1. Georgia Tech Clean Energy Speaker Series:
SE Solar Project Development Incentives & Challenges
Kerinia Cusick
Director, Government Affairs
May 26, 2010
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2. Today’s topics
Three types of solar – three
business models
Drivers and impediments for
commercial solar project
development
North Carolina case study:
SunEdison’s Duke project
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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3. Three types of PV, three business models
Residential Commercial/Industrial
Standard Solar, Silver Spring, MD SunEdison, Kohl’s Laguna Niguel, CA
Utility
SunEdison, Alamosa, CO
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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4. Residential PV: Largely Cash Purchase Business
Residential:
Historically cash purchase
Alternative financing models just getting
started: PACE and power purchase
agreements
Characterized by upfront incentives
Standard Solar, Silver Spring, MD Higher installation costs, but offsetting
highest electricity cost
Net metered, grid tied systems most
common
Less cost sensitive customer
Key challenges: upfront investment, HOA,
complexity for home owner
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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5. Commercial/Industrial: Dominated by Power
Purchase Agreements
Commercial/Industrial:
90% of commercial/industrial done via
power purchase agreements (PPAs)
Characterized by output based incentives
(PBI, SREC)
Economies of scale drop installation costs,
but offsetting lower electricity rates
SunEdison, Kohl’s Laguna Niguel, CA
Customer is very cost sensitive
Provides the benefit of distributed
generation
Interconnected on customer side of the
meter
Roof or ground mount
Key challenges: financing, net metering
Source: Greentech Media Research, “Solar Power Services:Edison LLC - confidential & proprietary. DoPV redistribute.
Sun How PPAs are Changing the not Value Chain”
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http://www.greentechmedia.com/GreentechMedia/Report/SolarPowerServicesHowPPAsareChangingthePVValueChain.html
6. Utility Scale: Power Purchase Agreements or
Ownership
Utility:
Ownership models driven by state
regulations
Competing against wholesale power rates
Greatest economies of scale but incurring
earthwork and foundation costs
Interconnected on the utility side of the
SunEdison, Alamosa, CO
meter
100% ground mount
Key challenges: land use, permitting,
financing, utility interest, interconnection
studies
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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7. Solar construction occurring all over the US
CO: 59 MW
MA: 18 MW
NV: 100 MW NY: 34 MW
CT: 20 MW
NJ: 128 MW
CA: 1,102 MW
AZ: 50 MW
FL: 39 MW
HI: 27 MW
Cumulative solar capacity: SEIA, US Solar Industry Year in Review 2009, April 2010
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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8. Solar friendly states on the rise
Solar friendly states in 2010
Solar friendly states beyond 2010
NH
WA
VT ME
MT ND What makes a state “solar friendly?”
MA
OR MN
NY Renewable Portfolio Standard
ID WI
SD RI (RPS): specifies amount of
MI
WY PA CT energy that must come from
IA NJ renewable sources by a target
NE OH
NV IL IN year. Some states have
DE
UT WV VA specific solar RPS requirements
CA CO MD
KS MO
DC Net metering: allows electricity
KY NC
to flow back to the grid when a
TN customer’s generation exceeds
OK SC
AZ NM AR usage, offsetting electricity
GA
MS AL consumed at a different time
LA Interconnection standards:
TX
set of technical, contractual,
FL metering, and rate arrangement
processes by which an electric
customer connects an
electricity-generating system to
AK
the grid
HI
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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9. Solar financials driven by more than just
insolation levels
South East US North East US West US
Solar Insolation
Levels
Electricity Rates
Peak/Congestion
Charges
Large peak load
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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10. Benefits of solar
Distributed solar produces power
where needed Solar offsets peak power
500 MW
500 MW
Central
Central
power
power
450
400
350
Strained
transmission
300
kWac
lines 250
200
End End End 150 Host load1
customer customer customer
100
2 MW 400 kW 50 Solar electric
Solar Solar production
0
6 MW
800 kW
1 MW Solar 0:00 4:00 8:00 12:00 16:00 20:00
Solar
Solar
Time of day
1. Actual SunEdison production data from 200 kW SunEdison solar installation– August 2008
Source: SunEdison team analysis; Illustrative example Sun Edison LLC - confidential & proprietary. Do not redistribute.
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11. Distributed solar supports more jobs than any other
energy source
Job Creation Potential of Various
Electricity Generation Assets1
35
Solar PV
30
Number of jobs per MW
25
20
15
Wind Geothermal Biomass
10
Coal Natural Nuclear Tidal
gas
5
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1. Includes upstream manufacturing jobs. Sources: New Enterprise Associates, INEEL, BC Sustainable
Energy Association, Renewable Energy Policy Project, SunEdison - confidential & proprietary. Do not redistribute.
Sun Edison LLC
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12. Declaring a state open for solar business
Typical market signals required:
• State incentive structure that encourages private financing
• Ability to secure long-term contracts
• Market demand (RPS)
• Net metering
• Interconnection standards
• Appropriate tax structure
• Zoning/permitting standards
• Incentives designed to meet three separate residential, commercial and utility-
scale business models
• Allow 3rd party developers
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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13. Case study: Duke Energy Davidson County
Project, North Carolina
Basic project information:
• 17 MW Project/ 354 acres
• RFP issued 8/2007
• Contract award 5/2008
• Broke ground summer 2009
• Phase 1 (4 MW) completed 12/2009
• Phase 2 – 4 will be complete 12/2010
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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14. Steps in getting Davidson County built
1. Permitting/legal
2. Engineering
3. Financing
4. Construction & procurement
5. Earthwork
6. Foundations
7. Electrical
8. Interconnection Sun Edison LLC - confidential & proprietary. Do not redistribute.
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15. Davidson County Lessons Learned
• Large projects = long timelines
• State tax incentive limits investment, doesn’t encourage it
• Anticipate market/legislative changes
• Utility/developer/legislative/PUC partnership is critical
• Create repeatable template
• Maintain tight control over supply chain
• Non issues:
– Technology
– Skilled labor
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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16. Thank you! Questions?
Kerinia Cusick
kcusick@sunedison.com
443-909-7200
Sun Edison LLC - confidential & proprietary. Do not redistribute.
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