1

Northern Virginia (NOVA) Solar Proposal

Michael Ham, Billy Mudd, Ramona Rubalcava, Shakib VafaeiSponsored by: Center for Air Transportation Systems Research

Copyright (CATSR/GMU) 2018

Agenda

1. Context Analysis

2. Concept of Operations

3. Data Collection & Modeling

4. Model Results & Data Analysis

5. Final Results of Alternatives

6. Final Recommendations

2

Context Analysis

Providing Analysis to a Utility Company

4

1. Currently buying electricity wholesalefrom coal power plants

Distributing energy to their residential customers for as low a price as possible

The energy market is moving awayfrom traditional energy sources

2. Analyze the changing energymarket

Find the effects of solar energyin their network

(Currently ~160 users or .1%)

Recommend changes to business model accordingly

from analysis

Energy Consumption Trends in the US

5

Traditional Energy (Coal) consumptions

are declining

Solar Energy consumptions are rising

Traditional Energy Solar Energy

Figure. EIA Energy Projections Figure. EIA Solar energy installations in Virginia

Energy Cost Trends in the US

6

Traditional Energy (Coal) costs are

rising (In VA +3.21% a year avg.)

Solar Energy costs are declining

Traditional Energy Cost Solar Energy Cost

Figure. EnergySage Solar costs decliningFigure. EIA Virginia Electricity costs for Residential

Solar Panel Technology and System

7

Photovoltaic Arrays

MonoCrystalline

Panels

Inverters

$

Net

Meter

Figure. Net metering

Converts energy to

Direct to Alternating

Current

Excess energy goes

back into the grid for

utility company

Home with Panels is

credited for Net

meter energy

(regulated by VA gov)

Northern Virginia Electric Cooperative

● Northern Virginia Electric Cooperative

○ Not for profit

○ 95% of customers are residential

○ 50% of Energy Demand is residential

○ Services 160,000 residential homes

● Wholesale Power from Pennsylvania Jersey Maryland (PJM) at ~$0.03/kWh

● Goal is to keep prices low for their Customers

Figure. NOVEC’s current Distribution Network

8

Gap Analysis: Risks In The Energy Market

9

NOVEC fails to identify the trends in energy and increasing amounts of customers moving to external solar energy

providers

Risk of losing revenue & failing to meet customer’s energy needs

Traditional electricity distribution with net metering

Solar Energy Integration/distribution to

customers

Stakeholder Analysis

10

● Tensions cause

trickle down cost

repercussions for the

Homeowner/Energy

User

● Government Entities

have the most

influence

Changing Federal and State Energy Policies

● Federal Investment Tax Credit (ITC)

Policies 30% investment credit on Solar

Energy

○ 26% in 2020, 22% in 2021, after

2021 residential is 0% and

commercial is 10%

● Potential for VA Carbon Tax on CO2

Emissions ($42 / ton of CO2)

○ Adds ~$0.01/kWh to Electricity

costs

● Avg. Electricity Price in the US = $

0.1213 / kWh

● Avg. Electricity Price in Virginia =

$0.1094 /kWhFigure. Electricity Prices in surround states w/o delivery

11

Concept of Operations

Problem Statement

As solar penetration levels rise in Virginia, NOVEC will begin to lose

revenue from the loss of traditional energy being distributed. NOVEC will

be forced to change pricing structures by raising electricity prices to

compensate for growing infrastructure costs.

13Current Environment in Virginia

● Solar Penetration in Virginia is currently at 0.1% for Residential solar, In 2017

approximately 2000 MW of solar energy was installed for Residential PV’s

○ On the Rise

● Average cost of Solar is estimated to be $0.12 cents per kWh

○ On the Decline

● Average cost of Electricity for NOVEC Residence is $0.13 per kWh

○ On the Rise

Need Statement

There is a need to analyze the effects of increasing amounts of solar energyusers in NOVEC’s distribution network on their current business model.

14

Furthermore, there is a need to identify the feasibility of new business models

that incorporate solar energy into their distribution network.

Mission Requirements

15

● MR 1. The system shall seek to minimize potential losses in profit and operating costs.

● MR 2. The system shall focus on regions currently serviced by the utility company.

● MR 3. The system shall seek to minimize customer costs.

● MR 4. The system shall incorporate infrastructure from the current model.

● MR 5. The system shall produce and identify feasible business models and plans of action to account for changes in energy policy and trends.

Assumed Breakdown of Business Model Costs

16

Per kWh

Distribution X<300 kWh

Distribution X>300 kWh

Local & State Taxes

Electricity Supplied

Overall Avg. Electricity

Price Panels are Sold at

Wholesale Price of Panels

Life Cycle Maintenance

Installation Costs

Misc. costs Solar Panel Profit

$15 $0.02109 $0.01609 $4 + $0.0015

$0.09731 $0.13

$22,000 $7,600 $1,200 $1,200 $1,500 ~$10,000

Always on Bill

Flat Service Charge

Per kWh Flat Fee and per kWh

Per kWh Per kWh

3x Wholesale 33 Panels per home, $230 ea

Services over lifespan

Labor and Time

Inverters, and more

Customer Bill(X = Energy Demanded)

Solar Panel Cost Breakdown

17

Alt(1): NOVEC’s Current Business Model

Figure. External Panel Supplier SolarCity

18

Alt(2): Proposal of Implementing Solar

Figure. Solar Panels from NOVEC

Method of Analysis

19

Data Collection & Modeling

Geospatial Information System (GIS): Analyze ~4,800 (~3%) of NOVEC Customer Base

● Esri ArcMap Software

○ Geospatial analysis of

datasets with

geographic locations

● Loudoun County

Geodatabase data

○ Building Polygon

○ Parcel Polygon

○ Address Points

● Loudoun Orthoimagery

○ Raster image of

Loudoun 2016Figure. ArcGis rooftop Analysis

21

Model Flow Diagram

22

NOVEC Service Region

● Designated lower right section of

Loudoun County as NOVEC Region for

Analysis

● Selected ~3% of NOVEC’s customer base

(4,800 out of 160,000)

● Removal of:

○ Commercial building points

○ No associated residential building

○ Unfinished buildings

○ Small sheds and garages

○ No matching NOVEC data point

● Extract raster data within the NOVEC

layer

Figure. Locating of Homes that fit requirements

Figure. Housing data matched with NOVEC address points 23

Visual Representation of Data Sets

= Sample 1(Medium Density)

= Sample 2 (High Density)

= Sample 3 (Low Density)

24Figure. Entirety of Loudoun with datasets highlighted

Figure. NOVEC’s servicing region in Loudoun County

X * 60 *0 .18 = kWh ProducedAccounts for panel decay with -.06% a year

(kWh/m^2 * # of panels in m^2 * panel efficiency)

Data Analysis

25

Figure. Area Solar Radiation Example Output

= X

GIS Model Results & Data Analysis

Production by Poor Solar NOVEC Homes: Solar Supply < Demand ALL Year

● Total Solar Produced = 5100 kWh/year

● % of Energy Offset by Solar System = 38%

● Net metered Energy = 0 kWh/year

Figure. Applying the Area Solar Radiation for July

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Production by the Average NOVEC Home: Solar Supply > Demand in ONLY April

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Figure. Applying the Area Solar Radiation for July

● Total Solar Produced = 6600 kWh/year

● Total % of Energy by Solar = 49%

● Net metered Energy = 51 kWh/year

● Net Metering Months: April

Production by Optimal Solar NOVEC Homes: Solar Supply > Demand @ April,May,June,July

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Figure. Applying the Area Solar Radiation for July

● Total Solar Produced = 9200 kWh/year

● Total % of Energy by Solar = 69%

● Net metered Energy = 970 kWh/year

● Net Metering Months: April, May, June

Only Constitutes ~6-10% of NOVEC’s current Homes

Estimated Distribution of Solar Produced on NOVEC Homes

30● Currently very small market of customers benefiting from solar

~N(880,130)

Maryland Modern 2000 Sq ft. Solar Energy Generation: Measured Data vs. Model Prediction

31

● 20 Years Savings

for Modern 2000

Sq ft. Home is

$5,500

● Verification

Home falls

between Avg. and

Optimal for

NOVEC’s Region

Assumed Breakdown of Business Model Costs

32

Per kWh

Distribution X<300 kWh

Distribution X>300 kWh

Local & State Taxes

Electricity Supplied

Overall Avg. Electricity

Price Panels are Sold at

Wholesale Price of Panels

Life Cycle Maintenance

Installation Costs

Misc. costs Solar Panel Profit

$15 $0.02109 $0.01609 $4 + $0.0015

$0.09731 $0.13

$22,000 $7,600 $1,200 $1,200 $1,500 ~$10,000

Always on Bill

Flat Service Charge

Per kWh Flat Fee and per kWh

Per kWh Per kWh

3x Wholesale 33 Panels per home, $230 ea

Services over lifespan

Labor and Time

Inverters, and more

Customer Bill(X = Energy Demanded)

Solar Panel Cost Breakdown

Average Homeowner with Solar Predicted to Break Even in 19 Years

Total cost of Electricity = $48,000

Total cost of Electricity and Solar

Before Tax Credit = $52,000

Total cost of Electricity and Solar After

Tax Credit = $46,000

Savings for Customer (19 Yr. ROI) =

$2,000

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Optimal Homeowner with Solar Predicted to Break Even in 14 Years● SolarCity’s research shows 82% of customers get Solar Panels for the cost benefit● After conducting a small scale survey, 50%+ of participants wanted to save at least

$10,000 over 20 years● Approximately 10% of homes produce enough to save $10,000 over 20 years

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Total cost of Electricity = $48,000

Total cost of Electricity and Solar After Tax

Credit = $38,000

Savings for Customer (14 Yr. ROI) =

$10,000

NET LOSS FOR NOVEC

Final Results of Alternatives

NOVEC Conservative Solar Penetration Growth: Current Energy Environment

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● At Year 10, 1% penetration or 1,600 solar energy users

● At the end of Year 10:

Alt (1) Losses = $31 mil.

Alt (2) Losses = $15 mil.

● Alt(1) because risks outweigh the cost benefits ($5.00/per customer/year)

Difference

Influential Factors of Savings for NOVEC Customers: Delivered Price of Electricity Most Critical

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Low Base High

Electricity Cost ($/kWh)

0.08 0.09 0.17

Delivery Cost ($) 0.016 0.018 0.035

Solar Production (kWh)

5100 6600 9200

Carbon Tax ($) N/A 0 42

Solar Cost ($) 15000 16800 22000

Scenarios for NOVEC Customer

Figure. Tornado diagram of cost factors

Energy Environment in 5 Years (2023)

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Now Cause of Increase

In 5 Years

Electricity Costs with Delivery (per kWh)

$0.133 3% Increase per year

$0.154

Carbon Tax (per kWh)

$0 Govt. Policy Changes

$0.0084

Solar Efficiency

18% Advances in Technology

20%

Cost of Panels $22,700 Decrease in Manufacture Costs

$20,000 Average Customer Saves = $13,000 LCCOptimal Customer Saves = $27,000 LCCBreak evens @ 10 Yrs. & 13 Yrs.*Does not include ITC

Aggressive Solar Penetration Growth: Energy Environment w/ Trends

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● At Year 2033, 15%penetration or 24,000 solar energy users

● At Year 2033:

Alt(1) Losses: $570 mil.

Alt(2) Losses: $310 mil.

● Alt(2) now has a real justified cost benefit offsetting $80.3/customer/year

Difference

Final Recommendations

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Now 3-5 Years

Proceed with Alt (1)

Conduct a Survey

Be aware of Factors

Re-Evaluate Alternatives

Continue to use current Business

Model, be ready to increase electricity

prices slightly

Conduct a survey of residences to find the

$ value of profit customers would move to solar at

Be aware of when factors reach this

value (sensitivity of electricity and solar

kWh)

In 3-5 years is when policy and factors will likely reach a turning

point in energy

Questions?

Acknowledgments&Sources

Sources

EIA, (12 May, 2016). EIA projects 48% increase in world energy consumption by 2040. Retrieved from

https://www.eia.gov/todayinenergy/detail.php?id=26212

Energy Information Administration. (2017). Electric power detailed state data. Retrieved from

https://www.eia.gov/electricity/data/state/

Rhodes, J. (2016, March 31). When Will Rooftop Solar Be Cheaper Than the Grid. US News. Retrieved from

https://www.usnews.com/news/articles/2016-03-31/when-will-rooftop-solar-be-cheaper-than-the-grid

Matasci, S. (2018, March 26). How Much Do Solar Panels Cost in the U.S. in 2018? Retrieved from

https://news.energysage.com/how-much-does-the-average-solar-panel-installation-cost-in-the-u-s/

Hobson, A., Munsell, M. (n.d.). Solar Market Insight Report 2017 Year In Review. Retrieved from

https://www.seia.org/research-resources/solar-market-insight-report-2017-year-review

Criste, L., Hoffman, J., and Grant, J. 2017. “Project Final Report for Solar Energy Generation.” White Paper, GMU SEOR

Department. http://seor.vse.gmu.edu/~klaskey/Capstone/DSGProject/downloads/DSGFinalReport.pdf

Casey. (2017, January 8). 2016 Solar Penetration By State. Retrieved from https://www.ohmhomenow.com/2016-solar-

penetration-state/

(Picture of States Surrounding Virginia). Retrieved from https://www.pinterest.com/pin/294985844318827461/

Solar Energy Industries Association.. (n.d.). Solar Industry Research Data. Retrieved from https://www.seia.org/solar-

industry-data

Richardson, L. (2018, March 1). 2018 SREC Prices: Explaining How to Sell Your RECs in the U.S. Retrieved from

https://news.energysage.com/srec-prices-explaining-u-s-srec-solar-market/43

Sources Cont.

Solar Energy Industries Association. (n.d.) Solar Investment Tax Credit (ITC).. Retrieved from

https://www.seia.org/initiatives/solar-investment-tax-credit-itc

(Picture of Solar Panel). Retrieved from http://idfabriek.com/home-solar-power-system-design.html/home-solar-power-

system-design-pleasing-inspiration

Virginia Department of Environmental Quality (n.d.). Net Metering. Retrieved from

http://www.deq.virginia.gov/Programs/PollutionPrevention/VirginiaInformationSourceforEnergy/DistributedGeneration/Net

Metering.aspx

NC Clean Energy Technology Center ( 2018). Net Metering. Retrieved from

http://programs.dsireusa.org/system/program/detail/40

DeBono, M. (2017, October 25). What Is Solar Energy and How Do Solar Panels Work? Retrieved from

https://us.sunpower.com/blog/2017/10/25/how-does-solar-energy-work/

(Picture of Solar Irradiation Map). Retrieved from https://www.nrel.gov/gis/solar.html

Solar Irradiance. (2017). Solar Electricity Handbook 2017 Edition. Retrieved from

http://solarelectricityhandbook.com/solar-irradiance.html

NOVEC. (2018). About NOVEC. Retrieved from https://www.novec.com/About_NOVEC/index.cfm

SolarCity. (2015). U.S. Homeowners on Clean Energy: A National Survey. Retrieved from

https://www.solarcity.com/sites/default/files/reports/reports-2015-homeowner-survey-clean-energy.pdf

44

Acknowledgements

George Donohue (GMU,

SEOR / CATSR)

Robert Bisson (NOVEC,

Vice President Electric

System Development)

45

Lance Sherry (GMU, SEOR

/ CATSR)

Paul Houser (GMU, GGS

Department)

We would like to Acknowledge the assistance received from…

Backup Slides

Sources (backup)https://governor.virginia.gov/media/4371/eo-36-continuing-qualified-energy-conservation-bondsada.pdf

http://news.energysage.com/solar-panel-efficiency-cost-over-time/

https://spectrum.ieee.org/energywise/energy/renewables/efficiency-of-solar-cells-continues-to-climb

https://s3.amazonaws.com/ecodirect_docs/HANWHA/Hanwha_Q_CELLS_Data_sheet_QPEAK_BLK-G4.1_290-

300_2016-09_Rev03.pdf

https://es-static-prod.s3.amazonaws.com/static/img/solar/solar-101/Net-metering-animation.388bae5d381a.gif

https://www.greentechmedia.com/articles/read/10-ways-to-solve-the-renewable-duck-curve#gs.BliT5aA

http://seor.vse.gmu.edu/~klaskey/Capstone/DSGProject/downloads/ProjectProposalDSG.pdf

https://www.novec.com/About_NOVEC/Annual-Report.cfm

https://www.solarcity.com/sites/default/files/reports/reports-2015-homeowner-survey-clean-energy.pdf

https://inhabitat.com/new-photovoltaic-solar-technology-boosts-efficiency-to-50/technion-photovoltaic-cell-efficiency-2

https://www.solarreviews.com/blog/how-much-electricity-does-a-solar-panel-produce (NOVA Logo panel photo)

http://nge.press/single-red-roof-tiles/cartoon-images-seamless-clay-terracotta-tile-beautiful-seamless-single-red-roof-tiles-

clay-terracotta-tile-beautiful-ing-texture-u-old-sc-st-jpg/ (regatta rules)

https://www.sketchuptextureclub.com/textures/architecture/wood-planks/siding-wood/blue-siding-wood-texture-seamless-

08827 (blue wood)

47

The Solar Panel System

● Photovoltaic array generates energy by

harnessing light

● Inverters convert solar energy from an Direct

Current (DC) to Alternating Current (AC) -

inverter used is SolarEdge#SE7600A

● Batteries not being considered

● Always need to be connected to the grid

Net Metering:

● Capabilities established by Grid Tie Inverters

● Excess solar energy generated relocates back

into the grid

● Net metering is regulated

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Figure. Net metering

49

States Surrounding Virginia

State Electricity Price

(cents per kwh)

SREC Market

Available

Maryland 12.95 Yes

Washington

D.C.

12.30 Yes

West Virginia 11.05 No

Virginia 10.94 No

North Carolina 10.27 Yes

Tennessee 10.02 No

Kentucky 9.78 No

Figure. Neighboring StatesTable. Prices do not include delivery costs

ITC Changes over the next years

50

Assumed Breakdown of Business Model Costs

51

Environmental Impacts

With about 33 Panels, Reduce

your yearly carbon emissions by ~

10.6 Metric Tons of CO2

Equivalent of your car’s emissions

in a year x2

52

Solar Energy Generation Factors

Solar Energy is Stochastic

● Surface Area of roof

○ Square footage for Panel

Placement

● Shading

○ Shadows cast onto a roof

● Weather/Time of Year

● Solar Radiation

● Azimuth Angle

○ Pitch of roof & Slope

○ Direction of roof

■ West / South West

Facing are optimal Figure. Average Solar Radiation levels in the United States

53

Solar Penetration Levels

● In 2017, Virginia installed 2,227 MW for Residential PV

54

Figure. Solar Penetration Levels based on State

Figure. Installed MW of Solar in Virginia

Competitors

55

NOVEC Dominion BGE

# of Customers 161,000 6 million 1.25 million

# of Employees 308 employees 16,200 3,200

Revenue in 2016 $468 million $11.7 billion $3.23 billion

Investment in Solar N/A $979 million $15 million

Cap on Net Metering 1% of peak-load for the

previous year (Open EI)

1% of peak-load for the

previous year (OpenEI)

10% of peak-load

for the previous

year

Solar energy efforts -Net Metering

-Fauquier County Livestock

Exchange

-Net Metering

-Solar Partnership Program

with schools/universities

-PPA

-Goal to use 8 million panels

by 2018

-Net Metering

-Provide

estimation,

consultation,

installation, and

maintenance of

solar system for

customers

Solar Energy Trends● The efficiency of solar panels is

going up each year

● The cost of solar is going down

each year, the average cost is

around $.12 per kwh

● Single junction cell theoretical max

efficiency of around 30%

Figure. Solar Panel Efficiency Trends 56Figure. Decline Cost per kWh for Solar

Limitations of Solar Energy

*The Duck Curve for California [15] 57

NOVEC Report

58NOVEC 2012-2016 annual report [2]

NOVEC Cont.

● NOVEC has office locations located

throughout our service territory in Manassas,

Gainesville, Leesburg and Minnieville.

● NOVEC's service territory encompasses 651

square miles with more than 7,200 miles of

power lines.

● NOVEC provides reliable electric service to

more than 167,000 homes and businesses

located in Clarke, Fairfax, Fauquier, Loudoun,

Prince William and Stafford counties, the City

of Manassas Park and the Town of Clifton, all

in the state of Virginia.

● NOVEC is a not-for-profit corporation. As a

cooperative it is owned and controlled by its

customer-owners — the customers who

purchase energy from NOVEC.

● NOVEC's customer-owners elect a board of

directors which governs all Cooperative

business affairs.

● The majority of NOVEC's customers are

residential and small commercial, however we

provide electric service to numerous large

commercial retailers59

Reliability and Maintainability

● Hanwha Q Cell 4.1

● Need for maintenance is

extremely low

● Average loss in energy

panel efficiency is around

5% from weather and debris

such as dirt and dust

● Panel efficiencies degrade

over time (Year 5 = 95%,

Year 10 = 93%, Year 12 =

92%)

*Warranty graph of Q cells efficiency [10]60

Adjustments / Loss Mitigation Strategies

● Delivery cost increase helps

NOVEC’s revenue but hurts

customers

● Nevada tripled the fixed fee that

customers pay and reduced the

credit customers earn for net

metering

○ SolarCity, Sunrun, and Vivint

Solar all left state of Nevada

● Find plan to allow NOVEC to earn

tax credit but sell panels at a

discounted price

61

Functional Requirements

● FR 1.1 The system model shall output overall potential kilowatts per month of NOVEC’s service area from 2018-2030.

● FR 1.3 The system model shall seek homes with the potential to generate substantial solar energy.

● FR 1.4 The system model shall be representative to NOVEC’s current customer base in terms of region modelled.

● FR 2.2 The system’s business model shall incorporate and analyze the Power Purchase Agreement (PPA), Buy, and Lease business model options.

● FR 3.1 The system shall have no excess wasted energy due to net metering.

62

Design Requirements

● DR 1.1 The system shall be able to get the necessary energy from their panels without exceeding a 10 kwH system

● DR 1.3 The system shall use Hanwha Q-cells G4.1 300W panels that cost $250 per panel at wholesale in 2018 as a baseline.

● DR 1.6.1 The system’s decay shall be: Year 1 = 100% (98%), Year 5 = 95%, Year 10 = 93%, Year 12 = 92%.

● DR 2.2 The system shall account for growth in penetration (.1% ,1%,

2%, 4%, 8%, 16%, 30%)

63

Assumptions

● Maryland Data is representative of Virginia Region

● 4800 Homes is representative of NOVEC region

● Customers want to maximize potential energy from solar systems

○ Size of system installed

● Assumed Installation costs nad Misc. Costs of panels

● Assumed profit # from panels

● Assumed baseline is correct and trends will continue

64

65

Solar panel decaying efficiency

Steps of Analysis

66

*Master Student Data

GIS Spatial Analyst Tools

67

Model Information

The outputs are used to determine the best design alternative and get estimates for potential business models.

Input ParametersRandom

VariablesTransfer

FunctionsOutputs

● Address

Points

● Raster File

● Building

Parameters

● Loudoun

County

Layer

● Solar

Penetration

Level (.01%...)

● Square

Footage

● NOVEC

Serviced

Residences

● PV Array Size

● Weather

○ Counteract

the variability

by using

monthly data

● Address points that

do not represent

actual residences

● Azimuth

● Elevation

● Shading

● Time of Year

● Surface Area

of Roof

● Irradiance in

Region

● Potential

Solar Energy

by individual

residential

rooftop

systems

68

No Low Pass Filter Vs. Low Pass Filter

69

Removing Unwanted Data

70

Figure. Identifying Bad Data

Modeling Settings

71

Annual Energy Not Supplied by NOVEC vs. Solar Penetration Level

● About 10% of modeled region fall in

the optimal range of production

At 15% Penetration (Optimal & Average

Homes), Yearly Energy Amounts:

● Do Nothing Energy Demanded = 320

million kWh

● Solar Energy Produced= 200 million

kWh

● Energy Distributed offset by Solar =

~9.5% of total ~2.1 billion kWh

● Net metered Energy= 16 million kWh

72

Visualizing Net Metering for Optimal Homes

● April, May, June

73

Verifying Energy Demand Data

74

● Comparison of

NOVEC’s Energy

demand versus

Modern 2000 sq

ft. Home’s Energy

demand

Comparing Categorized Optimal Homes

75

Comparing Data Sets

Month

% Difference for

Sample 1 and 2

% Difference for

Sample 1 and 3

January 0.06 0.02

February 0.05 0.02

March 0.02 0.00

April 0.00 0.01

May 0.00 0.01

June 0.00 0.01

July 0.00 0.01

August 0.00 0.01

September 0.01 0.00

October 0.04 0.01

November 0.06 0.02

December 0.04 0.01

Estimated Annual Production (kWh)

Sample_1 6580

Sample_2 6664

Sample_3 6556

76

● 95% Confidence Interval Combing the 3 samples = 6600 +/- 13 kWh

Distribution of Homes

Use aggregate tool to find histogram/distribution of houses in 1600 data set layer

How much they produce distribution

Put how much each sigma would save $$ as customer

Do that for current status

Then make this slide again and put it after slide 42 to show how in 5 years that distribution changes and $$’s change at sigmas

Aggregate tool

Averages pixels into 4 blocks a home

Analyze Histogram to find where homes lie77

Penetration

Now only looking at homes that fit the survey criteria (x% fall within this range)

Make conclusions about what happens at 1% penetration…

Using national averages (penetration will grow more than linearly)

In two years, what % of homes would be in the 7500 range

(Z factor)

RELATE THIS TO THE PENETRATION SLIDE IN MODEL RESULTS

78

Conservative Function

79

y = 40*e(3611t) + 120where t={0:10 years},

Optimal Homes will be the ones moving to Solar Energy

Aggressive Function

80

y = 40*e(3611t) + 120where t={0:10 years},

60% are Average, 40% are Optimal Homes moving to Solar Energy

Cost Breakdown

81

Cost for Panels

Cost Per Panel $250

Panels required per house 33 panels

Initial .1% penetration (houses) 155

Total Costs for Panels ~$1.3 Million

Estimated Cost for Installation

Number of installers 4

Hours required per house 6

Initial .1% penetration (houses) 155

Rate per Installer $50

Total Cost for Installation ~$190,000

NOVEC POV and NPV

Traditional

Energy

Competitor

Sells Panel

NOVEC Sells

Panels

Traditional

Energy

48000 30000 30000

Panel 0 0 22000

Panel Costs 0 0 -10000

PJM Costs xxx xxx xxx

48000 30000 42000

82

Optimal Home NPV = -$720 w/o Net Metering

Avg Home NPV = -$6,400 w/o Net Metering

Business Model Options

83

Purchase or Loan Power Purchase Agreement (PPA)

Costs up front for NOVEC ~$12,000 per house ~$12,000 per house

Tax Incentive Customer receives tax credit NOVEC receives tax credit

Maintenance NOVEC is responsible NOVEC is responsible

Benefit for Customer - Reduce electric bill - Potential to get credit

-Lock in the price of electricity at a discounted rate for length of contract- No upfront costs

Benefit for NOVEC - Helps alleviate peak load for utility company- High profit margin on panel sales

- Helps alleviate peak load for utility company

Maryland Vs. VirginiaMaryland Virginia

Cost without Solar (20 Years)* $86500.04 $60855.67

Cost with Solar (20 years)* $68417.77 $56897.67

Savings over 20 Years* $18082.27 $3958.00

*3.2% Price Increase in all scenarios

● Low prices of electricity in Virginia make it difficult for customers to save money by going solar

● Incorporating Carbon Tax will allow customers to save more

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Comparing Growth Scenarios

2018-2028 5 Year Lossesdue to Solar(.02% Pen.)

10 YearLosses due to Solar (1% Pen.)

(1) Do Nothing $7 Million $31 Million

(2) Implement Solar

$3.4 Million $15 Million

Difference (Offset due to Panel Profits)

$3.6 Million $16.0 Million

$ Required to Recoup Losses in Difference

~$1.1 per Customer/Year

~$5 per Customer/Year

Conservative Growth’s Effect on

NOVEC

Aggressive Growth’s Effect on

NOVEC

2023-2033 5 Year Lossesdue to Solar(2.4% Pen.)

10 YearLosses due to Solar (15% Pen.)

(1) Do Nothing $93 Million $570 Million

(2) Implement Solar

$51 Million $310 Million

Difference (Offset due to Panel Profits)

$42 Million $260 Million

$ Required to Recoup Losses in Difference

~$13 per Customer/Year

~$80 per Customer/Year

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Influential Factors for NOVEC Profit:Delivered Price of Electricity Most Critical

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Low Base High

Solar Panel Profit ($) 8000 10000 18000

Electricity Cost ($) 0.08 0.09 0.17

Delivery Cost ($) 0.016 0.018 0.035

Solar Produced (kWh)

5100 6600 8600

Wholesale Electricity Costs ($)

0.026 0.032 0.056

Scenarios for NOVEC

Electricity Sensitivity for Customer

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Final Recommendations

● Proceed with Alternative (1), current business model

○ Risk involved is not worth the profits from selling solar panels

currently

○ Re-evaluate in 3-5 years

● Be prepared for a large spike in Solar Energy Penetration as savings get

to $10,000 for the customer

○ Be aware of when Electricity Costs Rise to ~$.17/kWh

○ Be aware of when Solar Production Factors Reach a point where

customers ~9000 kWh a year

● Have NOVEC conduct a survey of their residential customers to see how

much they would need to save to switch to solar panel systems88

Future Studies

● Conduct a survey to residences currently serviced by NOVEC in order to

accurately find when customers will move to solar energy

● Analyze effects of solar energy on the benefits on NOVEC’s infrastructure and

peak demand costs

○ West Facing solar panels

● Investigate using batteries for solar energy into network when solar

penetration is very high

● Investigate viability of solar farms and commercial rooftops

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