Solar Energy in Maryland November 2014 Presented by: Hans Wittich President Solargaines

COURSE AGENDA 1.Theory Overview Environmental movement Economic movement 2.Solar in Maryland Incentives and climate Strong growth 3.Case Study How does it work Design considerations Installation Monitoring of system Financial Analysis 4. Interactive discussion

What will be learned 1. How it works 2.Four design principals Orientation Tilt Shading Weather / geographic 3.Installation and monitoring 4.Economics Costs Electricity savings Tax benefits Incentives

An oil spill is called a tragic environmental disaster…

A solar spill is just called a really nice day!!!

1. Theory Overview

Why Solar? Unlimited and sustainable resource Clean power is included in the future of energy generation Many states have adopted “Renewable Portfolio Standards”

Taking responsibility for the future Current circumstances present unprecedented opportunity to “do good” and “do well,” the proverbial “double dividend”

THE FUTURE IS NOW

30,000 ft view of renewables The way that we currently deliver power is, from an economic and environmental perspective, unsustainable. Period. – Dependent on limited resources – Environmentally damaging – Wasteful; concentrated generation vs. distributed generation

Solar in Maryland 1.Political Willpower RPS/Net Metering Federal stimulus Sustainability mandate 2.Favorable conditions Sun hours per day 3.Attractive economics Good incentives Rising rates Lower costs First LEED Platinum home in Baltimore

Market trends

Case Study Distribution Services Company

2. Basics How does it work Design Phase/technology overview Installation and monitoring of system Economic Review

How does it work? Technology is relatively simple and has been around since the 1960’s Points of potential failure are minimal with few moving parts (Panels, Inverters and Balance of System) No Batteries (net metering) The Panels (or Modules) have warranties to perform for 25 years; some systems placed in service in the 1970’s are still producing power

Design Phase/technology overview

Suitable location Four Main Design Principals Azimuth / orientation Tilt / pitch (latitude on earth) Shading analysis Weather Patterns (avg sun hours per day) insolation maps

Azimuth / orientation Compass Azimuth (deg) True Azimuth (deg)DirectionScaling Factor East South West0.7443

Tilt / Pitch Tilt Angle (deg)Scaling Factor

Shading Analysis

Insolation Maps

Racking / layout design Inverter design Roofing attachments for pitched roof (shingle or metal) and flat roof. Balance of system / electrical engineering – Service size constraints

Appropriate panel/inverter design Panel types – output characteristics Poly and Mono Crystalline silicon Thin Film CIGS Building integrated – roof shingles, wall systems

Examples

Installation of system

Monitoring of system

Financial Analysis

Incentives / Returns 1.Tax Advantages a.Federal Income Tax Credit 30% of total cost (including site preparation) b.Modified Accelerated Cost Recovery System (MACRS) depreciation (commercial projects only) NPV of depreciation is taxes avoided 2.Savings / Revenue Benefit a.Annual Electricity Savings (Net Metering) kWhr X total rate (supply+distribution+transmission+tax) b.Solar Renewable Energy Certificates (SRECs) Renewable Portfolio Standard (RPS) Spot Market vs Forward Contract

Structuring considerations 1.Corporate, LLC or solar proprietor? Tax rate of entity or members Where is tax liability? Passive income issues See Spreadsheet for Analysis

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Sample Last Slide Solar Gaines Beaver Dam Rd Baltimore, MD