Renewable Energy Incentive Program

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Renewable Energy Incentive Program

• Tony Tewelis
• [phone]

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Agenda

• Why Renewable Energy?
• Incentives
• Residential Technologies
• Non-Residential Technologies
• Project Funding
• 2009 Initiatives
• Summary
• Questions Answers

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Why Renewable Energy?

• Environmental Steward
• Energy Independence
• Positive Image
• Marketing Product Differentiation
• Utility Price Hedge
• Economic
• Regulatory Compliance

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Background

• Renewable Energy Standard Arizona Corporation
  Commission (ACC)
• RES Rules
• Approved August 2007
• By 2025 15 of APS Retail Sales (6,525,000
  MWHs)
• 70 - Renewable Generation (Utility Scale)
• 30 - Distributed (Customer Side of the Meter)
• 50 Residential 50 Non-Residential
• In 2008 1.75 of APS Retail Sales (516,000
  MWHs)
• 90 - Renewable Generation (Utility Scale)
• 10 - Distributed Energy (Customer Side of the
  Meter)
• 50 Residential 50 Non-Residential
• In 2009 2.0 of APS Retail Sales (586,666 MWHs)
• 85 - Renewable Generation (Utility Scale)
• 15 - Distributed Energy (Customer Side of the
  Meter)
• 50 Residential 50 Non-Residential
• APS 2009 Implementation Plan approved December
  2008
• Distributed Energy Administration Plan (5-YR
  Plan)

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Background

• Current Capacity 145 MW
• Enough for more
• than 36,000 homes

Projects Online Capacity Type 1. Aragonne
Mesa 90 MW Wind 2. Salton Sea 10 MW
Geothermal 3. Prescott Airport 3.5 MW
Solar PV 4. STAR Center 2.0 MW Solar
PV (and other AZ sites) 5. Saguaro
1 MW Solar Thermal 6. Snowflake White Mt. 14
MW Biomass Other Multiple Contracts 25 MW
Various Projects Under Development 7. High
Lonesome (2009) 100 MW Wind 8.
Solana (2012) 280 MW Solar Thermal
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7
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6
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More than a 2,000 increase since 2006
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Background

• Solana Project Facts
• Announced on February 21, 2008
• Largest solar plant in the world if operating
  today
• Located 70 miles southwest of Phoenix
• 2,700 parabolic trough collectors covering 3
  square miles
• 280 megawatts - enough for 70,000 homes
• Tentative completion date of 2012
• Abengoa Solar will own and operate
• APS will purchase 100 of the output

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Background
Targets

• Overall RES Target rises from 1.75 of APSs
  retail sales in 2008 to 15 by 2025
• DE Target rises from 10 of RES in 2008 to 30 in
  2012
• DE Target rises from 50,000 MWhs in 2008 to
  nearly 2,000,000 MWhs by 2025

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Background
2009 Year-to-Date DE Results
Non-Residential 44,000,000 kWhs
Residential 44,000,000 kWhs

• Results to date
• Over 2,400 participants in the program.
• Capacity to generate over 8.8 megawatts of
  green electricity.
• Over 2,750,000 kWhs of energy displaced by solar
  water heaters alone.
• Over 21,000,000 in renewable energy incentives
  paid so far.
• Market improvements in 2009
• Federal Investment Tax Credit extended for eight
  years
• Lifting of 2,000 limit of federal tax credit for
  residential customers

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Incentives

• Up-Front Incentive (UFI)
• A one-time incentive paid to a customer upon
  successful completion of all program
  requirements.
• In exchange for this incentive, APS will receive
  title and ownership to all the Renewable Energy
  Credits (RECs) attributed to the operation of the
  customers system.
• All up-front incentives are limited to 50 of the
  project costs and can not exceed a total of
  75,000.
• Incentive amounts are determined by customer rate
  class, technology, and application.
• Not all technologies are eligible for up-front
  incentives.

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Incentives

• Production Based Incentive (PBI)
• PBIs are designed to pay the customer for the
  environmental attributes associated with the
  actual production of its renewable system over
  time instead of an initial, up-front incentive
  payment.
• The structure for incentive payments to the
  customer is up to 20 years or a cap of 60 of the
  Real Project Cost (including acceptable financing
  charges), whichever comes first.
• The Customer is then obligated to provide APS
  with all Renewable Energy Credits (REC) produced
  for 10, 15, or 20 years, depending on the term of
  the agreement.
• Payments are paid quarterly, based on the actual
  production based meter reads.
• Incentive amounts are determined by customer rate
  class, technology, and application.
• Not all technologies are eligible for production
  based incentives.

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Residential Technologies

• Residential Technologies
• Photovoltaic Systems
• Grid-Tied
• Off-Grid
• Solar Water Heating
• Solar Space Heating
• Wind
• Grid-Tied
• Off-Grid
• Geothermal
• Electric
• Thermal

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Residential Technologies

• Photovoltaic Systems
• UFI up to 3/watt Grid-Tied 2/watt Off-Grid
• Solar Water Heating
• UFI up to 0.75/kWh
• Based on SRCC OG-300 first year energy savings
• Solar Space Heating
• UFI Up to 0.75/Kwh
• Based on SSH Calculator
• Wind
• UFI 2.50/watt Grid-Tied 2.00/watt Off-Grid
• Geothermal
• UFI 0.50/watt Electric 1.00/watt Thermal

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Non-Residential Technologies

• Non-Residential Technologies
• Solar
• PV (GT OG)
• Solar Water Heating
• Solar Process/Space Cooling
• Solar Process/Space Heating
• Solar Daylighting
• Wind
• Electric Generation (GTOG)
• Biogas/Biomass
• Electric Generation
• Thermal Cooling
• Thermal Heating
• CHP Electric
• CHP Thermal
• Geothermal
• Electric Generation
• Space/Process Heating

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Non-Residential Technologies
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Non-Residential Technologies

• PV Example
• 20 kWdc System
• Project Cost 140,000
• Installation Facts
• 20 Degrees off of True South
• 25 Tilt Angle
• No Shading
• Annual Production 32,000 kWhs
• APS Rebate
• De-rate Chart 100 of Rebate - 2.50/kWdc
• 20 kWdc x 2.50/kWdc 50,000
• UFI Project Cap 140,000 x 50 70,000
• UFI Incentive Cap 75,000
• APS UFI Rebate 50,000

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Non-Residential Technologies
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Non-Residential Technologies

• PV Example
• 100 kWdc System
• Project Cost 700,000
• Installation Facts
• 20 Degrees off of True South
• 25 Tilt Angle
• No Shading
• Annual Production 160,000 kWhs
• APS Rebate
• 10-Year Agreement _at_ 0.202 /kWh
• Qtrly Prod 40,000 kWhs x 0.202 /kWh 8,080
• Qtrly PBI Payment x 4 times/year x 10 years
  323,200
• PBI Project Cap 700,00 x 60 420,000
• Total APS PBI Rebate 323,200

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Non-Residential Technologies

• Incentive Process
• Submit Reservation Application and/or Agreement
• Receive Reservation Confirmation and/or Agreement
• Submit Interconnection Application
• Receive Preliminary Approval
• Obtain Local Permits
• Proceed with Installation
• Receive AHJ Clearance
• Request APS Inspection
• Submit Proof of Clearance, Acceptance and
  Installation Certification Form, Paid Invoice
• Grid-Tied Applications Only

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Project Funding

• Utility Incentives
• Tax Incentives
• Federal - 30
• State
• 10 - 25,000 / 50,000
• 20 - 1,000
• Leases
• Operating
• Capital
• Power Purchase / Solar Service Agreements
• Loans Secured vs. Unsecured

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2009 Initiatives

• Distributed Energy RFP
• Minimum 1,500 MWHs Target 200,000 MWHs
• 5 30 Year Agreement 1/1/2009 12/31/2013
• Homebuilders Solar Community Program
• Energy Conservation Renewable Technologies
• Incentive, Models, and Co-op Advertising
• Distributed Public Assistance Program
• Low Income, Non-Profit, Government, Schools
• Weatherization Installation 100 200 SHWs
• Qualified Contractors Program
• Solar Production Calculator Rate Optimization
  Tool
• GEOSmart Financing Residential Loan

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Summary

• UFI 50 of Project Cost - 75,000
• PBIs 60 of Total Project Cost Paid Quarterly
• Solar, Wind, Biogas/mass, Geothermal, Hydro,
  ???
• New Initiatives in 2009
• Website www.aps.com/renewables (Solar
  Renewable Rebates)
• Program Coordinators [phone] or
  dg_interconnect_at_aps.com

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Questions Answers

• Thank you for your attendance

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Questions Answers