Pursuing Economic Development
through Local Government Solar
Programs and Policy
Autumn Proudlove
NC Clean Energy Technology Center
afproudl@ncsu.edu
Alex Winn
The Solar Foundation
awinn@solarfound.org
About the SunShot Solar Outreach Partnership
The SunShot Solar Outreach Partnership (SolarOPs) is a U.S.
Department of Energy (DOE) program designed to increase the use
and integration of solar energy in communities across the US.
About the SunShot Solar Outreach Partnership
 Increase installed capacity of solar electricity in
U.S. communities
 Streamline and standardize permitting and
interconnection processes
 Improve planning and zoning codes/regulations
for solar electric technologies
 Increase access to solar financing options
We want to get to know you better
Agenda
09:15 – 09:55
Program Overview and Local Policy Context
09:55 – 10:25
Soft Costs and Local Impacts
10:25 – 10:40
Break
10:40 – 11:40
Soft Cost Reduction Strategies
11:40 – 12:25
Policy and Program Recommendations
12:25 – 1:10
Lunch and Local Speaker Panel
1:10 – 2:00
Discussion and Next Steps
Agenda
09:15 – 09:55
Program Overview and Local Policy Context
09:55 – 10:25
Soft Costs and Local Impacts
10:25 – 10:40
Break
10:40 – 11:40
Soft Cost Reduction Strategies
11:40 – 12:25
Policy and Program Recommendations
12:25 – 1:10
Lunch and Local Speaker Panel
1:10 – 2:00
Discussion and Next Steps
Solar Technologies
Solar Photovoltaic (PV)
Solar Hot Water
Concentrated Solar Power
8
Solar Technologies
Solar Photovoltaic (PV)
Solar Hot Water
Concentrated Solar Power
9
Some Basic Terminology
Cell
Panel / Module
Some Basic Terminology
Array
Some Basic Terminology
Production
Kilowatt-hour (kWh)
e- e - eCapacity / Power
kilowatt (kW)
Some Basic Terminology
Residence
5 kW
Factory
1 MW+
Office
50 – 500 kW
Utility
2 MW+
Solar Economic Growth
$16,000,000,000
$14,000,000,000
$12,000,000,000
~40% CAGR
$10,000,000,000
$8,000,000,000
$6,000,000,000
$4,000,000,000
$2,000,000,000
$0
2006
2007
2008
2009
2010
2011
Source: SEIA/GTM Research – 2009/2010/2011/2012 Year in Review Report
http://www.seia.org/research-resources/us-solar-market-insight
2012
2013
14
Solar Job Growth
Solar Job Growth in the US
180,000
160,000
140,000
120,000
100,000
80,000
SEIA
Estimates
60,000
The Solar
Foundation
40,000
20,000
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
(est.)
Source: SEIA Estimates (2006-2009), The Solar Foundation’s National Solar Jobs Census (20102013)
15
Job Creation
Correlation of Market Size & Jobs in Each State
50,000
Number of Solar Jobs
40,000
90%
Correlation
30,000
20,000
10,000
0
0
500
1000
1500
2000
2500
3000
Cumulative Installed Capacity (MW)
Sources: Interstate Renewable Energy Council, The Solar Foundation, Meister Consultants Group
16
The Local Economic Opportunity
1 Megawatt of Residential Solar
Development in Michigan:
42 Jobs
and
$4.9 Million
In economic output
Source: JEDI Model, NREL
Economic Development in Michigan
There are currently
176 solar companies
that employ
2,700 people
Source: SEIA, The Solar Foundation
Economic Development in Michigan
Source: SEIA “National Solar Database”
Source: ISO New England, Inc.
Nov-13
Jul-13
Mar-13
Nov-12
Jul-12
Mar-12
Nov-11
Jul-11
Mar-11
Nov-10
Jul-10
Mar-10
Nov-09
Jul-09
Mar-09
Nov-08
Jul-08
Mar-08
Nov-07
Jul-07
Mar-07
Nov-06
Jul-06
Mar-06
Nov-05
Jul-05
Mar-05
Nov-04
Jul-04
Mar-04
Nov-03
Jul-03
Mar-03
$/MWh
Price Stability
Boston Area Historic Average Wholesale Electricity Price
120.00
100.00
80.00
60.00
.
40.00
20.00
0.00
Date
20
Valuable to Community & Utilities
Source: Rocky Mountain Institute
(http://www.rmi.org/Content/Files/eLab-DER_cost_value_Deck_130722.pdf)
21
Smart Investment for Homeowners
Average Home Value Premium for Solar PV Systems in California
$50,000.00
$45,000.00
$47,312
$40,000.00
$35,000.00
$30,000.00
$25,000.00
$20,000.00
$20,714
$15,000.00
$10,000.00
$5,000.00
$8,892
$0.00
1 kW
3 kW
Source: LBNL, Exploring California PV Home Premiums (2013)
8 kW
Smart Investment for Businesses
Top 20 Companies by Solar Capacity
Dow Jones and Co
White Rose Foods
Toys 'R' Us
General Motors
L'Oreal
Intel
FedEx
Safeway
Target
Walgreen's
Volkswagen
Kaiser Permanente
Bed Bath and Beyond
U.S. Foods
Campbell's Soup
Staples
McGraw Hill
Johnson and Johnson
Macy's
Ikea
Apple
Kohl's
Costco
Walmart
445 megawatts
deployed as of
August 2013 –
enough to power
73,400 homes
0
20
40
60
Solar Capacity (MW)
Source: Solar Energy Industries Association
80
100
Smart Investment for Governments
Source: Borrego Solar
24
Smart Investment for Schools
Current:
3,752
$
=
$77.8m
Potential:
40,000 –
72,000
$
=
$800m
Source: The Solar Foundation (http://schools.tsfcensus.org)
Michigan Solar Market
Cumulative Installed Capacity
25
~22 Megawatts
20
MWdc
15
10
5
0
Enough to power
approx. 2,200 MI
homes
Source: SEIA/GTM Research, Solar Market Insight
Installed Capacity by ZIP Code
Source: NREL Open PV
Installed Capacity by ZIP Code
Grand Rapids/ Muskegon
Traverse City
Detroit/ Ann Arbor
0
California
Arizona
New Jersey
North Carolina
Massachusetts
Nevada
Colorado
Hawaii
New Mexico
New York
Texas
Pennsylvania
Maryland
Florida
Georgia
Ohio
Connecticut
Tennesseee
Delaware
Oregon
Indiana
Missouri
Louisiana
Illinois
Vermont
US Territories
Washington
Wisconsin
Michigan
District of Columbia
Utah
Minnesota
Virginia
New Hampshire
South Carolina
Kentucky
Rhode Island
Maine
Iowa
Montana
West Virginia
Alabama
Arkansas
Idaho
Kansas
Mississippi
Wyoming
Oklahoma
Nebraska
Alaska
North Dakota
South Dakota
US Solar Market
Installed Capacity by State (MW) 2013
6000
5000
4000
3000
2000
1000
0.2% of US
capacity
Source: IREC, Solar Market Trends 2013
World Solar Market
Germany
26~8.5%
% of
World Total
USA
8.6%
Source: REN 21
US Solar Resource
Source: National Renewable Energy Laboratory
31
The Cost of Solar PV
US Average Installed Cost for Behind-the-Meter PV
$14.00
Cost per Watt DC
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
44% drop in price
since 2010
$-
Tracking the Sun VII: The Installed Cost of Photovoltaics in the US from 1998-2013 (LBNL); Solar
Energy Industries Association Solar Market Insight Q2 2014
The Cost of Solar in the US
Comparison of US and German Solar Costs
$6.00
$5.00
$ per Watt
$4.00
Non-Hardware Cost
Total Installed Cost
$3.00
$2.00
$1.00
$US Solar Cost
German Solar Cost
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf)
LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
The Cost of Solar in the US
Comparison of US and German Solar Costs
$6.00
$5.00
$ per Watt
$4.00
Non-Hardware Cost
Hardware Cost
$3.00
$2.00
$1.00
$US Solar Cost
German Solar Cost
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf)
LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
The Cost of Solar in the US
Comparison of US and German Solar Costs
$6.00
$5.00
$ per Watt
$4.00
Non-Hardware Cost
Hardware Cost
$3.00
$2.00
$1.00
$US Solar Cost
German Solar Cost
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf)
LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
The Cost of Solar in the US
Comparison of US and German Solar Costs
$6.00
$5.00
$ per Watt
$4.00
Profits, Taxes, &
Overhead
$3.00
$2.00
Column1
Non-Hardware Cost
Hardware Cost
$1.00
$US Solar Cost
German Solar Cost
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf)
LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
The Cost of Solar in the US
Comparison of US and German Solar Costs
$6.00
$5.00
$1.60
Solar Soft Costs
$1.40
Other Paperwork
$1.20
$ per Watt
$ per Watt
$4.00
$3.00
$2.00
$1.00
$0.80
$0.60
$0.40
$1.00
$0.20
$-
$0.00
US Solar Cost
Permitting & Inspection
Column1
Financing Costs
Non-Hardware Cost
Hardware Cost
Customer Acquisition
Installation Labor
German Solar Cost
Source: NREL (http://www.nrel.gov/docs/fy14osti/60412.pdf)
LBNL (http://emp.lbl.gov/sites/all/files/lbnl-6350e.pdf)(http://www1.eere.energy.gov/solar/pdfs/sunshot_webinar_20130226.pdf )
The Cost of Solar in the US
Change in Soft Costs and Hardware Costs Over Time
$6.00
$3.32
$7.00
$3.32
$4.00
$2.00
Soft Costs
Hardware Costs
$1.90
$3.00
No change in soft
costs between
2010 and 2012
$3.28
$/watt
$5.00
$1.00
$2010
2012
2014
2016
2018
2020
Session Goal
To discuss previously identified and new
strategies for enhancing economic
development, job creation, and energy
customer benefits through solar
deployment.
A Policy Driven Market
Federal
State & Utility
State
&
Utility
Investment Tax
Credit
Accelerated
Depreciation
Qualified Energy
Conservation
Bond
Renewable
Portfolio
Standard
Net Metering
Interconnection
Solar Access
Property Tax
Exemption
A Policy Driven Market
Federal
State
&
Utility
Investment Tax
Credit
Accelerated
Depreciation
Qualified Energy
Conservation
Bond
Renewable
Portfolio
Standard
Net Metering
Interconnection
Solar Access
Property Tax
Exemption
Investment Tax Credit
Type: Tax Credit
Eligibility: For-Profit Organization
Value: 30% of the installation cost
Availability: Through 2016
Accelerated Depreciation
Modified Accelerated Cost-Recovery System (MACRS)
100%
Project Value
80%
60%
Straight Line
50% Bonus (2013)
40%
MACRS (2014+)
20%
0%
0
2
4
6
8 10 12 14 16 18 20 22 24
Year
Qualified Energy Conservation Bond
+ 3.7%
+ 2.3%
$
US Treasury
Local Gov
Project
QECB
Bond Holders
Qualified Energy Conservation Bond
Local Government
Amount
Use
Saginaw County
$2,088,779
Efficiency improvements to
county facilities
Osceola County
$650,000
Efficiency improvements to
county annex bldg.
Genesee County
$4,515,976
EECBG
City of Greenville
$800,000
Ottawa County
$2,825,981
Total Used
$10,880,736
Total Remaining
$92,899,264
Source: Energy Programs Consortium (June 2014)
A Policy Driven Market
Federal
State & Utility
State
&
Utility
Investment Tax
Credit
Accelerated
Depreciation
Qualified Energy
Conservation
Bond
Renewable
Portfolio
Standard
Net Metering
Interconnection
Solar Access
Property Tax
Exemption
Renewable Portfolio Standard
Retail Electricity Sales
Renewable
Energy
Any electricity source
Renewable Portfolio Standard
Retail Electricity Sales
Solar carve-out
Renewable
Energy
Any electricity source
Renewable Portfolio Standard
e$
Fossil Fuel
Two revenue streams
e$- $REC
Renewable Energy
Utility
Michigan RPS
2015 Retail Electricity Sales
Required
10%*
Solar
2%
Other
4%
Wind
94%
Any electricity source
Source: DSIRE
Renewable Portfolio Standard
www.dsireusa.org / August 2012.
29 states,+
Washington DC and 2
territories,have
Renewable Portfolio
Standards
(8 states and 2 territories have
renewable portfolio goals).
A Policy Driven Market
Federal
State & Utility
State
&
Utility
Investment Tax
Credit
Accelerated
Depreciation
Qualified Energy
Conservation
Bond
Renewable
Portfolio
Standard
Net Metering
Interconnection
Solar Access
Property Tax
Exemption
Net Metering
Net metering allows customers to export
power to the grid during times of excess
generation, and receive credits that can be
applied to later electricity usage.
Net Metering
Consumption and Generation in a Solar Home
kWh/hour
1.5
1.0
0.5
0.0
12 AM
4 AM
8 AM
12 PM
Household Consumption
4 PM
Solar Generation
8 PM
Net Metering: Market Share
More than 93%
of distributed
PV Installations are net-metered
Source: IREC (http://www.irecusa.org/wp-content/uploads/IRECSolarMarketTrends-2012-web.pdf)
Net Metering
43 states,+
Source: DSIRE (July 2013)
Washington DC and 4
territories,have Net
Metering Policies
Net Metering: Resources
Resource
Freeing the Grid
Provides a “report card” for
state policy on net metering
and interconnection
http://freeingthegrid.org/
Net Metering: Michigan
B
2007
2008
2009
2010
2011
2012
2013
2014
D
F
B
A
A
B
B
B
Net Excess Credit Value
Retail Rate (<20 kW)
Power Rate (>20 kW
Credit Rollover
Indefinite
System Capacity Limit
150 kW
Aggregate Limit
0.75% of peak load
Source: Freeing the Grid
A Policy Driven Market
Federal
State & Utility
State
&
Utility
Investment Tax
Credit
Accelerated
Depreciation
Qualified Energy
Conservation
Bond
Renewable
Portfolio
Standard
Net Metering
Interconnection
Solar Access
Property Tax
Exemption
Interconnection
Standardized interconnection rules require
utilities to provide a fair and transparent
pathway for customer-generators and other
developers of distributed energy resources to
interconnect with the utility’s grid.
Interconnection: Michigan
C
2007
2008
2009
2010
2011
2012
2013
2014
D
D
C
C
C
B
C
C
Applicable Technologies
Includes solar PV, as well as
other distributed
generation technologies
System Capacity Limit
No limit specified
Source: Freeing the Grid
Applicable Utilities
IOUs, electric co-ops

Bonus
Insurance waived for
generators up to 25
kW; dispute resolution
process
A Policy Driven Market
Federal
State & Utility
State
&
Utility
Investment Tax
Credit
Accelerated
Depreciation
Qualified Energy
Conservation
Bond
Renewable
Portfolio
Standard
Net Metering
Interconnection
Solar Access
Property Tax
Exemption
Solar Access
Eden Roc Hotel
Fontainebleau Hotel
A landowner does not have any legal right to the free flow
of light and air across the adjoining land of his neighbor.
Source: Google Earth
Solar Access
Solar Access Laws:
1. Increase the likelihood that properties will receive
sunlight
2. Protect the rights of property owners to install
solar
3. Reduce the risk that systems will be shaded after
installation
Solar Access
DC
Solar Easements Provision
U.S. Virgin Islands
Solar Rights Provision
Solar Easements and Solar Rights Provisions
Local option to create solar rights provision
Source: Database of State Incentives for Renewables & Efficiency (www.dsireusa.org)
Solar Access
Resource
Solar America Board for Codes & Standards
A comprehensive review of
solar access law in the US –
Suggested standards for a
model ordinance
www.solarabcs.org
Agenda
09:15 – 09:55
Program Overview and Local Policy Context
09:55 – 10:25
Soft Costs and Local Impacts
10:25 – 10:40
Break
10:40 – 11:40
Soft Cost Reduction Strategies
11:40 – 12:25
Policy and Program Recommendations
12:25 – 1:10
Lunch and Local Speaker Panel
1:10 – 2:00
Discussion and Next Steps
Soft Costs & Local Impacts
1. What is the status of Detroit’s solar policy,
and how does this affect the value of solar to
customers?
2. How would different soft cost-cutting policy
actions affect the value of solar to customers?
What are the top 3 barriers to solar
adoption in Detroit?
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High upfront cost
Lack of education
Lack of policy support
Lack of utility support
Private interests
Lack of HOA support
Historic preservation
Reliability concerns
Environmental impact
Other
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A.
B.
C.
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F.
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Solar Policy in Detroit
 Most policies that impact soft costs are
controlled at the local level
– Permitting & Inspections
– City Planning/Zoning
– Solar Access Rules (municipal & community
association level)
– Financing Options
Permitting & Inspection
Homeowners wishing
to install solar must
obtain building &
electrical permits
from the municipal
government
Pre-Application (accessing
requirements & info on
process)
Application Submittal
(forms & fees) & Review
Inspection
Source: IREC Efficient Solar Permitting Presentation- Centralina (2014)
Permitting & Inspection
 Why is this important?
– Adds cost & time to solar installation
– City resources could be spent elsewhere
– Creates uncertainty for installers
Local permitting and inspection add an
average of about $0.50 per watt, or
$2,516 per residential install!
Source: Sun Run Report: http://www.sunrunhome.com/solar-lease/cost-of-solar/local-permitting/
Permitting & Inspection: Detroit
Permit forms posted online
Checklist for building permits and plans
o No checklist for solar permit requirements
o Solar permit requirements are currently
unclear and difficult to find
o No special or expedited permitting procedure
is apparent for solar
o Expedited plan review request is subject to
additional fees
Permitting & Inspection: Detroit
Source: City of Detroit website
Permitting & Inspection: Detroit
From the City of Detroit’s website:
Source: City of Detroit website
Permitting & Inspection: Detroit
Taken from Detroit’s electrical permit
application:
Electrical Permit Fee: $225 (gridconnected PV system)
Source: City of Detroit website
Planning & Zoning: Solar Access
DC
Solar Easements Provision
U.S. Virgin Islands
Solar Rights Provision
Solar Easements and Solar Rights Provisions
Local option to create solar rights provision
Source: Database of State Incentives for Renewables & Efficiency (www.dsireusa.org)
Planning & Zoning
 Detroit Zoning Ordinance (2012) mentions
solar 4 times
– 3 out of 4 times vaguely refer to solar PV:
“Careful consideration should be given
to orientation for solar access to both
the proposed project and surrounding
development”
Source: Detroit Zoning Ordinance:
http://www.detroitmi.gov/portals/0/docs/legislative/cpc/pdf/Ch%2061%20Nov%2021,%202012.pdf (2012)
Financing
Financing options allow more people to
choose solar by providing options for those
who don’t have the cash to pay for a system
out of pocket
Median Household Income (2008-2012)
Detroit
$26,955
Michigan
$48,471
United States
$53,046
Detroit’s median income is $26,091 below the
national median- financing is particularly important
Source: NREL, Benchmarking Non-Hardware Balance-of-System (Soft) Costs for U.S. Photovoltaic
Systems, Using a Bottom-Up Approach and Installer Survey- Second Edition (Oct. 2013)
Source: U.S. Census Bureau QuickFacts
Types of Financing Options
 Loans
– Home equity loans
– Unsecured loans
 PACE (Property Assessed Clean Energy)
 Third Party Ownership
– Leases
– Power Purchase Agreements (PPAs)
Financing: Michigan Saves
 Michigan Saves Home Energy Loan Program
 Offers loans for $1,000 to $30,000 for energy
efficiency improvements, as well as solar
installations
– Available to residential customers
– Term lengths of 12 to 120 months
– APR no higher than 7%
Source: Database of State Incentives for Renewables and Efficiency (DSIRE)
Financing: Michigan Saves
Financing Offered in Wayne County through
Michigan Saves:
 Ascentium Captial- Business, Multi-Family, & Public
Sector financing
 Genisys Credit Union- Residential financing; 4.99%
interest rate
 MSU Federal Credit Union- 4.99% interest rate
 Opportunity Resource Fund- Serves customers
previously denied; 6.00%-9.00% interest rate
Types of Financing Options
 Loans
– Home equity loans
– Unsecured loans
 PACE (Property Assessed Clean Energy)
 Third Party Ownership
– Leases
– Power Purchase Agreements (PPAs)
Financing: PACE
 Michigan signed PACE
legislation in Dec. 2010
 Detroit has a PACE financing
program through Lean and Green
Michigan
 Open to owners of commercial, industrial, and
multi-family properties
 Typically no down payment
Types of Financing Options
 Loans
– Home equity loans
– Unsecured loans
 PACE (Property Assessed Clean Energy)
 Third Party Ownership
– Leases
– Power Purchase Agreements (PPAs)
Financing: Third Party Ownership
Benefits
Drawbacks
 No upfront cost
 Investor needs higher ROI
 No O&M costs
 Not available in all states
 Low risk
 Predictable payments
Source: DSIRE (map)
Financing: Third Party PPAs
Source: Database of State Incentives for Renewables and Efficiency (DSIRE)
Electricity Rates in Detroit
 U.S. National Average Residential Electricity
Rate= 11.9 cents/kWh
 DTE Energy Residential Service Rate (D1)
– 11.915 cents/kWh for the first 17 kWh per day
– 13.260 cents/kWh for all kWh above 17 kWh per
day
– PLUS rate riders and monthly service charge of
$6.00
Electricity rates in Detroit are higher
than the national average
Source: U.S. Energy Information Administration Form 861; DTE Energy Rate Book
Solar’s Financial Value
Electricity rates are projected to increase
48% in Detroit over the next 25 years…
$14
…while the
cost of solar
continues to
decline
Cost per Watt
$12
$10
$8
$6
$4
$2
$0
1998
2013
Tracking the Sun VII: The Installed Cost of Photovoltaics in
the US from 1998-2013 (LBNL)
Source: U.S. Energy Information Administration – Annual Energy Outlook 2014
Solar’s Financial Value
 Analysis based on a 5 kW rooftop system
– (nat. avg. is 5.3 kW- rounded down to 5)
 System located in Detroit- DTE Energy
territory
 Cost is based on a Q3 2014 regional average
(Midwest)*
 Typical energy usage patterns (NREL data)
 NREL System Advisor Model (SAM)
Disclaimer: Values will vary significantly based on household
energy usage patterns, system location, etc.
*Data provided by EnergySage
Solar’s Financial Value: Today
 Avg. Monthly Bill Savings (First Yr): $80.68
 First Year Bill Savings: $968.12
 Avg. Annual Bill Savings Over 25 Yrs: $1642
 Levelized Cost of Energy (LCOE)
– Cash purchase: 19.0 cents/kWh
– Fully financed: 10.8 cents/kWh
Solar’s Financial Value: Today
 Net Present Value as compared to an investment in
stocks (S&P 500)--- 6.61% discount rate
– Cash purchase: -$549.43
– Fully financed: $5,408.35
 After Tax Cash Flow (Total Net Income)
– Cash purchase: $26,417
– Fully financed: $11,934
 After Tax Net Equity Cost Flow (Total Costs-- does
not include value of energy produced)
– Cash purchase: -$14,644
– Fully financed: -$29,126
Impact of Cutting Soft Costs
 Impact of reducing soft costs by $0.64
cents/Watt*
 Levelized Cost of Energy (LCOE)
– Cash purchase: 15.6 cents/kWh
– Fully financed: 8.87 cents/kWh
 Net Present Value as compared to an
investment in stocks (S&P 500)
– Cash purchase: $1,911.34
– Fully financed: $6,789.36
*Figure chosen from LBNL report (How Much Do Local Regulations Matter?) stating impact of soft
costs ranges from $0.64-$0.93/W
Impact of Cutting Soft Costs
 After Tax Cash Flow (Total Net Income)
– Cash purchase: $28,791
– Fully financed: $16,933
 After Tax Net Equity Cost Flow (Total Costs-does not include value of energy produced)
– Cash purchase: -$12,269
– Fully financed: -$24,127
Impact of a Solarize Program
 Impact of a 20% discount on total system cost
 Levelized Cost of Energy (LCOE)
– Cash purchase: 15.1 cents/kWh
– Fully financed: 8.6 cents/kWh
 Net Present Value as compared to an
investment in stocks (S&P 500)
– Cash purchase: $2,295.84
– Fully financed: $7,005.14
Impact of a Solarize Program
 After Tax Cash Flow (Total Net Income)
– Cash purchase: $29,162
– Fully financed: $17,714
 After Tax Net Equity Cost Flow (Total Costs-does not include value of energy produced)
– Cash purchase: -$11,898
– Fully financed: -$23,346
Agenda
09:15 – 09:55
Program Overview and Local Policy Context
09:55 – 10:25
Soft Costs and Local Impacts
10:25 – 10:40
Break
10:40 – 11:40
Soft Cost Reduction Strategies
11:40 – 12:25
Policy and Program Recommendations
12:25 – 1:10
Lunch and Local Speaker Panel
1:10 – 2:00
Discussion and Next Steps
Agenda
09:15 – 09:55
Program Overview and Local Policy Context
09:55 – 10:25
Soft Costs and Local Impacts
10:25 – 10:40
Break
10:40 – 11:40
Soft Cost Reduction Strategies
11:40 – 12:25
Policy and Program Recommendations
12:25 – 1:10
Lunch and Local Speaker Panel
1:10 – 2:00
Discussion and Next Steps
Effective Local Solar Policy
Local Policy
Local Solar
Policy
Planning for
Solar
Solar in
Development
Regulation
Effective Solar
Permitting
Process
Solar Market
Development
Tools
Effective Local Solar Policy
Local Policy
Local Solar
Policy
Planning for
Solar
Solar in
Development
Regulation
Effective Solar
Permitting
Process
Solar Market
Development
Tools
Planning for Solar Development
Communitywide Comprehensive Plan
Neighborhood
Plans
Green
Infrastructure
Plans
Corridor Plans
Special District
Plans
Energy Plan
Climate Action
Plan
Source: American Planning Association
Existing Goals
Detroit Master Plan of Policies (2009)
Citywide Policies: Environment and Energy
The City’s central location among the Great
Lakes necessitates sound environmental policy.
Current environmental trends require new
directions in local policy that will help sustain
our vital ecosystem and insure a high quality of
life for all residents. Environmental and energy
considerations transcend political boundaries
and require regional cooperation…
Existing Goals: Citywide
Environment and Energy
Goal 2: Ensure Environmentally Healthy Neighborhoods
Goal 3: Minimize Resource Use and Waste
Policy 3.1: Promote the use of renewable and/or
sustainable resources
Policy 3.4: Provide incentives to attract green industry
and to encourage retooling of existing
industries to incorporate sustainable practices.
Goal 5: Improve Air Quality
Health and Social Services
Goal 4: Reduce Health Risks for Young Children
Existing Goals: Neighborhoods
Environment and Energy
“Attract industries that emphasize pollution
minimizing technology and research.”
Cluster 4
Middle East Central
Upper East Central
Cluster 5
Springwells
West Riverfront
Technical Resources
Resource
Planning for Solar Energy
A guide for planners on
determining and
implementing local solar
goals, objectives, policies, and
actions
www.planning.org
Effective Local Solar Policy
Local Policy
Local Solar
Policy
Planning for
Solar
Solar in
Development
Regulation
Effective Solar
Permitting
Process
Solar Market
Development
Tools
Zoning Standards
Section
Topics to Address
Definitions
Define technologies & terms
Applicability
Primary vs. accessory use
Dimensional Standards
• Height
• Size
• Setbacks
• Lot coverage
Design Standards
• Signage
• Disconnect
• Screening
• Fencing
Source: American Planning Association
Zoning Standards: Small Solar
Typical Requirements:
 Permitted as accessory use
 Minimize visibility if feasible
 Requirements:
– District height
– Lot coverage
– Setback
Zoning Standards: Large Solar
Typical Requirements:
 Allowed for primary use in
limited locations
 Requirements:
– Height limits
– Lot coverage
– Setback
– Fencing and Enclosure
Zoning Standards: Model Ordinances
Resource American Planning Association
Bethany Beach, Town of. 2010.
Ordinance no. 455: An Ordinance to Add A
New Chapter 484 “Solar Energy Systems”
To the Town Code of Bethany Beach.
Allows solar energy systems for on-site
energy use as permitted accessory uses in
all zoning districts. Encourages rooftop
panels on side and back roof slopes rather
than ground-mounted systems. Commercial
solar energy installations are prohibited.
https://www.planning.org/pas/infopackets/open/pdf/30intro.pdf
Zoning Standards: Historic
Typical Requirements:
 Prevent permanent loss of
“character defining” features
 Possible design requirements
– Ground mounted
– Flat roof with setback
– Panels flush with roof
– Blend color
Source: SolarCentury
Zoning Standards: Historic
Resource North Carolina Clean Energy Technology Center
Provides sample design
principles and example
regulations incorporating
historic preservation into
sustainability and energy
projects.
www.solaroutreach.org
Private Rules on Residential Solar
Resource The Solar Foundation
Guide for HOAs on solar
access law and simple
recommendations for
reducing barriers to solar
in association-governed
communities.
www.solaroutreach.org
Solar in HOAs: Best Practices
 Provide clear, unambiguous design guidelines
 Post rules and requirements online
 Provide a list of all required documents
 Waive design rules that significantly increase
cost or decrease performance
 Allow exceptions from tree removal rules for
solar
Installation Soft Costs
$1.60
$1.40
Other Paperwork
$ per Watt
$1.20
Permitting & Inspection
$1.00
$0.80
Financing Costs
$0.60
$0.40
$0.20
$0.55
Customer Acquisition
Per watt
Installation Labor
$0.00
11
Update Building Code
Solar Ready Construction:
Preparing a building for solar at the outset can
help make future solar installations easier and
more cost effective.
Update Building Code
Require builders to:
 Minimize rooftop equipment
 Plan for structure orientation to avoid shading
 Install a roof that will support the load of a solar array
 Record roof specifications on drawings
 Plan for wiring and inverter placement
Update Building Code
$5,000
$4,000
$3,000
60% Savings
when a building is
solar ready
Labor
$2,000
Equipment
$1,000
$-
During Construction
After Construction
Source: Solar Ready: An Overview of Implementation Practices [Draft]. NREL, Feb. 18, 2011.
Installation Labor Roadmap
$0.70
Added Cost Per Watt
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current Trajectory
Roadmap Target
Source: NREL (http://www.nrel.gov/docs/fy13osti/59155.pdf)
12
Effective Local Solar Policy
Local Policy
Local Solar
Policy
Planning for
Solar
Solar in
Development
Regulation
Effective Solar
Permitting
Process
Solar Market
Development
Tools
Challenge: Inconsistency
18,000+ local jurisdictions
with unique zoning and permitting requirements
Source: http://www.nrel.gov/docs/fy12osti/54689.pdf
Consumer Challenges
Source: Forbes
Regulatory Barriers
$1.60
$1.40
$0.17
Per Watt
Other Paperwork
$ per Watt
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
Permitting & Inspection
Financing Costs
Customer Acquisition
Installation Labor
Planning & Permitting Roadmap
Added Cost Per Watt
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current Trajectory
Roadmap Target
Permitting: Best Practices
Resource Interstate Renewable Energy Council
Outlines leading best
practices in residential solar
permitting and provides
examples of implementation.
http://projectpermit.org/wp-content/uploads/2013/04/Expanded-Best-Practices-7.23.13_VSI.pdf
Financing Costs
$1.60
$1.40
$ per Watt
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.30
Per watt
Other Paperwork
Permitting & Inspection
Financing Costs
Customer Acquisition
Installation Labor
$0.00
12
Third Party Ownership: Cost
Weighted Average Cost of Capital
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Third Party Ownership
Direct Ownership with Debt
Engage Local Lenders
Fewer than 5%
of the
6,500 banks in the US
are
actively financing solar PV projects
Engage Local Lenders: Resources
Resource Local Lending for Solar PV
!
A guide for local governments
seeking to engage financial
institutions
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
November!2013!
LOCAL LENDING FOR SOLAR PV:
!
A GUIDE FOR LOCAL GOVERNM ENTS SEEKING
TO ENGAGE FINANCIAL INSTITUTIONS
!
!
!
!
!
!
!
!
!
www.solaroutreach.org
w w w .m c-group.com
!
!
98 North W ashingt
! on Street Suite 302
Boston M A 02114
617.934.4847
Agenda
09:15 – 09:55
Program Overview and Local Policy Context
09:55 – 10:25
Soft Costs and Local Impacts
10:25 – 10:40
Break
10:40 – 11:40
Soft Cost Reduction Strategies
11:40 – 12:25
Policy and Program Recommendations
12:25 – 1:10
Lunch and Local Speaker Panel
1:10 – 2:00
Discussion and Next Steps
Policy & Program Recommendations
 City Goals
– Boost the local economy and employment
– Help residents and businesses save on energy
expenses
– Find ways for the city to save energy
– Don’t get “left behind” on solar
Others?
Policy & Program Recommendations
Streamline City’s Solar Permitting Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize) Program
Engaging Local Lenders
Performance Contracting
Streamlined Permitting
Solar Permitting Best Practices:
Post Requirements Online
Implement an Expedited Permit Process
Enable Online Permit Processing
Ensure a Fast Turn Around Time
Source: IREC/ Vote Solar
Transparent process
Electronic
materials
Permit
checklist
Source: Breckenridge, CO (http://www.townofbreckenridge.com/index.aspx?page=694)
Streamlined Permitting
Solar Permitting Best Practices:
Collect Reasonable Permitting Fees
Narrow Inspection Appointment Windows
Eliminate Excessive Inspections
Train Permitting Staff in Solar
Source: IREC/Vote Solar
Model Expedited Permitting Process
Resource
Solar America Board for Codes & Standards
Expedited Permitting:
 Simplifies requirements for PV
applications
 Facilitates efficient review of
content
 Minimize need for detailed
studies and unnecessary delays
1-1. Example Design
Criteria:
• Size < 10-15 kW
• Code compliant
• Weight < 5 lb / sqft
• 4 strings or less
Permitting Next Steps
 List out all current requirements with permitting staff
 Examine Solar ABCS model permitting process &
streamlined processes from other cities
 Identify opportunities to streamline Detroit’s process
or consider adopting the Solar ABCS model
 Ensure fees represent staff time required
 Clarify solar permitting requirements- list on website
 Consider creating an expedited process for systems
meeting certain requirements
Policy & Program Recommendations
Streamline City’s Solar Permitting Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize) Program
Engaging Local Lenders
Performance Contracting
Revise Zoning Code
Consider utilizing a
model zoning
ordinance for solar
energy systems
Specifically address:




Definitions
Uses
Siting Preferences
Design Preferences
Zoning Next Steps
 Planning & Visioning– What are Detroit’s solar goals?
 Look at Massachusetts and North Carolina model
solar development ordinances
 Utilize existing model ordinances and adapt to
Detroit’s needs for both large solar and small solar
Policy & Program Recommendations
Streamline City’s Solar Permitting Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize) Program
Engaging Local Lenders
Performance Contracting
Solarize
 Reduce the upfront cost of solar for
residential customers in Detroit (other
programs have seen reductions of 20%!)
 Expand access to solar & help more residents
save on energy costs
 Consider streamlining permitting first and
engaging local lenders to offer solar financing
products to participants
Source: Solarize Plano
The Solarize Program
Barriers
Solutions
High upfront cost
Group purchase
Complexity
Community outreach
Customer inertia
Limited-time offer
Solarize: Process
Select
Installer
Marketing
&
Workshops
Enrollment
Site
Assessment
Decision
&
Installation
Solarize: Lasting Impact
A household is
0.78% more likely to adopt solar
for
each additional installation in their zip code
Source: NYU Stern and Yale School of Forestry – Peer Effects in the Diffusion of Solar Panels
Solarize: Lasting Impact
Lasting
Impact
Source: NREL
Solarize Next Steps
Reach out to trusted local organizations &
those with renewable energy expertise
Provide support for a Solarize campaign run by
a local organization
Officially back the program
Advertise the program
Streamline permitting
Ensure financing is available to participants
Policy & Program Recommendations
Streamline City’s Solar Permitting Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize) Program
Engaging Local Lenders
Performance Contracting
Engaging Local Lenders
 Work with local banks and credit unions to
offer solar loans
 Expands access to solar to those who do not
have the cash upfront to pay for a system
 Solarize campaigns often work with local
lenders
Engaging Local Lenders
 Municipal Loans
– City of Pendleton, OR
 Bank or Credit Union Loans
– Home equity loans, unsecured loans
– Admirals Bank, local credit unions
 PACE Financing
 Solar Leases or PPAs (3rd Party Ownership)
 Utility Loans
Engaging Local Lenders
 Municipal Loans
– City of Pendleton, OR
Bank or Credit Union Loans
– Home equity loans, unsecured loans
– Admirals Bank, local credit unions
PACE Financing
Solar Leases or PPAs (3rd Party Ownership)
 Utility Loans
Engaging Local Lenders
Resource
Information on types of
solar financing and what
local governments can do to
make financing options
available to customers
www.solaroutreach.org
Engaging Local Lenders Next Steps
Connect with Michigan Saves and Lean and
Green Michigan to identify and publicize
existing financing options
Meet with local financial institutions to
encourage additional financing options
Coordinate with Solarize organizers to offer
financing for participants
Educate consumers on the options available to
them
Policy & Program Recommendations
Streamline City’s Solar Permitting Process
Revise Zoning Codes to Address Solar
Residential Bulk Purchasing (Solarize) Program
Engaging Local Lenders
Performance Contracting
Performance Contracting
 Incorporating solar into an energy services
performance contract (ESPC)
Source: Integrating Solar PV Into Energy Services Performance Contracts: Options for Local
Governments Nationwide (NC Solar Center, 2014)
Performance Contracting
 Limited to no upfront capital required
 Guaranteed long-term financial savings
 May help stem further job losses and enhance
delivery of government services
 Knoxville,TN: $1.1M/year shared savings
 Cincinnati, OH: shared savings of $153,732/year
(phase 1) and $324,819/year (phase 2)
Source: Integrating Solar PV Into Energy Services Performance Contracts: Options for Local
Governments Nationwide (NC Solar Center, 2014)
Performance Contracting Next Steps
Identify Energy Services Companies (ESCOs)
in your area)
Consider issuing a Request for Proposals
(RFP) to select an ESCO
Include ability to include a solar array in the
RFP criteria
Network with other cities to learn more
about their experiences with this option
Policy & Program Recommendations
 Streamline City’s Solar Permitting Process
 Revise Zoning Codes to Address Solar
 Residential Bulk Purchasing (Solarize) Program
 Engaging Local Lenders
 Performance Contracting
Questions?
Agenda
09:15 – 09:55
Program Overview and Local Policy Context
09:55 – 10:25
Soft Costs and Local Impacts
10:25 – 10:40
Break
10:40 – 11:40
Soft Cost Reduction Strategies
11:40 – 12:25
Policy and Program Recommendations
12:25 – 1:10
Lunch and Local Speaker Panel
1:10 – 2:00
Discussion and Next Steps
Agenda
09:15 – 09:55
Program Overview and Local Policy Context
09:55 – 10:25
Soft Costs and Local Impacts
10:25 – 10:40
Break
10:40 – 11:40
Soft Cost Reduction Strategies
11:40 – 12:25
Policy and Program Recommendations
12:25 – 1:10
Lunch and Local Speaker Panel
1:10 – 2:00
Discussion and Next Steps
Activity: Solar in Your Community
Spend the next 10 minutes
discussing next steps and
potential obstacles with others
at your table.
Which “best practice” should
be pursued first?
Integrate solar in plans
Address solar in zoning code
Adopt solar ready guidelines
Define permitting process
Expedite typical solar permits
Implement fair permit fees
Expand financing options
Implement solarize program
0%
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How difficult will it be to
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Very easy
Somewhat easy
Moderate
Somewhat difficult
Very difficult
0%
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Discussion
What obstacles stand in the
way of implementation?
Discussion
What are possible strategies
to overcome those obstacles?
Activity: Next Steps
What do you pledge to do when you leave
today’s workshop? [Orange Card]
Autumn Proudlove
NC Clean Energy Technology Center
afproudl@ncsu.edu
Alex Winn
The Solar Foundation
awinn@solarfound.org