August.Photovoltaics and Roofs
Photovoltaics and Roofs: Legal, Financial and Design Issues 08.26.2010
Speakers: Drew Torbin
Rudy Perez
Vice President – Renewable Energy
Program Manager – Solar Photovoltaic Program
Southern California Edison Overview •
•
• •
An Edison International company, SCE is one of the nation’s largest investor‐ owned electric utilities, with more than 120 years of service. Serves a population of 14 million people, via 4.8 million business and residential accounts in a 50,000‐ square‐mile service area within central, coastal and Southern California. 17% of Customer Load delivered via Renewable Energy Delivering that power takes 93,500 circuit miles of line connecting 1.5 million poles, 683,000 transformers and 737,000 area and street lights and the days and nights of 13,000 employees. 2
Solar Photovoltaic Program (SPVP) Overview •
On March 27, 2008, SCE filed the SPVP application with the CPUC and on June 18, 2009 received its’ approval. The SPVP is a two‐fold program: – 250 MW of Utility‐Owned Generation – Details of which are: • Typical installation to be from 1 to 2 MW on commercial warehouse rooftops. Projects can be larger or smaller than and up to 10% ground‐ mount • Installed at 50 MW per year with an average cost of $3.50/Watt (W), approximately half the current cost for large commercial PV installations. • If the program is successful, SCE may seek additional authority to expand the program to 500 MW. • SCE was earlier granted in August, 2008, the ability to establish a $25 M Memo Account thus allowing the utility to install up to 5 MW of PV at an average cost not to exceed $5.05/watt. – 250 MW from IPP Renewable Generation PV Solicitation – SCE will coordinate an annual solicitation for approxiately 50 MW per year for 5 years (250 MW total) of IPP Photovoltaic Power to be provided under long‐term PPAs. The price to be paid for this generation will be capped at the utility LOCE (26 cents per kWH). Other terms to be similar to UOG constraints. 3
SPVP Objectives • Market Transformation – Program large enough to impact costs/resources – Shift Focus towards California – Develops trained PV Installation workforce • Adds 1.0% to RPS Goals by 2014 • Supports CSI Goals: 167,000 equivalent roofs • Leverage SCE’s Solar Expertise – – History with solar – Utility implementation coupled with energy efficiency deployment • Advance R&D and PV Industry Knowledge – Grid impacts – intermittency, power quality, circuit saturation – Business Modeling • Deployment of PV on circuits in a distributed manner – Does not require any transmission upgrades • Can provide generation in critical AQMD emissions sensitive areas, such as the Inland Empire, with No Green House Gas Emissions 4
SPVP Goals • • • • • • • • • •
•
Cost Initial Phase – Install up to 5 MW at a cost of less than $5.05/watt Future Larger Deployment – Install 250 MW over 5 years at an average cost of $3.50/watt compared to $6.80/watt for CSI commercial installs. Schedule Average PV installation rate of 50 MW per year for the next 5 years. The average on‐site construction time will be kept to 45 days for a 1 MW project and 60 days for a 2 MW project so as to minimize impact to the building tenant Quality Safety/Environmental – No recordable accidents from SCE or contract personnel involved in the program. All environmental issues handled properly. System Performance – No adverse electrical impacts to distribution system. Unit output at or above manufacturer specifications. Project Administration and Reporting – All project cost forecasted and recorded in an accurate and timely manner. All project related contracts executed and administered in a professional manner. Minimize change orders. Continuous Process Improvement and Documentation –Document process flow so as to serve as a learning base for future installations. Develop best practices. 5
ProLogis • • • • • •
World’s largest industrial REIT More than 475 million square feet owned, controlled or under construction 2,400+ distribution facilities in 105 markets worldwide Over $34B in real estate assets Member of the S&P500, traded on the NYSE (PLD) 25 MW of rooftop PV completed or under construction
All figures as of 31 March 2010
6
Project Roles & Stakeholders •
Power Off‐Taker
•
– Options:
Site Host – Options:
• Building Owner • Tenant • Utility or Load Serving Entity
• Industrial • Commercial • Other
– Considerations:
– Considerations:
• Demand • Credit • Scale
•
• • • • •
Project Owner – Options: • Building Owner (or parent company) • Utility • Special Purpose Vehicle
– Considerations • Efficient Capital • Credit • PV Experience
•
Off‐Taker Project Scale Location Credit PV Experience
Others – – – – – –
EPC Construction Manager O&M Provider Debt Provider Rate Payers Regulating Body 7
Independently Owned Wholesale DG – Structure Utility Utility Å Electricity
Å Payment
TBD TBD “System “SystemDesigner” Designer”
TBD TBD “Installation “InstallationContractors” Contractors”
TBD TBD “module “modulesupplier” supplier”
TBD TBD “inverter “invertersupplier” supplier”
Racking Æ
Å Fee
Inverters Æ
Rate RatePayers Payers
Å Fee
Modules Æ
Å Fee
Installation Æ
Å Fee
Design Services Æ
Å Fee
EPC EPCor or Construction ConstructionManager Manager
Payment Æ
“Solar “SolarFacilities FacilitiesOwner” Owner” && “Roof “RoofTenant” Tenant”
Roof Lease Æ
Å Fee
“Landlord” “Landlord”
Electricity and/or RECs Æ
Turn Key Project Æ
Site SiteHost Host
Special SpecialPurpose Purpose Entity Entity
Å Rent
TBD TBD “racking “rackingsupplier” supplier”
8
Utility Owned Wholesale DG – Structure “Solar “SolarFacilities FacilitiesOwner” Owner” && “Roof “RoofTenant” Tenant”
Roof Lease Æ
Å Fee
“Landlord” “Landlord”
Electrical Infrastructure Æ
Rate RatePayers Payers
Å Payment
Turn Key Project Æ
Site SiteHost Host
Utility Utility
Å Rent
TBD TBD “System “SystemDesigner” Designer”
TBD TBD “Installation “InstallationContractors” Contractors”
TBD TBD “module “modulesupplier” supplier”
TBD TBD “inverter “invertersupplier” supplier”
Racking Æ
Å Fee
Inverters Æ
Å Fee
Modules Æ
Å Fee
Installation Æ
Å Fee
Design Services Æ
Å Fee
EPC EPCor or Construction ConstructionManager Manager
TBD TBD “racking “rackingsupplier” supplier”
9
Roof Lease – Key Terms and Considerations • • • • • •
Site Control Term Rate Taxes Insurance Site Access – During construction – During operation
• • • • •
Roof Warranty Credit Enhancement (LoC or cash deposit) Site Security Risk Allocation Quiet Enjoyment
10
Technology Selection Structural Capacity Seismic & Wind Zones
Other
Site Host Preference
Roof Size System Components
Investor Preference
Project Economics
Incentive Mechanism
Debt Provider Criteria
11
Balance of System Technology Issues PV Industry maturing – areas for improvements include: •Roof Protection, longevity •DC Wiring •Copper vs. Aluminum Wiring •Cable Tray vs. Conduit •1000 V. vs. 600 V. DC systems •Combiner Boxes •String Monitoring •Disconnect Switches •PV Site Security – roof and ground •Racking - Seismic Constraint vs. Floating system (penetrations, adhesion, etc.) •Operations and Maintenance (O&M) Issues •Performance Monitoring •Cost Effective Cleaning Programs •Emergency Call-out services •PV Systems grid impacts - Var Support, remote cut-off switches, etc.
12
SPVP Major Materials Procurement Update • SunPower Panels ‐ Master Services Agreement (MSA) in place for up to 200MW of panels. • Trina Panels ‐ Master Services Agreement (MSA) in place for 45MW of panels. • Panel Racking ‐ MSA reached with Sunlink for up to 45MWs. • Inverters ‐ MSA in place with Satcon to provide minimum of 75% of program needs. • Transformers / Wiring – SCE’s normal procurement channels to be used. • Switchgear, Balance of Systems – Competitive bid process to be used on Tranche Basis, Shoals Electric provided initial set of sites. 13
Interconnection • Not Net Energy Metering (NEM) • Will interconnect directly to 12 or 16 kV circuits, not to host load • “Merchant Plant” interconnected under Wholesale Distribution Access Tariff (WDAT) application • Large influx of WDAT applications has created challenges • 15% circuit penetration – 2MW limit • NREL High Penetration of PV Study on‐going 14
ISO Scheduling Improvements ISO requires: •Special metering and Data Acquisition System (DAS) •Power to be scheduled on an hourly basis, can be aggregated up to the ABank (220 KV) •Participating Intermittent Renewable Program (PIRP) minimizes scheduling costs. •SCE will fine-tune forecasting of intermittent resource As Modified Original
Policy Changes
Requirements
Cost*
Requirements
Cost*
2 Weather Stations at every site **
$5,000,000
2 Weather Stations every 10 Miles apart **
$500,000
1 DPG at every site ***
12,500,000
1 DPG per 25 sites ***
1,000,000
RTU at every site ****
12,500,000
RTU at every DPG site ****
1,000,000
Total 30,000,000
Total 2,500,000 15
Procurement Strategy – Strategic Purchasing Group 4
SCE SCE
SCE SCE 1
Independent Independent Engineer Engineer Qualified Qualified General General Contractors Contractors
5
Developmental Developmental General General Contractors Contractors
General General General General Contractor Contractor Contractor Contractor
2 3
1.
2. 3.
6 7
Purchasing Purchasing Group Group Negotiated Negotiated Materials Materials /Logistics /Logistics Contracts Contracts
SCE selects a number of GCs for Purchasing Group participation (both currently qualified and developmental candidates) Purchasing Group goes to market for solar supply and logistics contracts Purchasing Group establishes one or more master agreement that include current and future GCs and SCE to facilitate the purchase of materials at a known, quantity-discounted rate
Purchasing Purchasing Group Group Negotiated Materials Negotiated Materials /Logistics /Logistics Contracts Contracts
GC GC Engineer Engineer
4. 5. 6.
7.
SCE retains independent engineer to prepare design for PV system SCE appends design with commercial terms to prepare bid package for GC GCs engineer provides “of record” design and serves as GCs advisor on design and structural issues GC procures materials as needed via Purchasing Group agreements 16
Update on SPVP Installations • Site #1 Construction completed on September 19, 2008 Commissioning completed on Nov. 1, 2008. • Site #1 costs currently estimated at $11.5M or $4.90/watt, below the $5.05/watt Initial PV panel system. First Solar was the successful bidder for the solar panels. ProLogis is the roof landlord as well as the general contractor for the installation. Electrical sub‐contractor was Gregg Electric, an IBEW‐approved vendor. A project labor agreement was signed with IBEW Local 47 for all labor associated with these installations. 17
Update on SPVP Installations •
Site # 2 is a 1 MW installation in Chino, CA. Construction completed 11/09.
•
Site # 3 is a 1 MW installation in Rialto, CA. Construction completed 07/10.
•
ProLogis Tranche 1 sites (11 MW) to begin construction 9/1.
•
Poterville Groundsite (7MW) to begin construction 9/15/10
SPVP 2010 – 2012 Project Schedule
19
Future Demand Solar Capacity Required to Meet State RES Carve‐Outs Annual Solar Additions (MWac)
Annual Capacity (left axis)
1,000
10,000 Cumulative Capacity (right axis)
800
8,000
600
6,000
400
4,000
200
2,000
Cumulative Solar Capacity (MWac)
12,000
1,200
NJ IL AZ MD OH PA NM CO MA NC NV DE MO DC NH OR NY
0
0 2010
2015
2020
2025
2030
2035
Source: Lawrence Berkeley National Laboratory
20
Future Opportunity
21
Contact Information
Drew Torbin Vice President – Renewable Energy (303) 567‐5143 [email protected]
Rudy Perez Program Manager – Solar Photovoltaic Program (626) 302‐4193 [email protected]
22
Speakers: Drew Torbin
Rudy Perez
Vice President – Renewable Energy
Program Manager – Solar Photovoltaic Program
Southern California Edison Overview •
•
• •
An Edison International company, SCE is one of the nation’s largest investor‐ owned electric utilities, with more than 120 years of service. Serves a population of 14 million people, via 4.8 million business and residential accounts in a 50,000‐ square‐mile service area within central, coastal and Southern California. 17% of Customer Load delivered via Renewable Energy Delivering that power takes 93,500 circuit miles of line connecting 1.5 million poles, 683,000 transformers and 737,000 area and street lights and the days and nights of 13,000 employees. 2
Solar Photovoltaic Program (SPVP) Overview •
On March 27, 2008, SCE filed the SPVP application with the CPUC and on June 18, 2009 received its’ approval. The SPVP is a two‐fold program: – 250 MW of Utility‐Owned Generation – Details of which are: • Typical installation to be from 1 to 2 MW on commercial warehouse rooftops. Projects can be larger or smaller than and up to 10% ground‐ mount • Installed at 50 MW per year with an average cost of $3.50/Watt (W), approximately half the current cost for large commercial PV installations. • If the program is successful, SCE may seek additional authority to expand the program to 500 MW. • SCE was earlier granted in August, 2008, the ability to establish a $25 M Memo Account thus allowing the utility to install up to 5 MW of PV at an average cost not to exceed $5.05/watt. – 250 MW from IPP Renewable Generation PV Solicitation – SCE will coordinate an annual solicitation for approxiately 50 MW per year for 5 years (250 MW total) of IPP Photovoltaic Power to be provided under long‐term PPAs. The price to be paid for this generation will be capped at the utility LOCE (26 cents per kWH). Other terms to be similar to UOG constraints. 3
SPVP Objectives • Market Transformation – Program large enough to impact costs/resources – Shift Focus towards California – Develops trained PV Installation workforce • Adds 1.0% to RPS Goals by 2014 • Supports CSI Goals: 167,000 equivalent roofs • Leverage SCE’s Solar Expertise – – History with solar – Utility implementation coupled with energy efficiency deployment • Advance R&D and PV Industry Knowledge – Grid impacts – intermittency, power quality, circuit saturation – Business Modeling • Deployment of PV on circuits in a distributed manner – Does not require any transmission upgrades • Can provide generation in critical AQMD emissions sensitive areas, such as the Inland Empire, with No Green House Gas Emissions 4
SPVP Goals • • • • • • • • • •
•
Cost Initial Phase – Install up to 5 MW at a cost of less than $5.05/watt Future Larger Deployment – Install 250 MW over 5 years at an average cost of $3.50/watt compared to $6.80/watt for CSI commercial installs. Schedule Average PV installation rate of 50 MW per year for the next 5 years. The average on‐site construction time will be kept to 45 days for a 1 MW project and 60 days for a 2 MW project so as to minimize impact to the building tenant Quality Safety/Environmental – No recordable accidents from SCE or contract personnel involved in the program. All environmental issues handled properly. System Performance – No adverse electrical impacts to distribution system. Unit output at or above manufacturer specifications. Project Administration and Reporting – All project cost forecasted and recorded in an accurate and timely manner. All project related contracts executed and administered in a professional manner. Minimize change orders. Continuous Process Improvement and Documentation –Document process flow so as to serve as a learning base for future installations. Develop best practices. 5
ProLogis • • • • • •
World’s largest industrial REIT More than 475 million square feet owned, controlled or under construction 2,400+ distribution facilities in 105 markets worldwide Over $34B in real estate assets Member of the S&P500, traded on the NYSE (PLD) 25 MW of rooftop PV completed or under construction
All figures as of 31 March 2010
6
Project Roles & Stakeholders •
Power Off‐Taker
•
– Options:
Site Host – Options:
• Building Owner • Tenant • Utility or Load Serving Entity
• Industrial • Commercial • Other
– Considerations:
– Considerations:
• Demand • Credit • Scale
•
• • • • •
Project Owner – Options: • Building Owner (or parent company) • Utility • Special Purpose Vehicle
– Considerations • Efficient Capital • Credit • PV Experience
•
Off‐Taker Project Scale Location Credit PV Experience
Others – – – – – –
EPC Construction Manager O&M Provider Debt Provider Rate Payers Regulating Body 7
Independently Owned Wholesale DG – Structure Utility Utility Å Electricity
Å Payment
TBD TBD “System “SystemDesigner” Designer”
TBD TBD “Installation “InstallationContractors” Contractors”
TBD TBD “module “modulesupplier” supplier”
TBD TBD “inverter “invertersupplier” supplier”
Racking Æ
Å Fee
Inverters Æ
Rate RatePayers Payers
Å Fee
Modules Æ
Å Fee
Installation Æ
Å Fee
Design Services Æ
Å Fee
EPC EPCor or Construction ConstructionManager Manager
Payment Æ
“Solar “SolarFacilities FacilitiesOwner” Owner” && “Roof “RoofTenant” Tenant”
Roof Lease Æ
Å Fee
“Landlord” “Landlord”
Electricity and/or RECs Æ
Turn Key Project Æ
Site SiteHost Host
Special SpecialPurpose Purpose Entity Entity
Å Rent
TBD TBD “racking “rackingsupplier” supplier”
8
Utility Owned Wholesale DG – Structure “Solar “SolarFacilities FacilitiesOwner” Owner” && “Roof “RoofTenant” Tenant”
Roof Lease Æ
Å Fee
“Landlord” “Landlord”
Electrical Infrastructure Æ
Rate RatePayers Payers
Å Payment
Turn Key Project Æ
Site SiteHost Host
Utility Utility
Å Rent
TBD TBD “System “SystemDesigner” Designer”
TBD TBD “Installation “InstallationContractors” Contractors”
TBD TBD “module “modulesupplier” supplier”
TBD TBD “inverter “invertersupplier” supplier”
Racking Æ
Å Fee
Inverters Æ
Å Fee
Modules Æ
Å Fee
Installation Æ
Å Fee
Design Services Æ
Å Fee
EPC EPCor or Construction ConstructionManager Manager
TBD TBD “racking “rackingsupplier” supplier”
9
Roof Lease – Key Terms and Considerations • • • • • •
Site Control Term Rate Taxes Insurance Site Access – During construction – During operation
• • • • •
Roof Warranty Credit Enhancement (LoC or cash deposit) Site Security Risk Allocation Quiet Enjoyment
10
Technology Selection Structural Capacity Seismic & Wind Zones
Other
Site Host Preference
Roof Size System Components
Investor Preference
Project Economics
Incentive Mechanism
Debt Provider Criteria
11
Balance of System Technology Issues PV Industry maturing – areas for improvements include: •Roof Protection, longevity •DC Wiring •Copper vs. Aluminum Wiring •Cable Tray vs. Conduit •1000 V. vs. 600 V. DC systems •Combiner Boxes •String Monitoring •Disconnect Switches •PV Site Security – roof and ground •Racking - Seismic Constraint vs. Floating system (penetrations, adhesion, etc.) •Operations and Maintenance (O&M) Issues •Performance Monitoring •Cost Effective Cleaning Programs •Emergency Call-out services •PV Systems grid impacts - Var Support, remote cut-off switches, etc.
12
SPVP Major Materials Procurement Update • SunPower Panels ‐ Master Services Agreement (MSA) in place for up to 200MW of panels. • Trina Panels ‐ Master Services Agreement (MSA) in place for 45MW of panels. • Panel Racking ‐ MSA reached with Sunlink for up to 45MWs. • Inverters ‐ MSA in place with Satcon to provide minimum of 75% of program needs. • Transformers / Wiring – SCE’s normal procurement channels to be used. • Switchgear, Balance of Systems – Competitive bid process to be used on Tranche Basis, Shoals Electric provided initial set of sites. 13
Interconnection • Not Net Energy Metering (NEM) • Will interconnect directly to 12 or 16 kV circuits, not to host load • “Merchant Plant” interconnected under Wholesale Distribution Access Tariff (WDAT) application • Large influx of WDAT applications has created challenges • 15% circuit penetration – 2MW limit • NREL High Penetration of PV Study on‐going 14
ISO Scheduling Improvements ISO requires: •Special metering and Data Acquisition System (DAS) •Power to be scheduled on an hourly basis, can be aggregated up to the ABank (220 KV) •Participating Intermittent Renewable Program (PIRP) minimizes scheduling costs. •SCE will fine-tune forecasting of intermittent resource As Modified Original
Policy Changes
Requirements
Cost*
Requirements
Cost*
2 Weather Stations at every site **
$5,000,000
2 Weather Stations every 10 Miles apart **
$500,000
1 DPG at every site ***
12,500,000
1 DPG per 25 sites ***
1,000,000
RTU at every site ****
12,500,000
RTU at every DPG site ****
1,000,000
Total 30,000,000
Total 2,500,000 15
Procurement Strategy – Strategic Purchasing Group 4
SCE SCE
SCE SCE 1
Independent Independent Engineer Engineer Qualified Qualified General General Contractors Contractors
5
Developmental Developmental General General Contractors Contractors
General General General General Contractor Contractor Contractor Contractor
2 3
1.
2. 3.
6 7
Purchasing Purchasing Group Group Negotiated Negotiated Materials Materials /Logistics /Logistics Contracts Contracts
SCE selects a number of GCs for Purchasing Group participation (both currently qualified and developmental candidates) Purchasing Group goes to market for solar supply and logistics contracts Purchasing Group establishes one or more master agreement that include current and future GCs and SCE to facilitate the purchase of materials at a known, quantity-discounted rate
Purchasing Purchasing Group Group Negotiated Materials Negotiated Materials /Logistics /Logistics Contracts Contracts
GC GC Engineer Engineer
4. 5. 6.
7.
SCE retains independent engineer to prepare design for PV system SCE appends design with commercial terms to prepare bid package for GC GCs engineer provides “of record” design and serves as GCs advisor on design and structural issues GC procures materials as needed via Purchasing Group agreements 16
Update on SPVP Installations • Site #1 Construction completed on September 19, 2008 Commissioning completed on Nov. 1, 2008. • Site #1 costs currently estimated at $11.5M or $4.90/watt, below the $5.05/watt Initial PV panel system. First Solar was the successful bidder for the solar panels. ProLogis is the roof landlord as well as the general contractor for the installation. Electrical sub‐contractor was Gregg Electric, an IBEW‐approved vendor. A project labor agreement was signed with IBEW Local 47 for all labor associated with these installations. 17
Update on SPVP Installations •
Site # 2 is a 1 MW installation in Chino, CA. Construction completed 11/09.
•
Site # 3 is a 1 MW installation in Rialto, CA. Construction completed 07/10.
•
ProLogis Tranche 1 sites (11 MW) to begin construction 9/1.
•
Poterville Groundsite (7MW) to begin construction 9/15/10
SPVP 2010 – 2012 Project Schedule
19
Future Demand Solar Capacity Required to Meet State RES Carve‐Outs Annual Solar Additions (MWac)
Annual Capacity (left axis)
1,000
10,000 Cumulative Capacity (right axis)
800
8,000
600
6,000
400
4,000
200
2,000
Cumulative Solar Capacity (MWac)
12,000
1,200
NJ IL AZ MD OH PA NM CO MA NC NV DE MO DC NH OR NY
0
0 2010
2015
2020
2025
2030
2035
Source: Lawrence Berkeley National Laboratory
20
Future Opportunity
21
Contact Information
Drew Torbin Vice President – Renewable Energy (303) 567‐5143 [email protected]
Rudy Perez Program Manager – Solar Photovoltaic Program (626) 302‐4193 [email protected]
22
