Solar Renewable Energy - Now ISPE Meeting Thomas Leyden, Managing Director October 28, 2009 SunPower Update Established in 1985 World record solar cell efficiency = MORE POWER 4,000 Employees: All we do is solar Over 85 patents and over 20 years of R&D Worldwide footprint Publicly traded (NASDAQ), strong balance sheet Over 450 systems on 3 continents Energy efficiency expertise Over 500 MW installed, 24 MWs in NJ $1.4 billion in 2008 revenue – all solar Largest solar projects in North America Fully staffed NJ office in Trenton Established and Proven. Technology Leaders. Solar: Different Types of Solar Solar Hot Water: Parabolic Trough: Photovoltaics: Beats Electric Water Heating Today “Dispatchable” Wholesale Power Modular; Customer Side Value Technology Comprehensive Solar Program Your SunPower Solar Solution Reaching “Grid Parity” MSEIA/PV Now All-in price of electricity 0.4 0.35 Incentives accelerate the cross-over 0.3 $/kwh 0.25 Grid 4.5% inflation Grid 3% inflation solar declining 5% solar declining 6% 0.2 0.15 Crossover points 0.1 0.05 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2005-2020 Deployment Applications Residential Retrofit New Production Homes Commercial & Public Power Plants 6 Solar PV Value Chain Raw Materials to Rooftops = Lower Risk and Higher Savings Polysilicon Ingot Wafer Solar Cell Solar Panel Systems Deployment Products Solar Cell Rooftop SunPower PowerGuard ® SunPower ® T10 Solar Roof Tile Ground SunPower ® T5 Solar Roof Tile SunPower ® T0 Tracker SunPower ® T20 Tracker 8 More Power Per Square Foot More Energy (kWh) = More Customer Cost Savings Thin Film Conventional High Efficiency 205,000 kWh 468,000 kWh 880,000 kWh (4.4% efficiency) (12.8% efficiency) (18.4% efficiency) More Energy, Less Space Efficient Use of Land with High-Efficiency PV Technology Thin Film Conventional High Efficiency 41 Acres 32 Acres 21 Acres 9.5% Efficiency 12.6% Efficiency 19.3% Efficiency 6MW Solar Power Plant Installation Methods Have Improved Dramatically Features Patented Lightweight No roof penetrations Insulates roof Pre-engineered Class B Fire Rating 11 J&J Leadership Has Made a Difference Ortho-McNeil Pharmaceuticals, Springhouse, PA 75 kW 12 Meaningful Power in the Commercial/Industrial Sector 1.01 MW Fala Direct Marketing Farmingdale, NY 13 Shiseido 699 kW New Jersey Headquarters • Reduces annual energy usage by 35% • Saves $100,000 annually in electricity costs Tiffany & Co. 1.3 MW Parsippany, NJ Solar + Energy Efficiency delivering savings of more than $450,000/year Wal-Mart 5.9 MW Multiple Locations in CA & CO Reduce energy consumption by 10–40% per store New Jersey National Guard, Ft. Dix - 181 kW 17 Bayonne School District, Bayonne, NJ - 231 kW out of 2 MWs 18 J&J Consumer Products Skillman, NJ 500 kWs Sonoma County Water Agency Sonoma Valley, CA Bavaria 10.08 MW – Was World Largest Generates enough solar energy to power the entire village Nellis Air Force Base 14.2 MW Las Vegas, Nevada - Largest in the United States Supplies 25% of the base’s total power Over 500 Installations Worldwide Major Companies Turn to Solar 23 Simple and Robust Components Solar runs in parallel with utility power 24 Cutting-Edge Performance Monitoring Daily performance monitoring – Energy output Commercial Performance Monitoring Meteorological weather station – Sunlight irradiance and ambient temperature – Wind speed Web Accessible User Interface – Actual vs Expected array output – 15-minute interval data logging, 30-minute data updates to server Annual/monthly performance reports Exportable data for analysis Utility-grade data gathering, management and reporting: Monitoring – IBM Maximo asset-management – OSI PI real-time backbone infrastructure Control Center 25 Johnson & Johnson / Solar System Performance 350,000 Total Expected Energy (kWh): 8,976,895 Total Typical Energy (kWh): 9,022,304 Total Energy Produced (kWh): 8,898,314 % of Expected Energy Produced: 99.1% 300,000 250,000 Energy (kWh) 200,000 150,000 100,000 50,000 Energy Expected in Typical Year Energy Expected with Actual Weather 3/1/2009 1/1/2009 11/1/2008 9/1/2008 7/1/2008 5/1/2008 3/1/2008 1/1/2008 11/1/2007 9/1/2007 7/1/2007 5/1/2007 3/1/2007 1/1/2007 11/1/2006 9/1/2006 7/1/2006 5/1/2006 3/1/2006 1/1/2006 11/1/2005 9/1/2005 7/1/2005 5/1/2005 3/1/2005 1/1/2005 11/1/2004 9/1/2004 7/1/2004 5/1/2004 3/1/2004 1/1/2004 0 Electrical Generation 26 NJ SRECS 101 1 SREC = 1 MWhr (or 1000 kWhr) Energy Year = June 1- May 31 SREC generation for 15 years, Class 1 years 16+ First 3 Years NJ SRECs must be purchased by LSEs that supply the NJ electricity markets in order to meet the RPS obligation or else they will be fined (via an ACP) by the NJ BPU @ $300/MWh (or $0.30/kWh) – “Compliance RECs” Next 8 years New ACP schedule more than doubled to make up for lack of rebates 2009 2010 2011 2012 2013 2014 2015 2016 $ $ $ $ $ $ $ $ 711 693 675 658 641 625 609 594 27 27 NJ Solar Renewable Energy Certificate (SRECs) Energ y Year 2010 2011 2012 2013 2014 2015 2016 20172023 S-ACP $693 $675 $658 $641 $625 $609 $594 3% per Yr decrease Spot $589 $574 $559 $545 $531 $518 $505 ~85% • Current NJ Renewable Portfolio Standard (RPS) goal is 2.12% by 2021 • RPS Obligation continues beyond 2021, with no escalation • Load Servicing Entities (LSEs) required to comply with State RPS • Solar Alternative Compliance Penalty (S-ACP) created by Board of Public Utilities • S-ACP set maximum market trading price for NJ SRECs • S-ACP levels set forward for 8years at ~3% discount per year (renewed each yr) SunPower Proprietary and Confidential. © 2008 SunPower Corporation. All Rights Reserved 28 Purchase Option Objectives Benefits Maximize value Low-risk return on investment Long term asset ownership Reduce long term cost of energy Utilize Investment Tax Credits Increased cash flow Hedge energy costs No property tax impact Strategic investment Public recognition 5,000 4,000 3,000 2,000 1,000 0 -1,000 -2,000 -3,000 -4,000 25 23 21 19 17 15 Time 13 11 9 7 5 3 1 -5,000 0 Societal/environmental goals Cumulative Cashflow $ Thousands Cash/Credit reinvestment for strategic reasons Utility Purchases Solar Cash Flow 29 PPA Financing Objectives Benefits Site solar power system on property Simplified solution: focus on cost of energy Predictable long term electricity supply arrangement No up-front capital investment No asset ownership/investment risk Performance based obligation: pay only for electricity delivered Hedge against uncertain utility rates Integrator designs, builds, operates and maintains solar project Fixed rate electricity cost for 10+ years Enhanced cash flow: redirect sale of solar electricity to tenant Meet clean energy and environmental sustainability goals 30 Dedications & Media Events Positive publicity and recognition Promote goodwill 31 Corporate Media Coverage Enhance Value of Renewable Energy and Social Responsibility Leverage Investment: increase awareness of corporate social responsibility activities 32 Extend Corporate Vision Value to Your Employees, HR Department, and Organization SunPower can partner with HR departments to launch a program for your employees, offering them solar for their homes at reduced rates, with simple financing. “SunPower has a presence throughout the U.S. and a great dealer channel, so we could offer the benefit to a good percentage of our employees.” —Debbie Ledbetter, Corporate, Social, and Environmental Responsibility, Hewlett-Packard 33 Economic, Environmental and Social Benefits of Solar 1 Reduced carbon footprint and zero emissions — Be part of the solution! 4 Purchase electricity below current utility rates 2 Align with organizational sustainability goals 5 Flexible financing options 3 Reduce fossil fuel dependence 6 Hedge against rising and volatile electricity prices A New Era is Upon Us….…. DOE HQ Thomas Leyden Managing Director SunPower Corporation, Systems tleyden@sunpowercorp.com Pearl Harbor 609-964-8901 Fort Dix 35 Nothing is as powerful as an idea whose time has come -- Victor Hugo 36 Solar Initiatives 10/28/09 Art Goehry J&J Sr. Director Project Management agoehry1@its.jnj.com 732 524 1898 Jed Richardson J&J Site Manager jrichar9@its.jnj.com 908 927 5562 1 © Johnson & Johnson 2006 Energy Overview Climate Friendly Energy Policy Energy Usage/Cost & Procurement Energy Reduction Projects Campus Opportunities 2 © Johnson & Johnson 2006 Climate Friendly Energy Policy 1999/2003 Achieve a 7% absolute reduction in Green House Gas (CO2) emissions by 2010, compared to a base year of 1990 3 © Johnson & Johnson 2006 CO2 Reduction Pathway: A Balanced Approach • Energy Efficiency • On-site Cogeneration • On-Site Renewables: Solar, Wind, LFG, Biomass, Geothermal • Green Power Purchases • Carbon Offset Trading & Sequestration 4 © Johnson & Johnson 2006 J&J Group Finance CO2 Capital Funding Process August, 2004 $40 million per year in capital relief for Projects Worldwide Projects provide good financial returns: 10-15% Internal Rate of Return Projects provide meaningful CO2 reduction: $1000/Metric Ton • • • March 2009: CO2 Committee receives continued endorsement from CFO Identify Project Complete Project Form* Submit to WWEM for Review *Must include Finance Approved IRR Calculation CO2 Committee Review & Approval Obtain Local Approval Implement Project 5 © Johnson & Johnson 2006 CO2 Reduction Projects 80 projects approved for funding $187.2 million US 129,199 metric tons CO2/yr Average IRR: 18.6% 50 Projects Complete 6 © Johnson & Johnson 2006 Balancing 2009,2010,2011 2009 Estimate 2010 Estimate: 2011 Estimate: : $47.2 MM $70.0 MM $31.7 MM •7 7 © Johnson & Johnson 2006 Existing Solar PV Systems Company Location Capacity Neutrogena USA Los Angeles, CA 546 kW J&J Pharma R&D Springhouse, PA 75 kW Cordis Warren, NJ 72 kW Janssen USA Titusville, NJ 500 kW J&J Consumer Products Skillman, NJ 505 kW Ethicon, Inc. Somerville, NJ 250 kW J&J Corporate New Brunswick, NJ 234 kW J&J Pharma R&D La Jolla, CA 246 kW Ortho-McNeil, GPSG Raritan, NJ 10 KW GPSG Vacaville, CA Ortho-McNeil, GPSG Raritan, NJ 515 KW Janssen Xi’an, China 10 KW J&J Corporate New Brunswick, NJ Total Installed Capacity 1,194 KW 451 KW 4,608 kW 8 © Johnson & Johnson 2006 Proposed 2010 Solar PV Projects Company Location Capacity Ortho-McNeil-Janssen USA Titusville, NJ 4100 kW Ortho Clinical Diagnostics Raritan, NJ 1700 kW Consumer Products Skillman, NJ 1200 kW J&J Corporate ITS USA Raritan, NJ 1000 kW Cordis Bridgewater, NJ Total New Potential Capacity 250 kW 8,250 kW 9 © Johnson & Johnson 2006 Company: Neutrogena USA Location: Los Angeles, California Project: 546 kW Solar Photovoltaic Roof Mounted System Completed: August 2001, November 2002 (II) 10 © Johnson & Johnson 2006 Company: PSGA Location: Springhouse, Pennsylvania Project: 75 kW Solar Photovoltaic Roof Mounted System Completed: April 2002 11 © Johnson & Johnson 2006 Company: Cordis Location: Warren, New Jersey Project: 72 kW Solar Photovoltaic Roof Mounted System Completed: May 2002 12 © Johnson & Johnson 2006 Company: Janssen USA Location: Titusville, New Jersey Project: 522 kW Solar Photovoltaic Roof Mounted System Completed: February 2003 13 © Johnson & Johnson 2006 Company: J&J Consumer Products Location: Skillman, New Jersey Project: 505 kW Solar Photovoltaic Tracking System Completed: October 2005 14 © Johnson & Johnson 2006 Company: Ethicon Inc. Location: Somerville, New Jersey Project: 250 kW Solar Photovoltaic Roof Mounted System Completed: February 2006 15 © Johnson & Johnson 2006 Company: J&J Corporate Location: New Brunswick, New Jersey Project: 234 kW Solar Photovoltaic Tracking System Completed: March 2006 16 © Johnson & Johnson 2006 Company: J&J Pharma R&D Location: La Jolla, California Project: 246 kW Solar Photovoltaic Roof Mounted System Completed: March 2007 17 © Johnson & Johnson 2006 Company: Ortho-McNeil Location: Raritan, NJ Project: 10 kW Solar Photovoltaic Tracking System Completed: April 2007 18 © Johnson & Johnson 2006 Company: GPSG Location: Vacaville, California Project: 1,194 kW Solar Photovoltaic Tracking System Completed: September 2007 19 © Johnson & Johnson 2006 Company: Ortho-McNeil Location: Raritan, New Jersey Project: 515 kW Solar Photovoltaic Tracking System Completed: December 2007 20 © Johnson & Johnson 2006 Company: Janssen Location: Xi’an, China Project: 10 kW Solar Photovoltaic Tracking System Completed: June 2008 21 © Johnson & Johnson 2006 Company: Hyatt Hotel Location: New Brunswick, New Jersey Project: 451 kW Solar Photovoltaic Roof Mounted System Completed: April, 2009 22 © Johnson & Johnson 2006 Solar Thermal Projects J&J China, Shanghai: Domestic Hot Water McNeil Consumer Ft. Washington, PA Boiler Pre-heat Janssen Gurabo, Puerto Rico Domestic Hot Water 23 © Johnson & Johnson 2006 Solar projects – Lessons Learned • Turnkey project may not cover all needs • • • • • • Safety – Fencing, Fall protection Engineering – Arc flash, Wetlands, GPR Landscaping Electrical – Relays, Grounding Legal IT • Roof mounted • Loading, FM Requirements • Roof condition • Ground mounted • Land use • Impervious surface • Foundations 24 © Johnson & Johnson 2006 Solar projects – Lessons Learned cont. • Long term maintenance and operations • Negotiate before contracting • Duration/cost • Planned maintenance and monitoring • Unplanned maintenance • Data monitoring • Automatic notification • Other issues • Ground faults • Blown fuses • Inverter issues • Complete failures • Board failures 25 © Johnson & Johnson 2006 THANK YOU ! 26 © Johnson & Johnson 2006
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