Third-Party Solar Model

Third-Party Solar Model

Presentation to Legislative Committee

Interim Study on the Production & Use of Energy January 19, 2010

EXHIBIT D - ENERGY

Document consists of 16 pages. Entire exhibit provided.

Consumer-Perceived Barriers to

Rooftop Solar

•

High upfront costs

– Payback may take many years

•

Perceived monitoring & maintenance

concerns

– How do I know if it’s working properly? – Am I getting the maximum production?

– Don’t want to hassle with washing panels or fixing

Third-Party Owner Solar Model

• System owned & installed by a 3rd party provider • Host customer pays small or no down payment

• Host customer pays for energy generated by PV at a

fixed rate for life of system

• 3rd party provider guarantees min. production level • 3rd party provider responsible for monitoring and

maintenance (cleaning, inverter replacement, etc.)

• Contract transferable (stays w/ building, regardless

Advantages of 3

Party Owner Model

• Low/no down payment

• Lowers host customer bills immediately

• Guaranteed cost for energy produced from solar – Hedge against rate increase

• Hassle-free

– Host customer doesn’t need to worry about

maintenance or monitoring

– 3rd party provider issues guarantees for production and

price for solar produced-power

Elements of a Robust DG Solar Market

• Good Incentives

– Tax incentives (Federal) – Solar rebates/incentives

– Accelerated depreciation (commercial only) • Favorable utility rules & rates

– Reasonable interconnection rules – Reasonable net metering rules – Utility rates that support DG

• Increasing block rates, time-of-use rates, etc. • Higher utility rates yield faster payback

• Program certainty (reservation/rebate process) • Reasonably good solar irradiation

What’s keeping 3

party providers

away from Nevada?

•

Inadequate incentive levels

– Combined with relatively low utility rates means

longer payback

•

Great uncertainty caused by Solar Generations

program structure

– Annual capacity allocation discourages market

participation

Improvements to Solar Generations

•

Transform Solar Generations program from an

annual capacity allocation (plagued by a boom

and bust cycle) to an automatic step-down

declining rebate program.

•

Include incentives for commercial & industrial

customers.

•

Institute a Distributed Generation carve-out in

Solar Cost Equation Improving

•

½ price = Global Module Price. Over 50%

price drop in 2009 alone.

•

½ price = Local Costs. Studies show that local

costs come down as markets mature.

“My costs today for solar panels is less than half of what I would have paid 15 months ago. I can install residential systems for under $6.50 per” – Anonymous Nevada Solar Installer

Solar Power & Water

Consumption

Comparative Water Consumption

Source: Craig Turchi, National Renewable Energy Laboratory; resources:

• Concentrating Solar Power Commercial Application Study: Reducing Water Consumption of Concentrating Solar

Power Electricity Generation Report to Congress U.S. Department of Energy 2009.

• Blaney, H.F., “Monthly Consumptive Use of Water by Irrigated Crops and Natural Vegetation,” General Assembly of

International Union of Geodsy and Geophysics, Toronto, Canada, 1957.

• Consumptive Use of Water by Major Crops in the Southwestern United States, United States Department of

Agriculture, ARS Conservation Research Report 29, May 1982.

• “The Economic Contributions of Colorado’s Golf Industry: Environmental Aspects of Golf in Colorado” Philip

Comparison of Water Use in Power Generation

• Source: Congressional Research Service; Carter, Nicole T. and Campbell, Richard J.; Water Issues of Concentrating Solar

Options for Reducing Water

Consumption in Solar Generation

• PV uses very little or no water during operation

– Water may be required for panel washing (particularly for

concentrating PV)

• Dish Stirling requires very little water (washing only) • Parabolic trough, power tower & linear Fresnel can

use dry (air) or hybrid (combination wet/dry) cooling

– Dry cooling reduces water consumption by 90% – Hybrid varies: 40 to 60%

– Higher capital cost

– Lower efficiency results in less net energy produced

• Efficiency penalty greatest during hottest days when electricity

RPS Does Not Support Water

Conservation

•

Utility issues Request for Proposals

•

Bids evaluated based on least-cost, best-fit

– For solar thermal, wet cooling costs less and

produces more energy

– If developers can secure water rights, they will

often opt for wet cooling over dry or hybrid cooling

Possible Solutions for Encouraging

Water Conservation

•

Award “points” for renewable generation that

conserves water or uses impaired water

sources in RPS RFP evaluation

•

Require water conservation/ use of impaired

water sources for all (fossil & renewable) new

generation in Nevada

•

Guarantee rate recovery for utility if results in

California Desert Protection Act

Implications for Renewable Power

Development in Nevada

Nevada Highlights

• Would establish Regional Energy Coordination

Offices in law for Southwest

• Programmatic Environmental Impact Study (PEIS)

would be required for military installations in Mojave & Colorado Deserts (including NV)

• Would order study of impacts of renewable

development on military bases (including NV)

• Would displace several large-scale solar projects in

southern California

• Would prohibit solar & renewable development in

monument, but allow transmission development