2013 SREC Outlook in NJ & MA - Webinars, Webcasts, LMS...

© 2012 SEIA © 2012 SEIA

2013 SREC Outlook in NJ & MA Katie Bolcar Rever, Director Mid-Atlantic States, SEIA

Konstantin Braun, Managing Partner, Smart Energy Capita

George Ashton, VP and CFO, Sol Systems

© 2012 SEIA

Antitrust Reminder

As a trade association of competitors, SEIA must comply with and be mindful of antitrust laws. It is important that competitively sensitive matters are not discussed on this call, including product prices or costs; sales terms or conditions; production levels; sales territories; marketing plans; industry forecasts; or bid terms. If any such topic is raised, I will stop the conversation and, if necessary, end the call. For more information, SEIA’s antitrust guidelines are available on our website.

© 2012 SEIA

Introduction to SEIA SEIA is the voice of the U.S. solar energy industry

– Founded in 1974

– 1,000 member companies

– Across the US, including NYSEIA

– Largest solar companies in the world

– We promote solar to the State Policy Makers, White House and Congress

– Working with local chapters and other key industry players at the state level

Mission: Build a strong solar industry to power America

© 2012 SEIA

SEIA Member Benefits • Industry news and research

• Discounts on SEIA conferences (Solar Power International, PV America) and seminars (Finance Seminar, Installer Safety Seminar, Siting and Permitting Seminar, Solar Market Insight Conference)

• Free, optional listing in the online SEIA member directory and use of the SEIA member logo

• Industry leadership opportunities in technology, market and issue-based divisions, working groups and committees

• A role in the development of legislation and regulations for the solar industry

• Targeted subject-matter education, plus opportunities to present at SEIA seminars or webinars

• High-level access to solar industry leadership; networking event sponsorship opportunities

© 2012 SEIA

About today’s webinar • Agenda:

– Overview of US market – SRECs in NJ – SRECs in MA – Q&A

• Presenters:

– Konstantin Braun, Managing Partner, Smart Energy Capital – George Ashton, VP and CFO, Sol Systems

Disclaimer: Today’s webinar is educational in nature. The views expressed are not necessarily the views of SEIA and should be understood as the opinion of the presenters.

© 2012 SEIA

Solar in America: Strong and Getting Stronger

119,000 American workers in solar – double the number in 2009 – at 5,600 companies across the country

© 2012 SEIA

Solar Is an Economic Engine

• The value of U.S. solar installations is projected to be over $10 billion in 2012, up from $8.6 billion in 2011.

• There are now 119,000 solar workers in the U.S., a 13.2% increase over 2011 employment totals.1

0

20000

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80000

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140000

2006 2007 2009 2010 2011 2012

U.S. Solar Workforce

SEIA Estimate The Solar Foundation

$-

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

2006 2007 2008 2009 2010 2011 2012E

Bill

ion

s ($

)

Value of U.S. Solar Installations

SEIA Estimate SEIA/GTM Research

1 The Solar Foundation “National Jobs Census 2012”

© 2012 SEIA

Solar Continues to Boom- 684 MW Installed in Q3 2012

PV demand grew 44% in Q3 2012 over Q3 2011

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Inst

alle

d C

apac

ity

(MW

dc)

U.S. PV Installations

Annual Q1 Q2 Q3 Q4 Projected

© 2012 SEIA

Another Record Year of Installations Industry projected to install 3,200 MW in 2012, 70% over 2011’s record annual total. One of the fastest growing sectors in the US economy.

3,194

3,980

5,380

6,537

7,848

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Inst

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apac

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(MW

dc)

PV Installation Forecast

Residential Commercial Utility

© 2012 SEIA

State Q3 Performance

• 12 states installed 10 MW or more in Q3 2012

• The Massachusetts’s market grew 58% over Q2 2012, driven in part by strong commercial installations

• California’s DG market had a bounce back quarter, with 46% growth over Q2 2012

State Rank (Q3 PV Installations)

California 1

Arizona 2

New Jersey 3

Massachusetts 4

Nevada 5

Maryland 6

Texas 7

North Carolina 8

Hawaii 9

Pennsylvania 10

© 2012 SEIA

Solar More Affordable Than Ever

• Average system prices have declined 33% since Q1 2011

$-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1-Q32012

Inst

alle

d P

rice

($

/W)

Blended Average System Price

LBNL "Tracking the Sun IV" SEIA/GTM Research

© 2012 SEIA

Solar Market Insight: Q3 2012 • Detailed data on markets

in top 25 states plus DC available in full report.

• Free executive summary provides national aggregate data on installations, pricing, manufacturing and demand forecasts.

• Full report for sale (50% discount to SEIA members) includes quarterly forecasts as well as detailed market segment and state data.

© COPYRIGHT SMART ENERGY CAPITAL

NJ SREC Market Overview

December 18, 2012


NJ RPS

0.500%

1.500%

2.500%

3.500%

4.500%

5.500%

EY13 EY14 EY15 EY16 EY17 EY18 EY19 EY20 EY21 EY22 EY23 EY24 EY25 EY26 EY27 EY28

SRP

S R

eq

uir

em

en

t as

% o

f Lo

ad

NJ SRPS Schedule - New vs Previous Requirements

New SRPS Requirement Previous SRPS Requirement

Source: SEIA


NJ RPS

Approximately 950 MW installed (end of November 2012)

Energy Year % of Load Est. MWh Est. MWdc

2013 N/A 596,000 497

2014 2.05% 1,630,000 1,358

2015 2.45% 1,984,000 1,653

2016 2.75% 2,227,000 1,856

2017 3.00% 2,500,000 2,083

2018 3.20% 2,706,000 2,255

2019 3.29% 2,824,000 2,353

2020 3.38% 2,945,000 2,454

2021 3.47% 3,069,000 2,558

2022 3.56% 3,195,000 2,663

2023 3.65% 3,325,000 2,771

2024 3.74% 3,458,000 2,882

2025 3.83% 3,595,000 2,996

2026 3.92% 3,734,000 3,112

2027 4.01% 3,877,000 3,231

2028 4.10% 4,024,000 3,353


NJ RPS

-

100

200

300

400

500

600

EY13 EY14 EY15 EY16 EY17 EY18 EY19 EY20 EY21 EY22 EY23 EY24 EY25 EY26 EY27 EY28

SAC

P (

$)

NJ SACP - New vs Previous

New SACP Schedule Previous SACP Schedule

Source: SEIA


Installed Capacity

3 & 6 Month Moving Average of Capacity

Added

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Jun-

10

Sep-

10

Dec-

10

Mar-

11

Jun-

11

Sep-

11

Dec-

11

Mar-

12

Jun-

12

Sep-

12

Cap

acit

y A

dd

ed

(M

W)

3 mos avg 6 mos avg

Source: NJCEP


NJCEP Forecast

Source: NJCEP

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

Cu

mla

tiv

e C

ap

ac

ity

(M

W d

c)

Period Ending

Cumulative Installed Capacity By Month (MW dc)

Installed Capacity

Forecast - High

Forecast - Low


NJCEP Forecast

Source: NJCEP

Energy Yr (RPS Req) Item Low Med High

Est Avail (MWh) 704,688 704,688 704,688

% of RPS Requirement 159.4% 159.4% 159.4%

MW Difference 218.9 218.9 218.9

Est Avail (MWh) 1,367,488 1,377,688 1,394,288


MW Difference 642.9 651.4 665.2

Est Avail (MWh) 2,184,788 2,327,188 2,489,788


MW Difference 436.9 555.6 691.1

Est Avail (MWh) 2,239,388 2,632,388 3,058,288


MW Difference 212.4 539.9 894.8

Est Avail (MWh) 2,207,388 2,893,988 3,653,288


MW Difference (16.8) 555.4 1,188.2

EY2013 (596 GWh)

EY2014 (1660.5 GWh)

EY2015 (1984.5 GWh)

EY2016 (2227.5 GWh)

EY2012 (442 GWh)


NJ SREC – Pricing

Current pricing • Flat curve in 2013-2016 with bid/offer levels in the $80-$100 area Key contributors to excess supply • Boom-bust cycle • Relative lack of transparency • Treasury Cash Grant • Structure of EDC programs

Going forward… • Long-term SREC contracts • Improved transparency


NJ SREC – Estimated Long-Term Fundamental Value

Two pricing scenarios (20 years, no escalation) • High – total revenue requirement of 26 cents / kWh • Low – total revenue requirement of 14 cents / kWh Key factors • Cost of project (construction + development) • kWh production • Cost of capital • Availability of Federal incentives

Common impediments, affecting: • Cost of projects – design, site costs, interconnection costs, “unrelated costs” • Production levels – tilt, orientation, shading, PPA term • Cost of capital – credit, lack of SREC hedges, lack of fixed-price PPA

Solar Market Finance Expertise

SRECPrices.com Massachusetts Market

Update

George Ashton III, Vice President & CFO

Sol Systems, LLC

Solar Market Finance Expertise

Let’s Make Solar Simple TM

Sol Systems SREC Aggregation & Finance Largest SREC aggregator

Trusted partner to thousands of homeowners and businesses

350 developer and installer partners

PV and ST portfolio of 35MW

Facilitated over $100 million in project financing through SRECs

Our Company

SolMarket Project Development & Finance Innovator in solar energy finance and development

300+ solar projects seeking financing

$2.7 billion in aggregate capital seeking projects

300+ SolMarket members

20+ MW of SolMarket projects financed or at term sheet

Solar Market Finance Expertise 24

Market Set Up

Current Market Rules 6 Month Delay between Minting and Generation SRECs born with current year eligibility July Auction at the end of each compliance year Only owners and Agents can participate in Auction

Proposed Rule Changes • Concrete ACP schedule • Anyone can participate in the Auction • Remove Governing Term in RPS formula

ACP

Auction

$0

Supply

Demand

Market Price


Supply / Demand

0

100,000

200,000

300,000

400,000

500,000

600,000

1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018 1/1/2019

Cap

aco

ty k

W

12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019

SREC Demand 78,577 81,559 213,128 484,632 464,000 440,000 440,000 440,000 440,000

SREC Supply 26,660 127,867 311,781 495,933 451,302 440,000 440,000 440,000 440,000

EOY Capacity - 36,000 160,349 322,328 400,000 400,000 400,000 400,000 400,000 400,000

MA SREC MARKET DYNAMICS


Market Pricing

Spot Market Prices Long Term Prices

Term Jan 12 Jul 12 Dec 12

2yr $310 $255 $180

3yr $275 $190 $165

5yr $225 $170 $130


Execution Strategies

Execution Strategy Availability Risk Reward

Spot Market Sales Medium Medium High

RFPs Low Low Medium

Short Term Contracts Medium Medium Low

Upfront SREC Sales Low Low Low

Investor Owned Low Low Medium


SREC Services

Market Research Quarterly SREC Market Webinars Monthly SREC Commentary SREC Prices.com Specialized Reports

SREC Execution Services • SREC Research • SREC Strategy Development • SREC Monetization Execution Portfolio Management SREC Research SREC Execution SREC Servicing

© 2012 SEIA

Contact Information Konstantin Braun

[email protected]

George Ashton

[email protected]

Katie Bolcar Rever

[email protected]

mailto:[email protected]






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