1. How ^ to bring Community Solar to Your Members Mark Vogt President & CEO Wright-Hennepin Cooperative Electric Association Rockford, Minnesota Prepared for Oregon Rural Electric Cooperative Association Annual Meeting December 5, 2013 Salem, Oregon and why

2. Background about WH One of 44 distribution co-ops in Minnesota 40,321 members 61,540 meters Residential customers = 60% Renewable Energy Standard in 2007 – 25x25 Small solar carve out in 2013

3. Total Days With Sun

4. WH Service Territory: 196 Days (177-199 Days) Total Days With Sun

5. WH Service Territory: 196 Days (177-199 Days) Salem: 157 Days Portland: 142 Days Eugene: 157 Days Pendleton: 192 Days Burns: 214 Days (142-214 Days) Total Days With Sun

6. WH Service Territory: 196 Days (177-199 Days) Salem: 157 Days Portland: 142 Days Eugene: 157 Days Pendleton: 192 Days Burns: 214 Days (142-214 Days) Total Days With Sun 179-292 Days

7. WH Service Territory: 196 Days (177-199 Days) Salem: 157 Days Portland: 142 Days Eugene: 157 Days Pendleton: 192 Days Burns: 214 Days (142-214 Days) Total Days With Sun 179-292 Days 264-313 Days

8. WH Service Territory: 196 Days (177-199 Days) Salem: 157 Days Portland: 142 Days Eugene: 157 Days Pendleton: 192 Days Burns: 214 Days (142-214 Days) Total Days With Sun 179-292 Days 264-313 Days Solar intensity is not an Indicator of solar participation

9. Oregon vs. Minnesota Top Solar Installation States – 2012 1.California 2.Arizona 3.New Jersey 4.Hawaii 5.Colorado 6.New York 7.Texas 8.Oregon 9.Pennsylvania 10.Maryland Source: Solar Energy International Association Annual Report

10. Oregon vs. Minnesota Top Solar Installation States – 2012 1.California 2.Arizona 3.New Jersey 4.Hawaii 5.Colorado 6.New York 7.Texas 8.Oregon 9.Pennsylvania 10.Maryland Source: Solar Energy International Association Annual Report 5 US Solar Markets to Watch 1. Minnesota 2. Georgia 3. DC 4. Louisiana 5. Virginia Reason: 1. Regulatory landscape 2. State incentives 3. Marketplace acceptance/fundamentals Source: PV Solar Report 10/23/13

11. “A clear and present danger” For the first time ever, a third party can insert themselves between our infrastructure and our members

13. Does this scare you or excite you?

14. “(Solar) power would give America the potential to challenge the utility monopolies, democratize energy generation and transform millions of homes and small businesses into energy generators.”

15. Does this scare you or excite you?

16. Does this scare you or excite you? New Rooftop Solar Systems By Year

17. Price of power has increased significantly in the last decade

18. 48% “worry a great deal” 31% “worry a fair deal” How much do you worry about affordability of energy? Source: 2012 Gallup Poll

19. Lyndon Rive, CEO of Solar City “ We are an energy company. We install solar systems for free, and we sell the electricity at a lower price than you can buy it from the utility. More people, when given the option of paying more for dirty power or less for clean power will take paying less for clean power. ”

20. The public is hearing this message 82% believe solar will decrease electric energy costs Sharp Electronics 83% “strongly favor” or “favor” government mandated solar incentives Gallup 87% want home builders to start offering solar power as an alternative Roper

22. “Based on falling costs of solar and rising electric rates, PG&E, one of the largest utilities in the country… may not be able to compete with residential solar soon.” “Once customers go solar, PG&E loses the sales forever, exacerbating the smaller sales/higher price cycle.” Source: industry think tank The Energy Collective

23. “WH has to renew our mission with a renewable offering” How do we specifically help bring renewable energy into the mainstream for our members? How do we do solar without bankrupting the cooperative? –We lose kWh sales –Can we find “substitute revenues/margins” How do we make solar work for non participating members? How do we make solar work in harmony with the WH grid?

24. We needed first hand experience 2007: 20 KW wind 2009: 2 KW solar 2012: 2 KW tenKsolar 2012: Battery storage Explored business models to provide renewables WH gives away the energy each month WH’s demonstration projects

25. Community Solar Win - Win

26. The Member Wins With Community Solar Best economies of scale Quality control “Modular” purchasing choices We will introduce low or no up front cost entry Optimal placement of panels for best production Hassle free with tax application/credits built into purchase process Ownership moves with you Available to all Maintenance free Long term equipment warranty

27. The Co-op Can Win with the Community Solar model Opens a way for “substitute revenues/margins” Non participating members don’t subsidize No financial risk for co-op – projects are built only after member commitment Creates a viable alternative solution to offer legislators Best opportunity to make sense of solar

28. Solar Paired with Battery Storage 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 01234567891011121314151617181920212223 House Load (KW)Solar PV (KW)Net Usage with Battery Excess PV when house load is low charges batteries Batteries discharged during peak reduces total system demand

29. The Co-op Can Win with the Community Solar Model Opens a way to “substitute revenues/margins” Non participating members don’t subsidize No financial risk for co-op - build projects only after member commitment Best opportunity to incorporate battery storage The members view us as the trusted energy experts Best defense against third party solar providers

30. W-H 2013 Member Interest 31% “very likely” if offered $0 down Financing

31. W-H 2013 Member Interest 31% “very likely” if offered $0 down Financing 31% “very likely” if offered solar through a solar community

32. W-H 2013 Member Interest 31% “very likely” if offered $0 down Financing 31% “very likely” if offered solar through a solar community 41% “very likely” if both options were offered.

33. WH Solar Community Project #1 171 panels 32.5 kW of solar panels 36 kw of battery storage Meets MN 40 kW net metering rules Cost: $4.83/watt with battery 25 Members participated (1 to 30 panels) Net $900+/ panel – produces avg 33 kWh credit/mo Members are credited on electric bill Payback ~ 20 years (ROI 5-20%/yr based on amount of sunshine) Worked with Clean Energy Collective of Colorado

34. Dedication – September 9 Good will & high compliments from members, legislators, regulators, press –Minneapolis Star Tribune –USA Today –Christian Science Monitor –National Geographic –Widespread industry press Unit 2 ready to go – 70% subscribed

35. Lesson’s Learned Members want to participate in solar. Members would prefer to be involved in it through their co-op. If we don’t offer it, they will take their kWh’s to another provider. Solar paired with batteries makes it work for utilities. Witnessed first hand the “romance” customers have with solar energy

36. The Romance With Solar Price/payback is not the first consideration “Democratization of energy” Striking back against the utility The independence/pride of ownership with solar Controlling your destiny Doing what’s right for the environment

37. Lesson’s Learned The energy industry is changing rapidly by forces we don’t control. We must act – now -- to be prepared for a much different future.

38. How ^ to bring Community Solar to Your Members Mark Vogt President & CEO Wright-Hennepin Cooperative Electric Association Rockford, Minnesota Prepared for Oregon Rural Electric Cooperative Association Annual Meeting December 5, 2013 Salem, Oregon and why