Rhode Island Zero Energy Building (ZEB)Task

Force

Sixth Meeting

October, 2015

Agenda for October 23 Meeting

Topic Time Lead/

Facilitator

Introduction by host, Dryvit Inc 9:00 – 9:10 Dean Balcirak

Recap of Sept 2015 Meeting 9:10 – 9:25 Puja Vohra

Renewable Energy Overview 9:25– 9:35 Fran Boucher

State Energy Office Renewable

Initiatives

9:35 – 9:50 Shauna Beland

SolarWise Initiative through Renewable

Growth

9:50 – 10:00 Laura Rodormer

Designing a balanced portfolio for RI 10:00 – 10:15 Karsten Bard

Renewable energy--Summary 10:15-10:30 Fran Boucher

Discussions, next Steps & timelines 10:30 – 11:00 All

Recap September Meeting

Facilitator hiring update

White paper outline: High level feedback from team,

progress on homework assignment, any questions

Summary of September exercise: 2015-2017 forecast

Sept Recap: What is Happening

State Policy

• Renewable funding

• Solarize

• RIIB+PACE

• Governor sustainability

Utility

• Taskforce

• ZNE Ready (resi challenge)

• SolarWise

Education

• Some trainings

• Tours

• Showcase events

Others

• SBA capital planning for schools

• DOE definitions

What is Happening/will Happen (2015-2017)

Sept Recap: What NEEDS to

Happen (2015-2017 & Beyond0

State Policy

• Governor to adopt our white paper

• Require all NC projects to submit solar sighting

• Bills for solar+EE tax incentives*

• Consumer energy legistation

• Solar orientation requirements

• Roof structure requirements

Utility

• Act upon white paper recos.

• Incentives for ZNE projects

• ZNE demo projects

• Grow SolarWise

• Virtual net-metering for community solar*

• Resolve interconnection issues for high volume

• Approve 2016 ceiling prices*

Sept Recap: What NEEDS to

Happen (2015-2017 & Beyond0

Education/

Awareness

• Moisture/IAQ trainings

• Increase awareness: Social media, lectures

• Focus tech tracks on ZNE

• More funding for trainings

• Database of ZNE projects

• Present whitepaper to community

Others

• SBA capital funds

• Partnership with DOE/others

• Experimental growth in retrofit existing bldg stock*

• Use master planning for district-wide E savings + production*

• Greater attention to EE projects in State projects pipeline

• Identify potential state ZNE projects

Renewables Challenges

Renewable power is clean energy

National Grid is a huge supporter of renewables

:

Renewables Issues

Renewables present challenges to

utilities

Typical model

Utility pays for pipe or wire

Customer repays through rates

Renewables Issues

Renewables owners pay little or nothing for it service they get (use the grid 8760 hrs. year!)

With net metering

Customers pay little or no conservation charge

They don’t pay into funds that fund renewables

ZNE customers get maximum benefit but don’t pay anything back

Cost covered by “others”

The more renewables the higher the cost

Renewables Issues

Surplus Generation and the last

straw

Filling a wine glass with a fire hose

A house / building renewable system can generate 5 to 7

times the demand of the house at certain times of the

year

Transformers are designed for less than the peak

demand of each connected house/ building

Multiple houses with renewables will exceed transformer

capacity ( each PV system = 5 to 7 houses)

“Next on” must pay the entire cost of the transformer!

The person before or after that pays nothing.

Surplus Generation and the last

straw

Cost to maintain not covered

Two or three transformers instead of one

2x or 3x as much to maintain

2x or 3x the cost if a storm takes the pole down

Storms:

Increased inventory?

Increased restoration time waiting for transformers?

Meanwhile, the users that drive the extra equipment are paying little or nothing to the utility.

Underground neighborhoods

Situation compounded

More space needed on customer’s lawn for Xfrmr

The person with xfrmer may not be person with PV

Existing neighborhoods wires likely undersized

Case for grid/ community solar so these neighborhoods aren’t priced out?

New neighborhoods

Change standards for larger wire and larger transformer?

Who pays?

What if it never gets used ( community or grid scale PV)

Requires new policies

Requires economic analysis

New thinking?

Lottery for capacity?

Auction for capacity?

Loans for private owners to have capacity?

14

Components of charges

Meter readings

Wires and poles depreciation and maintenance

Customer services

Emergency response

Retirement payment obligations

All office and facilities costs

All transportation and equipment costs

Regulatory costs and rate case

Cost of procuring energy

15

Grid scale verses individual

homes

Grid scale renewables eliminates

Grid scale connected “upstream” on larger lines

Eliminates:

Cost of upgrading maintaining thousands of small

transformers is

Strain on underground residential neighborhoods

“Last Straw” sole bearer of additional transformer cost

Cheaper? Safer?

Few barriers to growth?

Battery storage more viable?

16

Our mission is to lead Rhode Island to a

secure, cost-effective, and sustainable energy

future

Currently Available RI State

Renewable Energy Programs

Renewable Energy Fund

Managed by the Rhode Island Commerce Corporation and provides grants for:

Residential and small commercial PV and solar hot water projects

Commercial Scale renewable energy projects as defined in RIGL § 39-26-5 (primarily solar PV and wind)

The REF also provides loans for the feasibility of renewable energy projects, specifically for brownfield solar PV, anaerobic digestion, and small scale hydro

REF uses system benefits charge funds as the capital source

All projects awarded through the REF programs are expected to be net-metered

REF pays for a quality assurance program for all

Solarize Rhode Island

Purpose

Solarize is a community-driven program designed to drive down the costs of installing small-scale solar energy systems

Key components include:

Tiered pricing system that leverages economies of scale

Competitively-selected installer

Community-based marketing

Partnership between Commerce RI, OER, and SmartPower

Job Growth in the PV Industry - new installers entering into the RI market to participate

19

Solarize Rhode

Island Program

Summary

Phase I Solarize North Smithfield

• 9 Week Campaign

• 84 contracts signed for a total of 623 kW

• Only four solar PV projects had been installed in the community prior to the Program

• Program had the direct effect of lowering the statewide cost of solar from an average of $4.35/watt to $3.95/watt as of May 2015.

• Program reached Tier 3 in the 4th week, meaning the base price for all participants was $3.45/watt

• The first educational workshop had a standing room only crowd of 123 people

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7

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13

8 7

6

12

25

0

5

10

15

20

25

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Num

be

r o

f C

on

tra

cts

Sig

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Program Week

Systems Contracted

Systems contracted

Solarize Rhode Island Program Summary

Phase II Tiverton and Little

Compton

• Communities were chosen to

see if a Solarize campaign can

help with National Grid’s

System Reliability.

• Contracts were signed for a

total of 485 kW nameplate of

solar. This represents 252 kW

in Little Compton (37 contracts)

and 232 kW in Tiverton (30

contracts).

• 64 out of 67 systems were on

feeders 3 and 4 (the “SRP

area”). The Program far

exceeded the pilot goal of 240

kW from Solarize residential

and small commercial projects.

# of

systems

# of SRP

systems

Nameplate

kW

SRP

kW Little

Compton 37 37 252.89

128.1

0

Tiverton 30 27 232.26 69.85

Total 67 64 485.15

197.9

4

Fall 2015 Solarize Communities

October 8, 2015 the Solarize Program Administrators

held a Fall Campaign Kickoff Event which announced

the following communities:

Foster

South Kingstown

Barrington

Warwick

Aquidneck Island - Newport, Middletown and Portsmouth

Installer-Community Interview Day – October 22 to

choose the selected installers for the campaign.

Solarize @ Work

Parallel to the Municipal Solarize campaigns, OER is working with SmartPower to pilot a Solarize “Affinity” model targeting where people work rather than where they live

Partner with a RI based company or Community to educate employees about solar PV

Program will increase solar adoption in RI across a wide geographic area

Selected businesses will work with Program Administrators throughout 2015- 2016 while running the Municipal Solarize Program in Fall 2015 and Spring 2016

Dividend Solar will be offering financing for small scale PV systems through solar loans

Solarize@Work will utilize a Dividend Solar’s network of New England and RI based installers

23

Renewable Energy Growth Program

Managed by National Grid with oversight by OER and the Distributed Generation Board

160 Megawatt Renewable Energy Program between 2015 and 2019

15 and 20 Year Tariffs provided to renewable energy system owners for the financing/incentives of the installations

Eligible technologies include solar, wind, anaerobic digestion and small-scale hydropower

The DG Board approved the 2016 ceiling prices on October 19.

These are not net metered projects.

The PUC approved $125,000 toward a quality assurance program for PV and Wind projects, vendor soon to be under contract with OER

The 2016 ceiling prices also include three new pricing categories for income eligible, non-profit, and multifamily projects.

This program is in lieu of a solar RPS carve out.

Summary of 2016 Ceiling Prices

Recommended for PUC Approval (1)

25

Ceiling Price Category (kW) CP Description

Recommended

CP

(all prices in

¢/kWh)

Small Solar I, Host Owned (1-10)

15-year Tariff, With 30%

ITC 37.65

20-year Tariff, With 30%

ITC 33.45

Small Solar I, Third-Party Owned

(1-10)

15-year Tariff, With 30%

ITC 29.90

20-year Tariff, With 30%

ITC 26.10

Small Solar II (11-25) 20-year Tariff, With 30%

ITC 26.15

Medium Solar (26-250) 20-year Tariff, With 30%

ITC 24.40

Commercial Solar (251-999) 20-year Tariff, With 10%

ITC

23.15

Large Solar (1,000-5,000) 18.35

Wind I (1,500-2,999)

20-year Tariff, Without PTC

24.45

Wind II (3,000-5,000; 2-turbine) 23.45

Wind III (3,000-5,000; 3-turbine) 22.65

Anaerobic Digestion I (150-500) 21.20

Anaerobic Digestion II (501-1,000) 21.20

Hydro I (10-250) 21.00

Hydro II (251-1,000) 19.75

Not compet

itive

Competitive

Summary of 2016 Ceiling Prices

Recommended for PUC Approval (2)

26

Ceiling Price Category (kW) CP Description

Recommended

CP

(all prices in

¢/kWh)

Small-Scale Solar – Residential or

Non-profit master metered single

unit building (1-10 kW)

15-year 45.25

20-year 39.85

Small Scale Solar – Residential,

Small Commercial, or Non-profit

master metered multi-unit building

(2-4 tenant units) (11-25 kW)

20-year 30.15

Medium Solar - Non-profit or multi-

unit (5 or more tenant units) master

metered building

(26-250 kW)

20-year 29.55

These three new ceiling prices are not competitive

Future Rhode Island Infrastructure

Bank Programs

General Overview of RIIB

Over 20 years of experience in issuing bonds (AAA-rated)

Over $1.4 billion

Article 14 of the FY 2016 budget expanded responsibilities of the Rhode Island Clean Water Finance Agency to include energy efficiency and renewable energy, and brownfields financing programs

Programs meet a market failure for energy efficiency and renewable energy investment needs

Job creation mechanism

RICWFA’s name was changed (on September 1st) to better reflect the expanded responsibilities of the agency

Oversees Clean Water State Revolving Fund, Drinking Water State Revolving Fund, Road and Bridge Revolving Loan Fund, Septic and Sewer tie-ins

Efficient Buildings Fund

Public entity revolving loan fund for municipalities and school districts to make clean energy improvements

Eligible improvements include energy efficiency and renewable energy investments

Encourages deep retrofits, energy savings greater than 20% of baseline

RI Office of Energy Resources will solicit projects through a project priority list from local governments early in 2016

OER will rank and publish the project priority list and RIIB will make financing decisions from the OER EBF PPL

Finance structure will be through a municipal lease arrangement

Requires appropriation pledge

Annual energy savings will be greater than or equal to the annual debt service

National Grid incentives available to reduce total cost of the project

Property Assessed Clean Energy – Residential and Commercial

Property Assessed Clean Energy (PACE) is a financing vehicle for commercial and residential property owners to finance energy efficiency and renewable energy improvements on their property

RIIB has solicited third party administrator(s) to administer the commercial and residential PACE programs

RIIB currently reviewing proposals

Program policies and procedures in development

Municipalities must voluntary opt-in to a PACE resolution

PACE funding is arranged by a third party administrator for 100% of a project’s cost

Private capital provides 100% upfront, long-term financing

Repayment through an assessment on property taxes

Improvements and loan term create positive cash flow

Energy savings must exceed investment cost

Lien transfers to new owner if the property is sold

Residential PACE lien is subordinate to the mortgage

Commercial PACE lien is superior to the mortgage and requires mortgage holder consent

Envisioning an Integrated Renewable

Future for RI

Large-scale renewables are

most cost-effective

Large-scale renewables are

most cost-effective per kwh

of clean energy and ton of

carbon emission avoided

Are there large-scale

“shared renewables”

programs that should be part

of the ZNE future?

31

National Grid chart, from data in: https://www.lazard.com/media/1777/levelized_cost_of_energy_-_version_80.pdf

Zero Net Energy should not be

about “going off the grid”

32

If a PV customer were to try and get the same services independent of the

grid, it would cost 4-8X as much

Extra PV panels (beyond the annual kWh requirement)

Battery storage

Charge controller

Backup generator

EPRI Integrated Grid 2014 report: http://www.epri.com/abstracts/Pages/ProductAbstract.aspx?ProductId=000000003002002733

Aren’t battery storage prices

coming down?

Yes.

Some early-adopter customers may

deploy storage in near-term for demand

charge mitigation and potential resiliency

benefit.

But long-term, storage’s value to

customers and to the utility will depend on

the ability to achieve multiple types of

benefits.

There are many unknowns!

33

ZNE is an important part of the

integrated grid

34

“The future of the distribution utility is evolving towards the integration of load and generation at the distribution level, for the benefit of customers receiving deliveries of electricity and customers generating electricity behind or at the meter.”

National Grid, Massachusetts Grid Modernization Plan, August 19, 2015