California’s MASH Low Income Solar PV Incentive Program October 5, 2011 Melanie McCutchan Senior Analyst California Center for Sustainable Energy

2 Presentation Overview About CCSE Multifamily Affordable Solar Housing (MASH) Program Goals Structure Challenges Strategies Lessons Learned

(c)3 Non profit organization Based in San Diego, CA 70 employees

4 CCSE’s Role: Catalyst for Clean Energy Market Transformation Industry Innovators Policy Makers Energy Users

5 Our Core Activities: Incentive Program Administration Energy Efficiency Distributed Energy Resources Clean Transportation Sustainable Energy Education and Outreach Energy Policy and Planning Research and Consulting Services

6 Multifamily Affordable Solar Housing MASH Program

7 Study Available at: programs/multifamily-affordable-solar-housing

8 California Solar Initiative (CSI) $2.1 billion program for 10 years ( ) Financed through rate-payers 10% of funds set aside for low- income ratepayers Solar incentive program in California for IOU customers:  Pacific Gas and Electric  Southern California Edison, and  San Diego Gas & Electric (administered by CCSE)

9 CSI Program Progress

10 CSI Budget

11 MASH Program - Goals 1.Stimulate adoption of solar power in the affordable housing sector 2.Improve energy utilization and overall quality of affordable housing through application of solar and energy efficiency technologies 3.Decrease electricity use and costs without increasing monthly household expenses for affordable housing building occupants 4.Increase awareness and appreciation of the benefits of solar among affordable housing occupants and developers

12 MASH Program- Structure Different incentive for: common area meters$3.30/Watt-AC tenant meters$4.00/Watt-AC Program required at least 20% of incentive dollars to go to offsetting tenant load Solar Costs about $6-8/Watt-AC

13 Virtual Net Metering MASH Program- Structure

14 What is Net Metering? Net metering is a method of “banking” excess electricity credits.

15 How does Net Metering work? -Producing more than consuming (spinning the meter backwards) -Consuming more than producing (spinning the meter forward)

16 Virtual Net Metering

17 Without Virtual Net Metering Source: CA Public Utilities Commission (CPUC)

18 With Virtual Net Metering Source: CA Public Utilities Commission (CPUC)

19 Virtual Net Metering

20 MASH Program - Progress From: MASH July 2011 Semi Annual Progress Report

21 MASH Program - Challenges Capital constraints

22 Solar PV Tax Benefits

23 MASH Participants- System Ownership From: Navigant Consulting’s MASH Program Evaluation

24 MASH Program - Challenges Capital constraints Regulated rents limit cash flows to property owners- utility allowance adjustments difficult for retrofits

25 California Utility Allowance Calculator

26 MASH Program - Challenges Capital constraints Regulated rents limit cash flows to property owners- utility allowance adjustments difficult for retrofits High learning curve for affordable housing property owners and lenders

27 MASH Program - Strategies Large incentives helped bring solar providers to the sector

28 CA Solar PV Incentives Solar Incentives Existing BuildingsNew Construction MASHCSINSHP Common Area Load $1.90/Watt -AC$0.25/Watt -AC$2.97/Watt -AC Tenant Load$2.80/Watt -AC$0.25/Watt -AC$3.15/Watt -AC

29 MASH Program - Strategies Large incentives helped bring solar providers to the sector Marketing, Outreach, and Education Educated contractors and used their marketing channels Reached out to affordable housing sector through conferences/workshops/trade association meetings Gave property owners and contractors tools to educate lenders/ financing partners

31 MASH Program - Strategies Large incentives helped bring solar providers to the sector Marketing, Outreach, and Education Educated contractors and used their marketing channels Reached out to affordable housing sector at conferences/workshops/trade association meetings Gave property owners and contractors tools to educate lenders/ financing partners Program progress has relied on a relatively small core of motivated property owners/managers and solar contractors (early adopters)

32 MASH Program – Lessons Learned Marketing, Outreach, & Education Leverage contractors’ marketing channels for M&O Flatten learning curve for property owners and lenders through targeted educational efforts Don’t “over-incentivize” PV dedicated to common area meters Meaningful energy efficiency requirements can increase participant/utility/societal benefits

33 Considerations for DC Characterize your affordable housing building stock and market as it relates to solar: Electricity usage and costs Roof to living space ratio Metering- Master metered or individual tenant meters Consider a variety of models, community solar, on- site solar Foster cross program collaboration with energy efficiency efforts Evaluate other technologies- SWH, Fuel cells

34 Useful Resources/Links CSI SASH and MASH Market Assessment Report Solar PV Retrofits in Multifamily Affordable Housing Impacts of Virtual Net Metering and MASH Incentives on Project Economics Upper Right Hand Corner of Site CCSE MASH Program Workshops

35 Thank you for your attention Feel free to contact me: Melanie McCutchan