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 OConnor 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)

Massachuse(s)Solar)Development)Strategies ) (PreDSolar)CarveDOut) )
Renewable(Por,olio(Standard((established(in(2003( Governor(Patricks(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.(

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

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(eecGve(energy(eciency( 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(
Crea%ng(A(Greener(Energy(Future(For(the(Commonwealth(

Summary)of)MA)Renewable)Energy) PorRolio)Standard)(RPS))Programs)
RPS Class Sub Class Technology Wind, LFG, Biomass, Solar, Small Hydro, AD, etc. Solar Carve-Out Solar PV; 6 MW or less, in MA same as Class I Waste to Energy Plants, in MA CHP in MA, flywheels, storage, etc. Minimum Standard 7% in 2012, increases 1%/ year set by formula to grow installed capacity to 400 MW 3.6%, stays constant 3.5%, stays constant 2.5% in 2012; increases to 5% in 2020 2012 ACP Rate, $/MWh $64.02; increases with CPI $550; reduced annually according to 10year schedule $26.28; increases with CPI $10.51; increases with CPI $21.02; increases with CPI

Class I

Renewable Class II Waste Energy

APS

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

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(oor(price(

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

! Program(Cap(of(400(MW(
Enables(sucient(market(growth(opportunity((exceeds(Governors(goal(of(250(MW(by(2017)(

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

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

Minimum)Standard)Adjustment )
)Compliance)Year)) 2010) 2011) 2012) 2013) Compliance)ObligaLon) Minimum)Standard) Equivalent)FullDYear)Solar) (MWh)) Percentage) Capacity)(MW))) 34,164) 78,577) 81,559) 135,495) 0.0679%) 0.1627%) 0.1630%) 0.2744%) 30) 69) 72) 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(

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

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(oered(to(bidders(for(a(xed(price(of($300/MWh( before(being(assessed(a($15/MWh(aucGon(fee(by(DOER.(( Bidders(bid(on(volume(willing(to(buy(at(the(xed(price( SREC(owners(will(be(paid($285/MWh(for(each(SREC(sold( through(the(AucGon(
7

(((

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

Current)SREC)Program)StaLsLcs))3/15/13 )
Over(5,400(applicaGons( (( received( ApplicaLons) Over(4,900(qualied(units( Received) ) Nearly(215(MW(qualied( Nearly(200(MW(of(qualied( ApplicaLons) under)Review) projects(installed( ) 2,741(SRECs(created(in( ApplicaLons) Qualied) 2010( ) 26,598(SRECs(created(in( Qualied)but) 2011( InstallaLon) Incomplete) More(than(115,000(SRECs( Qualied)and) expected(to(be(created(in( Installed) 2012(
Number)of) Systems) 5,700) ) 494) ) 4,963) ) 20) ) 4,943) ) Capacity)) (MW)) 292.7) ) 79.1) ) 214.6) ) 17.4) ) 197.2) )

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

Current)SREC)Program)StaLsLcs))3/15/13 ) AcLvity)by)System)Size )
#)of)ApplicaLons)
221) 132) 572) 25.4) 18.1)

#)of)MW)

<(10(kW(
48.8) 200.3)

10g100(kW( 100g500(kW( >(500(kW(

4,532)

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

BUILDING)ON)SUCCESS )

) ) ) ) ) )

10

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

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(
Example Calculation CY 2013 Current Formula Proposed Formula

135,495 MWh Compliance Obligation

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

11

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(

0.2744% Minimum Standard

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

0.3833%

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

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

PostD400)MW)Policy)Development )
DOER(began(discussions(on(development(of(a(postg400(MW( solar(policy(in(March( PresentaGon(was(given(to(stakeholders(on(the(dierent( 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(
12

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

) ) ) ) ) )

SUPPORTING)CAST )

13

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

Ownership)Models )
Power(Purchase( Agreement((PPA)( Net(Metering(Credit( Purchase(Agreement( (CPA)( Outright(purchase( Land(lease(

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

Green)CommuniLes)DesignaLon )
110(ciGes(and(towns( designated(Green( CommuniGes( More(than($24(million( invested(to(implement( energy(eciency(and( renewable( technologies( Total(reducGon(of( 1,809,059(MMBTUs( commiwed,(equivalent( to(the(annual(energy( consumpGon(of( approximately(13,600(( Massachusews( households((

15

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

Helpful)PublicaLons )
( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (((((((((((PV(Guide(for(projects(on(landlls( ( (g(Available(IncenGves( ( (g(Permivng(( ( (g(Development(models( ( (( ((((((((((Q&A(on(Ground((Mounted(Systems ( (g(Health(topics( (( ( (g(Decommissioning(

16

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

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

Deploying(a(coordinated(educaGon( (markeGng(and(outreach(eort(( ! Oering(a(group(purchasing(model(( ! Providing(increased(savings(as(more(people(in(a(community(go(solar(

! !

2011(pilot(program(results(in(four(selected(communiGes:(

2012(program(results(in(17(selected(communiGes:(
!

164(contracted(projects(represenGng(over(800(kW(of(capacity( Projects(installed(at(signicantly(less($/waw(cost(than(statewide(average( during(the(same(period( 748(contracted(projects(represenGng(over(4.8(MW(of(capacity(

10(communiGes(have(been(selected(to(parGcipate(in(the( 2013(program(
17

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

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(nancial(insGtuGons( Products:(
! ! ! ! !
18

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(states(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(

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

Monthly)Web)Updates )

19

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

) ) ) ) RESULTS )

20

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

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

(((

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

Average)$/Wa()Installed)Costs)(2010D2013) )
$10.00( $9.00( $8.00( $7.00(

$/Wa()Cost)

$6.00( $5.00( $4.00( $3.00( $2.00( $1.00( $0.00( 1/1/2010( 7/20/2010( 2/5/2011( 8/24/2011( 3/11/2012( 9/27/2012( 4/15/2013(

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

InterconnecLon)Date)
Crea%ng(A(Greener(Energy(Future(For(the(Commonwealth(

Installed)Solar)Capacity)in)Massachuse(s)
(4/1/13))
250.00(

Annual(Installed(Capacity((MW)(

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

200.00(

150.00(

100.00( 135.80) 50.00( 0.04) 2002( 0.29) 2003( 0.59) 2004( 0.81) 2005( 1.84) 2006( 1.64) 2007( 3.63) 2008( 9.64) 2009( 22.95) 2010( 42.51) 2011( 2012( 23.61) 2013(

0.00(

23

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

24

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

Thank)you! )
( DOER(RPS(Website:((www.mass.gov/energy/rps( ( RPS(Contact:(DOER.RPS@state.ma.us( ( DOER(Solar(Website:(www.mass.gov/energy/solar( ( SREC(Contact:(DOER.SREC@state.ma.us( ( ( ( (
25

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

U.S.$Solar$Market$Insight$ 2012$Year7In7Review$ SEIA$and$GTM$Research$

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

"2012"SEIA"

"2012"SEIA"

Solar"Con;nues"to"Boom@"3,313$MW$Installed"in"2012"
Record"Q4"with"1,300"MW"deployed"
New$U.S.$Solar$Electric$InstallaNons$$
3500"

3000" Installed$Capacity$(MW)$

2500"

2000"

1500"

1000"

500"

0" 2006$ 2007$ 2008$ Annual" 2009$ Q1" Q2" Q3" 2010$ Q4" 2011$ 2012$

"2012"SEIA"

Record"Quarter"for"U;lity"and"Residen;al" Markets"
1000" 900" 800"

874$MW$

Installed$Capacity$(MW)$

700" 600" 500" 400" 300" 200" 100" 0"

282$MW$ 144$MW$

ResidenNal$
Q1"2010" Q2"2010" Q3"2010" Q4"2010" Q1"2011"

Commercial$
Q2"2011" Q3"2011" Q4"2011" Q1"2012" Q2"2012"

UNlity$
Q3"2012" Q4"2012"

"2012"SEIA"

Solar"More"Aordable"Than"Ever"
Average"system"prices"declined$27%"over"the"past"year"
Blended$Average$System$Prices$
"$12.00""

"$10.00"" Blended$Average$System$Price$($/W)$

"$8.00""

"$6.00""

"$4.00""

"$2.00""

"$@"""" 1998$ 1999$ 2000$ 2001$ 2002$ 2003$ 2004$ 2005$ 2006$ 2007$ 2008$ 2009$ 2010$ 2011$ 2012$ LBNL""Tracking"the"Sun"IV"" SEIA/GTM"Research"

"2012"SEIA"

State"2012"Performance""
11"states"installed"50$ MW$or"more"in"2012" The"Massachuse3s" market"more"than" quadrupled"in"new" PV"capacity"from" 2011"to"2012" Californias" residen;al"and" commercial"markets" led"the"na;on" Hawaiis"market" grew"169%"in"2012" over"2011" "
1.$California$ 2.$Arizona$ 3.$New$Jersey$ 4.$Nevada$ 5.$North$Carolina$ 6.$MassachuseZs$ 7.$Hawaii$ 8.$Maryland$ 9.$Texas$ 10.$New$York$
0" 200" 400" 600" 800" 1,000" 1,200" 415$MW" 710$MW" 1,033$MW"

198$MW"

132$MW"

Residen;al" Commercial" U;lity"

"2012"SEIA"

Fun"With"Rankings"
CumulaNve$Solar$Electric$ Capacity$
California" Arizona" New"Jersey" Nevada" North"Carolina" Massachuse3s" Hawaii" Maryland" Texas" New"York" "@"""" "198"" "132"" "129"" "109"" "74"" "64"" "61"" "300"" "600"" "415"" "710"" "1,033""

Installed$Solar$Electric$WaZs/ Capita$
Arizona" Nevada" Hawaii" New"Jersey" New"Mexico" California" Colorado" Delaware" Vermont" Massachuse3s" "167"" "146"" "137"" "110"" "91"" "76"" "52"" "48"" "34"" "30"" "@"""" "50"" "100"" "150""

Number$of$Homes$Powered$by$ Installed$Solar$Capacity$
California" New"Jersey" Arizona" Nevada" Colorado" New"Mexico" Hawaii" Massachuse3s" New"York" North"Carolina" "200"" "@"""" "138,951"" "138,731"" "48,641"" "43,049"" "37,463"" "37,269"" "32,075"" "27,035"" "21,729"" "200,000"" "400,000"" "600,000"" "547,085""

"900"" "1,200""

"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" signicant"growth" U;lity"market" projected"to"grow" 31%"in"2013," compared"to"134%" in"2012"
2012$vs.$2013E$PV$InstallaNons$$
"4,500"" "4,000"" "3,500"" "3,000"" "2,500"" "2,000"" "1,500"" "1,000"" "500"" "@""""

Installed$Capacity$(MW)$

2012"

2013E"

"2012"SEIA"

Another"Record"Year"of"Installa;ons"
U.S."PV"market"expected"to"grow"29%"in"2013,"signicantly" higher"than"the"global"rate"
PV$InstallaNon$Forecast$
10000" 9000" 8000" 7000" 6000" 5000" 4000" 3000" 2000" 1000" 0" 2008$ 2009$ 2010$ 2011$ Residen;al" 2012$ Commercial" 2013E$ U;lity" 2014E$ 2015E$ 2016E$

8,943$

6,868$

Installed$Capacity$(MW)$

$5,180$ 4,269$

"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 doesnt 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 states 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.
"2012"SEIA"

Installed"Prices"
Pricing by Market Segment Pricing by Project Size

"2012"SEIA"

Next Steps for Solar in Massachusetts and Beyond

Massachusetts Developer Perspective
Patrick Daly President and CEO pdaly@nexamp.com

April 2013

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

Cumulative MW

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

30000" 25000" 20000" 15000" 10000" 5000" 0" 2008"

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

2009" UJlity"PV"

2010"

2011"

2012"

2013"

2014"

2015"

2016"

Commercial"PV"

ResidenJal"PV"

April"2013"

2"

Solar PV Growth in Massachusetts

200 180 160 140 120

Annual Installed Capacity

Cumulative Installed Capacity

MW

100 80 60 40 20 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Nexamp,"Inc.""

April"2013"

3"

2013 and Beyond

Drivers of Success
Strong, Consistent Policy Support (State and Federal) Smooth Post-400 Transition (Nexamp Supports SEIA Position)

Nexamp,"Inc.""

April"2013"

4"

2013 and Beyond

Access to Capital: Getting it Built
Project Size: Financiers:
Institutions, Funds Scale of Portfolio Size Can Matter Strategics, Financial

Financeability: Finance Fundamentals;

Sponsorship, Project Off-taker, Credit, Other Structure,

Nexamp,"Inc.""

April"2013"

5"

2013 and Beyond Key Issues to be Addressed

Net Metering Credit Expansion (again) Interconnection Queue & Timing Bankability of SRECs

Nexamp,"Inc.""

April"2013"

6"

Nexamp Solar Power. Delivered.

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.

Nexamp,"Inc.""

Nexamp"Solar"|"July"2011"

7"

Thank You

Nexamp,"Inc.""

April"2013"

8"