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Don Wichert Director August 17, 2006

Focus on Energy Renewable Energy Program Sawyer County Energy Forum Program, Technologies, Economics. Don Wichert Director August 17, 2006. This presentation is funded in whole by Focus on Energy. Outline. What is the Focus on Energy Program What are the technologies we are supporting

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Don Wichert Director August 17, 2006

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  1. Focus on EnergyRenewable Energy ProgramSawyer County Energy ForumProgram, Technologies, Economics Don Wichert Director August 17, 2006 This presentation is funded in whole by Focus on Energy

  2. Outline • What is the Focus on Energy Program • What are the technologies we are supporting • What are the customer economics of these technologies

  3. Focus on Energy – Big Picture • Created by legislature in 2000 • Offered statewide in 2002 • Funding from utility fees • Initial Focus budget: $62.3 million per year • Current Focus budget: $38.8 million per year • Initial RE program budget ~$4.4 million per year • Current RE program budget ~$3.0 million • New program starts in July, 2007 • Structure and budgets to be decided • Overall funding for EE/RE ~$100 million

  4. Wisconsin Focus on Energy Includes • Energy Efficiency (~90% of budget) • Business • Homes • Renewable Energy (~8% of budget) • Environmental research (~2% of budget)

  5. Eligible Customers • Located in the service territory of a participating electric provider • Xcel, Wisconsin Public Service, We Energies, Madison Gas and Electric, Alliant • 24 Rural Electric Coops and Municipal Utilities • Individuals, businesses, organizations, institutions, municipal or tribal government • Non Eligible: Utilities, State Government Capital Projects

  6. Renewable Energy Vision Program Plan • Vision: Make renewable energy a main stream option leading to large scale adoption • Plan: Reduce Barriers to Adoption • Lack of Information • Lack of Infrastructure (supply chain) • Institutional Constraints (permits, rates, policies) • High First Cost • Focus on Specific Markets

  7. FY 06 Renewable Energy Targeted Markets • Solar Electric • Solar Water Heating • Wind-Primarily Commercial Wind • Biogas Digesters • Non-Residential Wood Burning

  8. Program Services • Information & Marketing • Education & Training • Project Facilitation • Institutional & Business Development • Financial Incentives

  9. Project Incentives Cash Back Rewards and Implementation Grants • Incentivelevels based on kWh or Therm production • Solar Electric • ~25% of installed cost up to $35,000 • ~35% of installed cost for non-profits up to $35,000 • Residential Solar Hot Water • ~25% of installed cost up to $2,500 • ~50% of repairs up to $1,500 • Commercial Solar Water Heating • ~25% of installed cost up to $35,000 • Wind • ~25% of installed cost (1-20 kW) up to $35,000 • ~35% of installed cost (>20 kW to 250 kW) up to $45,000 • Biogas Digesters and Non-residential Wood Burning • up to 35% and $45,000 (electric) • Up to 25% and $30,000 (heat)

  10. Solar Electric Niels Wolter, 888.476.9534, wolter@msbnrg.org Market Conditions • Pros: Quiet, long lasting, low maintenance, no pollution, green marketing angle for firms • Cons: High first cost, availability of panels and installers • New federal tax credit, Focus incentives, new WE PV tariff, rising conventional prices • World wide demand has exceeded supply leading to higher panel prices. • Expect rapid growth (20-30 % per year), especially for C/I and in WE territory.

  11. Residential PV Economics (2 KW) roof mounted, grid connected – no batteries • Installed cost: $16,000 • Focus on Energy Cash back reward: $3,600 • Federal Tax Credit: $2,000 • Final cost to customer: $10,400 • Delivers: ~2,400 kWh per year • Payback: @12.5 cents per kWh and increasing at 8% per year=18 years • Most components will last 40-50 years

  12. Commercial Solar Electric Economics(15 kW) roof mounted (1200 sq. ft.), grid connected - no batteries • Installed cost:~$100,000 • Focus Incentive: $25,000 • Federal Tax Incentive: $30,000 • Federal Accelerated Depreciation: ~$25,000 • Final Cost to Customer: ~$20,000 • Delivers 18,000 kWh • Assume 12.5 cents/kWh, increasing at 7 %/year • Payback: ~8 years

  13. Solar Hot WaterRes: Kari Heinrich, 888.509.3247, karih@weccusa.orgComm: Bob Ramlow, 800.762.7077, artha@wi-net.com Market Conditions • Pros: • New solar federal tax credits, increased conventional fuel costs, local manufacturers and installers make for favorable market conditions, especially for high users of hot water. • Equipment is certified. Residential applications tripled in FY 06 from FY 05 • Cons • High first costs • Aesthetics • Need solar access • Mistakes from the 1980’s

  14. Residential Solar Water Heating Economics • A 65 square foot 1-2 panel system • Installed cost: $7,000 • Focus on Energy Cash back reward: $1,750 • Federal Tax Credit: $1,575 • Final cost to customer: $3,675 • Saves ~165 therms per year • Payback: at $1.25 per therm increasing at 7@ per year, 1% O&M = 15 yrs • Replacing electricity reduces payback to ~7.5 years

  15. Commercial Solar Water Heating Economics(Hotel - showers, laundry, restaurant) • 2,000 sq. ft. system (5 10x 40 square foot panels) delivers ~5,000 therms per year, replaces natural gas • Cost: $90,000 • Focus incentive: $22,500 • Federal incentive: $20,250 • Accelerated depreciation: ~$20,000 • Cost to Customer: ~$27,250 • Saves: ~$5,000 per year • Payback: ~5 years

  16. Customer Owned Rural WindMick Sagrillo, 800.762.7077, msagrillo@itol.com Market Conditions • Interest high (Information requests, site assessments) • Need good wind resource (>11 mph at 110 feet) • New higher buyback tariffs • Installations down • Small turbines expensive • Medium turbines performance issues • Large turbines difficult to find • Town & County zoning problems • Small industry • USDA grants • Slow growth for next year

  17. Small Wind Economics • 10 kW system on 120 foot tower • Installed cost is ~$52,200 • At 12 mph, system will produce 10,800 kWh/yr • Focus incentive=$8,045 • Final customer cost=$44,155 • Payback@ 12.5 cents/kWh, increasing @8% per year, 1% O&M increasing @3%=20 years • Business can take accelerated depreciation, reduces payback to 16 years.

  18. Medium Wind - Economics(40 kW Farm or Business) • Installed cost on 110 foot tower: $132,500 • Focus incentive: $35,000 • Federal USDA grant: $33,000 • Accelerated Depreciation: $25,000 • Final Cost to Customer: ~$40,000 • Delivers: ~60,000 kWh @11mph • Revenue: $7,000 increasing at 7%/yr • Payback: ~5 years

  19. Biogas DigestersLarry Krom, 800.762.7077,lk@wisolarelectric.com Market Conditions • Excellent for ~250 Farms>500 cows, large food industry plants, municipal WWTP • Very large PR and appeal customer interest for dairy • Technology and economics improving • New buyback rates added plus • USDA grants • Likely strong market for immediate future

  20. Farm Biogas Economics • 1000 head dairy • Installed cost ~$1000 per head: $1 million • Focus incentive: $50,000 • USDA incentive: $250,000 • Cost to Customer: $700,000 • Supports 200 kW engine, delivers 1.25 million kwh; @6 cents/kwh:~$75,000 • Bedding: $45,000; Waste heat: $4,000, depreciation: $21,000 • Revenue after O&M and loan: $122,700 • Payback: ~6 years

  21. Non-Residential Wood BurningTerry Stebor, 800.762-7077, stebor@stsconsultants.com Markets Conditions • High natural gas prices have spurred interest in rural areas • Forest product industries • Upgrades of older systems • Rural schools & municipalities • Niche (farms, greenhouses, etc) • Supply concerns – pellets and “waste” fuel • Limited infrastructure • Building market will increase suppliers and fuel supply

  22. Wood Energy Economics (Restaurant) - 1.5 Million Btu/hr wood pellet/corn burner • Installed cost: $66,000 • Focus Incentive: $11,500 • Cost to customer: $53,500 • Produces 17,500 therms per year • @50 cents per therm for corn/pellets, saves ~$8,500 per year • Payback:~6.3 years

  23. How to Get a Renewable Energy System • Learn • Focus on Energy 800 number, factsheets, website, talk to facilitators • Site Assessment or Feasibility Study • Focus on Energy covers 25% to 60% of cost • Installer’s Estimate (get three) • Full Service Installers list • Check Neighbors, Zoning, Utility, Insurance, etc. • Problems - Call Focus on Energy • Financing/Incentives • Focus Cash back reward, Focus implementation grant, USDA • Maintain your system • Save Money and Make Green Energy • But it’s not always about payback: Technical interest, Fuel cost stability, Ethics/environment, Self sufficiency

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