Overview and Market Projections Jennifer Szaro, Senior Director - - PowerPoint PPT Presentation

Community Solar Overview and Market Projections

Jennifer Szaro, Senior Director SEPA

About SEPA

SEPA’s mission is to facilitate the utility industry’s smart transition to a clean energy future through education, research, and collaboration.

Growth of Community Solar Programs

Status of Community Solar Programs

Utility-Managed Community Solar Programs Third-party Managed Community Solar Programs

Untapped Market Today

Source: SEPA Analysis

Rooftop Solar Community Solar Utility-Scale Solar

Cumulative Installed US Capacity

(2014 MW)

• Median program is 102.5 kW
• 75% of programs leverage systems less than 800 kW
• Largest programs are around 20 MW (TEP, SRP, Xcel, RMP)

Understanding Customer Perspectives on Community Solar

Jennifer Szaro Senior Director, SEPA

Methodology

Sample of 2,001 regionally diverse U.S. residential utility customers from a national online consumer panel A mix of multiple choice, fixed response, Likert scale and discrete choice (conjoint) analysis questions Stratified random sample included a mix of genders, ages, home

• wnership,

ethnicities/races, education, incomes and geography Margin of error +/-2.2% at a 95% confidence level

The Current Residential Solar Landscape

Consideration by Type Consideration Interest

59% are interested in getting solar power for their home 34% are seriously considering renewable energy

• ptions

16% are currently considering rooftop solar 14% are currently considering community solar

But DO customers UNDERSTAND community solar?

14% 47%

Current consideration Interest after education

Residential Community Solar Landscape

19% 52%

Current consideration Interest after education

Commercial Community Solar Landscape

How Do Customers Respond to Different Program Designs?

Residential Customer Research

Panel lease

• Pay up front fee to lease a certain number of

panels

• Receive bill credit per panel per year based on

production of the panel

• Time-certain contract

Solar le lease target

• Younger, affluent couples (25-54)
• Suburban
• White collar
• More likely to live in the NE

Care about:

• Saving money
• The environment
• Being good role models for their

kids

• Time management

Why a Community Solar lease?

• Like having an ownership stake
• In-community location is more

important to them

• Worried about inconsistent

production of a rooftop system

Low-end market potential for panel lease model, or roughly 2.5% of households

2,800,000

Messaging

Community solar is good for the planet!

• Promote environmental benefits,

including curbing climate change. Take your kids to see your solar array!

• Talk about future

generations/being a good role model. Solar without the hassle!

• Note key community solar

strengths: lower risk of inconsistent output or maintenance headaches.

An Effective Lease Design

20+ year term $595+ per panel No on-bill financing Less ownership – customer doesn’t “own” the panels or power the panels produce Location based on efficiency/lowest cost to utility (often distant) Most capacity currently generated by non- utility-owned arrays. Often no real-time access to production information 5-10 year term $395/panel On bill financing Customer “owns” the power the panels produce (and even better) “owns” the panels Location in the community or within 15 minutes driving Utility sponsor or solar co./utility partnership Real-time panel production info via web portal or smartphone app.

High Probability of Success Low Probability of Success

Block Subscription Offering

• Subscribe to blocks of power produced by a

solar array at a slight price premium per kWh ($.01-.03)

• That rate is locked in for the duration of the

contract, even if the utility’s rates go up

Low-end market potential for block subscription rate model, or roughly 3% of households

3,700,000

Blo lock Subscription Target

• Females, 45+
• Suburban
• Well educated and middle class
• No kids at home
• More likely to live in the South

Care about:

• The environment
• Locking in lower energy costs
• Being responsible

Why a Community Solar Subscription?

• Haven’t really thought much about solar

before

• Utility sponsorship is more important to

them

• Adverse to ongoing maintenance required

for a rooftop system

Messaging

Community solar is good for the planet!

• Though they haven’t considered solar viable for

themselves, they’re concerned re climate change Community solar is affordable!

• Point to the economic benefit of locking in what will likely

be a lower-than-average rate over a long term. You can be part of the solution!

• Help them feel empowered

An Effective Subscription Design

2 year term w/option to renew $100 non-refundable deposit or “sign-up fee” $.03-$.05 premium kWh rate Most capacity currently generated by non-utility-owned arrays. Location based on efficiency/lowest cost to utility (often distant) No real-time access to production information 20+ year term No sign-up fee or $50 refundable deposit (after 2-5 year participation) $.01-$.02 premium kWh rate Utility sponsor or solar co./utility partnership Location within community Real-time panel production info via web portal or smartphone app

High Probability of Success Low Probability of Success

Overall, the best package from a customer perspective:

• “Community Shared Solar” = best description
• If leasing:
• Shorter (5-10 year) terms; < $495/panel
• If subscribing :
• Longer (up to 20 year) subscription rate term is OK; premium kWh

subscription rate won’t fly above $.01/kWh

• No sign-up fee
• Non-refundable deposits don’t fly
• Utility involvement in community solar projects preferred
• Siting in their community or within a 15 minute driving

distance preferred

• Need access to panel power production info.

Community Solar Program Participant Feedback Survey

Education is Critical Program Demographics

Subscribers who felt program was clearly explained Subscribers who felt program was not clearly explained

Key takeaways

Build your CS arrays within a 15 minute drive of most likely subscribers Offer a robust portfolio of options – different customer segments need different solutions Rethink price points and terms, using the guidance noted here to craft the offers with the highest likelihood of success. Education is key to community solar recruitment Consider the customer journey when designing a program – are you making it easy or difficult?

Commercial Customer Research

Low-end market potential for panel lease model, or roughly 4% of American businesses

308,000

• Younger executives (CEO/CFO/COO; 18-44 years
• ld)
• Small to mid-size companies (revenue less than

$10 million – majority have fewer than 10 employees)

• Own their building and operate in a single

location

• More likely than average to be located in the

Midwest

• More likely than average to be in business

services. Cares about:

• Being a good corporate citizen
• Reducing energy costs

Why a Community Solar lease?

• Less risk and better monthly cost benefits
• Likes the idea of sponsorship by a reputable

solar company, working in partnership with the utility

Panel Lease Target

Messaging

Be a good corporate citizen!

• They feel a strong sense of responsibility and report already

undertaking at least 5 sustainability initiatives Community solar is good for the bottom line!

• If they can’t make the economic case for it they won’t do it.

They’re also not willing to pay extra for visibility of the panels

Low-end market potential for subscription rate model, or roughly 2% of American businesses

132,000

• Older owners/partners(at least 45 years
• ld)
• Small companies (1-9 employees; revenue

less than $5 million)

• Lease their buildings
• Located in the Midwest or Northeast
• More likely than average to be in business

services, manufacturing or technology. Cares about:

• Reducing energy costs
• Control and independence from their

electric utility Why a Community Solar lease?

• No maintenance costs
• Sponsorship by local utility

Block Subscription Target

Messaging

Get control over your energy costs!

• The bottom line is their top driver…and they are control-
• riented

All the advantages of solar without messing with your rooftop!

• They’re wary of the impact of rooftop solar on their

property values and resale value. And many don’t own their buildings Be recognized for your contribution

• This target does want the array to be local and visible…and

they want credit for their participation

Businesses are participating in/considering a wide variety of renewable options

• 8% say they’re buying RECS and 23% are currently

considering them.

• 7% have some other renewable generation solution

(e.g., geothermal) and 20% are considering them.

• 6% are participating in a green power plan and 20% are

considering one.

• And many (18%) participate in more than one option

and 42% are currently considering more than one

• ption.

RECOMMENDATION: Offer a diverse portfolio of renewable energy options.

The market for business community solar is significant, but smaller than rooftop/onsite.

• 27% are currently considering rooftop/onsite.
• After exposure to rooftop cost and lease/financing examples

and community solar models, interest in rooftop increased.

• Given a final choice, most (50%) will be more likely to

consider rooftop (either leased, purchase, or financed), compared to 39% who will be more likely to chose a community solar option. RECOMMENDATION Unlike consumers, community solar isn’t seen as an acceptable alternative to those who are interested in their

• wn system, but CS does offer a viable option to a

different market – particularly smaller companies and those who lease, rather than own, their facilities. So offer both alternatives.

Is Your Program Contagious?

More Community Solar Resources

• 1. Select a community solar program design from

your table.

• 2. Take 7 minutes to map out the customer’s journey

to participate in the program.

• 3. Each table will report out what they learned about

the customer’s experience.

1. How long was the process? 2. Were there any potential hurdles? If so, what could be done to address them?

Table Exercise