Ahead of the Curve: Architectural Solar and How to Pay For It - - PowerPoint PPT Presentation
Ahead of the Curve: Architectural Solar and How to Pay For It Presented by: AGENDA Introductions Trends Transforming the Building Industry Innovation Overview: Architectural Solar Innovation Overview: Solar PACE Financing Use Case
Presented by:
Ø Introductions Ø Trends Transforming the Building Industry Ø Innovation Overview: Architectural Solar Ø Innovation Overview: SolarPACE Financing Ø Use Case Ø Take-Aways Ø Q + A
Rob Watson is an international leader in market transformation
for green buildings, known by many as the “founding father of LEED.” Under Rob’s direction, LEED became the largest and fastest-growing international standard by which green buildings are measured. Rob’s inspiring career has seen tenures at the Natural Resource Defense Council.
The ECON Group, one of Rob’s various current organizations, is
a building optimization company with the unique ability to
throughouth the building lifecylce. Their LeenOps platform bridges the gap between building sustainability and the bottom- line.
Rob Watson
CEO & Chief Scientist
Chris Klinga has 10 years of experience as a trained
mechanical engineer and licensed structural engineer, deeply involved with integrating the solar and building industries. Through construction experience, work with Solaria and leadership in the Architectural Solar Association, Chris is a driving force bringing about design-driven solar solutions.
Solaria has developed a technology platform that unlocks the
potential for solar energy allowing it to be ubiquitously accessed through innovative and optimized solar technologies. Solaria is cutting costs, improving efficiencies and pioneering decentralized power generation, enabling the trend toward sustainable building and supporting the architects and developers involved.
Chris Klinga
Senior Project Engineer
Joshua Kagan focuses on cultivating channel partnerships and
working with direct owners of commercial real estate to create accretive market-based solutions that positively impact the planet and unlock value. Prior to joining CleanFund, he ran the Carbon War Room’s global energy efficiency division. Prior to the War Room, he was a Senior Analyst with cleantech VC firm Atlas Capital Investments.
CleanFund is a national leader in Commercial PACE financing,
solving big challenges for the $60 billion solar and energy efficiency market for U.S. commercial buildings. A direct capital provider with 100% focus on Commercial PACE, CleanFund offers project financing solutions to both owners and developers of high-performance buildings.
Joshua Kagan
VP of Business Development
The Problem
LEED was a good start, but the industry is structurally incapable of delivering full sustainability. ◍ Still missing the forest for the trees Buildings still use the most energy of all sectors, though less than 20 years ago, in spite of adding 30% more floor area.
The Solution
Green is the norm in new construction, though existing stock is stubbornly hard to penetrate. Wellness will be a good hook. Multiple innovations in design technology and finance coming together to leverage fractal networks.
Innovations
◍ Design tools finally catching up. ◍ Architectural Solar (BIPV) beginning to take-off. ◍ PACE provides access to better
sustainability vs. expensing it.
Transforming the Market Industry and the Way We Think
◍ Industry needs dramatic consolidation. ◍ Buildings as strategic assets vs. cost centers.
Ø Big Data or Big Garbage? Ø Self-Sufficiency is Growing Ø Building as Branded Service
Inter- and Intra-connection of data-sharing devices is growing wildly, but on a foundation of questionable data. Nonetheless, the network effect will lead to good mix of independence and interdependence. Utilities beware! Emphasis on building services means asset utilization with grow significantly w/opportunity for financial innovation. Good for environment, but new construction will contract— almost exclusively for replacements.
Silicon PV Cells Integrated
Solaria transforms conventional PV cells into
module architecture and manufacturing process
PowerVision™ Transparent architectural glass delivers energy efficiency and high power density. PowerSpandrel™ Architecturally appealing,
leading power density. PowerXT™ High Efficiency solar module with best in class shade tolerance.
PV C overage VLT Module Power (W atts) Module Area (SqFt) Power D ensity (W att/sqft) PowerVision 43% 51% 150 25.0 6.0 PowerS pandrel 100% 0% 350 21.7 16.1 PowerXT 100% 0% 400 22.7 17.6
Rooftop PV Canopies Architectural Structures Window Awnings Rainscreens Balustrades Sloped Glazing Vertical Spandrel Glazing Vertical Vision Glazing
Weather Barrier
Shading Messaging Shading Glare Control Safety Bird -Safe Shading Weather Barrier Sound Barrier Shading Applications Multi-Functional Advantage Solaria Advantage Appearance
Bifacial Capability
Efficiency Bird Safe
Rooftop PV Canopies
Awnings Rainscreens Balustrades Sloped Glazing Spandrel Glass Vision Glass Multi-Functional Value Most Integrated High Market Barriers Least Integrated Low Market Barriers Applications
2009 2010 2011 2012 2013 2014 2015 2016 * Commercial $64.62 $59.93 $40.96 $35.75 $36.62 $31.00 $30.87 $28.70 Residential $87.23 $76.48 $53.59 $50.39 $45.57 $43.63 $42.46 $40.92 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00
Cost Per SQFT
NREL PV Installed Cost Per Sqft (Commercial 200 kW)
Areas based on module area and average yearly efficiencies outlined in NREL Q1 2016 Benchmark Report (Fu et al. 2016) All figures 2009-2015 Ref. Fu et al. 2016 *2016 data based on .49 cent module price in SEIA Solar Market Insight Report 2016 Q4 and NREL 2015 BOS Data.
Traditional Solar Installation Cost (Fu et al. 2016) 5 MW Utility PV = $1.82 100 kW Commercial PV = $2.29/W Residential PV = $2.93/W
* Includes typical PV labor without module & racking install (~$0.05/watt or 70% of install labor) ** Cell, encapsulant and additional glass costs.
$80-120 / sqft Typical - $80 / sqft Assumed
There is precedence for 100% but it will vary based on the installation. 50% Assumed in analysis.
100% = $34-$51/sqft 50% = $17-$26/sqft
◍ Architectural Solar enables C-PACE to encompass more of a building’s cost ◍ C-PACE enables financing for integrated applications otherwise hard to finance
CleanFund is a nationwide financing platform that solves big challenges for the $60 billion energy efficiency and solar market for U.S. commercial properties. We make renewable energy, water conservation, energy efficiency, seismic strengthening and other building improvements easy and affordable for commercial property owners. Our products leverage a new financial technology – property assessed clean energy (PACE) – that is based upon centuries-old land-secured financing. Payments are billed and collected in the form of property taxes.
◍ PACE exists because lowering the carbon footprint of the built environment is in the public interest – just like other bond financings that show up on property tax bills (schools, roads, fire stations). ◍ The power of PACE is based upon two simple provisions:
◍ PACE has achieved strong growth nationwide:
Active PACE Programs PACE Legislation Passed
Source: PACENation
Upfront project cost/lack of funds 100% third party financed Tendency that only “low-hanging fruit” projects get done Inability or unwillingness to take on additional debt Split incentives Owner might be selling building Up to 30 year financing enables deep retrofits to be accretive Property assessment treated as an
Tenants share cost/savings in NNN leases Transferable to next owner
Barrier Solution
Most Soft Costs Energy Efficiency
Air Sealing & Ventilation Envelope EV Charging Insulation Windows Elevator Modernization HVAC Systems Refrigeration Building Controls Lighting Compressed Air Water Conservation Renewable Energy Low Flow Fixtures Grey/Black Water Rainwater Harvesting Irrigation & Controls Solar Wind Fuel Cell Cogeneration Seismic (CA) Permits Architectural, Engineering Plans Measurement & Verification Seismic strengthening improvements may qualify
Compared to other financing
both the highest ongoing Net Present Value and better non- discounted cash flows for 20 year term.
Vision Areas Spandrel Areas West Elevation East Elevation South Elevation
Power (kW) Area (sqft) Weighted Average EUI (kWh/sqft/yr) Production Savings (kWh/yr) Performance Savings (kWh/yr) Total Savings (kWh/yr) PowerVision 25.6 4,278.0 5.6 24,057 8,377 32,434 PowerSpandrel - Spandrel Area 277.5 17,224.0 13.3 229,693 229,693 303.1 21,502.0 11.8 253,750 8,377 262,126 Total
Rooftop Potential ~200 kW ~292,000 kWh/yr
SYSTEM DETAILS Nameplate capacity (kW) 303 Year 1 net energy (kWh/year) 253,750 Building Performance Savings (kWh/yr) 8,377 System Area 21,502 System Power Density (watts/sqft) 14.09 System EUI (kWh/sqft) 11.80 Frit Replacement Area 4,278.00 Non Frit Replacement Area 17,224.00 Frit Replacement % 25% SYSTEM COST ASSUMPTIONS Utility Rate 0.135 $ Utility Rate Increase 3% Incremental Installation Baseline Cost/Watt 1.17 $ Incremental Module Cost/sqft 40.00 $ Frit Offset Cost per sqft 10 $ Baseline Curtainwall Cost per SQFT 80 $ O & M Cost Per/kW 7 $ FRIT OFFSET DETAIL FINANCING PARAMETERS Debt fraction (% of installed cost) 100.00 Financing term (years) 30 Financing rate (%/year) 6.00 ANALYSIS PARAMETERS Analysis period (years) 30 Inflation rate (%/year) 2.50% Real discount rate (%/year) 7.00% TAX AND INSURANCE RATES Federal income tax rate 35% State income tax rate 8.84% Sales tax 7.75% Insurance rate (%/year) 0.5% Property Tax (%/year) Assessed percentage 0% Annual decline (%/year) 0% Property tax rate 1.25% ITC % 30% ITC Curtainwall Impact 50% Bonus Depreciation 0%
Total Per Watt Per Sqft Baseline Installation Cost $354,510 $1.17 $16.49 Incremental Module Cost $860,080 $2.84 $40.00 Frit Cost Deduction
Total Incremental Installed Cost $1,171,810 $3.87 $54.50 Total Incremental Installed Cost $1,171,810 $3.87 $54.50 Baseline Curtainwall Cost $1,720,160 $5.68 $80.00 Total Install Cost $2,891,970 $11.40 $134.50 ITC Curtainwall Tax Basis $860,080 $2.84 $40.00 ITC Solar Tax Basis $1,171,810 $3.87 $54.50 Total ITC Tax Basis $2,031,890 $6.71 $94.50 ITC Value, End of Year 1 (30%) $609,567 $2.01 $28.35 Depreciation Basis Percentage 85% Depreciation Basis (Pre Bonus Depreciation) $1,727,106.50 $5.70 $80.32 Depreciation Value, End of Year 1 $140,692 $0.46 $6.54 Depreciation Value, End of Year 6 $691,271 $2.28 $32.15
Assumes 50% of Curtainwall Cost ITC + Depreciation > $54.50
Total Per Watt Per Sqft
Total Incremental Installed Cost $1,171,810 $3.87 $54.50 Tax Deductable Operating Expenses $7,980 $0.03 $0.37 kWh Savings (After Taxes)
ITC Value, End of Year 1 (30%)
Depreciation Value, End of Year 1
End of Year 1 Cost $408,547 $1.35 $19.00
Net Benefit Over Next 10 Years: $892,420 Term: 30 Years First Payment Due: Dec. 2018 First Payment Amount: $48,960 Total Fixed Annual Payment: $97,912
Ø Architectural Solar bridges the gap between energy efficiency and net zero buildings. Ø Financial innovations, such as C-PACE will increasingly support owners and developers seeking to build and
Ø Convergence of improved design tools, technology improvements and financial instruments that properly value and finance sustainability will lead to an explosion of net zero buildings.
Joshua Kagan
VP of Business Development joshua.kagan@cleanfund.com CleanFund
Chris Klinga
Senior Project Engineer cklinga@solaria.com Solaria
Rob Watson
CEO & Chief Scientist rwatson@econ.us.com ECON Group For slides, recording and more on the Solaria/CleanFund partnership visit: http://go.cleanfund.com/Solaria