NECEC Solar Finance Event Slides 25Apr13

Next Steps for Solar in Massachusetts and Beyond

Hosted by

One Financial Center, 38th Floor Boston, MA 02111

•  Patrick Daly President and Chief Executive Officer, Nexamp

•  Carrie Cullen Hitt Senior Vice President of State Affairs, Solar Energy Industries Association (SEIA)

•  David O’Connor Senior Vice President for Energy & Clean Technology, Mintz Levin •  Mark Sylvia Commissioner, Massachusetts Department of Energy Resources (DOER) Moderated by Janet Gail Besser Vice President, Policy & Government Affairs, NECEC

Crea%ng(A(Greener(Energy(Future(For(the(Commonwealth(

Massachuse(s)Solar)Policy)&)Results)

)Mark)Sylvia)

Commissioner))

April)25,)2013)

Crea%ng(A(Greener(Energy(Future(For(the(Commonwealth(2

Massachuse(s)Solar)Development)Strategies)(PreDSolar)CarveDOut))

•  Renewable(Por,olio(Standard(–(established(in(2003(

•  Governor(Patrick’s(goal(–(250(MW(by(2017((set(in(2007)(

•  Commonwealth(Solar((Rebates)(–(iniGated(Dec.(2007(–  Rebate(Program:($68(million,(27(MW(–  Successfully(achieved(and(completed(Oct.(2009(–  Created(robust(PV(development(sector(in(MA(

•  Commonwealth(Solar(II((Rebates)(managed(by(the(MassCEC(for(small((<15kW)(systems(has(maintained(residenGal(PV(market(

•  Federal(SGmulus/ARRA(funds(used(by(DOER(to(support(over(10(MW(of(PV(at(state/municipal(faciliGes.(


State)Law)Drives)Investments,)Creates)Economic)&)Environmental)Opportunity,)

NaLonal)Leadership)•  Green)CommuniLes)Act)(GCA)((((((((((

–  RPS(Class(I(Carve(Out(–  Long(Term(Contracts(/(Net(Metering(

–  Green(CommuniGes((110/45%) ( ((

–  All(cost(effecGve(energy(efficiency(

–  UGlity(owned(solar(pv()

•  Global)Warming)SoluLons)Act)(GWSA))–  GHG(reducGon(goals:(25%(by(2020;(80%(by(2050(

•  7.7%(from(electric(supply;(1.2%(from(RPS()

•  Act)RelaLve)to)CompeLLvely)Priced)Electricity)in)the)Commonwealth)–  Long(Term(Contracts(

–  Increase(in(Net(Metering(Cap(

(


Summary)of)MA)Renewable)Energy)PorRolio)Standard)(RPS))Programs)

4

RPS Class Sub Class Technology Minimum

Standard 2012 ACP Rate,

$/MWh

Class I

Wind, LFG, Biomass, Solar, Small Hydro, AD, etc.

7% in 2012, increases 1%/year

$64.02; increases with CPI

Solar Carve-Out Solar PV; 6 MW or less, in MA

set by formula to grow installed capacity to 400 MW

$550; reduced annually according to 10-year schedule

Class II

Renewable same as Class I 3.6%, stays constant


Waste Energy Waste to Energy Plants, in MA

3.5%, stays constant


APS CHP in MA, flywheels, storage, etc.

2.5% in 2012; increases to 5% in 2020



SREC)Program)Design)Features)

Program((design(features(help(ensure(market(stability,(balance(!  Adjustable(Minimum(Standard((

maintains(SREC(demand/supply(in(reasonable(balance(

!  Forward(ACP(Rate(Schedule(provides(investor(certainty)

!  Solar(Credit(Clearinghouse(AucGon(Account(essenGal(price(support(mechanism(to(assure(SREC(floor(price(

!  OptgIn(Term(provides(right(to(use(AucGon(for(a(set(period(of(Gme(

!  Program(Cap(of(400(MW(

Enables(sufficient(market(growth(opportunity((exceeds(Governor’s(goal(of(250(MW(by(2017)(

These(features(work(together(to(ensure(the(market(will(remain(in(balance(as(more(PV(is(built(


Minimum)Standard)Adjustment)

6

)Compliance)Year))Compliance)ObligaLon)

(MWh))Minimum)Standard)

Percentage)Equivalent)FullDYear)Solar)

Capacity)(MW)))

2010) 34,164) 0.0679%) 30)

2011) 78,577) 0.1627%) 69)

2012) 81,559) 0.1630%) 72)

2013) 135,495) 0.2744%) 119)

For(2012(and(beyond,(the(Minimum(Standard((Compliance(ObligaGon)(is(adjusted(each(August(according(to(a(formula(set(in(the(program(regulaGon.(

(2013(Min.(Stand(=(2012(Min.(Stand(

(+([Projected(2012(SRECs(–(Actual(2011(SRECs]((x((1.3((–(2011(ACP(Volume(+((2011(Banked(Volume(+(2011(AucGon(Volume(

2013)CalculaLon)Based)on)Current)Formula)135,495(MWh(=(81,559(MWh(+([109,465(–(26,598]((x((1.3(–(53,802(+((11(+(0(


Price)Support)–)AucLon)Mechanism)•  Solar(Credit(Clearinghouse(AucGon(Account(

!  Open(every(year(from(May(16th(–(June(15th((

!  Any(unsold(SRECs(may(be(deposited(into(the(Account(

•  AucGon(will(be(held(no(later(than(July(31st,(but(aoer(the(Minimum(Standard(adjustment(is(announced(

•  Deposited(SRECs(are(regminted(as(“extended(life”(SRECs((good(for(compliance(in(either(of(the(following(two(Compliance(Years)(

•  SRECs(are(offered(to(bidders(for(a(fixed(price(of($300/MWh(before(being(assessed(a($15/MWh(aucGon(fee(by(DOER.((Bidders(bid(on(volume(willing(to(buy(at(the(fixed(price(

•  SREC(owners(will(be(paid($285/MWh(for(each(SREC(sold(through(the(AucGon(

(((


Current)SREC)Program)StaLsLcs)–)3/15/13)

•  Over(5,400(applicaGons(received(

•  Over(4,900(qualified(units(

•  Nearly(215(MW(qualified(

•  Nearly(200(MW(of(qualified(projects(installed(

•  2,741(SRECs(created(in(2010(

•  26,598(SRECs(created(in(2011(

•  More(than(115,000(SRECs(expected(to(be(created(in(2012(

((Number)of)Systems)

Capacity))(MW))

ApplicaLons)Received))

5,700))

292.7))

ApplicaLons)under)Review))

494))

79.1))

ApplicaLons)Qualified))

4,963))

214.6))

Qualified)but)InstallaLon)Incomplete)

20))

17.4))

Qualified)and)Installed)

4,943))

197.2))


Current)SREC)Program)StaLsLcs)–)3/15/13)AcLvity)by)System)Size)

4,532)

572)

221) 132)

#)of)ApplicaLons)

25.4)18.1)

48.8)

200.3)

#)of)MW)

<(10(kW(

10g100(kW(

100g500(kW(

>(500(kW(


)))))))))

BUILDING)ON)SUCCESS)

10


2013)Rulemaking)Process)

•  DOER(began(formal(rulemaking(process(in(February(

•  Primary(reason(for(rulemaking(was(to(make(two(changes(to(RPS(Class(I(RegulaGon:(–  Insert(10gyear(forward(ACP(Rate(

schedule(into(regulaGon(

–  Remove(the(subtracGon(of(ACP(Volume(from(Minimum(Standard(formula(

•  DOER(plans(to(retroacGvely(apply(change(to(2013(Minimum(Standard,(thereby(increasing(demand(in(2013(

•  AddiGonal(changes(also(made(to(improve(the(funcGon(of(the(market(

•  Final(rules(expected(to(be(promulgated(in(June(or(July(

Example Calculation – CY

2013 Current Formula Proposed Formula

Compliance Obligation

135,495 MWh 189,297 MWh

= 81,559 MWh + [109,465 - 26,598] x 1.3 - 53,802 + 11 + 0

= 81,559 MWh + [109,465 - 26,598] x 1.3 + 11 + 0

Minimum Standard

0.2744% 0.3833%

= 135,495 MWh / 49,386,169 MWh x 100

= 189,297 MWh / 49,386,169 MWh x 100


PostD400)MW)Policy)Development)

•  DOER(began(discussions(on(development(of(a(postg400(MW(solar(policy(in(March(

•  PresentaGon(was(given(to(stakeholders(on(the(different(opGons(available(at(a(public(meeGng(on(March(22nd((

•  Comments(were(solicited(through(April(8th(on(the(iniGal(policy(design(

•  DOER(plans(to(review(comments(before(convening(another(stakeholder(meeGng(and(puvng(forth(a(straw(proposal(for(further(public(comment(

•  Will(follow(with(a(rulemaking(process(to(adopt(new(rules(and(establish(a(successor(program(or(expansion(to(the(exisGng(Solar(CarvegOut(

•  Process(expected(to(conGnue(throughout(2013(


))))))))

SUPPORTING)CAST)

13


Ownership)Models)

•  Power(Purchase(Agreement((PPA)(

•  Net(Metering(Credit(Purchase(Agreement((CPA)(

•  Outright(purchase(•  Land(lease(


Green)CommuniLes)DesignaLon)• 110(ciGes(and(towns(designated(Green(CommuniGes(

• More(than($24(million(invested(to(implement(energy(efficiency(and(renewable(technologies(

• Total(reducGon(of(1,809,059(MMBTUs(commiwed,(equivalent(to(the(annual(energy(consumpGon(of(approximately(13,600((Massachusews(households((15


Helpful)PublicaLons)

( ( ( ((

( ( ((((((((((Q&A(on(Ground((Mounted(Systems( ( (g(Health(topics( ((

( ( ( (g(Decommissioning(

(

( ( (((((((((((PV(Guide(for(projects(on(landfills(

( ( ( (g(Available(IncenGves(

( ( ( (g(Permivng((

( ( ( (g(Development(models(

16


SolarizeMass®)•  Partnership(between(MassCEC(and(DOER(•  Encourages(the(adopGon(of(((((((smallgscale(PV(projects(by:(

!  Deploying(a(coordinated(educaGon((markeGng(and(outreach(effort((

!  Offering(a(group(purchasing(model((!  Providing(increased(savings(as(more(people(in(a(community(go(solar(

•  2011(pilot(program(results(in(four(selected(communiGes:(!  164(contracted(projects(represenGng(over(800(kW(of(capacity(!  Projects(installed(at(significantly(less($/waw(cost(than(statewide(average(

during(the(same(period(

•  2012(program(results(in(17(selected(communiGes:(!  748(contracted(projects(represenGng(over(4.8(MW(of(capacity(

•  10(communiGes(have(been(selected(to(parGcipate(in(the(2013(program(

17


SunShot)IniLaLve)Rooiop)Challenge)•  DOE(grant(to(lower(“soo(costs”(($566,354)(

•  MassSolar(Partners:(Boston,(Cambridge,(Harvard,(Ha,ield,(and(Winchester,(Public(Safety,(MassDevelopment,(MassCEC,(SEBANE(

•  Outreach(to(community(financial(insGtuGons(

•  Products:(!  model(permivng(processes(and(permit(applicaGons(for(systems(

under(300(kilowaws((kW)(and(10(kW(

!  prescripGve(structural(review(process(to(reduce(the(review(Gme(required(for(common(types(of(residenGal(systems(below(10kW(

!  updates(to(the(state’s(interconnecGon(website(to(make(the(content(more(user(friendly(

!  model(solar(PV(bylaw(with(regulatory(guidance((for(both(roooop(and(groundgmounted(PV(systems(of(all(sizes.(((

!  guidance(documents(on(Community(Shared(Solar(18


Monthly)Web)Updates)

19


))))))

RESULTS)

20


Highlights)•  MA(ranks(7th(naGonally(in(cumulaGve(installed(capacity(

•  Ranked(3rd(in(commercial(installaGons(and(6th(in(residenGal(installaGons(in(2012(

•  2nd(lowest(weighted(average(commercial(installaGon(costs(

•  Ranked(4th(in(total(solar(jobs(and(8th(in(per(capita(solar(jobs(in(2012(

•  342(of(351(MA(ciGes(&(towns(have(at(least(one(solar(installaGon(

•  More(capacity(was(installed(2012(than(was(installed(in(all(years(prior(to(2012(

•  Solar(generaGon(as(a(percentage(of(the(RPS(increased(by(more(than(700%(from(2010(to(2011(and(is(expected(to(increase(by(an(addiGonal(300%(in(2012(

(((Sources: SEIA/GTM Research 2012 US Solar Market Insight Report, The Solar Foundation’s National 2012 Jobs Census, and 2011 Annual RPS/APS Compliance Report


Average)$/Wa()Installed)Costs)(2010D2013))

$0.00(

$1.00(

$2.00(

$3.00(

$4.00(

$5.00(

$6.00(

$7.00(

$8.00(

$9.00(

$10.00(

1/1/2010( 7/20/2010( 2/5/2011( 8/24/2011( 3/11/2012( 9/27/2012( 4/15/2013(

$/Wa(

)Cost)

InterconnecLon)Date)

Linear((>100(kW(Roof(Mount)(Linear((10g100(kW(Roof(Mount)(Linear((0g10(kW)(

Linear((Ground(Mount)(


0.04) 0.29) 0.59) 0.81) 1.84) 1.64) 3.63) 9.64) 22.95)42.51)

135.80)

23.61)0.00(

50.00(

100.00(

150.00(

200.00(

250.00(

2002( 2003( 2004( 2005( 2006( 2007( 2008( 2009( 2010( 2011( 2012( 2013(

Installed)Solar)Capacity)in)Massachuse(s)(4/1/13))

Annual(Installed(Capacity((MW)( CumulaGve(Installed(Capacity((MW)( 243)MW)


Thank)you!)

(

DOER(RPS(Website:((www.mass.gov/energy/rps((

RPS(Contact:([email protected]((

DOER(Solar(Website:(www.mass.gov/energy/solar((

SREC(Contact:([email protected]((

(

(

(

25

©"2012"SEIA"©"2012"SEIA"

U.S.$Solar$Market$Insight$2012$Year7In7Review$

SEIA$and$GTM$Research$

Carrie"Cullen"Hi3"SVP,"SEIA"April"25,"2013"

©"2012"SEIA"

Solar"Con;nues"to"Boom@"3,313$MW$Installed"in"2012"

•  Record"Q4"with"1,300"MW"deployed"

0"

500"

1000"

1500"

2000"

2500"

3000"

3500"

2006$ 2007$ 2008$ 2009$ 2010$ 2011$ 2012$

Installed$Ca

pacity$(M

W)$

New$U.S.$Solar$Electric$InstallaNons$$

Annual" Q1" Q2" Q3" Q4"

©"2012"SEIA"

Record"Quarter"for"U;lity"and"Residen;al"Markets"

144$MW$

282$MW$

874$MW$

0"

100"

200"

300"

400"

500"

600"

700"

800"

900"

1000"

ResidenNal$ Commercial$ UNlity$

Installed$Ca

pacity$(M

W)$

Q1"2010" Q2"2010" Q3"2010" Q4"2010" Q1"2011" Q2"2011" Q3"2011" Q4"2011" Q1"2012" Q2"2012" Q3"2012" Q4"2012"

©"2012"SEIA"

Solar"More"Affordable"Than"Ever"•  Average"system"prices"declined$27%"over"the"past"year"

"$@""""

"$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$ 2012$

Blen

ded$Av

erage$System

$Pric

e$($/W

)$

Blended$Average$System$Prices$

LBNL""Tracking"the"Sun"IV"" SEIA/GTM"Research"

©"2012"SEIA"

State"2012"Performance""

•  11"states"installed"50$MW$or"more"in"2012"

•  The"Massachuse3s"market"more"than"quadrupled"in"new"PV"capacity"from"2011"to"2012"

•  California’s"residen;al"and"commercial"markets"led"the"na;on"

•  Hawaii’s"market"grew"169%"in"2012"over"2011"

"

0" 200" 400" 600" 800" 1,000" 1,200"

10.$New$York$

9.$Texas$

8.$Maryland$

7.$Hawaii$

6.$MassachuseZs$

5.$North$Carolina$

4.$Nevada$

3.$New$Jersey$

2.$Arizona$

1.$California$

Residen;al"Commercial"U;lity"

1,033$MW"

710$MW"

415$MW"

198$MW"

132$MW"

©"2012"SEIA"

Fun"With"Rankings"

"61""

"64""

"74""

"109""

"129""

"132""

"198""

"415""

"710""

"1,033""

"@"""" "300"" "600"" "900"" "1,200""

New"York"

Texas"

Maryland"

Hawaii"

Massachuse3s"

North"Carolina"

Nevada"

New"Jersey"

Arizona"

California"

CumulaNve$Solar$Electric$Capacity$

"30""

"34""

"48""

"52""

"76""

"91""

"110""

"137""

"146""

"167""

"@"""" "50"" "100"" "150"" "200""

Massachuse3s"

Vermont"

Delaware"

Colorado"

California"

New"Mexico"

New"Jersey"

Hawaii"

Nevada"

Arizona"

Installed$Solar$Electric$WaZs/Capita$

"21,729""

"27,035""

"32,075""

"37,269""

"37,463""

"43,049""

"48,641""

"138,731""

"138,951""

"547,085""

"@"""" "200,000"" "400,000"" "600,000""

North"Carolina"

New"York"

Massachuse3s"

Hawaii"

New"Mexico"

Colorado"

Nevada"

Arizona"

New"Jersey"

California"

Number$of$Homes$Powered$by$Installed$Solar$Capacity$

©"2012"SEIA"

What"to"Expect"in"2013"•  4,300"MW"of"PV"and"

940"MW"of"CSP"expected"to"come"online"in"2013"

•  Residen;al"market"to"show"most"significant"growth"

•  U;lity"market"projected"to"grow"31%"in"2013,"compared"to"134%"in"2012"

"@""""

"500""

"1,000""

"1,500""

"2,000""

"2,500""

"3,000""

"3,500""

"4,000""

"4,500""

2012" 2013E"

Installed$Ca

pacity$(M

W)$

2012$vs.$2013E$PV$InstallaNons$$

©"2012"SEIA"

Another"Record"Year"of"Installa;ons"•  U.S."PV"market"expected"to"grow"29%"in"2013,"significantly"

higher"than"the"global"rate"

4,269$

$5,180$

6,868$

8,943$

0"

1000"

2000"

3000"

4000"

5000"

6000"

7000"

8000"

9000"

10000"

2008$ 2009$ 2010$ 2011$ 2012$ 2013E$ 2014E$ 2015E$ 2016E$

Installed$Ca

pacity$(M

W)$

PV$InstallaNon$Forecast$

Residen;al" Commercial" U;lity"

©"2012"SEIA"

Residen;al"Third@Party"Ownership"

Third-party owned market share broke 90% in Arizona and neared 90% in Colorado TPO market share fell in California in Q4 2012, but this doesn’t mean fewer systems were financed. Debt products are becoming increasingly prevalent in mature state markets.

©"2012"SEIA"

Residen;al"Market"Forecast"by"State"

California will remain the largest residential market in the next four years even as the state’s primary rebate, the CSI, comes to a close. Arizona will also continue to grow despite the likelihood that incentives will be exhausted in 2013 New York and Texas will become increasingly important in the out years

©"2012"SEIA"

Non@Residen;al"Installa;ons"by"State"

New Jersey was the largest non-residential market in 2011, and while new capacity increased in 2012, installations rates fell throughout the year. California was the leading non-residential market, with 307 MWdc of new capacity installed in 2012, driven by municipal installations. Massachusetts grew substantially in 2012, though growth is expected to slow in 2013 due to SREC oversupply.

©"2012"SEIA"

Non@Residen;al"Forecasts"by"State"The non-residential market will experience slowed growth in 2013, but will continue to comprise an increasingly significant portion of all U.S. installations, especially in the out years California will remain the largest market in 2013 while New Jersey suffers from SREC oversupply; Massachusetts and New York will account for an increasing share of the market in the near term.

Next Steps for Solar in Massachusetts and Beyond

April 2013

Patrick Daly President and CEO [email protected]

Massachusetts Developer Perspective

2"

North"America"is"very"early"in"the"growth"stage…"

3.1 GWs installed in 2012… up to 9 GW 2016 (GTM)? 35% CAGR through 2016 >75% non-residential

$100+ billion capital investment over next 5 years

$30 billion market in 2016

30 GWs installed through 2016 <1% of electricity generation <3% of installed electricity capacity

Significant opportunity for growth beyond 2016

0"

5000"

10000"

15000"

20000"

25000"

30000"

2008" 2009" 2010" 2011" 2012" 2013" 2014" 2015" 2016"

Cum

ulat

ive

MW

Forecasted*MW*Installed*(Source:"Bloomberg,"GTM)"

UJlity"PV" Commercial"PV" ResidenJal"PV"

April"2013"

Solar PV Growth in Massachusetts

Nexamp,"Inc."" April"2013" 3"

0

20

40

60

80

100

120

140

160

180

200

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MW

Annual Installed Capacity Cumulative Installed Capacity

2013 and Beyond


Drivers of Success

Strong, Consistent Policy Support (State and Federal)

Smooth Post-400 Transition

(Nexamp Supports SEIA Position)

2013 and Beyond


Access to Capital: “Getting it Built” Project Size: Scale of Portfolio

“Size Can Matter” Financiers: “Strategics”, Financial Institutions, Funds Financeability: “Finance Fundamentals”; Sponsorship, Project Structure, Off-taker, Credit, Other

2013 and Beyond


Key Issues to be Addressed Net Metering Credit Expansion (again)

Interconnection Queue & Timing

“Bankability” of SRECs

Nexamp Solar Power. Delivered.

Nexamp,"Inc."" Nexamp"Solar"|"July"2011" 7"

As a leading solar independent power producer, Nexamp develops, builds, owns, and operates distributed and utility-scale solar projects.

•  Founded in 2006.

•  Largest, most experienced solar company

headquartered in Massachusetts; satellite offices

in CT, NY, RI.

•  25 MW Installed or under construction; over 75

MW under development.

•  Over 200 clients served, including General Mills,

Boston Properties, Cathartes Private

Investments, University of Massachusetts,

Middlesex Savings Bank, and the U.S. Army.

Thank You


NECEC Solar Finance Event Slides 25Apr13

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