SolarCurrents - Customer-Owned ExpansionPhase 2 Program Overview

MREP Solar Committee MeetingDecember 12, 2012Julie Londo, Program Manager

A quick look at the results of Phase 1

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• 570 projects commissioned as of 12/12/12 (20 pending)

• 75/25 split between residential and non-residential based on number of projects (60/40 based on capacity)

• Projects located in all 13 counties of DTE Energy’s electric service territory

• Highest concentration of projects by City

- Ann Arbor (54)

- Detroit (21)

- Ypsilanti (15)

• Average capacity factor ≈ 12%

Program Incentives – Phase 2

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Program Incentives*Pricing will be reviewed prior to each offering.

Program Parameter Residential Non-Residential

Program Capacity 1.5MW 0.5 MW

(One-time) up-front payment $0.20/W initially* $0.13/W initially*

Ongoing Payment $0.03/kWh initially* $0.02/kWh initially*

Agreement term Until August 31, 2029

Eligible system size 1-20kW DC

Award method

Random selection process to award four 500-

kW offerings of capacity released, from 2013

through 2014

• New pricing reflects updated market pricing in installed cost of PV systems and different economics for residential / commercial customers

• Discrete offerings of capacity to control pace of subscriptions and avoid stampede for available kilowatts

• Desire to incentivize better system design and maintenance (new pricing reflects 30/70 split between up front and ongoing incentive components vs. 50/50 split in Phase 1)

Note: (over 2.5MW of projects are active in Net Metering Program since Phase 1 concluded with 1.1MW fully commissioned)

Program offering timeline

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• The new process drives controlled approval, and quicker construction, of projects

− Approximately 2 ½ months from program launch until project selection

− 10 months from project selection until completion deadline.

Planned offering schedule

− Jan 2013– 500kW

− Jun 2013– 500kW

− Jan 2014 – 500kW

− Jun 2014 – 500kW

− Feb 2015 – remnants

SolarCurrents Customer-owned Program Launch Timeline

Offering 1 - 500kW (375kW Res / 125kW Non-Res) Actual Date

Offering Launches – Customers apply

Day One1/7/2013

8 a.m.

Application Deadline 30 days2/5/2013

5 p.m.SolarCurrents team completes review of applications

5 business days

2/12/2013

Random Selection Event held (if required)

Within 10 business days

2/18/2013

Selected Projects Posted on SolarCurrents website

24 hours 2/19/2013

Submit Interconnection Application

20 business days

3/19/2013

Submit invoice or project quote, site plan and PVWatts annual solar production form

40 business days

4/16/2013

Project Completion Deadline 10 months 12/16/2013

Random Selection Event

Reasons for random project selection award method Spreading out kW available for length of RPS program 2015 compliance targetScheduled offerings of kW over time creates opportunities for customers to participate throughout the duration of the program

How it worksApplications will be assigned a unique id number keeping customer identities confidentialNumbered balls representing eligible applications will be randomly drawn until the capacity is awarded for the phase The drawing process stops when total kW capacity exceeds the offering limitAny capacity not commissioned in an offering will be added the 2015 offeringAny overage of capacity awarded reduces size of next offeringCustomers not selected will have to reapply for future offerings All customers will be informed via email within 24 hours of selectionResults will be posted on the DTE Energy Web site (dteenergy.com/SCresults) within 24 hours of selection

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SolarCurrents Agreement

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New for Phase 2:

•Agreement will be mailed upon selection of project

•Within 10 months of receiving notification of project selection, project must be ready for DTE Energy commissioning or the project may be subject to removal from participation in the SolarCurrents Customer-owned Pilot Program

•The contractual end date for every commissioned project is August 31, 2029 regardless of commissioning year

•Customers shall grant access rights to DTE Energy to obtain information regarding design, cost or performance of the solar PV energy system that participates in the DTE Energy SolarCurrents Customer-owned Pilot Program. Customers will be notified prior to scheduled visit.

Process Checklist

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Step 5: Submit documentation.

• Within 40 business days of notification of project selection, provide commitment tocomplete project within 10 months by submitting:

~ Detailed site plan indicating placement of solar panels, including trees, buildingsand other structures near the PV installation, and site orientation relative to

True North.

~ Invoice showing proof of equipment purchased or document between installerand customer showing agreement to install solar PV system indicating downpayment on project.

~ The completed annual solar production form by visiting the PVWatts website:www.nrel.gov/rredc/pvwatts/grid.html

www.dteenergy.com/solar

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313.235.4SUN(4786)

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Residential example of $0.20/$0.03 Non-Residential example of $0.13/$0.02Solar PV system size 5,000 wattsSolar PV system cost $30,650*Applicable Federal Tax Credit, if applicable (up to 30%)

$9,195

Up-front REC payment upon installation $1,000**

Ongoing yearly REC payment for kWh generated over 16 years

$2,736***

(term of Agreement depends on project commissioning date)Estimated Reduction In Electricity Costs over 16 years (Net Metering Generation Savings)

$11,840****

Total Estimated Savings over 16 years $24,771

*assumes $6.13 per watt installed **in the form of a check*** will appear as a credit on DTE Energy Electric Bill****based on residential electric service rates and estimated generation of 500kWh per month for 12 months

Solar PV system size 5,000 wattsSolar PV system cost $30,650*Applicable Federal Tax Credit, if applicable (up to 30%)

$9,195

Up-front REC payment upon installation $650**

Ongoing yearly REC payment for kWh generated over 16 years

$1,824***

(term of Agreement depends on project commissioning date)

Estimated Reduction In Electricity Costs over 16 years (Net Metering Generation Savings)

$11,105****

Total Estimated Savings over 16 years $22,774

*assumes $6.13 per watt installed **in the form of a check *** will appear as a credit on DTE Energy Electric Bill

****based on residential electric service rates and estimated generation of 500kWh per month for 12 months

Res vs. Non-Res Pricing Examples

To date, Detroit Edison has built or contracted for approximately 700MW of renewable capacity

Detroit Edison has already contracted for

~700 MW of new renewable capacity:

L’Anse Warden17 MW BiomassBaraga County

Eagle Valley3 MW Landfill GasOakland County

Smiths Creek3 MW Landfill Gas

St. Clair County

Stoney Corners32 MW Wind

Missaukee County

Gratiot Wind Energy212 MW* WindGratiot County

SolarCurrents Pilot: 7 MW contractedLocated at customer /company sites across SE MI ~600 customer-owned projects once complete

* Detroit Edison’s capacity equals 102.4MW Detroit Edison owned projects Third party owned projects

Tuscola Bay120 MW Wind

Tuscola County

Tuscola Wind 2 100 MW WindPending MPSC

approval

Thumb Wind Farms

~110 MW WindHuron & Sanilac

County

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MegawattsWind 684Biomass 17Solar 7Landfill Gas 6

Echo~110 MW WindHuron County