PG&E to fund $10.3 million in new multifamily rooftop solar projects

Pacific Gas & Energy

Pacific Gas and Electric Company is making $10.3 million available for the Multifamily Affordable Solar Housing (MASH) Program, which offers rebates for affordable solar energy to families in disadvantaged communities across Northern and Central California. Supported by the MASH program, solar energy can lower monthly energy costs for tenants, improve the quality of low-income multifamily housing and drive more clean energy in the state.

Through the MASH program, PG&E offsets the costs of installing new solar energy systems on multifamily affordable housing buildings, providing clean energy for tenants as well as in common areas like hallways, stairwells and laundry rooms. On average, the program financially supports about 40 percent of the solar system equipment and installation for an apartment building.

In addition to expanding solar energy in disadvantaged communities, the MASH program also increases job training in the clean energy industry by requiring at least one trainee work on each project.

Since it started in 2008, the program has:

• Directly benefitted more than 3,600 families across Northern and Central California
• Provided $33 million in funding for rooftop solar on multifamily buildings like apartments and condos
• Supplied about 15 megawatts of solar energy, equivalent to powering more than 6,000 homes

How the program works

Typically, solar contractors apply for the MASH program on behalf of property owners of multifamily developments in disadvantaged communities. After the solar system is installed, the MASH program provides financial rebates based on the size of the system and how much of the solar energy is allocated to tenants. The benefits of solar can be split among the tenants and common areas, with residents seeing lower monthly bills as they use solar for electricity during the day.

Any building with customers participating in the MASH program are required to go through an energy efficiency audit to ensure their facility is energy efficient before going solar, which can save money in upfront costs by allowing for smaller solar systems. Additionally, tenants are informed of energy efficiency programs they may be eligible for, such as PG&E’s Energy Savings Assistance Program that offers free energy-saving improvements for customers on PG&E’s California Alternate Rates for Energy (CARE) Program.

The end of net metering? Report sums up movement to new solar compensation plans

— Solar Builder magazine

New platform launches to fund small, medium-sized solar projects

Small and medium-sized commercial projects remain the toughest nut to crack for the solar industry, but a new proprietary online process hopes to change all that. The Braggawatt platform, from Braggawatt Energy, is specifically built to address financing needs of this underserved market segment. By focusing on a partner-driven model, the platform streamlines opportunity evaluation and project conversions through a set of origination, credit review and financing enablers that unlock immediate and long-term energy-cost savings from clean onsite energy solutions for non- and for-profit clients.

Braggawatt

The non-residential solar market has primarily been financed by a few retail electricity providers, independent power producers and niche investors. However, these options don’t address the true potential within the sizeable and established SME market. Braggawatt developed a partner-centric business model that streamlines the project value integration and drives significant scale through financing certainty and optimization of economic value for end-customers, installers and investors alike.

Braggawatt’s free end-to-end online platform is designed for simple navigation, creation of financing proposals and automation of credit reviews and financing contracts to implement reliable onsite energy solutions that uniquely address the needs of SME customers.

“Unlike disjointed software platforms or standalone financing providers, Braggawatt’s platform streamlines the origination, development and financing of distributed energy solutions for SMEs,” said Trey Ramsey, co-founder and CEO of Braggawatt. “We connect the dots between local installers, solar-ready businesses and the financing necessary to make it all happen,” Oleg Popovsky, Braggawatt’s co-founder and CCO added.

With the platform, project integrators can:

• Gain 24/7, autonomous access to a complete suite of actionable financing options.
• Evaluate and optimize installation pricing to improve profitability and end-customers’ value.
• Print unlimited customized financing proposals to uniquely address project needs.
• Achieve financing certainty for incremental, smaller and medium-sized projects.
• Enhance cash flow management with effective milestone payments.
• Rely on fast, hassle-free end-customer credit review and project contracts.
• Use platform free of charge, with no fees or strings attached.

The platform offers investors:

• Strong deal flow from a proven aggregation platform built on industry best-practices.
• Project-specific, risk-adjusted pricing via agile scoring framework.
• Comprehensive, asset-risk specific and transparent credit policy.
• Superior risk-adjusted IRRs.
• Streamlined financing process to fund energy projects at scale.

— Solar Builder magazine

When is the solar-plus-storage era going to get here?

storing solar

You know how when you can see mountains in the distance, and it looks like they are maybe only a mile or two away but really they are 100 miles away? This is our perception of solar-plus-storage — the most visible topic towering over the industry for the last few years, and yet, where are all of the installs?

That was our starting point for this article. Is solar-plus-storage just great in theory and easy to hype, or is it close to catching on? As always, the answer is a firm maybe. Let’s dive into the factors that will get us from here to that proverbial solar-plus-storage mountain on the horizon.

Technology

This is the driver of the whole movement, but the available technology is already pretty great and not a barrier holding back wider adoption. There is now an abundance of system controllers with intelligent software that can handle solar-plus-storage as well as become the central hub for the oncoming smart home revolution, connecting with and distributing energy efficiently among home appliances.

But there’s always room for improvement. The next step could be connecting these decentralized brains. Sonnen’s already done this in Germany with its sonnenCommunity in which systems are networked together to act as a virtual power plant and energy trading community. The company is working on accomplishing the same in the U.S., opening its first net-zero community last year in partnership with Vermont utility Green Mountain Power.

“As discussions between renewable technology companies and local utilities begin, we can expect to see developments in the aggregation model, which allow it to be better integrated into the U.S. utility market,” says Michelle Mapel, director of marketing at sonnen.

Adara Power, as another example, just debuted its second-generation residential ESS Adara Pulse that uses its iC3 Smart Controls technology. Here, Adara has integrated the system controls with its cloud-based data network. This optimizes energy flows to and from the grid to automatically achieve the minimum cost profile. It also decouples the controller from the system so that it can work with an array of inverters and batteries as new technology becomes available while allowing Adara to remotely monitor for system performance, firmware updates, remote troubleshooting, etc.

Sales and Marketing

Storage is still in its early adopter stage, but becoming more mainstream is just a matter of stacking the right pieces together.

“People in the U.S. are much more savvy about the advantages of energy storage technology, especially as time-of-use rates change and evolve. They are very surprised to hear that solar alone won’t operate if the grid fails. That’s a clause buried at the bottom of every solar contract,” says Greg Maguire, co-founder and VP of sales and marketing of Adara Power. “In many cases, we find it’s the solar sales teams that need to understand the benefits of adding energy storage.”

To aid in that effort, Adara introduced a Partner Program for installers and developers in June 2016 that allows solar installers to make an easy transition into the energy storage industry, to better understand the benefits and make an effective sales pitch.

On the Scene: 11 cool things we saw at Intersolar 2017

But each installer can only do so much. Mapel points out that getting to the point where energy storage is part of a new home build requires utilities to play a key role in promoting energy storage to their massive customer base through growing partnerships.

“This will allow the innovative technology to be brought to neighborhoods and populations who may not be as green-conscious,” she says. “Education is key to increasing the implementation of energy storage across the country.”

Costs

In its published report “Installed Cost Benchmarks and Deployment Barriers for Residential Solar Photovoltaics with Energy Storage: Q1 2016,” Researchers from the U.S. Department of Energy (DOE) National Renewable Energy Laboratory (NREL) offered an expanded look at the component- and system-level cost modeling methodology for solar-plus-storage systems, to better understand the cost profile. This first effort showed that declining costs in customer-side energy storage products have opened the door for batteries to improve the value and flexibility of residential PV systems while falling costs in PV technologies have been driving the growing adoption of combined PV and storage solutions. However, gaps remain in developing an in-depth understanding of the costs of combined PV and battery systems and in effectively communicating their value proposition.

The authors separate installed system cost into 13 categories that range from direct hardware costs, such as the PV modules and batteries, to soft costs such as labor, permitting and net profits. The resulting cost for a DC-coupled system that integrates a 5.6-kW PV array and a 3-kW/6-kWh battery is $27,703, which is roughly half hardware costs and half soft costs. An AC-coupled system, which can be more effective in applications that tend to use the energy from the PV array at the time of generation, costs $1,865 more if the battery is installed at the same time as the array. In settings where the battery is retrofitted to an existing AC-coupled system, the cost increased to $32,786. The system design that provides for greater resiliency with a 5-kW/20-kWh battery costs $45,237 when DC-coupled and $47,171 when AC-coupled.

The cost of ESS equipment has come down as battery technology has evolved. Maguire has seen the total cost of ownership drop to less than half, or even one third, of the list price in the right market. Cost comparisons in storage systems can be complex because of the variety available. Some offer only batteries, some offer batteries with an inverter and others focus on one-stop, all-in-one systems.

All-in-one systems tend to have more premium pricing because they include all the needed components to effectively store and manage energy. Other systems on the market require some components to be purchased and installed separately, so while the initial price may look more affordable, once gathering all the other components, the prices are pretty comparable.

Sonnen, recommends comparing systems by the price that will be paid per kWh — multiplying the size of the system (10 kWh, for instance) by the number of cycles its warrantee guarantees, then dividing that value by the cost of the system.

“You should also consider the cost per warrantied battery cycle as this is a true indicator of the cost for using the battery instead of the cost of it just sitting in your home,” Mapel says, which you do by dividing the total cost by the warrantied number of cycles. So, in the case of sonnenBatterie systems, which are warrantied for 10 years or 10,000 cycles, the system usage cost is approximately $1 per cycle depending on system size.

“Price is an important part of the consideration set for end customers, however given the evolving business models for storage it’s important to consider price with a view of the long-term benefits of a system, not just the short-term cost,” Mapel says.

Rates and Incentives

The future of energy storage will be as impactful or as niche as utilities and policymakers allow it to be, either intentionally or unintentionally, just as has been the case in the solar industry.

Incentives certainly help, and there are more of these popping up. California’s SB 700, the Energy Storage Initiative, would create a rebate program for local, customer-sited energy storage. Much like the California Solar Initiative that transformed the solar PV market, this bill would create a declining rebate system to encourage businesses to bring down prices. Maryland is on track to become the first state to offer a tax credit to consumers with home energy storage systems. Massachusetts is investing $10 million to advance the storage segment of the state’s clean energy industry, and New York announced $15.5 million in funding for energy storage projects through 2020.

The Holistic Home: We peer into the future of home energy generation, usage

Incentives aren’t necessarily the path forward though. Ironically, some of the utility-driven energy policies that the solar industry is fighting against, like anti-net metering proposals, improve the case for solar-plus-storage. This has been borne out by examples set in Australia and Germany — two booming solar-plus-storage countries. If you won’t see a return sending your excess energy to the grid, then why not use it strategically to shave peak demand or shift time of use? Maguire believes that solar designers will look at reducing the amount of PV they are estimating for a job and offset it with a corresponding amount of energy storage. This will be the focus for the future for the solar industry in the United States.

“Payback periods and ROI calculations vary by the type of solution chosen, installation specifics and local utility rates and policies,” Maguire says. “System capabilities have significantly increased [e.g. 8.6 kWh to 20 kWh] with the cost per kWh decreasing even more as a customer goes up in energy size. So, we are at this point where it makes more economic sense to install larger energy storage systems, and we can use that premise to really build a solar-plus-storage system that probably requires less solar than a normal full net-metered solution would require. With rate structures changing to time of use rates, customers will definitely see a need to add storage to offset the higher energy costs later in the day.”

Conclusion

“There is opportunity for payback to households, but it will be unique to each individual utility partnership and may take longer to come to fruition under the U.S. system,” Mapel says. “However, once developed, these partnerships will have immense opportunities for end-users. As new business models arise and the market matures, storage adoption will increase, leading to a decrease in system costs and faster payback periods, but for now price and value are important factors in growing the storage market.”

This article appears in the Jul/August 2017 issue of Solar Builder. Get your FREE print or digital subscription here.

— Solar Builder magazine

16 community solar projects across Massachusetts being financed by Key Equipment Finance

solar community program

Key Equipment Finance, one of the nation’s largest bank-held equipment finance companies and an affiliate of KeyCorp, is boosting financing for 16 community solar projects across Massachusetts for Clean Energy Collective (CEC), the nation’s leading community solar solutions provider, and ENGIE, a global energy developer focusing on responsible growth and the challenges of the energy transition to a low-carbon economy.

Using financing from Key Equipment Finance, CEC and ENGIE will own and operate the community solar projects and sell the energy to utilities, creating savings on electric bills for the commercial, municipal, nonprofit and residential customers. The combined CEC and ENGIE projects are adding 22.1 megawatts of clean capacity, which is equivalent to fully offsetting energy for 3,700 residential homes.

“ENGIE and CEC are industry leaders using Key Equipment Finance’s financing solutions to bring a broad expansion of community solar to customers across Massachusetts,” said Luis Gutierrez, vice president of energy finance for Key Equipment Finance’s Energy Solutions team, which provides leases tailored to the energy market. “Customized financing plays a vital role in bringing the benefits of community solar to more customers, which contributes to Key’s broader sustainability goals.”

Community Solar Legal Primer: From project structure to consumer protection

Project details

The 16 community solar projects in Massachusetts are constructed and interconnected and will serve customers in the Eversource and National Grid utility territories. They include solar arrays in the towns of Sutton, Williamsburg, Orange, Goshen, Phillipston, Uxbridge, West Bridgewater, Kingston, North Adams, Clarksburg, and Wareham.

The economic benefits of these projects will be seen for years to come – including decades of property tax payments in each of the project towns, millions of dollars of construction investment through utilizing local electricians and other contracted specialists to maintain the arrays and the long-term savings, which area businesses and residential customers will receive throughout the duration of the community solar program.

“Key Equipment Finance’s partnership has allowed CEC to bring its RooflessSolar™ community solar options to more Massachusetts customers, giving them greater choice in how they meet their power needs,” said Tom Sweeney, CEC’s president of renewables. “Funding community solar projects can be a very complicated and capital-intensive process, and we are proud to be collaborating with Key Equipment Finance and ENGIE to ‘uncomplicate’ clean energy access and sustain the growing energy movement in Massachusetts.”

The 25-year lifespan of the systems will produce solar energy output equivalent to reducing 1 billion pounds of carbon dioxide, planting 1.5 million trees or eliminating 1.1 billion miles of driving.

— Solar Builder magazine

Solar market uncertainty: Funding activity down in Q1 2017

Mercom Capital Group LLC, a global clean energy communications and consulting firm, released its report on funding and merger and acquisition (M&A) activity for the solar sector in the second quarter of 2017 and first half of 2017.

Total corporate funding (including venture capital funding, public market and debt financing) in the first half (1H) of 2017 was slightly up compared to the same period in 2016 with about $4.6 billion raised compared to the $4.5 billion raised in 1H 2016. There were 97 deals in 1H 2017 compared to the 79 deals in 1H 2016.

Solar_Corporate_Funding_1H_2013-1H_2017

Corporate funding in the solar sector fell in Q2 with $1.4 billion raised in 37 deals compared to the $3.2 billion raised in 60 deals in Q1 2017. Year-over-year (YoY) funding in Q2 2017 was about 17 percent lower compared to the $1.7 billion raised in Q2 2016.

“There is a great deal of uncertainty in the solar markets right now, which is reflected in funding activity. However, solar public companies, especially on the U.S. stock markets, have done well this year. A lot is riding on how the Suniva anti-dumping case plays out as it will dictate market dynamics going forward,” commented Raj Prabhu, CEO of Mercom Capital Group.

Global VC funding (venture capital, private equity, and corporate venture capital) for the solar sector in 1H 2017 was 23 percent higher with $713 million compared to the $579 million raised in 1H 2016, largely due to a strong first quarter in 2017.

Solar_VC_Funding_1H_2013-1H_2017

In Q2 2017, VC funding for the solar sector saw a steep decline with $128 million in 23 deals compared to $585 million in 22 deals in Q1 2017. Most of the VC funding in Q2 2017 went to solar downstream companies (72 percent); $92 million was raised in 15 deals.

Top VC deals in 1H 2017 included the $200 million raised by ReNew Power Ventures followed by the $155 million raised by Greenko Energy Holdings, the $125 million secured by Hero Future Energies, Silicon Ranch’s $55 million, $25 million raise by Siva Power and the $25 million raise by Spruce Finance. A total of 55 investors participated in solar funding in 1H 2017.

Solar public market funding was much higher in 1H 2017 compared to the first half of 2016 with $934 million raised compared to $276 million in 1H 2016. Public market financing was slightly up in Q2 2017 with $473 million raised in six deals compared to the $461 million in 13 deals in Q1 2017.

Here was New York’s pro-renewables response after Trump pulled out of Paris Agreement

Announced debt financing in 1H 2017 came to $3 billion compared to $3.7 billion in 1H 2016. In Q2 2017, announced debt financing fell to $798 million in eight deals compared to $2.2 billion in 25 deals in Q1 2017. There was one securitization deal in Q2 2017 by Sunnova which raised $255 million.

Announced large-scale project funding in 1H 2017 came to $7.4 billion in 81 projects. In Q2 2017, announced large-scale project funding came in at $4.8 billion in 48 deals.

Solar_Top_5_Announced_Large-Scale_Projects_Funded_By_Dollar_Amount_in_Q2_2017

Announced residential and commercial solar funds totaled $1.8 billion in 1H 2017 compared to $2.3 billion in the same period of 2016.

In 1H 2017 there were a total of 40 M&A transactions, compared to 30 in the same period of 2016. There were 11 solar M&A transactions in Q2 2017 compared to 29 solar M&A transactions in Q1 2017 and 16 transactions in Q2 2016. Of the 11 total transactions in Q2, eight involved solar downstream companies, two involved PV manufacturers, and one transaction was by a BOS company.

There were 100 large-scale project acquisitions in 1H 2017 totaling 10.6 MW, compared to 90 project acquisitions totaling 4.5 GW in the first half of 2016.

Solar_Top_5_Project_Acquisitions_by_Megawatts_in_Q2_2017(1)

Investment firms and funds were the most active acquirers in 1H 2017, picking up 37 projects totaling 4.2 GW, followed by project developers with 17 transactions for 4.6 GW.
Mercom tracked 206 new large-scale project announcements worldwide in Q2 2017 totaling 11.1 GW.

— Solar Builder magazine