Oct 1 BNL Michael Hervey LIPA
LIPA’s Investment in Solar Energy; Benefitting Customers, Communities, & Businesses Presented by Michael Hervey, Chief Operating Officer SEPA Fact Finding Mission October 1, 2012
What is LIPA?
In 1998, the Long Island Power Authority (LIPA) became Long Island’s primary electric service provider. LIPA is a municipal subdivision of the State of New York and operates as a non-profit state entity. ►
LIPA is regulated by a 15 member Board of Trustees who serve a four-year term without compensation, 9 of whom are appointed by the Governor including the Chairman, 3 by the Senate Majority Leader, and 3 by the Assembly Speaker.
►
In 1998, the Authority acquired all of the common stock of LILCO, where after LILCO became a wholly-owned subsidiary of the Authority and now does business as “LIPA.” The Authority conducts its electric business through LIPA, and has the sole authority to direct the management of its business and affairs.
►
LIPA owns the retail electric transmission and distribution system on Long Island and provides electric service to approximately 1.1 million customers (approximately 900,000 residential & 200,000 commercial) in Nassau and Suffolk counties, and the Rockaway peninsula in Queens.
►
LIPA is the 2nd largest municipal electric utility in the nation in terms of electric revenues, 3rd largest in terms of customers served and the 7th largest in terms of electricity delivered.
►
Typically, LIPA has outperformed or is at the top of all other overhead electric utilities in New York State in all three major reliability categories. LIPA does not provide natural gas service or own any on-island generating assets.
1
LIPA’s Mission, Vision, and Values Our Mission Our mission is to provide highly reliable and economical electric service through our valued workforce with a commitment to superior customer service, accountability and transparency in all of our operations, while being recognized as a leader in the advancement of efficiency and renewable energy. Our Vision The Long Island Power Authority strives to be:
The most reliable overhead electric utility in the state The industry leader in the advancement of energy efficiency and renewable energy A responsible steward of the environment A catalyst for economic development in the region Focused on superior customer service The best managed electric utility in the state
2
2012 New York State of the State Address “Investing in Solar While Protecting Ratepayers”
“Over the decades, we have aggressively developed our hydroelectric resources and are making great progress in tapping our land-based wind resources. Now it is time to focus more attention on exploiting our solar potential that is designed to meet both goals of expanding production of solar energy and protecting the ratepayer,” Governor Andrew Cuomo
The Governor, in his State of the State Address called for: Increased competitive procurement of large, commercial sized solar projects Expand rebate programs for residential & commercial small-tomedium systems The NY-Sun Initiative will be capable of doubling the customer-sited photovoltaic capacity that was installed in 2011 By 2013, it is estimated that the NY-Sun Initiative will quadruple 2011 capacity 3
LIPA’s Current Solar Photovoltaic (PV) Initiatives
Solar Pioneer & Solar Entrepreneur Programs (1% peak load) ~50 MW ► ► ► ► ►
Rebates and net metering for small systems More than 5,000 customers enrolled Projected to grow to 92 MW by the end of 2015 Remote Net Metering to be reviewed at tomorrow’s board meeting Increasing net metering limit by an additional 2.0% of peak demand adding 100 MW of potential capacity is also to be reviewed at tomorrow’s board meeting
Long Island Uniform Solar Code (LIUSPI)
Smart Grid Route 110 Solar Panel Project at LIPA Substations
Utility Scale Solar Projects ► ►
~50 MW
Long Island Solar Farm (BP Solar) at Brookhaven National Laboratory Eastern Long Island Solar Project (enXco) carports on Suffolk County parking lots
Smart Grid Small Generator Interconnection Procedures (SGIP)
CLEAN Solar Initiative (feed-in tariff aka standard offer)
~50 MW 4
LIPA’s Solar Pioneer & Solar Entrepreneur Programs
LIPA’s Solar Pioneer and Solar Entrepreneur Programs have provided up-front rebates of over $130 million for rooftop solar systems
LIPA has provided rebates for the installation of solar panels on a combination of 4,830 residential and 699 commercial roofs
LIPA was named among the top ten utilities in the US with the most solar electricity integrated into their energy mix by SEPA ranking 4th in the Eastern Region & 9th in US
In 2008, LIPA’s budget for solar programs was $8 million, and every subsequent year the budget has increased to the current 2012 level of $27 million for implementation of the Solar Pioneer and Solar Entrepreneur Programs
Goals are to continue to help improve environment, lower cost of solar equipment, reduce peak load, diversify energy portfolio, and transform and sustain a robust solar market to create clean energy jobs 5
Historical View of LIPA’s Solar Pioneer & Solar Entrepreneur Programs (through end of 2011)
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LIPA’s Solar Pioneer & Solar Entrepreneur Programs (continued)
Solar Pioneer Program ►
Rebate for LIPA residential customers is currently set at $1.75/watt up to system size of 10kW
Solar Entrepreneur Program Rebate for LIPA business customers is currently at $1.30/watt up to system size of 50kW per unique customer over 12 months ► Rebate for LIPA government and not-for-profit customers is currently at $1.75/watt up to system size of 50kW per unique customer over 12 months ►
LIPA Solar Pioneer & Solar Entrepreneur Programs are “Standard Offers” and are enhanced through net (and remote net) metering ►
Open enrollment, upfront incentive program
►
Currently funded at $27 million/year (subject to LIPA Board approval)
►
Serves small-to-medium scale systems (up to 50 kW) 7
LIPA’s Solar Pioneer Program Standard Offer Example Sample Cost for Average 5,200 watt / 5.2 kW PV System: Please note: Installed cost may not reflect actual market price
Installed Cost (assumes $5.80 per watt) LIPA Rebate (at $1.75 per watt) Cost after Rebate Less 30% Federal Tax Credit NY State Tax Credit (Lower of 25% or $5,000) Total Combined Tax Credits Final Customer Investment
$30,160 ($9,100) $21,060 ($6,318) ($5,000) ($11,318) $9,742
Estimated Annual $ Saved Annual Estimated Savings
$1,297
Based on output 6,620kWh annually at 0.196 cents / kWh rate Approximate Simple Payback
7.51 years
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Rationale for the Long Island Unified Solar Permit Initiative (LIUSPI)
LIPA, in conjunction with both the Nassau and Suffolk Planning Commissions and others, authored a new solar permitting process as part of the Long Island Unified Solar Permit Initiative (LIUSPI)
The U.S. Department of Energy has identified the variability in solar permitting processes as a nationwide problem
Permitting issues had been identified as a major local/regional Issue inhibiting a more rapid scaling of solar energy ►
Establishing a uniform permitting process across municipal boundaries reduces uncertainty, time and cost
Initiating a unified permitting process for the Long Island region Among the first of its kind - Collaborative (utility, government, & industry) regional effort ► Serve as a positive example of regulatory consistency for state and nation ► Continue creating clean energy jobs and advance renewable energy ►
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What is the Long Island Unified Solar Permit Initiative (LIUSPI)?
LIUSPI was created to help uniform and streamline the solar installation approval process across Long Island, which has different sets of regulations for each town, city and village creating confusion, delays and extra costs for those wishing to install solar systems on their homes with the hopes of improving the environment and lowering their energy bills.
Long Island includes Brooklyn & Queens, and… 2 Counties – Nassau & Suffolk ► 13 Towns – 2 Cities – 2 Indian Reservations ► 96 Villages – 195 Hamlets ► 293 Communities with Home Rule Power ►
The collaborative developed a model application and a consistent approval process and conducted forums for and individually met with municipalities across Long Island to discuss and share the information to adopt a standard residential solar electric and solar hot water permit 10
Components of the Long Island Unified Solar Permit Initiative (LIUSPI)
The Collaborative - LIPA, Suffolk County & Nassau County Planning Commissions, New York Department of State’s Division of Code Enforcement and Administration, Long Island Solar Energy Industries Association, & Long Island Counties, Towns and Villages developed a: ►
Uniform and New “Solar Energy System Fast Track Permit Application” • Covers 90% of Residential Installations
►
Flush Mounted - Single Layer Residential Roof Installations Waive or Provide for Minimal Application Fees No Survey Required Not subject to review by Architectural or Historical Review Board Permit Determinations within 14 days of Complete Application Alternative to Existing and Different Building Permit Forms Require Warning Labels on the Utility Meter and any AC Disconnect Switch
Provides First Responders with greater awareness and safety: • Require 18” Clearance to Roof Ridge and along Ridgeline • Municipality will Maintain Central Registry of Solar Installations 11
LIPA Commitment to & Success of the Long Island Unified Solar Permit Initiative (LIUSPI) LIPA helped initiate what was among the first of its kind, bi-county multijurisdictional, public-private initiative to streamline and standardize permitting for installation of residential solar electric and solar hot water systems across Long Island.
LIPA provides Implementation Assistance for those municipalities that adopt this ground-breaking solar initiative ►
For the adoption of a Local Law by a Town or City and the first ten villages in each County by end of 2011, LIPA provided • $15,000 for each Township or City • $5,000 for first ten Villages in each County
►
In 2012, LIPA extended Implementation Assistance providing • $7,500 for each Township or City • $2,500 for first ten villages in each County
Region-Wide Implementation Success To Date ►
10 of 13 Townships & 8 Villages have adopted LIUSPI 12
Smart Grid Route 110 Solar Panel Project at LIPA Substations ■ As LIPA advances the installation and operation of solar power throughout Long Island, we have also begun to “green” our own facilities ■ LIPA is investigating the use of solar panels at three substations along the Smart Grid Route 110 Corridor in Melville generating an additional 17.5 kWs
■ Installations would be part of the US Department of Energy’s Smart Grid Demonstration Project and will aid in developing and evaluating benefits and costs of using solar energy to reduce internal power consumption, supplement or replace battery chargers and auxiliary power for substation needs, as well as increase the use of renewable energy resources 13
LIPA’s Utility-Scale Solar Initiative
This is the Largest Solar Energy Project in New York State ►
Through a Request for Proposals issued in 2008, LIPA, working with its public and private partners, has nearly completed a 50 MW utility-scale solar generation project
Long Island Solar Farm (developed by BP Solar) 32 MW of solar energy located at Brookhaven National Laboratory ► Two large-scale arrays on approximately 165 acres ► Laboratory-dedicated Solar Research Facility on 5 acres ►
►
Among the largest solar projects on Federal Land in the United States
Eastern Long Island Solar Project (developed by enXco) Up to 7 MW of solar energy on Suffolk County-owned properties ► Solar energy systems being installed on newly built carports within existing parking lots ►
14
Long Island Solar Farm at Brookhaven National Laboratory (32 MW)
Arrays
Substation 15
Solar Carport (portion) at H. Lee Dennison Parking Lot, Suffolk County (up-to 17 MW)
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Overview of New Smart Grid Small Generator Interconnection Procedures (SGIP) LIPA’s new Smart Grid Small Generator Interconnection Procedures
Establish requirements to attach any small generator (0 to 20 MW) to the LIPA distribution system, including: All Solar PV and Wind rebate program participants ► All other net metering customers ► All CLEAN Solar Initiative (feed-in tariff) participants ►
Replace existing “Interconnection Guide for Independent Power Producers”
Generally consistent with NY Public Service Commission (“PSC”) small generator interconnection procedures
Incorporate modifications to net metering eligibility to be consistent with Public Service Law 66-j, which LIPA is obligated to follow 17
Reasons for Modifications to Interconnection Processes and Procedures
Interconnection procedures determine how to attach customer-owned generators to the LIPA system ► ►
Interconnection procedures need to balance interests of customergenerators with the interests of all other customers on the system ► ► ►
Generators need to attach or else they are truly “off the grid” and would have to be entirely self-reliant on their systems The benefits associated with solar and wind generation, as well as fossil fuel generation, are all predicated on attachment to the grid
Shouldn’t create safety risks for line workers or the public Shouldn’t impact reliability of the delivery system for all other customers Shouldn’t impose costs on all other customers beyond what is authorized by law for net metering participants
Interconnection procedures help by: ► ►
Standardizing and shortening the process, especially for smaller generators Conforming to common standards and processes across the state, which helps the developers to keep costs down and work more efficiently 18
Modifications to Smart Grid Small Generator Interconnection Procedures Feature
0 kW to 25 kW
Fast Track Timetable
Yes for standardized, type tested equipment
System Studies Requirement
No
25 kW to 2,000 kW
2,000 kW to 20,000 kW
Yes for standardized, type tested equipment
No
Coordinated Electric System Interconnection Review (CESIR)
Full System Impact Study based on position in study queue $350 plus $10,000 system impact study fee. 11.4% per year
Applicable Fees
No
$350 (refundable for net metering projects only)
Interconnection Maintenance Charges
No
No
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Energy Portfolio that is Eligible for Net Metering Type of Generation
Solar Wind Farm Wind Farm Waste Micro-CHP Micro-Fuel Cell Micro-Hydro
Res. Limit
Comm. Limit
Banking Allowed
25 kW 25 kW 500 kW 1,000 kW 25 kW 10 kW 25kW
2,000 kW 2,000 kW n/a 1,000 kW n/a 1,500 kW 2,000 kW
Monthly Monthly Monthly Monthly Not Allowed Not Allowed Monthly 20
LIPA’s CLEAN Solar Initiative (feed-in tariff)
LIPA’s CLEAN Solar Initiative is a feed-in tariff program (aka, standard offer) in which the owner of an eligible solar photovoltaic (PV) electric system is paid a fixed rate for every solar kilowatt hour generated over the 20-year term of a Power Purchase Agreement between the owner and LIPA
LIPA’s CLEAN Solar Initiative is New York State’s first feed-in tariff program and consistent with Governor Cuomo’s call to expand solar energy in the State
All of the energy that is produced from solar arrays installed through LIPA’s CLEAN Solar Initiative will be fed into the grid and the customer will be paid only for the energy produced
The feed-in tariff or “standard offer” has been used successfully by other utilities in the United States, Canada, and Europe to encourage solar PV projects and increase the production of renewable energy 21
Why Use CLEAN Solar Initiative (feed-in tariff) to Invest in Solar Energy?
Help meet Governor Cuomo’s goal of quadrupling customer-sited PV that was installed in 2011 by 2013
Expand development of larger solar systems on Long Island and diversify LIPA’s energy portfolio – current rebate program limits size to 50 kW
Pay for the actual performance of the solar arrays over a 20-year term
Enable developer to get project financing through use of LIPA Power Purchase Agreement (PPA)
No lost revenue impact associated with net metering
Viewed favorably by Long Island solar contractors
Facilitates solar energy growth in manageable sized tranches 22
What is Budget Impact of the CLEAN Solar Initiative (feed-in tariff)?
50 MW (AC) of solar PV at a feed-in tariff rate of $0.22 per kWh would total $17.5 million per year ($11.5 million incremental cost with base cost of energy equal to 7.5 cents per kWh)
Incremental cost of feed-in tariff would be 0.57% of overall fuel and purchase power costs
Incremental cost of purchased power is expected to be phased in over the two-year period (2012-2014) as projects come online
Incremental cost for an average residential customer would be $0.44 per month
Incremental cost is inversely related to fuel costs, as such future increases in forecasted fuel costs will reduce the incremental cost 23
Summary of Key Features of the CLEAN Solar Initiative (feed-in tariff)
Solar Generator agrees to build new PV generation in the LIPA service territory, connected to the distribution system
Solar Generator agrees to sell 100% of that output to LIPA
Minimum size is more than 50 kW at each separately metered facility
LIPA agrees to pay 22¢ per kWh for next 20 years for the actual output from that dedicated solar facility
Enrollment is limited to 50 MW of applications or two years from date of tariff approval (June 2014) with carve outs for smaller projects: ► ► ►
5 MW reserved for projects more than 50kW and less than 150 kW 10 MW reserved for projects between 150kW and 500 kW 35 MW unrestricted for all sizes of systems
Participants are not eligible for other LIPA incentives (e.g., Solar Entrepreneur rebates, net or remote net metering) during term of PPA 24
Overview of CLEAN Solar Initiative (feed-in tariff) Documents
LIPA’s Tariff for Electric Service Establishes the CLEAN Solar Initiative program ► Authorizes rates, terms, and conditions for participation ►
Interconnection Agreement Allows generator to attach to LIPA distribution system ► Requires generator to maintain equipment and operating standards ► Requires generator to pay the cost of interconnection ► Requires generator to pay for system upgrades (if any) ►
Power Purchase Agreement Provides certainty on revenue stream to developer/generator to support financing of the solar generation ► Specifies outer limit on commercial operation date or agreement expires ► Terms of Power Purchase Agreement are not negotiable ►
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Small Generator Interconnection Procedures (SGIP) and Queuing Process
The applicants’ position in the Reservation Queue for the CLEAN Solar Initiative is determined by the earliest of: ►
The date on which the applicant meets all the requirements for immediate interconnection
►
For generators up to 2,000 kW, the date on which LIPA receives the applicant’s commitment to the completion of the Coordinated Electric System Interconnection Review (CESIR)
►
For generators greater than 2,000 kW, the date on which LIPA receives the applicant’s “feasibility study agreement” or if no study is performed, the applicant’s “system impact study agreement”
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Preliminary Applications Received Through CLEAN Solar Initiative (July 16-August 1, 2012) Completed Applications
Average Size per project (kW)
50 – 150 kW
23
83
150 – 500 kW
35
381
over 500 kW
56
3,713
TOTAL
114
1,916
Tranche
Note: many of the category 2 projects and all of the category 3 projects will require interconnection studies before being authorized and entering into a PPA. Therefore, LIPA has not yet determined which projects will enter the queue, and which ones will ultimately be built. 27
Summary and Conclusions CLEAN Solar Initiative (feed-in tariff)
LIPA received a robust response to its CLEAN Solar Initiative, especially in the large (over 500 kW) category 3.
We’re still very early in the process – several months of interconnection studies lie ahead before we will know which projects proceed to construction.
Price of $0.22 per kWh is lower than the cost to LIPA for the combination of rebates and net metering in the solar pioneer and solar entrepreneur programs
Response shows that there is a viable market for solar generation on Long Island, especially for systems sized above 500 kW.
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Summary of LIPA’s Portfolio of Solar Programs
LIPA has a range of offers to help advance development of solar and attract different sized solar systems in different market segments Rebates plus net metering for smaller systems ► Feed-in tariff and wholesale RFP’s attractive for larger systems ►
►
Remote net metering is expected to enhance commercial market
Available market for solar PV systems far exceeds 1.0% of peak load
Aggressive programs and continued innovation drive down cost of solar to utility and customers to enhance the LI region
Range of available sites include roof tops, parking lots, greenfields, brownfields, and landfills. Sites include businesses, school districts, and county, state and federal governments as well as other types of municipal facilities (e.g. libraries, special districts, etc.) 29
What is LIPA?
In 1998, the Long Island Power Authority (LIPA) became Long Island’s primary electric service provider. LIPA is a municipal subdivision of the State of New York and operates as a non-profit state entity. ►
LIPA is regulated by a 15 member Board of Trustees who serve a four-year term without compensation, 9 of whom are appointed by the Governor including the Chairman, 3 by the Senate Majority Leader, and 3 by the Assembly Speaker.
►
In 1998, the Authority acquired all of the common stock of LILCO, where after LILCO became a wholly-owned subsidiary of the Authority and now does business as “LIPA.” The Authority conducts its electric business through LIPA, and has the sole authority to direct the management of its business and affairs.
►
LIPA owns the retail electric transmission and distribution system on Long Island and provides electric service to approximately 1.1 million customers (approximately 900,000 residential & 200,000 commercial) in Nassau and Suffolk counties, and the Rockaway peninsula in Queens.
►
LIPA is the 2nd largest municipal electric utility in the nation in terms of electric revenues, 3rd largest in terms of customers served and the 7th largest in terms of electricity delivered.
►
Typically, LIPA has outperformed or is at the top of all other overhead electric utilities in New York State in all three major reliability categories. LIPA does not provide natural gas service or own any on-island generating assets.
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LIPA’s Mission, Vision, and Values Our Mission Our mission is to provide highly reliable and economical electric service through our valued workforce with a commitment to superior customer service, accountability and transparency in all of our operations, while being recognized as a leader in the advancement of efficiency and renewable energy. Our Vision The Long Island Power Authority strives to be:
The most reliable overhead electric utility in the state The industry leader in the advancement of energy efficiency and renewable energy A responsible steward of the environment A catalyst for economic development in the region Focused on superior customer service The best managed electric utility in the state
2
2012 New York State of the State Address “Investing in Solar While Protecting Ratepayers”
“Over the decades, we have aggressively developed our hydroelectric resources and are making great progress in tapping our land-based wind resources. Now it is time to focus more attention on exploiting our solar potential that is designed to meet both goals of expanding production of solar energy and protecting the ratepayer,” Governor Andrew Cuomo
The Governor, in his State of the State Address called for: Increased competitive procurement of large, commercial sized solar projects Expand rebate programs for residential & commercial small-tomedium systems The NY-Sun Initiative will be capable of doubling the customer-sited photovoltaic capacity that was installed in 2011 By 2013, it is estimated that the NY-Sun Initiative will quadruple 2011 capacity 3
LIPA’s Current Solar Photovoltaic (PV) Initiatives
Solar Pioneer & Solar Entrepreneur Programs (1% peak load) ~50 MW ► ► ► ► ►
Rebates and net metering for small systems More than 5,000 customers enrolled Projected to grow to 92 MW by the end of 2015 Remote Net Metering to be reviewed at tomorrow’s board meeting Increasing net metering limit by an additional 2.0% of peak demand adding 100 MW of potential capacity is also to be reviewed at tomorrow’s board meeting
Long Island Uniform Solar Code (LIUSPI)
Smart Grid Route 110 Solar Panel Project at LIPA Substations
Utility Scale Solar Projects ► ►
~50 MW
Long Island Solar Farm (BP Solar) at Brookhaven National Laboratory Eastern Long Island Solar Project (enXco) carports on Suffolk County parking lots
Smart Grid Small Generator Interconnection Procedures (SGIP)
CLEAN Solar Initiative (feed-in tariff aka standard offer)
~50 MW 4
LIPA’s Solar Pioneer & Solar Entrepreneur Programs
LIPA’s Solar Pioneer and Solar Entrepreneur Programs have provided up-front rebates of over $130 million for rooftop solar systems
LIPA has provided rebates for the installation of solar panels on a combination of 4,830 residential and 699 commercial roofs
LIPA was named among the top ten utilities in the US with the most solar electricity integrated into their energy mix by SEPA ranking 4th in the Eastern Region & 9th in US
In 2008, LIPA’s budget for solar programs was $8 million, and every subsequent year the budget has increased to the current 2012 level of $27 million for implementation of the Solar Pioneer and Solar Entrepreneur Programs
Goals are to continue to help improve environment, lower cost of solar equipment, reduce peak load, diversify energy portfolio, and transform and sustain a robust solar market to create clean energy jobs 5
Historical View of LIPA’s Solar Pioneer & Solar Entrepreneur Programs (through end of 2011)
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LIPA’s Solar Pioneer & Solar Entrepreneur Programs (continued)
Solar Pioneer Program ►
Rebate for LIPA residential customers is currently set at $1.75/watt up to system size of 10kW
Solar Entrepreneur Program Rebate for LIPA business customers is currently at $1.30/watt up to system size of 50kW per unique customer over 12 months ► Rebate for LIPA government and not-for-profit customers is currently at $1.75/watt up to system size of 50kW per unique customer over 12 months ►
LIPA Solar Pioneer & Solar Entrepreneur Programs are “Standard Offers” and are enhanced through net (and remote net) metering ►
Open enrollment, upfront incentive program
►
Currently funded at $27 million/year (subject to LIPA Board approval)
►
Serves small-to-medium scale systems (up to 50 kW) 7
LIPA’s Solar Pioneer Program Standard Offer Example Sample Cost for Average 5,200 watt / 5.2 kW PV System: Please note: Installed cost may not reflect actual market price
Installed Cost (assumes $5.80 per watt) LIPA Rebate (at $1.75 per watt) Cost after Rebate Less 30% Federal Tax Credit NY State Tax Credit (Lower of 25% or $5,000) Total Combined Tax Credits Final Customer Investment
$30,160 ($9,100) $21,060 ($6,318) ($5,000) ($11,318) $9,742
Estimated Annual $ Saved Annual Estimated Savings
$1,297
Based on output 6,620kWh annually at 0.196 cents / kWh rate Approximate Simple Payback
7.51 years
8
Rationale for the Long Island Unified Solar Permit Initiative (LIUSPI)
LIPA, in conjunction with both the Nassau and Suffolk Planning Commissions and others, authored a new solar permitting process as part of the Long Island Unified Solar Permit Initiative (LIUSPI)
The U.S. Department of Energy has identified the variability in solar permitting processes as a nationwide problem
Permitting issues had been identified as a major local/regional Issue inhibiting a more rapid scaling of solar energy ►
Establishing a uniform permitting process across municipal boundaries reduces uncertainty, time and cost
Initiating a unified permitting process for the Long Island region Among the first of its kind - Collaborative (utility, government, & industry) regional effort ► Serve as a positive example of regulatory consistency for state and nation ► Continue creating clean energy jobs and advance renewable energy ►
9
What is the Long Island Unified Solar Permit Initiative (LIUSPI)?
LIUSPI was created to help uniform and streamline the solar installation approval process across Long Island, which has different sets of regulations for each town, city and village creating confusion, delays and extra costs for those wishing to install solar systems on their homes with the hopes of improving the environment and lowering their energy bills.
Long Island includes Brooklyn & Queens, and… 2 Counties – Nassau & Suffolk ► 13 Towns – 2 Cities – 2 Indian Reservations ► 96 Villages – 195 Hamlets ► 293 Communities with Home Rule Power ►
The collaborative developed a model application and a consistent approval process and conducted forums for and individually met with municipalities across Long Island to discuss and share the information to adopt a standard residential solar electric and solar hot water permit 10
Components of the Long Island Unified Solar Permit Initiative (LIUSPI)
The Collaborative - LIPA, Suffolk County & Nassau County Planning Commissions, New York Department of State’s Division of Code Enforcement and Administration, Long Island Solar Energy Industries Association, & Long Island Counties, Towns and Villages developed a: ►
Uniform and New “Solar Energy System Fast Track Permit Application” • Covers 90% of Residential Installations
►
Flush Mounted - Single Layer Residential Roof Installations Waive or Provide for Minimal Application Fees No Survey Required Not subject to review by Architectural or Historical Review Board Permit Determinations within 14 days of Complete Application Alternative to Existing and Different Building Permit Forms Require Warning Labels on the Utility Meter and any AC Disconnect Switch
Provides First Responders with greater awareness and safety: • Require 18” Clearance to Roof Ridge and along Ridgeline • Municipality will Maintain Central Registry of Solar Installations 11
LIPA Commitment to & Success of the Long Island Unified Solar Permit Initiative (LIUSPI) LIPA helped initiate what was among the first of its kind, bi-county multijurisdictional, public-private initiative to streamline and standardize permitting for installation of residential solar electric and solar hot water systems across Long Island.
LIPA provides Implementation Assistance for those municipalities that adopt this ground-breaking solar initiative ►
For the adoption of a Local Law by a Town or City and the first ten villages in each County by end of 2011, LIPA provided • $15,000 for each Township or City • $5,000 for first ten Villages in each County
►
In 2012, LIPA extended Implementation Assistance providing • $7,500 for each Township or City • $2,500 for first ten villages in each County
Region-Wide Implementation Success To Date ►
10 of 13 Townships & 8 Villages have adopted LIUSPI 12
Smart Grid Route 110 Solar Panel Project at LIPA Substations ■ As LIPA advances the installation and operation of solar power throughout Long Island, we have also begun to “green” our own facilities ■ LIPA is investigating the use of solar panels at three substations along the Smart Grid Route 110 Corridor in Melville generating an additional 17.5 kWs
■ Installations would be part of the US Department of Energy’s Smart Grid Demonstration Project and will aid in developing and evaluating benefits and costs of using solar energy to reduce internal power consumption, supplement or replace battery chargers and auxiliary power for substation needs, as well as increase the use of renewable energy resources 13
LIPA’s Utility-Scale Solar Initiative
This is the Largest Solar Energy Project in New York State ►
Through a Request for Proposals issued in 2008, LIPA, working with its public and private partners, has nearly completed a 50 MW utility-scale solar generation project
Long Island Solar Farm (developed by BP Solar) 32 MW of solar energy located at Brookhaven National Laboratory ► Two large-scale arrays on approximately 165 acres ► Laboratory-dedicated Solar Research Facility on 5 acres ►
►
Among the largest solar projects on Federal Land in the United States
Eastern Long Island Solar Project (developed by enXco) Up to 7 MW of solar energy on Suffolk County-owned properties ► Solar energy systems being installed on newly built carports within existing parking lots ►
14
Long Island Solar Farm at Brookhaven National Laboratory (32 MW)
Arrays
Substation 15
Solar Carport (portion) at H. Lee Dennison Parking Lot, Suffolk County (up-to 17 MW)
16
Overview of New Smart Grid Small Generator Interconnection Procedures (SGIP) LIPA’s new Smart Grid Small Generator Interconnection Procedures
Establish requirements to attach any small generator (0 to 20 MW) to the LIPA distribution system, including: All Solar PV and Wind rebate program participants ► All other net metering customers ► All CLEAN Solar Initiative (feed-in tariff) participants ►
Replace existing “Interconnection Guide for Independent Power Producers”
Generally consistent with NY Public Service Commission (“PSC”) small generator interconnection procedures
Incorporate modifications to net metering eligibility to be consistent with Public Service Law 66-j, which LIPA is obligated to follow 17
Reasons for Modifications to Interconnection Processes and Procedures
Interconnection procedures determine how to attach customer-owned generators to the LIPA system ► ►
Interconnection procedures need to balance interests of customergenerators with the interests of all other customers on the system ► ► ►
Generators need to attach or else they are truly “off the grid” and would have to be entirely self-reliant on their systems The benefits associated with solar and wind generation, as well as fossil fuel generation, are all predicated on attachment to the grid
Shouldn’t create safety risks for line workers or the public Shouldn’t impact reliability of the delivery system for all other customers Shouldn’t impose costs on all other customers beyond what is authorized by law for net metering participants
Interconnection procedures help by: ► ►
Standardizing and shortening the process, especially for smaller generators Conforming to common standards and processes across the state, which helps the developers to keep costs down and work more efficiently 18
Modifications to Smart Grid Small Generator Interconnection Procedures Feature
0 kW to 25 kW
Fast Track Timetable
Yes for standardized, type tested equipment
System Studies Requirement
No
25 kW to 2,000 kW
2,000 kW to 20,000 kW
Yes for standardized, type tested equipment
No
Coordinated Electric System Interconnection Review (CESIR)
Full System Impact Study based on position in study queue $350 plus $10,000 system impact study fee. 11.4% per year
Applicable Fees
No
$350 (refundable for net metering projects only)
Interconnection Maintenance Charges
No
No
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Energy Portfolio that is Eligible for Net Metering Type of Generation
Solar Wind Farm Wind Farm Waste Micro-CHP Micro-Fuel Cell Micro-Hydro
Res. Limit
Comm. Limit
Banking Allowed
25 kW 25 kW 500 kW 1,000 kW 25 kW 10 kW 25kW
2,000 kW 2,000 kW n/a 1,000 kW n/a 1,500 kW 2,000 kW
Monthly Monthly Monthly Monthly Not Allowed Not Allowed Monthly 20
LIPA’s CLEAN Solar Initiative (feed-in tariff)
LIPA’s CLEAN Solar Initiative is a feed-in tariff program (aka, standard offer) in which the owner of an eligible solar photovoltaic (PV) electric system is paid a fixed rate for every solar kilowatt hour generated over the 20-year term of a Power Purchase Agreement between the owner and LIPA
LIPA’s CLEAN Solar Initiative is New York State’s first feed-in tariff program and consistent with Governor Cuomo’s call to expand solar energy in the State
All of the energy that is produced from solar arrays installed through LIPA’s CLEAN Solar Initiative will be fed into the grid and the customer will be paid only for the energy produced
The feed-in tariff or “standard offer” has been used successfully by other utilities in the United States, Canada, and Europe to encourage solar PV projects and increase the production of renewable energy 21
Why Use CLEAN Solar Initiative (feed-in tariff) to Invest in Solar Energy?
Help meet Governor Cuomo’s goal of quadrupling customer-sited PV that was installed in 2011 by 2013
Expand development of larger solar systems on Long Island and diversify LIPA’s energy portfolio – current rebate program limits size to 50 kW
Pay for the actual performance of the solar arrays over a 20-year term
Enable developer to get project financing through use of LIPA Power Purchase Agreement (PPA)
No lost revenue impact associated with net metering
Viewed favorably by Long Island solar contractors
Facilitates solar energy growth in manageable sized tranches 22
What is Budget Impact of the CLEAN Solar Initiative (feed-in tariff)?
50 MW (AC) of solar PV at a feed-in tariff rate of $0.22 per kWh would total $17.5 million per year ($11.5 million incremental cost with base cost of energy equal to 7.5 cents per kWh)
Incremental cost of feed-in tariff would be 0.57% of overall fuel and purchase power costs
Incremental cost of purchased power is expected to be phased in over the two-year period (2012-2014) as projects come online
Incremental cost for an average residential customer would be $0.44 per month
Incremental cost is inversely related to fuel costs, as such future increases in forecasted fuel costs will reduce the incremental cost 23
Summary of Key Features of the CLEAN Solar Initiative (feed-in tariff)
Solar Generator agrees to build new PV generation in the LIPA service territory, connected to the distribution system
Solar Generator agrees to sell 100% of that output to LIPA
Minimum size is more than 50 kW at each separately metered facility
LIPA agrees to pay 22¢ per kWh for next 20 years for the actual output from that dedicated solar facility
Enrollment is limited to 50 MW of applications or two years from date of tariff approval (June 2014) with carve outs for smaller projects: ► ► ►
5 MW reserved for projects more than 50kW and less than 150 kW 10 MW reserved for projects between 150kW and 500 kW 35 MW unrestricted for all sizes of systems
Participants are not eligible for other LIPA incentives (e.g., Solar Entrepreneur rebates, net or remote net metering) during term of PPA 24
Overview of CLEAN Solar Initiative (feed-in tariff) Documents
LIPA’s Tariff for Electric Service Establishes the CLEAN Solar Initiative program ► Authorizes rates, terms, and conditions for participation ►
Interconnection Agreement Allows generator to attach to LIPA distribution system ► Requires generator to maintain equipment and operating standards ► Requires generator to pay the cost of interconnection ► Requires generator to pay for system upgrades (if any) ►
Power Purchase Agreement Provides certainty on revenue stream to developer/generator to support financing of the solar generation ► Specifies outer limit on commercial operation date or agreement expires ► Terms of Power Purchase Agreement are not negotiable ►
25
Small Generator Interconnection Procedures (SGIP) and Queuing Process
The applicants’ position in the Reservation Queue for the CLEAN Solar Initiative is determined by the earliest of: ►
The date on which the applicant meets all the requirements for immediate interconnection
►
For generators up to 2,000 kW, the date on which LIPA receives the applicant’s commitment to the completion of the Coordinated Electric System Interconnection Review (CESIR)
►
For generators greater than 2,000 kW, the date on which LIPA receives the applicant’s “feasibility study agreement” or if no study is performed, the applicant’s “system impact study agreement”
26
Preliminary Applications Received Through CLEAN Solar Initiative (July 16-August 1, 2012) Completed Applications
Average Size per project (kW)
50 – 150 kW
23
83
150 – 500 kW
35
381
over 500 kW
56
3,713
TOTAL
114
1,916
Tranche
Note: many of the category 2 projects and all of the category 3 projects will require interconnection studies before being authorized and entering into a PPA. Therefore, LIPA has not yet determined which projects will enter the queue, and which ones will ultimately be built. 27
Summary and Conclusions CLEAN Solar Initiative (feed-in tariff)
LIPA received a robust response to its CLEAN Solar Initiative, especially in the large (over 500 kW) category 3.
We’re still very early in the process – several months of interconnection studies lie ahead before we will know which projects proceed to construction.
Price of $0.22 per kWh is lower than the cost to LIPA for the combination of rebates and net metering in the solar pioneer and solar entrepreneur programs
Response shows that there is a viable market for solar generation on Long Island, especially for systems sized above 500 kW.
28
Summary of LIPA’s Portfolio of Solar Programs
LIPA has a range of offers to help advance development of solar and attract different sized solar systems in different market segments Rebates plus net metering for smaller systems ► Feed-in tariff and wholesale RFP’s attractive for larger systems ►
►
Remote net metering is expected to enhance commercial market
Available market for solar PV systems far exceeds 1.0% of peak load
Aggressive programs and continued innovation drive down cost of solar to utility and customers to enhance the LI region
Range of available sites include roof tops, parking lots, greenfields, brownfields, and landfills. Sites include businesses, school districts, and county, state and federal governments as well as other types of municipal facilities (e.g. libraries, special districts, etc.) 29
