Solar in the RPS: Costs & Benefits July 26, 2007

1. Solar in the RPS:Costs & BenefitsJuly 26, 2007 Gwen Rose Vote Solar www.votesolar.org

2. PSC Session Questions 10. Identification of Likely Impacts on Florida’s Economy and Consumers from a Renewable Portfolio Standard 1. What are the general concerns? 2. What are the economic impacts? 3. What are the utility costs? 4. What are the environmental impacts? 5. What are the consumer costs?

3. Solar’s Role in RPS Under the RPS structure, development of a solar market is unlikely to occur without a specific solar carve-out. Most practical application is on-site, distributed generation (solar PV or solar thermal) EO 127: open the market to clean, renewable energy technologies, thus avoiding future GHG through an RPS with “strong focus on solar”

4. Suggested Solar Goal under a FL RPS: 4% by 2020 • Ramp up is slow in early years as program is developing. As system costs decline (greater demand, maturing industry), solar requirements increase in later years

5. Solar Program Design Design Objectives • Create self-sufficient industry • Keep costs as low as possible • Stimulate demand

6. Large Commercial Incentives: 15-YR RECs

7. Funding for Small Commercial & Residential Systems These customers would need an upfront incentive. Options for funding: • Comination of an upfront rebate* & revenue from sale of RECs (NJ & CO) • SRECs purchased upfront for lifetime production (MD) * Rebate may be funded through a rider, SBC, or rates. SBC funds and linkages the RPS/RE development: • Directly fund above-market costs of RPS • Support financing of projects • Fund projects that RPS will not adequately support

8. Customer Perspective: Commercial PV (Yr 1)

9. Customer Perspective: Solar Thermal (Yr 1) Public/Nonprofit Commercial

10. Residential Costs • As incentive levels and system costs decline, the primary savings come from value of electricity and tax credits.

11. Projected Ratepayer Impact of 4% Solar Goal • Funding requirement from 2008 - 2035

12. Solar Program Costs in Other States • Actual RPS costs: Where RECs or surcharge sets above-market cost, estimated to be at most: ME (0.1%), MD (0.1%), CA (0.3%), NJ (0.1%), MA(1.1%) Wiser, LBNL (5/06) Solar Provisions • NJ: 2.12% by 2021 • $0.00139 - $.0022 (projection) • CA: 3000 MW by 2017

13. Utility Benefits: 4 GW solar PV has real value! Capacity • 1700 Megawatts* • Equivalent to 26 peakers Value: (peak power, T&D benefits) • CA: 23 - 25¢/kWh • NY: 9 - 16 ¢/kWh * ELCC is estimated to be 40% - 45%.

14. Utility Benefits: Peak Demand Reduction

15. CA: Customer-Sited Solar Can Leverage Other Funds

16. Emissions Benefits of Rooftop Solar Solar PV Total Emissions Avoided*: 63 Million tons CO2 203,000 tons SO2 109,000 tons of NO2 Solar Thermal Total Emissions Avoided**: 49 Million tons CO2 155,200 tons SO2 85,600 tons of No2 *30-yr life, assumes (2025) **20-yr life, assumes (2025) 0.8092 lbs/kWh

17. Economic Development Benefits: Job Creation Solar PV Average 13 direct job-years/MW (VS study of 5 models) Industry estimates that: Residential: 10 job-yrs/MW Small Commercial: 9 job-yrs/MW Large Commercial: 7 job-yrs/MW Benefit of 2% Goal: 31,600 job-years (low) 50,000 job-years (high) Solar Thermal One job-year created for every 50 systems installed Benefit of 2% Goal: 32,800 job-years

18. Societal Perspective: Overwhelming Citizen Support… Mason-Dixon Survey: 90% of voters say Legislature should support investment in solar 78% are willing to pay between $0.50 - $1.00/month CA (2005): 77%, 58% TX (2007): 85%, 75% FPL: 30,000 people in FPL territory pay $10/month premium to support solar

19. …Overwhelming Citizen Support Constituent contacts per issue by CA Assemblymember Koretz Courtesy of Environment California