott McNeil. Scott and the member will share information. Scott will answer questions about the application, about the procedures, how to move forward, etcetera. The member then submits the application for incentives, if applicable, which I'll address in a moment. Scott will then review the following: the existing electrical service with the engineering department -- that's to ensure the existing service drop and the transformer that's serving the meter is sized adequately. He'll also look at the PV design, the interconnection application, and the REC agreement. Once the application is approved, the member will be notified by mail. Scott will send it to them. From that point forward, the installation must be completed within 120 days. Next slide, please.
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Alright, renewable energy credits, or RECs. The EPA defines RECs as the property rights to the environmental, social, and other nonpower qualities, renewable, electrical generation. By receiving an incentive -- by the member of a co-op receiving an incentive, they will be giving NHEC the rights to their RECs. For residential members, it's in perpetuity. For commercial, it's a negotiated term. The negotiation is based on a return of the investment of the incentives we provide to the commercial members. These certificates are used to help us reach our renewable energy portfolio requirements. We have to have, as many utilities do, renewable energy that we offer. Now, the member can choose to not receive an incentive. And in lieu in receiving an incentive, the member may sell the RECs produced by these PV systems to the co-op or to another entity. And if the member chooses to sell the RECs to the co-op, we'll pay the current market value. And we look at that annually for the RECs produced. In 2013, each REC was valued at $50. Last year, 2014, it was $40. This year is to be determined. We haven't established that yet. And each REC is equal to 1 megawatt hour, or 1,000 kilowatt hours of PV generation. And it's also required by state regulation that the members' RECs are monitored by an approved entity. Next slide, please.
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There's additional incentives that can be realized in New Hampshire. The NHEC members may be eligible for a state of New Hampshire incentive, and there's the New Hampshire PUC website that will detail the incentive levels that they provide. And also we all know about the tax credit from the federal government, and we advise our members to consult their own tax adviser to determine the eligibility for these credits. Next slide.
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Alright, the system is done. It's completed. The contractor has completed the installation, and the member now calls Scott. They set up a visit. Scott will visit the site, review the applications with the member, ensure the equipment that was specified has been installed. He'll verify the primary meter number that's associated with that particular account where the PV is installed. He'll also look at the hardware, make sure that the location of the PV panel is sited properly, verify the tilt, azimuth, and shading consistency, as listed in the application. He'll check to see if the inverter is UL listed, the 1741 list. Check the disconnects and over-current devices, and also ensure that the REC meter is in proper location. Scott will then replace the primary meter with a net meter. He'll install the REC meter, and energize the system, test the inverter, the UL 1741, review the meter displays with the member, and follow on site, and when it's up and running, he'll answer any questions that the member may have. Next slide, please.
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And here is a simple diagram of a PV system and a REC meter. As you can see in the upper right, is the solar panels, generating DC, going through the PV inverter, and that's the UL 1741 inverter. Converting to AC through the REC meter, on to the house panel, and then from there, as you see, it's bi-directional going to the primary net meter and on to the NHEC lines. Next slide.
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And here are solar PV installations as of last week, January 15, installed on our lines. Commercial systems: 36 commercial systems that generate .636 megawatts. Residential: 402 systems we have operating, at 2.0 megawatts. And in progress, we have two commercial systems, 199,000 KW, and 19 residential systems at 115, almost 116,000 KW. The program is pretty well-received by our members, and this is a good reflection on the success of the program. Next slide, please.
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Alright, there's Scott McNeil in the center right, with the cap. He is delivering an incentive check to the member after this PV installation at the Plymouth -- right here in town -- Plymouth Village Water and Sewer District. They have a 121 KW solar array that is up and running. When was that installed, Scott?
Scott McNeil:
It was commissioned December 31.
Bill Vecchio:
Alright. So that's fairly recent. Next slide, please.
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OK. That's it. We'd be happy to answer any questions.
Odette Mucha:
Great. Thanks, Bill. We will connect to questions at the end, and everyone on the line, feel free to continue typing in your questions, and we'll get to them right after our next speaker.
Bill Vecchio:
Alright. Odette, one more slide, please.
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That's our contact info, should anybody wish to follow up. And that's it. Thank-you very much.
Odette Mucha:
Great. Thank-you so much, Bill.
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OK. And our next speaker is Chad Laurent. Take it away, Chad.
Chad Laurent:
Alright. Thanks, Odette. Hi, everyone. Thanks for having me on the webinar. Next slide.
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So my name is Chad Laurent. I'm from Meister Consultants Group. We're based out of Boston, and we work with a number of partners. We're here on behalf of the -- I'm here on behalf of the SunShot Solar Outreach Partnership, which is a DOE initiative to help communities across the U.S. increase the amount of solar power that's installed within their jurisdictions, often focusing on how to reduce soft costs for solar PV, which are all the nonhardware costs, which now equal more than 60 percent of the total cost in solar systems, isn't related to the hardware, but are all soft costs, like permitting, zoning, customer acquisition costs, labor, things like that. Next slide.
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So just in terms of solar technologies, the three most common: solar photovoltaic PV, solar hot water, and concentrated solar power. For purposes of today, we're all talking about solar PV. So generating electricity using the sun. But there are also other technologies where you can use the reflection of the sun to boil water, concentrated solar power, and then the thermal energy from the sun to heat an antifreeze solution, solar hot water. But today again, focusing on solar PV. Next.
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Just a little bit of background and backdrop of the current solar market. So despite what folks in Seattle and Alaska and also us in New England might think, solar really works anywhere within the U.S. Germany is the world's largest solar market and has the solar resource comparable really just to Alaska and parts of the Pacific Northwest. So nearly everyone in the U.S. can produce a significant amount of solar, assuming they have access to the sunlight, they have roof space or ground if it's unshaded. But solar really works anywhere and can contribute significantly to on-site electricity generation. Next.
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Over the recent history, last 30, 40 years, the price of modules have come down 99 percent. And as you can see, the global installed capacity, which are the bars going toward the right, in gigawatts across the globe has increased exponentially and really quite dramatically. So you sort of can't underestimate the scale of the drop in price of solar PV, even within recent -- the last maybe five or 10 years -- and the real sort of huge explosion of the amount of installed solar PV across the world. Next.
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What's been true across global PV markets is also true in the U.S. Even just going back to 2008, 2009, there was less than 2 gigawatts of solar installed in the U.S. And now there are over 12,000 megawatts, 12 gigawatts installed solar within the U.S. So a really exponential growth of the U.S. solar market. Next.
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And U.S. average and installed behind-the-meter PV costs also have fallen and are continuing to fall dramatically. So just in 2013, the installed price of solar, U.S. average costs was 50 percent lower where it was in 2009. So what we're seeing is that homeowners and businesses who maybe considered solar just a couple years ago and found it didn't quite break even, it didn't quite make financial sense for them, prices are falling so dramatically that solar really is a viable option for more and more people every year. So the market -- folks are generally interested in installing, customers are generally interested in installing solar. And where it was maybe too expensive to do so in recent history, it may make really good economic sense for folks today. Next.
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Along those same trends, we're seeing huge job growth in solar. So in terms of an economic development impact, we see a lot of local jobs being created by the solar market, and the solar job force has increased dramatically also in recent years. And that trendline has continued. And what we see is, you can't ship your house overseas to have the solar installed on it -- these are inherently local jobs, local electricians, local installers that are doing the work. Next.
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So there is a huge interest in solar. Prices have come down. We hear a lot from co-ops and utilities that we work with that their customers want to go solar. It may make economic sense for them, but there is still a high up-front cost for solar. It's not yet free. Even if the panels were free, you'd still probably pay a decent many thousands of dollars just for all the other costs associated with solar. And also fewer than 5 percent of the 6,500 banks in the U.S. actively finance for solar PV projects. So while it's very easy to find a car loan or a mortgage and other types of consumer loans, as well, not many banks are in the solar market yet. A lot of this is just lack of awareness and education, lack of good knowing that there's an opportunity there, just because of the rate at which prices have come down so dramatically. Next.
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So in terms of the most active PV markets in the country, many states and some utilities allow for third-party ownership, where a third party owns the system on someone's roof space and then they lease the power to the homeowner. And this is an option where folks often don't have -- pay no money down or very low money down for the system, and then receive a sort of discounted price in their kilowatt hours, a lease payment or power purchase agreement over time. And so those states that allow for them see a pretty dramatic percentage of solar customers, generally at least 50 percent up to 90 percent of customers going the third-party ownership or PPA route. A lot because they don't necessarily -- in some ways, because they don't necessarily have a good low-interest or no-money-down loan option. Next.
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When you look at the value of a loan versus paying for cash for a system, or a lease or PPA, this is an analysis that was done by Energy Sage. What you see is that it often can make -- the solar system will pay for itself over time. If you look at the total 20-year net savings, cash purchase is generally the highest but you have to have that cash up-front, and not everyone has the ability to do that. A zero-down loan comes out quite ahead of the solar lease or PPA option. Again, not to say that a lease or PPA isn't a good option for folks, when they take that option, but there's a real sort of opportunity here to provide a low-interest or a zero-down or a relatively low-expense loan for customers who want to go solar. Next.
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And this is where the EECLP solar loan program that Gerry spoke about, there's a real sort of opportunity here. So under the program, utilities can make a consumer loan, collect payments on that loan, or they could delegate the servicing of the loan to a third-party agent. And so co-ops have a real opportunity to provide low-interest loans through the EECLP loan, to their customers who want to go solar. So a utility could pay for a system without making a loan. Or the other option that the EECLP offers is the utility can lend the money, or pay for the system without making a loan per se, and recover costs through an opt-in tariff, or a specific customer or customer class charge. So the money could essentially be lended out to those customers who want to go solar, and if you choose to go solar, you could pay back your loan through a special tariff or special customer class. Which is sort of a really unique way of going about financing solar projects. And there's a real potential there for the utility to provide that benefit to its members. And in a minute I'll talk about community solar programs, and that could be a type of program funded through EECLP loans where customers could opt in to a particular tariff and then potentially receive benefits from a community solar project or community solar garden. And I'll describe what that means, could potentially mean in a few slides. Next.
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Just going back over some of the things Gerry said that are applicable to the solar context is, on-bill repayment is OK. So the loan would travel with the electric bill. And someone who took out a loan from the utility or the utility's agent to put solar on their house -- they can repay it through their bill. The utility can recover costs through the rate base if the project reduces peak demand. And other financial recruitment mechanisms may also be approved by RUS. So when the business plan is submitted to RUS through the EECLP program, sort of innovative structures and other alternative mechanisms have the potential to be approved. So there's ways to be sort of creative about creating loan products and being able to lend the money out in the community so community members can reduce their electric bills with solar, reduce peak demand, for the co-op, and also spur economic development within the co-op's service territory. Next.
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So again, through EECLP there's opportunity to lend to residential, commercial, industrial customers, small businesses, farmers who often have a lot of space available for land, either on farms or other farm structures, also areas of property that might be suitable for ground-mounted systems. Solar output often matches well with electricity use for pumping and irrigation. We worked with a couple utilities, folks in Nebraska, and this was often the case for folks there, that when they looked at solar output, it could often match that demand. And small commercial systems, have often been difficult to finance; residential systems are all fairly similar. Something like 80 or 90 percent of residential rooftop systems are designed in pretty much the same way, no matter where you are. But small commercial systems tend to cost a little bit more because commercial rooftops are a little bit more unique and customers may have demands, charges associated with their electric bill, and they may not fit the traditional sort of peak and demand curves that the utility might see. And so a low-interest loan from the co-op through EECLP could really significantly help customers in this small commercial, farmers and other soft of industrial customers, finance PV projects that they may not have been able to otherwise, with really attractive rates and terms. Next.
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So one of the stipulations for recovering through the rate base or customer charges, is if the PV contributed to a reduction in peak demand. And a couple of interesting studies have come out recently. This one is from Austin, Texas, where they found that most customers who look to install solar PV, they'll get the most overall generation from that system if it faces south. However, if the system faces a little bit toward the west, what it's found is that that system can contribute a significant more amount of electricity toward the peak if the peak is in the late afternoon. And so in this case, in Austin, Texas, the peak was a little bit later in the day, than say, the 12 to 3 o'clock range. The peak was a little bit later. So facing the solar PV system somewhat to the west actually provided more benefit to the utility in terms of reducing peak demand. Next.
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And so similarly, this is a study out of Rhode Island with National Grid, the investor-owned utility there. And this -- these bars show the percentage contribution to peak demand that the system produces over -- depending on the way that it's facing. So south has less than 30 percent of the output of the system contributes to the peak. Southwest, closer to 50 percent. And due west, over 50 percent of the output from that PV system contributes to peak demand. Single-axis is single-axis tracking, where it follows the sun across the sky. Dual-axis tracking sort of follows the sun and also adjusts its tilt. So obviously you would get the maximum output from tracking systems. Those tend to be a little bit more expensive. But so that the utility, you know, could work with its customers, and if there is looking to reduce peak, maybe working with its customers to get them to face their systems a little bit more toward the west, may provide more benefit to the co-op, to the utility. Next.
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So the other concept is community solar. So upward studies have shown that something like 70 percent of customers may not be able to put solar on their roof. Either their roof is shaded or the only suitable space would be facing north, which wouldn't work too well in terms of the output from that system. The economics wouldn't pan out as well, obviously, if that system was facing north. Or the structural issues associated with the home -- it's an older home, or if it's a condo or renters, they may not be able to install solar as well as lower-income folks who may not be able to afford the loan, or obviously afford the cash of an up-front payment. So community solar programs is where a larger system is installed somewhere suitable for solar PV, and it allows customers to buy a portion of that system, or at least to receive a part of the benefits from that system that is located not necessarily on their property. There are some advantages why community solar might work in the co-op context. More customers can participate in the solar program, so it improves the equity of and the ability of a more diverse and greater number of members to participate. Across the country where we see community solar programs installed, and there have been upwards of about 60 in some way, shape, or form, customer satisfaction tends to be very high. Increases economic development, in terms of increasing installations, because folks see the community solar project, they also look to potentially put solar on their own roof. You can often get economies of scale with a larger project, so the lower price per installed watt for a larger project. It can also be strategically located. The utility can work to say where would a community solar project provide the most benefit to the grid, where do we already have the infrastructure that's there to support that size system? Or if there's issues in the system with congestion that solar PV may be able to reduce peak and help maybe able to strategically locate it, rather than just wherever a customer happens to have their rooftop. And then there's even a potential to provide backup power, both in terms of for the utility, and then backup power on individual systems tend to be more expensive, but that could be something that could be financed as well through the EECLP program, as a solar PV system with battery backup could be an option, as well, if it makes economic sense. Next.
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So the sort of variation on a community solar program that might work with the EECLP loan program would be that the co-op utility could lend to a third party to own and manage that PV system on behalf of its customers. The co-op utility would allow its customers to purchase a right to the benefits of that PV system, so they may purchase a certain output from a certain number of panels at a certain cost. And then maybe that shows up on their electric bill as a savings. And they're able to repay the cost of buying those individual panels from the community solar project through the on-bill repayment system. And it's sort of a variation using the EECLP loan that some community solar projects are administered by municipal utilities and co-ops, where the municipal utility or the co-op owns the PV system and then allows its members to participate. And that's through the traditional RUS loan program. But under the EECLP, the variation would be that the co-op could lend the money to the third party to own the system and manage that process on behalf of the co-op. So that could be an interesting way of accessing the EECLP loan funds and being able to distribute that funding for solar PV projects to their members, in particular to their members who may not be able to put solar PV on their own rooftop. Next.
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Just a sort of diagram of how something like this might work. So the EECLP loan goes to the co-op; they lend the money to a solar installation, a third party that would own the system. If that third party pays taxes, they maybe they can take the investor tax credit, the ITC, from the federal government. And then the electrons either go to the utility or go to the customers, who then pay for the right to receive some form of benefit from that solar installation. Next.
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So these are not EECLP loan, community loans, provided to community solar projects. These are just sort of -- I guess you would call, traditional community solar projects. But it sort of gives a sense of how they might be structured. So this is Kit Carson Electric Cooperative in Taos, New Mexico. They contracted with a company, and at the time a nonprofit, called Clean Energy Collective, which I think it's been bought by First Solar. They did a 98 kilowatt solar canopy at a charter school in Taos. The bill credits are available to utility customers and came online in 2012. Next slide.
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And the way that was structured is Clean Energy Collective owned the system and sold the electricity through a 20-year PPA to the co-op and then the net-metering credits appeared to utility customers who paid $845 for each panel's production. So the variation on this using EECLP funds would be, as the two slides ago showed, that the electric cooperative would instead lend money to the Clean Energy Collective, who would manage the program on behalf of utility customers, who would take out a loan potentially. The Clean Energy Collective would then use utility customer payments to pay back the loan to install the system to the electric co-op. Next.
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So some best practices generally from community solar programs and other utility solar programs that we looked at over the years. It's important to engage stakeholders, in this case your members, ratepayers, but also solar installers, regulators, elected officials. So everyone sort of understands the program, what the goals of the program are, who can benefit, what its costs are. Make sure that everyone is aware of the program and hear their concerns ahead of time. Having a plan for over- and under-subscription is really important. So often we haven't seen too many under-subscription problems with community solar. As the market slides sort of earlier indicate, there's a lot of generally pent-up demand for solar. A lot of folks want solar either on their home or want their utility to consider solar as part of the energy mix. As Bill was saying from New Hampshire, it's important to decide who owns the RECs, if RECs are created within your co-op territory. Make sure that there's a value proposition to the customer. So generally those programs that are the most successful allow customers who participate to reduce their electric bills with solar. There are some solar programs where customers pay more per month for RECs. And those are also successful programs, but generally not in the same way as the different value propositions. So just make sure that everyone is clear here that the customer would hopefully have the ability to benefit or reduce their electric bill by going to solar. And then with on-bill repayment and also tracking the output, making sure that billing and IT systems that the utility has are set up to be able to track and output, and also the on-bill financing and repayment options work with the current billing and IT systems. Next.
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So just another quick example. The Farmer's Electric Cooperative in Iowa has done a number of different solar programs. They've done a solar -- a green power REC-buying program, they did a solar garden. They also did a feed-in tariff. And as a result of sort of all the different variations that they've done on solar programs, they lead the nation in terms of installed solar watts per customer, with almost 2 kilowatts per co-op member of installed solar. And as I mentioned, they had all sorts of different programs available, community solar programs, community solar garden, feed-in tariff, and even rebates, as well. So there's a case study that the Solar Outreach Partnership and the Solar Electric Power Association put out. So if you go to solaroutreach.org, there's these sort of short case studies available there. Next.
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Additionally, some other resources. The Solar Electric Power Association has great resources on community solar. IREC has some model rules for sharing renewable energy programs that aren't particularly focused on co-ops but offer some useful insights and information about how community solar programs can be set up. Next.
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And this is my contact information. The Solar Outreach Partnership also offers free technical assistance. So if your co-op is interested in exploring these options, please feel free to reach out. They may be able to provide technical assistance through our U.S. Department of Energy funds. And thanks for your time, and look forward to hearing some questions.
Odette Mucha:
Great. Thank-you so much, Chad. That was really interesting. And I would echo: We encourage everyone to reach out to the DOE, and we're happy to help you figure out how to go solar.
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OK, now it's time for some questions. Why don't we start with a question for Bill. Someone has asked, what is the NHEC's member's typical ROI timeframe?
Bill Vecchio:
That's a good question. The commercial, it's negotiated based on the RECs, the number of RECs produced, I believe, and the value of the incentive. And the value of the RECs and the value of the incentive. I believe the way it works -- and I'm not involved in that side -- but the ROI is usually about 10 years. I can't tell you what the calculation is, but I can find out. Please contact -- reach out to Scott and myself through the email link that we provided. So that's the basis of how they do that. I can certainly provide more information on that.
Odette Mucha:
OK, great. Someone else wanted to know if NHEC allows unlimited net metering and if so, what happens to credits that go beyond the power consumed by the consumer? So in the example of excess supply.
Bill Vecchio:
I'm going to have Scott answer that.
Scott McNeil:
Right. OK. Well, I think what they're asking is about the banking of the kilowatt hours. We have to follow the rules that are under Article 900 for net metering. So potentially, they can install a system and approve kilowatt hours beyond what they use and bank them for any amount of time. There is a facility to cash those kilowatt hours in, if they have over 600 at a certain time of the year. At that point, they would get a letter from the co-op offering to buy those out and start at zero. So I believe that's what they were asking for.
Odette Mucha:
Sounds good. Thanks. How about this question? What is the maximum loan amount we can issue via the EECLP? So that would be a question for Gerry.
Gerry Moore:
OK, so ... (feedback on the line)
Odette Mucha:
OK, we'll just skip Gerry. Gerry, if you could just mute your speakers, that might help a little bit. Let me see another question here, and we'll get back to you in a minute, Gerry. So this one is asking about Chad's slide on third-party ownership. And they're interested in an explanation about Arizona, and it seems like it's not as volatile as the other states. And so they're wondering why is that, if you happen to know. Is it because of utility incentives, perhaps?
Chad Laurent:
That's a good question. And I don't know a definitive answer on why. I don't believe it has to do with the utility incentive. It's often a behavior -- behavior reasons that no one really knows for sure that why there's often an uptick in PPAs by why it levels off lower in some states and not in others. But yea, I'm not sure exactly if anyone's done the analysis on Arizona. I would have to double-check to see if it was in fact tied to the utility incentive programs or if there was a reason for that. My guess ... (feedback on the line)
Odette Mucha:
Did we lose you there, Chad?
Chad Laurent:
I'm still here.
Odette Mucha:
OK, great. Sorry.
Chad Laurent:
Did you hear any of my response, or was that ...
Odette Mucha:
Yea, you said your guess is ...
Chad Laurent:
So my guess would be that it may just be behavioral and sort of market dynamics. It could be related to an incentive structure in Arizona, but I would have to double-check on that in order to determine for sure.
Odette Mucha:
OK. We have another trivia question for you. One of the participants is asking about New York, and they said they believe there's a 2 megawatt limit for any particular PPA PV installation. And they're just wondering if you know about that example, and if there's a plan to increase that limit.
Chad Laurent:
So I think the 2 megawatt limit in New York for a PPA was related to virtual net metering and not necessarily an on-site PPA. So, and virtual net metering is where the customer who receives the credit on their bill is not at the location where the installation is. So my understanding in New York is that the current 2 megawatt cap is for virtual net metered systems, but I don't believe it applies for on-site systems. But, yea, again, I would -- those regulations just passed a couple weeks ago, and so there could be a link on there that may bear that to be slightly different than what I say. But I think that had more to do with the 2 megawatt cap on virtual net metering.
Odette Mucha:
Cool; thanks. So here's a question for Bill. They're asking about the 1,375-hour limit from NHEC and they're saying is that a one-time limit, i.e., is it based on installed watts? If that makes sense to you, go for it. I'm not sure I understand it.
Bill Vecchio:
Yes, one time. The incentive is based on installed watts, and it's one incentive for a lifetime per member.
Odette Mucha:
Alright, great. And, Gerry, I'm not sure if you're still online. Looks like you may have dropped.
Gerry Moore:
So I can an --
Odette Mucha:
Oh, there you are.
Gerry Moore:
I can answer that original question. It is just a loan amount size. There is not a cap or minimum or maximum. But the loan amount must be justified by a work plan. So the agreed-upon work plan about what you need the money for, and how much you need. But we get billions each year, and we do not have some sort of cap that says we can only lend this much for EECLP. There's just nothing there. It's just another eligible purpose.
Odette Mucha:
Another question for you, Gerry, is, are the RUS loans available to be used for CHP, so combined heat and power?
Gerry Moore:
Now, I've heard this question before. It depends on application. So what we're looking at, these type of loan funds for EECLP are on the customer side of the meter. And so if it was an eligible borrower and they had that CHP application on the customer side of the meter, then we can talk about that. If it was not on the customer side of the meter, then our standard loan program may be able to handle that. But that's a little bit more of a specific topic that we would discuss. But it's not disabled.
Odette Mucha:
Great. And one last question. We're just about to hit 4 o'clock. This is a question for you, Gerry. They're wondering about how to start. So they're interested in a 1 megawatt solar system for their municipal buildings. Where should they start, who should they contact for details?
Gerry Moore:
Well, I think you can start with me, and we can talk about what kind of entity this is looking for this type of a loan. And so we would look at eligibility if it wasn't already an RUS borrower. An RUS borrower is the easiest way to go. But start with me, and then we'll go from there.
Odette Mucha:
OK, great. I think that's all the time we have for questions. We didn't get to every question, so we might send up a follow-up email with the answers to the questions we didn't get a chance to cover today.
Next slide:
So thank-you all for participating, and a big thank-you to our speakers. We really appreciate your time. Again, the copies of the presentations can be found at that website: energy.gov/rpsc. And we'll be emailing out a link to the recording of today's webinar, but you can find the recordings of all the previous webinars at this website, which is the U.S. Department of Energy's YouTube page. Finally, if you're interested in sort of updates on EECLP and other types of financing, you can send an email to John-Michael Cross at EESI, and they plan to send periodic updates into the future. And finally, if you have any other questions, feel free to email me at this email address here, se@ee.doe.gov. Alright, that's it for today. Thanks again to everyone, and we hope you have a great day.