Vermont Solar Development Pathways Stakeholder Kickoff Meeting March 6, 2014 Montpelier, VT

Agenda 1.Welcome, Introductions, Meeting Purpose,9:00 – 9:15 & Stakeholder Roles Christine Donovan, Moderator 2. Project Overview & Objectives9:15 – 10:00 David Hill, Principal Investigator Damon Lane, Project Manager Break10:00 – 10:20 4.Project Essentials10:20 – 11:45 Angela Crooks, US Department of Energy (by phone) Debra Perry, Institute for Sustainable Communities Suzanne Elowson, Ethan Goldman, Nick Lange, Carl Linvill, Peter Schneider, Focus Area Leads 5.Looking Forward11:45 – noo n David Hill, Principal Investigator

Meeting Purpose Introduce key Project Team members Orient Stakeholders to the project Through discussion and dialogue, obtain stakeholder input on key areas of focus for the project Explain next steps and the process from here

The Role of Stakeholders Provide input on the strategic direction of the project Offer subject matter expertise for key areas of focus Help inform project findings and recommendations Review and comment on draft deliverables

Vermont Solar Development Pathways Overview and Objectives

Project Overview Solar and Distributed Generation as Key Elements in Meeting Vermont’s Comprehensive Energy Plan Goals Project Objectives Convene and engage stakeholders to inform analytically based discussions and report on how Vermont moves from a developed to advanced saturation solar market in the coming decade What to be thinking about as we move along Key opportunities and or barriers What focus area(s) are of particular interest

Vermont Solar Development Pathways Vermont Energy Investment Corporation (VEIC) Competitive solicitation Cooperative Agreement with Department of Energy 3 years with cost share requirements Public Service Department (PSD) Subrecipient, advising on energy scenario modeling related to CEP and other policy initiatives Regulatory Assistance Project (RAP) Subrecipient, leading topic area and analysis of net metering and alternatives

Stakeholders / Supporters Energy Action Network Green Mountain Power Lintilhac Foundation LW Seddon Lyndon State College Renewable Energy Vermont Vermont Conservation Voters Virginia Lyons VPIRG Washington Electric Coop Wolfe Energy AllEarth ANR BED, VEC Conergy DC Energy Innovations Dynapower Faraday Green Lantern Group groSolar High Meadows Fund NESCAUM NRG Pomerleau Group Positive Energy Solarize Upper Valley Suncommon UVM VELCO Vermont Law School Vermont Solar Engineering VHCB VNRC Others….

Sun Shot Initiative Launched 4 years ago More than $500 million for 350+ projects PV CSP Balance of system (soft costs) Systems integration Tech to market Objectives to reduce costs of solar to $0.06 / kWh by 2020

Sun Shot Indicators – Fall 2014 GROWING DEPLOYMENT 15.9 gigawatts of solar power in the United States Enough to power 3.2 million average American homes In 2013, solar was the second-largest source of new electricity generating capacity in the U.S., exceeded only by natural gas More solar has been installed in the U.S. in the last 18 months than in the 30 years prior Large organizations deploying solar: Apple, Berkshire Hathaway, FedEx, GE, GM, Google, IKEA, Macy’s, Target, Walmart, and the U.S. military. A new solar project was installed every 4 minutes in 2013 in America

FALLING COSTS Since 2010, the average cost of panels has dropped more than 60% and the cost of a system has dropped by about 50% Solar installations are overwhelmingly occurring in middle-class neighborhoods that have median incomes ranging from $40,000 to $90, over 60% of installations were in such neighborhoods Although the cost of solar energy system hardware has dropped significantly, the non-hardware “soft” costs of solar – such as permitting, installation, interconnection, and maintenance fees – remain a major barrier to greater deployment nationwide and can account for up to 64% of total system cost Sun Shot Indicators – Fall 2014

SOLAR AS AN ECONOMIC ENGINE Solar jobs have increased nearly 20% since 2012, which is 10x the national job growth rate. There are more than 140,000 solar workers in the United States, up from 119,016 in The solar industry is making a similar economic impact as other cornerstone American industries. For example, the U.S. iron and steel mill industry employs 86,122 workers. In 2013, new U.S. PV installations were valued at $13.7 billion – more than double the $5.5 billion value of installations in Sun Shot Indicators – Fall 2014

Scenario testing Net metering Electric vehicles Heat pumps Smart Grid / DM Energy storage Low- income Incentives / social equity Goals: 1.A clear and detailed path to 1 GW of solar, contributing to Vermont’s 90% renewable energy goal 2.Sustained engagement and support from diverse groups across the state Impacts: 1.Added momentum to the 90% renewable energy goal, preventing it from falling out of focus, unmet 2.Increased agreement among utilities, advocates, and government on value of solar and its role 3.A documented process replicable in other jurisdictions SOLAR AND DISTRIBUTED GENERATION AS KEY ELEMENTS IN MEETING VERMONT’S COMPREHENSIVE ENERGY PLAN GOALS Prime Recipient: Vermont Energy Investment Corporation Principal Investigator: David Hill, Distributed Resources Director, VEIC Co-Applicants: Regulatory Assistance Project, Vermont Public Service Department EERE Funds Requested: $518,535 Proposed Applicant Cost Match: $141,456 Total Project Value: $659,991 Key Idea: A well-coordinated stakeholder engagement process and analysis of well-understood scenarios will create shared understanding and buy-in from many parties. The effort will reveal the contribution of, and effect on, net metering, social equity, incentives, electric vehicles, heat pumps, smart grid, and energy storage, and represent a necessary step toward the State goal. Summary: Create a shared vision for the most effective ways in which Vermont can reach its legislated goal of meeting 90% of the state’s total energy needs through renewable energy. This project uses a comprehensive stakeholder engagement process, scenario analysis, and a consensus approach to map out a Solar Development Plan.

Outcomes by Year 2015: Stakeholder Engagement and Scenario Modeling 2016: Stakeholder Engagement, Revised Scenarios and Vermont’s Solar Pathways Plan 2017: Implementation Support

Year 1 Stakeholder Meetings (2015) March 6: Vermont College of Fine Arts,Montpelier Project Introduction and Kickoff April 3: Rutland Introduction to Scenarios and Focus Area Breakouts Tentative May 19:Likely Burlington Alpha Scenario Results Tentative October 6: Feedback / discussion by groups on revised analyses Tentative November 10 : Revised scenario results, and priorities for Year 2 (2016)

Year 1 Milestones Mid-June 1.Alpha scenario results webinar 2.Net metering Focus Area brief, with webinar 3.Other Focus Area briefs, with webinar Mid-September Brief on barriers and integration Mid-December Revised scenario, Go / No-Go for Year 2

LEAP System Long-range Energy Alternatives Planning System Developed / maintained by Stockholm Environment Institute Decades of application and development in > 190 countries worldwide Scenario based – “self consistent story lines of how an energy system might evolve over time” well suited for regional and targeted technology (Solar Development Pathways) analyses Transparent accounting framework

Flexible Reporting & Structure for Appropriately Detailed Analyses Heaps, C.G., Long-range Energy Alternatives Planning (LEAP) system. [Software version ] Stockholm Environment Institute. Somerville, MA, USA.

Analytic Approaches Model will be technology honest, but not technology agnostic (solar growing to 20% target) Compare to a base scenario informed by Total Energy Study (TREES local, hybrid of biofuel prices) and CEP target Solar not in a vacuum; part of total energy economy Start at high level; build depth through Focus Areas and stakeholder inputs on scenarios Alpha Scenario  Focus Area Analyses  Integration and Barriers  Beta Scenario  Priority Analyses  Final Scenarios  Solar Development Pathways Report  Implementation

Vermont Solar Development Pathways Break

Vermont Solar Development Pathways Project Essentials

DOE and National Coordinator roles Focus Areas Introduce leaders and review sample questions Topic area scheduling objectives Communications guidelines

Focus Area Near Term Activities April 3 Outline for Focus Area brief Framework (calls, shared documents for initial solar scenario inputs) May 19 (with materials week before meeting) Draft of Focus Area brief Draft of Alpha Scenario inputs

The Focus Areas Scenario testing Net metering Electric vehicles Heat pumps Smart Grid / DM Energy storage Low- income Incentives / social equity

Key Questions for All Focus Areas Current market conditions – market share, growth, costs, performance Baseline changes, path(s) to meet CEP targets Alpha solar development path 1.Key interactions / opportunities with more advanced solar deployment 2.Key regulatory, market, technical, or policy barriers / drivers Other stakeholders we should invite

Focus Area: Incentives – Suzanne Elowson Federal tax credit changes Customer financial analyses Business models and strategies Underserved market segments Renewable Energy Credits (RECs), solar set- aside Consistency in face of uncertainty Stakeholders, key barriers Other?

Focus Area: Net Metering – Carl Linvill What combination of solar installations makes sense? (distributed generation [DG] to utility scale) Guidelines and principles for good tariff design May be complementary to PSB workshop process in looking at alternatives that support DG but may not be strictly “net metering” Consider interaction with process for PSB group Other?

Focus Area: Electric Vehicles – David Roberts Light-duty vehicles and heavy-duty vehicles (LDV and HDV) market segments Trends / changes in modes and vehicle miles traveled (VMT) Complementary to solar via storage and / or charging Target segments and market uptake strategies Other?

Focus Area: Heat Pumps – Peter Schneider Load shape Relation to demand response (DR) / thermal storage Thermal shell enhancements Market share and rates compared to biomass and non-renewable energy systems Target segments and market uptake strategies Stakeholders, key barriers Other?

Focus Area:High-Performance Modular Housing Peter Schneider Business structure / models Scale and costs Integration of multiple technologies Solar, heat pumps, demand response, storage Smart inverters Integration to other net-zero energy / new construction trends and market Code and permitting Financing Stakeholders, key barriers Other?

Focus Area: Smart Grid / Demand Response – Ethan Goldman Priority loads and technical options Business structure / models Links to forecasting Links to storage Standardization Smart inverters Stakeholders, key barriers Other?

Focus Area: Energy Storage – Nick Lange Scale and distribution Mobile and stationary Business structure/models Value chains, load shifting, back up, ancillary services Links to forecasting Links to demand response Smart inverters Stakeholders, key barriers Other?

Communications Work is on Alpha Scenarios and Focus Area briefs 1.Both of these provide foundation for work in remainder of Year 1 and will inform Year 2 report 2.Work over the next couple months is important but does not “lock down” scenarios, results, or recommendations 3.Comments will be kept and organized

Vermont Solar Development Pathways Looking Forward

Next Meeting - April 3, Rutland Focus Area calls and activities: Draft outline and schedule for addressing priority topics Next meeting: Baseline scenario review, in-depth Focus Area discussions, breakouts Stakeholder time tracking

For more information, contact: General questions on project: objectives, scope, timing and scenario modeling: David Hill and Damon Lane Focus area logistics, issues or topics: Focus Area Leads – Suzanne Elwoson: Carl Linvill: David Roberts: Peter Schneider: Ethan Goldman: Nick Lange:

Thank You! David Hill (802)