national bo s process cost webinar
DESCRIPTION
Solar soft costs are now 50%+ of system costs and rising. What\'s being done about it? We want your feedbackTRANSCRIPT
National “Balance of System Cost” Reduction
Roadmap
Permitting, Inspection, Interconnection
Tuesday January 11th, 2011
Making Solar Happen. Since 2006.
Introductions• Doug Payne Executive Director, SolarTech Co-founder,
Webinar Panel Moderator
• Tom McCalmont CEO McCalmont Engineering
Co-Founder, Board Chair of SolarTech
• Angiolo Laviziano CEO Mainstream Energy / REC Solar
• Ned Harvey COO Rocky Mountain Institute
Making Solar Happen. Since 2006.
• Greg Sellers President, Burnham Energy
Greg SellersAngiolo Laviziano
Ned HarveyDoug Payne Tom McCalmont
About SolarTech
Scalable, Local best practices, National impact
Collaborative Consortium
Integrated
Performance
WorkforceInstallation
EERE
CPUC
State level Fed level
Making Solar Happen. Since 2006.
Integrated Systematic methods
CPUC : California Public Utility Commission
EERE : Energy Efficiency & Renewable Energy
IREC : Interstate Renewable Energy Council
SEPA : Solar Electric Power Association
SVLG : Silicon Valley Leadership Group
UL: NABCEP:
Underwriters LaboratoriesN.A. Board of Certified Energy Practitioners
Interconnect
FinancingPermitting
Solar America Cities
CPUC
SVLG
EERE
Solar America Cities
Making Solar Happen
Non-Hardware costs now account for over
50% of PV system costs.
Current BoS Process cost curves put $1/W
by 2017 DOE goal(s) at risk
Framing today’s discussion
Making Solar Happen. Since 2006.
by 2017 DOE goal(s) at risk
Industry processes lack scalability to meet
US / DOE goals
4
Non-Hardware costs are now > 50%
(SolarABCs, DOE, Navigant)
BoS slope
must get
Making Solar Happen. Since 2006.
must get
steeper
<2 yrs
Permitting, Inspection, Interconnection:
Everyone’s problem, no-one’s problem
1
50+ x 3
National Electrical Code (NEC, article 690)
Federal
State State Building Codes (Electrical, Structural, Fire)
18,443 “AHJs” + 3,273 UtilitiesLocalCity Building Codes, Policies,
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6
18,443 “AHJs” + 3,273 UtilitiesLocal FERC (Electrical, Structural, Fire, Fees)
Forms, Fees, Rates, are ALL different
AHJs = Authorities Having Jurisdiction
$ $
Impact extends beyond PV into solar thermal, EE, wind, biomass, etc.
DOE is aware of the issues, we need to make it real (data)
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DOE baseline costs ($/Wp)
11/2010 Baseline - $5.08, NREL. Permitting work, Inspection, Interconnection is under system design, mgmt, and marketing
Accurate?
Ranges?
Categories?
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Not included / unknown:Permit dropouts Permitting delays Multiple tripsInspection failures Interconnection dropouts Interconnection delays
Industry Perspectives - Discussion
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9
Solving the Permitting &
Inspection Challenge
• Innovation industries in the U.S. achieved scale demand
driven and without many dependencies.
– Computers � people wanted desktop calculating power
– Cell phones � people wanted personal communications
– Internet � people wanted readily searchable information
• Energy/renewables depend on Old World industries.
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• Energy/renewables depend on Old World industries.
– Utilities – 125 years old
– Building codes & permits – 3,800 years old
– Government – 195,000 years old
• These dependencies create barriers to achieving massive
scale quickly.
• We need to invest in a Manhattan Project to dramatically
improve processes so renewable energy can achieve scale.
Solving the Permitting &
Inspection Challenge
• Our understanding of the situation in the solar industry
– Achieving scale in manufacturing and installation is the critical path
for driving costs down.
• RMI believes
– There are few if any real long-lasting technology challenges to
achieving Massive Scale in the US Solar industry that won't on their
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achieving Massive Scale in the US Solar industry that won't on their
own move faster than the process and regulatory challenges.
• We should
– Develop a logical model we can use which ties all the major steps
required to get to the $1/watt installed to scale and then focus our
discussion on the critical barriers to achieving massive scale in the
solar industry as process related.
Solving the Permitting &
Inspection ChallengeThere are two possibilities to decrease BOS cost
• BOS Design Cost – These were dealt with in the $1/Watt workshop.
– Design cost are decreasing steadily.
– Example: Since 2007 design cost for residential mounting structures has come down ~25%
from about $0.22/Watt to around $0.16-0.17/Watt today. Additional savings due to labor
efficiency gains.
– Market forces ensure product and cost innovation
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• BOS Process Cost – Focus of SolarTech delegation
– Permitting, interconnection, inspections, etc. which have an impact on material cost as well
as administrative expenses
– Almost completely neglected during the $1/Watt workshop.
– Example: Permitting costs for residential PV have remained relatively stagnant at $.08/watt
on average, with the majority falling between $.05/watt and $.10/watt. For commercial-scale
PV cost have stayed at $.05/watt with the majority falling between $.05 - $.12 /Watt.
– Reducing cost is a time-consuming function of working with numerous (and often financially-
pressed) local government agencies to enable change or re-interpretation of rules and
regulations
– System challenge, making progress very slow without a federal policy champion
Solving the Permitting &
Inspection Challenge
• Some examples of BOS process cost that mock $1/ w roadmap dream:
Rules can be Excessive• EG FEMA flood zone issues in the Sacramento area.
– a. Summary: new rule adopted that prohibits any home remodel or addition (including solar) if said
improvement value is greater than 50% of the home’s value (home only, not property).
– b. Sungevity systems valued by generic “non LADWP” appraisal at $7,800 per KW DC and unique in lease terms
vs. purchase.
– Consequence – Any system size above 4KW sold will likely be rejected by local planning department in light of new
rule. Depends on homes value against value of PV system per appraisal terms. Therefore the solar capital is OSA!
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rule. Depends on homes value against value of PV system per appraisal terms. Therefore the solar capital is OSA!
Rules are Inconsistent• EG CA Fire Marshall guidelines.
– a. Not uniformly adopted in CA let alone Western States.
– b. Lack of standardization requires significant data base management to keep up with local changes to adopted
guidelines. As a result we’re spending 3x as much on these back office labor costs than installation labor.
Rules can be Crazy-making• EG Home Owner violations, where PV permit held hostage
– El Cerrito CA/ Tiburon CA are famous for this. Upon final PV inspection AHJ requires anything from fire alarms,
service mast securement, water heater earthquake strapping etc be brought up to code by solar contractor.
Solving the Permitting &
Inspection Challenge
• Challenge:– Building in most solar regions has slowed to a crawl
– Cities have significantly reduced plan review and inspection staff
– Remaining staff less able to process and inspect solar projects
• Solution 1: Allow installers to use third party plan checkers and inspectors for small PV
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checkers and inspectors for small PV – Allows market choice as way to expedite plan review and inspections
– Enables consistent deployment of Solar ABCS level best practices
– Encourages more consistent and verifiable permitting and inspections
– Saves cities money while enabling them to tout their “solar leadership”
– Gives DOE leadership role w/out usurping local control
• Solution 2: Develop Uniform Online Permitting– “Forces” the right solution
– Reduces city staff time
– Improves overall quality of solar design/installation
US Dept of Energy / EERE
Solar Energy Technology Program
Industry Led “Balance of System Process Cost” Roundtable
Making Solar Happen. Since 2006.
Proposed Solution Paths
The Solar Industry is unable to manage this
amount of information on its own.
DOE programs can seed industry solutions
18,443 “AHJs” + 3,273 UtilitiesLocal
City Building Codes, Policies, FERC (Electrical, Structural, Fire, Fees)
$ $
Permitting /Inspection Interconnection
Forms, Fees, Rates, are
ALL different
Making Solar Happen. Since 2006.Proprietary & Confidential
All Rights Reserved www.solartech.org
NEC code?NEC code?Fees?Bldg code?Structural?Fire?Planning?Other?
Bldg OfficialsPaperFilesPartial websitesArchivesUndocumentedVaried forms
FeesInterconnectGrid capacitySingle linesSwitch gearUL ratings
Permitting /Inspection Interconnection
Start
here
DOE Can Help:• RFIs / FOAs• Support / inform
broader policies
Permitting/Inspection/Interconnection Roadmap
Element Phase 1
Education
/Awareness
Phase 2
Streamline
(Paper based)
Phase 3A
Streamline
(Online)
Phase 3B
Integrated
(P, Insp, Int)
Phase3C
Solar 3.0
National SolarABCs SolarABCs DOE DOE DOE
VoteSolar VoteSolar SolarTech SolarTech SolarTech
State SACCO SACCO SolarTech SolarTech SolarTech
SolarABCs SolarABCs
Regional Industry/NGO
Partnerships
Industry/NGO
Partnerships
Multiple Multiple Multiple
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Partnerships Partnerships
Local DOE / SACCO
effort
DOE / SACCO
Effort
Multiple Multiple Multiple
Industry/NGO
Partnerships
Industry/NGO
Partnerships
•Recommendations•Industry, NGOs, and DOE work together to align National, State, Regional and Local best practices.•A multi-phase roadmap (directive) from Dept of Energy to guide efforts•Measure progress - # of Cities, Counties, States per phase over time
Solution Paths (details)• Phase 1 – Policy Innovation
• Scale, standardize, and drive adoption of initial policy solutions
ie. VoteSolar Project Permit
• Scale adoption of SolarABCs templates to 50% of US market <2 yrs
• Document uniform inspection standards for authorities having jurisdiction (AHJ),
engage at local level to jointly develop stds
• A balanced approach to permitting fees
• Phase 2 – Business Innovation
– One-Stop-Shop for municipal rules, regulations, and building codes, including changes
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– Improve consistency in pass/fail criteria, guidance on requirements to ensure
approval, industry held accountable
– Cost recovery “plus” model – Conformance to submittal guidelines in exchange for
higher reliability processes, consistent requirements, and better visibility
• Phase 3 and beyond - Technical Innovation
• Off the shelf solutions, on-line, paperless,
• Online Portals to inform / drive Federal, State, Local policy
• Integrate Permitting, Inspection, Interconnection requirements, pass/fail criteria
• Automation through the application of able software tools, applications, and systems
based on open architectures across Cities, Utilities, and Industry18
Costs, Benefits, Impacts, Priorities• SolarTech and RMIs work indicate BoS Soft Costs - "Current Non-Hardware BoS
Process costs account for up to $0.98 / W" ?
• Is this High, Low, within +/- 5%, other?
• For your business, approx. what % of the following can be directly attributed to delays in
the Permitting, Inspection, or Interconnection processes or variability of these processes:
• Engineering overhead, sunk time
• Inventory, idle crews, trucks, etc
• Mobilization or Wait time forcing internal cost absorption
• Milestone risks – ITC, MACRS, rebate payment, rebate carrying cost
• Legal / financial risk due to liquidated damages caused by project delays
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• Legal / financial risk due to liquidated damages caused by project delays
• Opportunity Cost (Consumer impact, lower sales, etc)
• Can you prioritize the following possilbe solutions from Lowest to Highest (Urgent)?
• A central entity or clearing house of municipal rules, regulations, and building codes –
a one stop-shop including up to date changes on legislation
• Document uniform inspection standards for authorities having jurisdiction (AHJ) –
Engage with local government to jointly develop standards
• Off the shelf solutions, on-line, paperless, with a strong incentive for increased
consistency in requirements, forms, coordination on a regional level
• Scale adoption of SolarABCs templates to 50% of the US market <2 yrs
• Consistency in pass/fail criteria and reqts to ensure safe, predictable approvals19
Industry Value Proposition
•Scalable, open access to Permitting, Inspection, Interconnection information drives out 50-60% of process related costs
•Enables Private/Public workflow driven cost reductions for PV
1-3 years
• 50% less paper
• 40% faster
3-5 years
• 75% less paper
• 75% faster
5-7 years
• Paperless
• Support $1/Wp
5-7 years is Too Late
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• 40% faster projects
• Distributed PV
• 75% faster projects
• Add Solar Hot Water, EE, Wind
• Support $1/Wpadoption curves
• Add other RE, Vehicle to Grid
BoS Non-Hdwr costs
(Distributed PV)
(Permitting, Inspection,
Interconnection,SG&A)
$0.98 / W $0.56 / W $0.43/ W
Time for a Paradigm Shift
$/W
2005 – 2010 “Cost”
2011 – 2015“Speed”
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$/W
Watts.P.H.
1GW
Next Steps• Get Engaged
• Review solution(s) presented
• Complete survey no later than 1/21
http://www.surveymonkey.com/s/MV7QJGP
– Accuracy of BoS Soft Costs estimates
– Prioritize the various "Solution Paths“ presented today
• Get Involved
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• Get Involved
• Sign-On to “DOE Letter” (email to follow) 1/28
• “National BoS Process Cost Webinar” - Results 2/22
• Collaborate on solutions March 29, 30
2011 Solar Leadership Summit 2011 Solar Leadership Summit
www.solartech.orgwww.solartech.org
SolarTech gratefully acknowledges• Our panel, and “DC Need for Speed Delegation” in supporting this National BoS Process cost reduction effort
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• Outreach partners for this National BoS Process cost reduction effort
23
Thank You!Doug Payne
Executive Director, SolarTech
www.solartech.org
Please join and support SolarTech
www.solartech.org
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Resources
• Permitting
• SolarTech http://solartech.org/initiatives/permitting
• SolarABCs http://solarabcs.org/
• Vote Solar http://votesolar.org/city-initiatives/project-permit/
• Bay Area C.C. http://svlg.net/campaigns/bacc/
• BoS Process Research, Rocky Mtn. Institute www.rmi.org
• Cost learning curve www.navigant.org