University of Pittsburgh School of Law 2013 Energy Law & Policy Institute October 14, 2012 Citizens for Pennsylvania’s Future (PennFuture). A statewide non-profit environmental and clean energy advocacy group. Foundation and member supported. Provide $2 million in legal services per year. Evan R. Endres Project Coordinator, PennFuture Energy Center

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute October 14, 2012 Photovoltaic (Solar Electric) Solar Thermal Electric Landfill Gas Wind Biomass Fuel Cells Distributed Generation- Defined by on-site generation of electricity primarily for on-site use. In Pennsylvania, defined by which technologies can net-meter, operating as grid-tied. Coal-Mine Methane Anaerobic Digestion Small Hydroelectric Fuel Cells using Renewable Fuels Waste Coal Hydroelectric Municipal Solid Waste CHP/Cogeneration

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute Net Metering

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute Net-metering Needs to have an existing load. System size limits. 50kW limit on residential 3MW, 5MW limit on commercial Compensation for Generation Full retail rate, including distribution, up to 100% of usage. Excess can carry over from over until annual true –up at which the customer would receive a payment for excess. Excess over 100% is only paid at the wholesale rate with no distribution.

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute Individual Solar Installations 400+ in western Pennsylvania 12 western PA companies that offer the service of solar installation 178+ MW of in-state solar capacity 99% installed in the last 5 years

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute PA Market Drivers Declining solar hardware costs Average installed cost per-watt, residential, $4.25. Average system size 6.8 kW. Total system cost $ 28,000

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute PA Market Drivers Alternative Energy Portfolio Standard (AEPS) Progressive Energy Policies Achieved through REC (Renewable Energy Credit) and SREC (Solar Renewable Energy Credit) purchases. SREC market is currently oversupplied leaving to SREC price that doesn’t stimulate new project development of consumer purchase. 6.8 kW = 8 SRECs per year x $15 = $120 per year Tier I: 8% by Tier II: 10% by compliance year PV: 0.5% by compliance year % electricity from alternative energy resources by 2020

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute PA Market Drivers PA Sunshine Rebate Program $111 Million in total funding Progressive Energy Policies Residential PV: $0.75 per watt (started at $1.25 per watt) Commercial PV: $ $0.75 per watt Residential Battery Backup (1-10 kW only): $0.35 per amp-hour Solar Thermal: 35% of installed cost Low-income (PV and solar thermal): 35% of installed cost 6800 watt x $.75 per watt = $5,600 rebate (rebate can be taxed as income)

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute PA Market Drivers Federal Progressive Energy Policies Federal tax credit 30% of the system cost over 4 years. Accelerated depreciation for commercial purchasers of renewable energy systems. Tax Policy 30% on $28,000= $8,400

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute National Market Drivers Solar Leasing- = 70% of all new residential installations. Power Purchase Agreements- Third party owns energy system, sells electricity at an agreed upon rate. Purchase option for host. Leverages tax equity. Community Solar- Dependant on robust virtual net metering. Allows community members to subscribe to a solar installation that is not on their home or business and receive net metering benefit for a portion of that in

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute National Market Drivers Community Solar- Dependant on robust virtual net metering. Allows community members to subscribe to a solar installation that is not on their home or business and receive net metering benefit for a portion of that installation.

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute Few Traditional Financing Mechanisms for Solar Residential customers use cash, unsecured financing, home-equity lines of credit. Available financing products have comparatively high interest rates. Financing from non-traditional development institutions, public –private partnerships. Interest rate buy-downs, rolling funds. Less than 5 percent of the country’s 6,500 banks and lending institutions are actively involved in financing solar projects (commercial scale) due to ongoing concerns about, and misunderstanding, industry risks. Tru-solar is collaborative that is working to create industry risk assessment standards (project ratings). Financing

University of Pittsburgh School of Law 2013 Energy Law & Policy Institute Few Traditional Financing Mechanisms for Solar cont. Renewable energy (or energy efficiency) are not considered in a home appraisals for the purposes of mortgages. A customer is not guaranteed to increase their home value after installation. “Greening” real estate MLS (Multiple Listing Services) to include home renewable energy systems and energy efficiency information. Senate Bill 1106, the Sensible Accounting to Value Energy Act of 2013, is bi- partisan bill that would require home energy efficiency to be cosidered in appraisals of FHA backed mortages. Financing