NYC Solar Summit 2013: Breaking Solar Barriers in NYC
1. NYC Solar Summit
June 4, 2013
David Gilford, Assistant Director
Breaking Solar Barriers in NYC:
From Finance to Hot Water
2. 2
Why solar matters to NYC
Financing remains a key barrier
Solar thermal in NYC: opportunities and challenges
Credit: NYC Mayor’s Office of Long-term Planning and Sustainability
Breaking Solar Barriers in NYC
From Finance to Hot Water
3. 3
Clean, distributed energy
– Helps reach NYC’s 2030 goal of
800MW of new clean DG
– Can target particular areas and
neighborhoods (e.g., Solar
Empowerment Zones)
Economic development
– ~$116M economic impact,
growing at ~80% per year
– Not just panels: labor costs can
be ~50% of the total
Looking ahead, other benefits
– Resiliency and disaster recovery
– Software and data innovation
Why solar matters to NYC
Benefits go far beyond sustainability
4. 4
Despite progress in many areas, financing remains a key barrier
Upfront costs are a major impediment to solar market growth
Capital expense vs. operating expense
– Building owners face high upfront
costs for a long-term return
For SunShot Rooftop Solar Challenge,
Mayor’s Office and EDC co-chairing
Financing Options working group
“Generating reliable and affordable solar energy is both a public
good and a national goal.
A necessary component to achieve this vision is the availability of
scalable, low-cost financing.”
(US Department of Energy, SunShot Grand Challenge)
5. 5
5
A multitude of mechanisms help finance solar PV nationally
Type Offered by
Loans and
credit
enhance-
ment
Crowd-
funding
Issue addressed Description
Individual projects gather equity from
cooperative investors for small shares of
ownership
Investors receive low-yield and do not off-
take energy
Various programs offer low cost debt
financing with long term payback periods
for certain PV projects
4
2
Community
Solar
1
Access to low cost equity
financing
Decoupling of system
location, ownership and
power off-taking
Lower installed cost through
aggregation/economies of
scale
Utility or Special Purpose Entity offers a
program to retail customers to own or
purchase energy/RECs from a locally
sited PV system for a premium
This program allows customers who
would otherwise be unable a way to
“power” their homes with PV
Solar Mosaic
Abundance
Generation
SunFunder
Kickstarter
Kiva
Sacramento
United Power
(CO)
University Park
(MD)
Clean Energy
Collective (CO)
Solar for Sakai
Municipal
Credit Unions
Public
institutions
Sources: 1. BNEF, Extraordinary popular solutions: funding from the crowds, 06/15/12
2. NREL, A Guide to Community Solar: Utility, Private, and Non-profit Project Development, 11/2012
On-bill
financing
Several utilities nationwide administer
low-interest loans which are repaid
through utility bills
3
Access to low cost debt
financing
System ownership tied to
utility account
Public
institutions
Utilities
Access to low cost debt
financing
PPA’s and
Solar Leasing
Third party companies offer the electricity
produced or leasing of the PV system
5 High up-front capital cost
Maintenance and service
Various
DirectOwnership3rdPartyOwnership
6. 6
Financing solar in NYC has unique challenges
Stakeholder interviews identified NYC-specific paths forward
Nature of NYC projects often makes them more difficult to finance
– Many small-to-medium-sized, unique projects
– Multiple tenants or owners (e.g., condos) adds complexity, as power
off-taker is often not the owner
To help solve these challenges, existing financing options include:
– Reducing customer acquisition costs, by aggregating purchasing (e.g.,
“Solarize”)
– Bundling projects together, or targeting multi-building projects for
economies of scale and consistency
Emerging options include crowdfunding and community solar
– Allows renters and others to make small investments can expand the
pool of capital and reduce financing costs
Next phase of SunShot Rooftop Solar Challenge will identify opportunities
to pilot new mechanisms to address these barriers
7. 7
One of the most promising
renewable energy
technologies:
High energy production, low
capital costs relative to PV
Mature, efficient technology
Shorter payback period than
solar PV, excluding incentives
NYC is the most favorable
market in the state for solar
thermal:
High solar radiation
High energy savings potential:
DHW accounts for 19% of
energy consumption
Potential to provide up to 75%
of hot water needs for an
average family
A great opportunity… …still poised for takeoff…
New York has trailed
domestic and global markets
for solar thermal:
Installed capacity per capita in
the United States is 24Wth
while in New York State it is
only 0.3Wth
NYS has 6% of the US
population but only 0.008% of
the solar thermal installed
capacity
Although arguably more
promising, solar thermal
significantly lags PV growth:
~50 systems commissioned in
NYC vs. 687 PV systems
…if barriers are addressed.
Obstacles to growth include:
Financial
− High upfront capital costs
− Lack of financing
− Limited incentives
Technical
− Insufficient performance
data
− Limited awareness of
technology and potential
− Lack of certified
professionals
Regulatory
− Complex regulation and
high transaction costs
The “Other” Solar: Solar Thermal
Despite a strong opportunity, solar hot water has lagged PV locally
8. 8
NYCEDC Solar Thermal Pilot set out to identify market potential
Grants led to white paper on opportunities and challenges
Announced in 2009, grant program
offered incentives (up to $50K per
system) to commercial and multi-
family residential installations
Installations took place from 2010-
2012, with performance data
collected from diverse projects
White paper released June 2013,
available for download at
www.nycedc.com/cleantech
9. 9
Key findings show opportunities to scale deployment
Pilot suggests strong viability for
scaling solar thermal citywide,
identifying 4,565 highest-potential
buildings
– Over 20 years, these could yield
$200M in energy savings;
– Create 1,200 new jobs; and
– Reduce emissions by 6 billion
pounds
Key takeaways from pilot include:
– Hot water load matters
– Siting and orientation are critical
– Incentives are important
– Data increases transparency and
drives deployment