Powering Green: An Overview of Issues in Generating Solar Power on Buildings and Sites

1. Powering Green:An Overview of Issues in Generating Solar Power on Buildings and Sites The material provided herein is for informational purposes only and is not intended as legal advice or counsel.

2. Please help yourself to food and drinks Please let us know if the roomtemperature is too hot or cold Bathrooms are located past the reception desk on the right Please turn OFF your cell phones Please complete and returnsurveys at the end of the seminar

3. Powering Green Chris Stevenson, Esq.

4. Powering Green Renewable Energy • Class I - solar technologies, PV technologies, wind, fuel cells, geothermal, wave or tidal, and methane from landfills or biomass • Class II - resource recovery facility or hydropower facility

5. Powering Green Market Growth/Potential • Solar PV growing 45% annually • Installations of solar PV doubling every 2 years - expected to continue until at least 2020 • According to USDOE, the electricity needs of entire U.S. could theoretically be met by a PV array within an area 100 mi. x 100 mi. (10,000 sq. mi.), which is equivalent to just under 0.3% of land area of U.S.

6. Powering Green Market Growth/Potential (cont.) • Estimated that U.S. has 8,620 sq. mi. of building area (roofs and facades) suitable for generating solar power • Estimated that one-half of that area could supply almost 30% of U.S. electricity • According to USDOE, PV power will be competitive in price with traditional sources of electricity within 10 years

7. Powering Green Market Growth/Potential (cont.) • NJ is No. 2 nationally for solar power installations • NJ solar 100+ MW as of October 2009 • Up to 2,200 additional MW in next decade • RPS goal of up to 3% solar by 2020 and 7% by 2026

8. Powering Green Federal Legislation • Climate Change / GHG Reduction • Waxman-Markey Bill (American Clean Energy and Security Act of 2009) • Kerry-Boxer Bill (Clean Energy Jobs and American Power Act) • Kerry-Graham-Lieberman Framework for Climate Change and Energy Independence Legislation • The Stimulus (American Recovery and Reinvestment Act of 2009) • Extension of credit for electricity produced from certain renewable resources

9. Powering Green Federal Legislation (cont.) • 10 Million Solar Roofs and 10 Million Gallons of Solar Water Heating Act of 2010 (S. 993) • “use of solar photovoltaics on the roofs of 10 percent of existing buildings could meet 70 percent of peak electric demand” • “the State of New Jersey is second in the United States in installed solar photovoltaic systems and has used incentive programs to achieve 90 megawatts of installed solar capacity”

10. Powering Green Federal Legislation (cont.) • 10 Million Solar Roofs (cont.) • “despite inventing solar technology, the United States has fallen behind nations with less solar resources because those nations have set in place policies to promote solar energy, and the United States now ranks fourth in installed solar behind Germany, Spain, and Japan”

11. Powering Green NJ Legislation • NJGlobal Warming Response Act • The Solar Energy Advancement and Fair Competition Act • Increasing RPS for solar • Favorable siting legislation NJ Programs • EMP, BPU, Clean Energy Program • RPS goals

12. Powering Green NJ Programs (cont.) • EMP, BPU, Clean Energy Program (cont.) • Helped to install 90+ MW of solar capacity during last eight years • From 6 installations to more than 4,000 in eight years • Rebates, net metering, standardized interconnection, RPS for solar, SREC trading system • Clean Energy Fund ↓ ↓ ↓ ↓

13. Powering Green Innovations in Financing • Power Purchase Agreement • Solar Lease • RPS/SACP • SRECs • Tax credits

14. Powering Green May 12, 2010 Solar Options for Buildings/Sites Lyle Rawlings, P.E. CEO, Advanced Solar Products President, Mid-Atlantic Solar Energy Industries Association

15. The Photovoltaic Effect Phosphorous has one more electron than Silicon, and Boron has one less. When these materials are substituted into a Silicon crystal, it creates an electric field that sweeps electrons freed by light energy out of the cell and to a load. No material is consumed and the process could continue indefinitely.. P The Photovoltaic Effect Si B

16. Solar is desired for Jobs and Economic Growth… Among today’s energy resources, PV is the most intensive job creator per MWH generated. Sources: Renewable Energy Policy Project, “The Work That Goes Into Renewable Energy”, and Mid-Atlantic Solar Energy Industries Association

17. Creation of a Diverse Market: A (partial) success story: The New Jersey Solar Market • Over 260 solar integrator companies in the state • Plus… • + Large engineering firms • + Architectural firms • + Electrical contractors • + Financial Community • + Brokers & Aggregators • + Accounting firms • + Law firms • + Union locals • + Real estate firms and developers • Etc., etc.

18. What kinds of jobs are created? • Engineers • Project managers • Marketing and sales • Upper management • Architects • Administrative • Manufacturing jobs • Installers • Electricians • Lawyers • Accountants • Brokers & Aggregators • Bankers • Etc., etc.

19. Types of PV Arrays: Residential PV Systems

20. Types of PV arrays: Flat Roof-mounted arrays (Older Design: Less common today due to lower annual output)

21. Types of PV arrays: Tilted roof-mounted arrays(Current Application10-15 degree tilt, higher annual output) Lawrence High School

22. Types of PV arrays: Tilted ground-mounted arrays

23. Fixed-Tilt Ground Array – View from South

24. Fixed-Tilt Ground Array – View from North

25. Types of PV arrays: Trackers

26. PV Power for Emergency Facilities:Bayonne Midtown School

27. A D V A N C E D S O L A R P R O D U C T S 1 Meter 2 3 T R S A W N I S T F C E H R PV Inverter Main Distribution Panel Emergency Power Panel Generator • In a power outage, the existing emergency power system • automatically disconnects from the outside electric grid • The Generator starts • The Inverter re-starts in a special “Generator Support Mode” and • automatically shares the building’s emergency power load with the • Generator, keeping fuel use to a minimum • When power is restored, the Inverter goes back to normal mode, • supplying solar power to the building • The entire process is fully automated 1 2 3

28. Power conversion: Inverters convert DC power to AC

29. Current Trends • In one year, PV module supply has gone from severe scarcity to severe oversupply – and back to scarcity. • Module prices and system prices have plummeted (economy, cuts in Spain, more & cheaper silicon feedstocks) – but in last 6 weeks, supply has become very tight and prices have risen. • Thin-film PV has arrived as a low-cost alternative, but also low efficiency. • Requirements for Made in America for school and ARRA projects • PV serving multiple purposes e.g., PV for emergency power / homeland security

30. Current Situation: the SREC structure is resulting in a ratepayer burden that is far too high.

31. This was predicted - BPU-Commissioned Summit Blue Study on the Cost of Different Models:

32. Status Quo1: • SREC Market: $0.67/KWH • PSEG Loan II: $0.38/KWH • JCPL/ACE LT contracts: $0.40/KWH2 • Real Cost of Production: $0.25/KWH3 • Notes: • Prices do not include LSE markups (which apply to PSEG and JCPL/ • ACE as long as SRECs are auctioned instead of retired & allocated) • Does not include JCP&L/ACE markup. • With a “reasonable rate of return” added

33. Ratepayer Burden: • The Cost of High SREC Prices could amount to: • $60 million to $160 million per year of additional costs • $2.3 billion between 2010 and 2026 of additional costs

34. Additional Ratepayer Burden as long as SRECs are short: • SACP Payments: • even higher than commodity market prices • As an example, if we are 50% short on SRECs, then • the SREC cost burden effectively doubles due to SACP • payments.

35. The Other Side of the Coin: • What if there is an SREC oversupply (e.g., two years from now)? • SREC prices are likely to crash • 100’s of schools who have issued bonds to build solar • systems cannot pay off their bonds • Tens of thousands of homeowners, hundreds of municipal • buildings, thousands of business, churches, farms, etc., • all of whom have built solar power systems, are losing • money. • Result: large-scale political turmoil and unhappiness

36. Green Power – Funding & Incentives William Amann, P.E., LEED AP Chairman: USGBC, NJ Chapter Chairman: Somerset County Energy Council President: M&E Engineers, Inc.

38. Building Design • Building Operations & Maintenance • Renewable Energy • Energy Modeling • Energy Audits • Commissioning ENERGY & ATMOSPHERE

39. Energy Incentives • Investment Tax Credit • (Section 179D) • Renewable Energy Credits • Energy Incentives (“Rebates”) • Federal Funding

40. New Jersey’s Clean Energy Program • Funded since 2001 from “Societal Benefits Charge” on utility bill • Provides opportunities for energy projects in three sectors: • Residential (Energy Star) • Renewable (Solar, Wind, Biomass) • Commercial & Industrial

41. New Jersey’s Clean Energy Program 2010 Funding Levels: Energy Efficiency- • Residential $113,899,902 • C&I $119,963,654 Subtotal $233,863,556 Renewable $183,343,174 Total $417,206,730

42. 2010- Renewable Energy Programs • Renewable Energy Incentive Program (REIP) • </=10 kW residential solar projects up to $1.35 per watt with Home Performance with ENERGY STAR audit • </= 50 kW commercial/municipal solar projects up to $.80 per watt • Wind rebates based on estimated energy production, from $0.50 up to $3.20 • Sustainable biomass projects from $0.15 up to $4.00 per watt

43. Renewable Energy Ferreira ConstructionBranchburg, NJ Solar is delivered at $0.21/Kwh +/-

44. “The cheapest, cleanest energy is the energy you don’t use” Energy Efficiency is delivered at $0.03/Kwh or $0.30/therm

45. Energy Efficiency vs. Renewable Energy • Before considering solar or wind alternatives, take steps to reduce energy consumption in buildings with measures that address… • Building envelope – insulation, air sealing, windows • Lighting and lighting controls • Heating, ventilation, air conditioning, water heating • Variable frequency drives and motors

46. Commercial & Industrial Programs • NJ SmartStart Buildings Design Assistance Prescriptive Equipment Rebates Custom Measures Program • Direct Install (< 200 kW Peak Demand) • Pay for Performance (includes Combined Heat & Power)

47. NJ SmartStart Buildings Program Eligibility • New Construction, Renovation, and Equipment Replacement • Commercial & Industrial Customers Served by a Public Utility • Municipalities and Government-Owned Facilities Features • Financial Incentives to Reduce Capital Cost (Prescriptive and Performance) • Comprehensive Design Support for Larger Projects (≥ 50,000 sq. ft.) • Technical Assistance for Other Projects (Walk-through analysis) • Up to $500,000 per utility account per calendar year

48. Direct Install Program • Small and Medium-Sized Businesses and Government-Owned Facilities with ≤200 kW Peak Load • Designated Contractor (+/or PSE&G) Provides Walk-thru Energy Audit, Recommendations and Installation • 80% of Material and Labor Costs Paid Directly to Contractor • Facility Owner Pays Remaining 20% • No Cap on Measure Installations (as long as measures hit savings criteria)

49. Pay for Performance (P4P) The greater the savings, the greater the incentives… • Buildings over 200 kW Peak Demand • Network of Trained Program Partners • Whole-Building Approach – Minimum 15% Performance Threshold • Incentives up to $1 Million/Meter – Natural Gas and Electricity • Additional Incentive up to $1 Million for Combined Heat & Power • Staged Incentives

50. 300,000 Sq Ft building with a 21% energy reduction plan Energy Reduction Plan Development    $   25,000 Energy Reduction Design Incentive       $ 150,000 Post Construction Verification               $  300,000 (or 75% of project incremental cost) Up to $475,000 of potential incentives for this project, not including additional CHP incentive