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State Allocation Board HearingSolar Energy and Energy Efficiency Project Options for California Schools
Mark Johnson, Energy Solutions Manager - Schools Segment Pacific Gas & Electric Company
Kim Ngo, Program Manager – Solar and Customer GenerationPacific Gas & Electric Company
December 5, 2011
2
Where does the savings come from?GWH Impacts from Programs Begun Prior to 2001
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Utility Programs
Building Standards
Appliance Standards
Source: California Energy Commission
Where does the savings come from?GWH Impacts from Programs Begun Prior to 2001
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Utility Programs
Building Standards
Appliance Standards
Source: California Energy Commission
3
Long-standing State policies lower carbon footprint
30+ years of energy efficiency programs facilitated by “decoupling” of rates
California Energy Action Plan’s preferred loading order:
1. Customer Energy Efficiency and Demand Response
2. New Renewable and Distributed Generation
3. Clean gas-fired plants
Progressive Energy Policy
4
PG&E Energy Efficiency Programs Impact on Schools Segment
From January 2010 – September 2011 Represents EE programs only (does not include DG programs) PG&E system wide, all projects under Schools segment NAICS codes.
YEAR PEAK KW SAVINGS
KWH SAVINGS
THERM SAVINGS
PAID INCENTIVES
2010 7,801 33,290,453 767,643 $ 6,811,4832011 (9 months)
5,888 39,858,766 3,520,687 $ 10,953,148
Total
13,689 431,878,119 4,288,330 $ 17,764,631
5
Energy Efficiency Integrated with Solar
Solar projects typically take 2 – 3 times longer to payback verses Energy Efficiency projects.
The “blended” financials (EE + Solar) typically result in EE making Solar more affordable when evaluated as an integrated project.
Solar / DG size and cost can be reduced ( less power required ).
This can result in lower overall project costs, less risk due to better financials, greater comfort & control usually result too!
Energy Energy EfficiencyEfficiency
Demand Demand ResponseResponse
Self - Self - GenerationGeneration
Carbon Carbon OffsetsOffsets
6
PG&E Retrofit Incentive ProgramsEnergy Savings Rebates The fastest and easiest approach for common retrofits
Customized Retrofit Incentives Calculated approach for more comprehensive projects
Retrocommissioning incentive program Focuses on “tuning up” controls
Third Party Programs Over 80 select programs with offerings that address specific
needs of a market segment (i.e. schools) OR a specific technology (i.e. lighting, HVAC, etc).
7
Energy Efficiency Supporting Programs
Energy Efficiency Financing Program Bill Neutrality – Loan payments equal to estimated energy savings Zero Interest - no cost to customer for life of the loan Public Schools/Gov. - Up to 10 yr loan term, $250,000 per meter
Large Integrated Audit Program Investment grade integrated energy audits for larger facilities (i.e. High
Schools) that address evaluating Energy Efficiency, Demand Response, Solar, Distributed Generation.
Project Engineering & Calculation Assistance Specialized local engineering support for project and energy saving
calculation assistance.
8
California Solar Initiative Program
Kim Ngo, Program Manager – Solar and Customer GenerationPacific Gas & Electric Company
9
Integration of EE and Renewables
EE should be considered prior to Renewables
Why?
California’s loading order encourages that EE be implemented prior to DG
EE is typically much more cost-effective than RenewablesDecreasing a facility’s consumption with EE reduces the
size (and cost) of a Renewable system necessary to offset facility’s load
The capital investment on EE projects are typically a lot less and easier to implement than a large solar
deployment.
10
PG&E began administering program in 2007
PG&E will provide $1 billion in incentives over life of the program
Statewide Objective: 3,000 MW by 2016 (PG&E’s goal 764.8 MW)
Customers must perform energy efficiency audit to be eligible for incentives
Includes retrofit, low income, and new homes elements
PG&E CSI
• Received more than 39,000 applications Since January 2007
• Completed over 33,000 projects for a total of over 365 MW (CEC AC)
The California Solar Initiative
Data as of 11/21/11
11
The California Solar Initiative
Expected Performance-Based Buydown (EPBB)
Performance-Based Incentive
(PBI)
Payment basisPV system size and design
(expected production)PV system actual
energy output
System size < 30 kW AnyPayment frequency One time, up-front Monthly for 5 years
12The California Solar InitiativeSenate Bill 585:
• Increases the total cost of the CSI Program funded by customers of PG&E, Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E) by $200 million statewide
• Revises the PBI payment rates for Steps 8, 9, and 10 for all new CSI applicants (both residential and non-residential) to incorporate a 4% discount rate rather than the 8% rate previously incorporated into PBI payments
13
CSI Schools (K-12) Participation
Approximately 29% of Completed K-12 Projects are PPAs
*Active includes reserved and projects under review
73.33 32.24
214
211.84
73.21
738
0
100
200
300
400
500
600
700
800
900
1000
CSI Incentives ($mm) Capacity (MW) Number of Projects
Completed Active
16
Customer Financing OverviewFinancing Option Cash Solar Lease Power Purchase
AgreementUpfront cost to school
Borrow $ or pay cash
Low down payment Low down payment or pre-payment options
System Ownership School Solar Company Solar Company
Payments Down payment and final payment upon completion
Down payment and Monthly lease payments
Monthly PV electricity payments
Operations & Maintenance
School Solar Company Solar Company
Federal Tax Credit N/A Solar Company Solar Company
Performance Guarantee
None Offered by Solar Company
Offered by Solar Company
Term of Financing N/A Up to 20 Years Up to 20 Years
Approximately 29% of Completed K-12 Projects are PPAs
17Financing OptionsFinancing OptionsFull Purchase (Cash or Financing)
Owner of systemBorrow money or pay cash
Full payment up front
Maintain and monitor systemEconomics:Cash / total savingsLoan pmt. / monthly savings
Design and install SellHonor warranties (equipment & labor)
School District Solar Company
$
18
PPA
Low or no money down
Monthly power paymentPossible buyout in the futureEconomics:Monthly pmt. / monthly savings
Owner of system Design and install Sell powerMaintain and monitor systemHonor warranties (equipment & labor)Remove system at end if needed
School District Solar Company
Common Financing Options Common Financing Options for Schoolsfor Schools
$
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