Solar Energy in Washington State and Executive Order 14-04 All Stakeholder Workgroup Jake Fey Director, WSU Energy Program December 8, 2014.

Solar Energy in Washington State and Executive Order 14-04

All Stakeholder Workgroup

Jake FeyDirector, WSU Energy ProgramDecember 8, 2014

Today’s Stakeholder Meeting• 1:00 pm – Welcome and Introductions• 1:10 pm – Review of Past Meetings and Timeline• 1:15 pm – Review of Proposed Program Design

and Administration Elements• 1:45 pm – Presentation of Proposed Changes

– Program Size and Adjustment Mechanisms– Community Solar

•

• 2:30 pm – Further Discussion of Utility Proposal for Net-Metering Flexibility regarding Rate Design

• 3:00 pm - Adjourn

2014 Stakeholder Process Timeline

June 30

1st All Stakeholder Meeting

Aug 14

1st Framework Workgroup Meeting

October 8

1st Program Design Workgroup Meeting

Oct 13

2nd Program Design and 1st Utility -Centered Workgroup Meetings

Oct 3

2nd All-Stakeholder Meeting

Oct 29

3rd Program Designand 2nd Utility-Centered Meetings

Nov 12

4th Program Design and Third Utility-Centered Meetings

Nov 24

5th Program Design and 4th Utility-Centered Meetings

Aug 26

2nd Framework Workgroup Meeting

Dec 8

3rd All Stakeholder Meeting

Major Program Elements

• Implement an incentive structure that pays participating customers based on kWh production for a fixed 12-year period from installation.

• Implement a total program cap of 150 MW of capacity over 8 years, allowing for growth in all sectors of the solar marketplace while limiting total budgetary impact. Also consider a maximum biennial allocation to mitigate impact.

• Remove the $5,000 cap per participant to allow greater commercial ownership.

• Remove the WA State and Local Sales Tax exemptions for solar equipment and labor.

• Remove the annual utility PUT credit limit, allowing solar development to continue to occur in the service areas of utilities with high customer demand.

Defining Sectors for Incentive Rates

Four Sectors:

• Defined by system size and ownership structure

Sector System Size Ownership Structure Initial Rate

Residential Scale Less than 10 kW Customer-Generator $0.14/ kWh

Commercial Scale 10 kW – 500 kW Customer-Generator $0.10/ kWh

Third-Party Owned Solar 0kW – 500kW Commercial Entity other than Customer-Generator

$0.10/ kWh

Community Solar 0kw – 500 kW Structured to involve broad community investment by utility customers, Organized by Utility

$0.14/ kWh

(Note: Utilities reserve the right to determine if systems larger than 100 kW are eligible for net metering.)

Performance- Based Incentive Model Block Rates - 12 Year Incentive Term

Target Rates with Annual Review of Future Block Rates

Community Solar Program Qualifications

Sector: Community SolarSubject Objective Solution

Entities Eligible as Sponsor

Provide opportunity for range of utility customers with interest in participation

Eligible Organizer- UtilityOwnership structure to be determined by utility

Rate ReceivedProvide reasonable incentives with similar value as residential ownership

First Block Rate of $0.24 / Kwh for In-State Modules, $0.14 / kWh for Standard systems

Locations Eligible for Site Hosting of Community Solar Installation

Lower costs and increase opportunity for participation

- All Location restriction removed- Direct Utilities to seek partnership opportunities with low-income housing providers

Participation Levels

Promote broad participation, allowing for site hosts to benefit as well in program

- Minimum Participation Number (TBD)- Maximum percentage by any single

participant (TBD)

System Size

Allow for larger system size, and promote greater customer participation in Community Solar Model

Maximum system size 500 kW

Performance- Based Incentive Model Block Rates -12 Year Incentive Term

Target Rates with Annual Review of Future Block Rates

Third-Party Ownership Qualifications

Sector: Third Party Ownership

Subject Objective Solution

Entities Eligible

Provide opportunity for new participants in solar services market

- Lease or Power Purchase Agreement Third-Party providers

- Commercial or Residential customers- Utility-Owned, Customer-Sited systems

Rate Received

Provide reasonable incentives for customers who choose TPO entity structure

First Block Rate of $0.10 / Kwh

AssignabilityLimit administrative burden and direct incentives to customers

Incentive is paid to customer-generator, but can be transferred in contract between TPO and Customer

Regulation

Provide for Market Oversight and Consumer Protection

Clarify that TPO must register with State, regulated by UTC and AG for consumer protection, but are exempt from economic regulation

Administration : Major Roles in Incentive

Application Intake and Qualification- Develop Application Forms

-Receive Applications from Customers/Installers-Qualify Systems’ Incentive Levels and communicate with Utility and Customer

Oversight and Incentive Level Steps- Implement Tracking Database for Applications and Market Activity

- Qualify Manufacturers for Made-In WA Incentives- Communicate with Solar Industry about Incentive Level Steps

- Provide Regular Reporting on Program

Incentive Payment- Collect Annual Generation Information

-Provide Payment to Customer- Track payment information, report to DoR, and collect PUT credit

Tax – Related Issues- Receive PUT Credit Information and PBI Payment amounts from Utilities

- Account for Revenue Associated with Sales Tax and Provide Tax Credit and Budget Impact Reporting

Prog

ram

Adm

inist

rato

rU

tility

DoR

Contacts and Additional Information• Project website :

www.energy.wsu.edu/RenewableEnergy/WashingtonSolarStakeholderProcess.aspx

• Jake Fey – [email protected]

• Questions about Stakeholder Workgroups:

Jaimes Valdez – [email protected]