1. Photovoltaic Systems Engineering Application to PV Systems
SEC598F18
Photovoltaic Systems Engineering
Session 21
Policy Analysis
Application to PV Systems
November 19, 2018

2. Session 21 Learning Outcomes
An overview of the various aspects of policy and impact on the solar enterprise
An introduction to the factors that aid or hinder the expansion of the solar enterprise

3. Value to course participants
A recognition of the interrelationships among:
Engineering and technology efforts
Business and economic components
Policy frameworks
These components are essential in the development and adoption of solar power.

4. Policy
What is policy, why is it necessary, and what are its essential elements?
What are the pillars of solar policy and who establishes the policies themselves?
What are some examples of existing policies?
What are the impacts of solar policies?

5. Policies for Residential Systems
Market Creation Policies
Renewable Portfolio Standards
Solar Carve-outs
Energy choice, CCAs
Market Expansion Policies
Financial incentives
Grants, rebates, tax incentives
Financing options
Solar leases, third-part ownership, PACE
Lead-by-example policies

6. Policies for Residential Systems
Environment Arizona “Lighting the Way”
Ten U.S. states lead the nation in the amount of installed solar electricity capacity per capita.
All ten of these states have strong solar energy policies
Strong Policies lead to Strong Markets

7. Solar Energy Policies can be Established by just About Any Entity
International
National
Regional
State
Municipality
Neighborhood
Private and Public Company
University

8. PV Systems Residential Scale Non-residential Scale Utility Scale
Self-consumption
Power export
Peak shaving
Self-consumption
Power export
Direct power export to the grid

9. The Role of Politics

10. Background on DSIRE Database of State Incentives for Renewables & Efficiency
Created by the NC Solar Center in 1995
Funded by the US DOE (EERE)
Administered by NREL
Approximately 2,700 entries
Renewable energy and energy efficiency
Rules, regulations, policies, and incentives
Approximately 200,000 visitors/month

11. DSIRE Database Content
All State incentives and policies – including DC and territories
All Federal incentives and policies
Most Utility incentives
Some Local policies and incentives – examples and largest cities/counties

12. Background on the Governor's Office of Energy Policy
The Governor's Office of Energy Policy (OEP) was established by Governor Jan Brewer and effective July 1, 2011, moved the Energy Office from the Arizona Commerce Authority.
VISION To lead Arizona to a clean and reliable energy future by promoting policies and initiatives that strengthen the economy, better the environment and ensure lasting energy security.
MISSION To be the national leader in renewable energy development, while buoying traditional energy sources with new clean technologies and increased efficiency to benefit all Arizonans.

13. Arizona Office of Energy Policy

14. Residential PV Systems
Renewable Portfolio Standards (RPS)
Often has a “solar carve-out” – a portion of the RPS must be met by Distributed Generation (DG), or rooftop solar
Incentives
Federal Investment Tax Credits (ITC) – Reduces Initial Investment
State Tax Credits
Utility incentives
Public Utility Commission Policies
Net Electrical Metering – Reduces Annual Cash Payments

15. Commercial and Industrial PV Systems
Renewable Portfolio Standards (RPS)
C&I systems are also included in Distributed Generation (DG) solar carve-out
Incentives
Federal Investment Tax Credits (ITC)
State Tax Credits
Accelerated Depreciation Schedules
Public Utility Commission Policies
Net Electrical Metering
Demand Charges

16. Utility Scale PV Systems
Renewable Portfolio Standards (RPS)
Used to meet RPS values, usually through the generation and sale of Renewable Energy Credits (RECs)
Incentives
Federal Investment Tax Credits (ITC)
Federal Solar Energy Zones (SEZs)

17. ITC
For Solar Energy Systems, the credit is equal to 30% of expenditures, with no maximum credit.
Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat.
Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible.
Passive solar systems and solar pool-heating systems are not eligible.

18. Renewable Portfolio Standards (RPS) Arizona

19. The compliance schedule is:
Arizona RES (details)
The compliance schedule is:
2006: 1.25%
2007: 1.50% (5% DR)
2008: 1.75% (10% DR)
2009: 2.00% (15% DR)
2010: 2.50% (20% DR)
2011: 3.00% (25% DR)
2012: 3.50% (30% DR)
2013: 4.00% (30% DR)
2014: 4.50% (30% DR)
2015: 5.00% (30% DR)
2016: 6.00% (30% DR)
2017: 7.00% (30% DR)
2018: 8.00% (30% DR)
2019: 9.00% (30% DR)
2020: 10.00% (30% DR)
2021: 11.00% (30% DR)
2022: 12.00% (30% DR)
2023: 13.00% (30% DR)
2024: 14.00% (30% DR)
2025: 15.00% (30% DR)

20. Net Metering At the end of each month, a utility bill is calculated:
Electricity Generation = Number of kWh purchased from utility – Number of kWh exported to utility +/- residual credits (in kWh) to/from “energy bank”
This is all carried out at the retail rate
Once a year, the residual credits are cashed in:
This is carried out at the wholesale rate
In some utilities, the reset date is 12/31
In other utilities, the reset date is 04/30