SMUD PV PROGRAM HANDBOOK

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1 SMUD PV PROGRAM HANDBOOK SMUD Photovoltaics Incentive Program July 1, 2009 v070109

2 TABLE OF CONTENTS SMUD S 10-YEAR PROGRAM...1 SMUD BUDGET AND INCENTIVES...1 SCHEDULE...2 PARTIES TO THE PROGRAM/PROCESS...2 SMUD PV CONTRACTOR LIST...3 SYSTEM COMPONENTS...3 SYSTEM SIZE...4 SHADING...4 SYSTEM WARRANTY...5 PERFORMANCE METERS...5 PERFORMANCE AND PERMANENCY...5 INSPECTIONS & CERTIFICATION...5 INCENTIVE CALCULATIONS...6 How EPBIs and PBIs Are Calculated...6 CODES AND STANDARDS...7 ENERGY EFFICIENCY...7 COMMERCIAL APPLICATION MILESTONES...10 HOW TO PARTICIPATE...11 Residential Applications...11 Commercial Applications...13 DETAILS ON NET METERING...15 ADDITIONAL PROGRAM REQUIREMENTS...17 CURRENT PROGRAM CONTRACT TERMS Reservation Request...19 Incentive Claim...21 ATTACHMENTS: CALIFORNIA ENERGY COMMISSION GUIDELINES FOR CALIFORNIA S SOLAR ELECTRIC IN- CENTIVE PROGRAMS (SENATE BILL 1) SECOND EDITION Sample Single Line & Layout Drawings Meter Socket Clearance Requirements Cert Sheet Residential Retrofit Energy Efficiency Customer Declaration

3 1 SMUD S 10-YEAR PROGRAM SMUD s Photovoltaics Incentive Program supports the development of a local market for photovoltaic (PV) electricity by offering direct subsidies for PV systems that are installed on the customer s side of the meter and that are designed to offset all or part of the customer s annual electricity usage. In 2007, SMUD began implementing California Senate Bill 1 (SB1), which requires utilities to: adopt, implement, and finance a 10-year PV incentive program offer an incentive of at least $2.80 per watt by January 2008 set 10-year installation and budget goals proportional to the utility s share of statewide load, which in SMUD s case amounts to 125 megawatts (MW) of new capacity by the end of 2016 $130.5M in incentives reduce incentive levels by an average of no less than 7% per year or more over the next 10 years SB 1 establishes three specific expectations for California s program: 1. High-quality solar energy systems with maximum system performance to promote the highest energy production per ratepayer dollar 2. Optimal system performance during periods of peak demand 3. Appropriate energy efficiency improvements in the new and existing home or commercial structure where the solar energy system is installed SMUD BUDGET & INCENTIVES In response to SB1, SMUD developed the budget and rebate structure shown in the table below. The steps designate the number of MW to be awarded at a given incentive level. The incentive level available at any given time will depend on how fast the market uses the incentives available in each step. The current incentive level will be posted on smud.org. Incentive levels for the SMUD SB1 program will be reduced automatically over the duration of the program once the MW allocated to a given step are reserved. This incentive program will end no later than December 2016, depending on how fast the incentives are used. Step 1 (2007) Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 TOTAL Incentives $14.6 $21.3 $20.9 $19.0 $16.3 $14.3 $9.4 $6.0 $4.4 $3.9 $130.0 Commercial $0.8 $12.5 $13.2 $12.4 $11.6 $10.5 $6.5 $4.2 $2.9 $2.3 Residential $13.9 $8.8 $7.7 $6.7 $4.7 $3.9 $2.9 $1.8 $1.5 $1.6 Megawatts Commercial Residential Res Retro New Solar Homes Incentive Buydown ($/W) $2.50-$3 $2.50 $2.20 $1.90 $1.55 $1.10 $0.65 $0.35 $0.25 $0.20 PBI 5-yr ($/kwh) $0.40 $0.35 $0.30 $0.25 $0.17 $0.10 $0.06 $0.04 $0.03 PBI 10-yr ($/kwh) $0.24 $0.21 $0.18 $0.15 $0.11 $0.06 $0.03 $0.02 $0.02

4 2 The solar energy system must be located on the same premises where the consumers own electricity demand is located. The system must be connected to SMUD s electrical distribution grid or connected within the SMUD customer s facility distribution system served by SMUD. A project will be counted in a step as soon as an incentive reservation has been approved by SMUD and a reservation confirmation is sent to the customer. If a project fails to be completed, the kilowatts covered by the incentive reservation will be reinstated in the step that was in effect on the date the funds were reserved. Projects can be moved forward based on application date and project status. The rebates available within each step will be allocated by customer segment (commercial, residential retrofit, new solar homes, and multifamily affordable housing). Market activity will be evaluated on a quarterly basis by staff, and incentive funds may be redeployed between market segments as necessary to ensure that goals are met as efficiently as possible. SMUD owns the renewable energy credits (RECs) produced by the system, but customers may elect to retain rights to the RECs in exchange for a reduced incentive; incentive reductions will be based on SMUD s current market price for RECs. SCHEDULE SMUD began its PV Incentive Program responding to SB1 legislation on January 1, The PV Program will continue through December 31, 2016 unless legislation directs otherwise or SMUD reaches its portion of the California-wide goal prior to that date. Energy efficiency requirements established in the CEC GUIDELINES FOR CALIFORNIA S SOLAR ELECTRIC INCENTIVE PROGRAMS (SENATE BILL 1) SECOND EDITION will begin July 1, See Energy Efficiency Section in v in this document. PARTIES IN THE SMUD PV INCENTIVE PROGRAM/PROCESS The PV Incentive Program is available to SMUD customers who receive electricity from SMUD. The Host Customer must be the utility customer of record at the location where the generation equipment is located. The Host Customer may act as the applicant and/or System Owner. The Host Customer retains sole rights to the incentive reservation. They also have the right to designate the Applicant, Installer or System Owner. In circumstances where the Host Customer is not on the Electric Service Provider Account, a letter of explanation must be submitted explaining the relationship of the Host Customer to the person(s) who is on the utility service bill and interconnection agreement. SMUD s Net Metering Agreement will apply to the SMUD Customer. The System Owner is the owner of the generating equipment at the time the incentive is paid. For example, when a vendor sells a turnkey system to a Host Customer, the Host Customer is the System Owner. In the case of a third-party-owned system contracted under a Power Purchase Agreement (or leased system, for example), the third party (or lessor) is the System Owner. The System Owner should be designated on the Reservation Request Form, if known at that time, and on the Incentive Claim Form. If different from the Host Customer, the System Owner shall also be a party to the SMUD PV Incentive Program. SMUD may require documentation substantiating equipment ownership. SMUD s Interconnection Agreement applies to the System Owner. The Applicant is the primary contact for the application process.

5 3 The Payee will be the recipient of the incentive and may be the Applicant, System Owner or Host SMUD Customer. Installers must possess a Contractors State License Board A, B, C-10, or C-46 contractor s license. Self installs can receive the incentive for PV installations placed on their own personal residence. Roofing contractors with a C-39 license may place PV panels in accordance with the limitations of their license. Electrical connections must not be made by the roofing contractor. Although not required, installation contractors are encouraged to become certified by the North American Board of Certified Energy Practitioners (NABCEP). For additional information on NABCEP, refer to SMUD also recommends that the installer be registered with and meet the pre-screening criteria. In all cases, systems must be installed in conformance with the manufacturers specifications and all applicable electrical and building codes and standards. SMUD PV CONTRACTORS LIST SMUD maintains a list of PV contractors which is accessed by many of our customers. To be on the list, a contractor must prove experience with PV installations, meet SMUD s insurance requirements and possess a current C-10 or C-46 contractor license. Class B General Contractors who are certified with NABCEP, or like programs (IBEW & NECA Solar Certification) are also qualified. Contact SMUD for more information. SYSTEM COMPONENTS To receive incentives, all PV modules and inverters will be new equipment and listed with the California Energy Commission. List of approved PV equipment can be located at the GoSolar- California website. Eligibility requirements for components are summarized below: PV modules must be certified to UL 1703 by a nationally recognized testing laboratory (NRTL). Performance meters must measure kwh (or Watt hours) with a manufacturer's uncertainty of ±2 or ±5 percent (depending on rating size and incentive), retain data in the event of a power outage, and be easy to read for the customer's benefit. SMUD generally supplies the production meter. Installers provide the meter socket. Inverters must be certified to UL 1741 by a Nationally Recognized Testing Laboratory (NRTL). They also must have completed the Energy Commission's required weighted efficiency testing. Electrical Requirements All electrical wiring (including grounding), shall comply with manufacturer s recommendations, National Electrical Code, and all applicable local codes and ordinances. An AC disconnect (that has an air gap) is required for all grid connected PV systems. The line side of the AC disconnect shall be connected to the dedicated PV circuit breaker in the main service panel. The load side of the AC disconnect shall be connected to the load side (lower jaws) of the PV meter socket. The line side of the PV meter socket (upper jaws), is connected to the Inverter AC output (in a one inverter system), or to the line side of the AC sub-panel (also called the Inverter Distribution Panel (IDP)) in a multiple In-

6 4 verter system. In the case of a multiple Inverter system, each breaker in the IDP is connected to the AC output of each Inverter. A DC disconnect (that has an air gap) is required, if not already incorporated into the inverter. Installations must include a Meter Socket PV 4-Jaw 125 Amp 1PH (B-line 011 or Circle A&W 011) that will accommodate the PV Production Meter installed by SMUD to measure the energy generated by the customer. (This meter is in addition to the standard revenue meter used for net metering.) Where the PV array is on a secondary structure, refer to enclosed document entitled, Disconnect & Metering Locations & Standards, for the siting of disconnects, the siting of the PV meter and the number of required disconnects. SYSTEM SIZE There is no limit on system size, so long as the system is sized not to exceed the customer s annual energy consumption. However, only one MW per customer is allowed at a given incentive level. Each additional megawatt will drop to the next lower level (e.g., for a 3 MW system, the 1st MW=$2.50/W, 2nd= $2.20/W, 3rd= $1.90/W). SMUD Rate Regulations currently in effect do limit net metering to 1MW or less; however, custom contracts may allow large customers to recoup full net metering value from multi-megawatt systems. The expected production of electricity by the system may not exceed the actual energy consumed during the previous 12 months at the site, as calculated per this formula: Maximum System Capacity (kw-ac) = Previous 12 months electric usage (kwh/year) / 1,600 (hours/year) In the case of Applicants with new or expanded sites where no electric bill has been accrued or where the existing electric bill does not reflect the Applicant s expected expanded consumption, the Applicant must include an engineering estimate. The engineering estimate must include the appropriate substantiation of the forecast of the Host Customer site s annual energy use (in kwh) if the generating system size is based on future load growth, including new construction, load growth due to site expansion, or other load growth circumstances. Suggested methods of demonstrating load growth include an Electric Load Sheet with corresponding equipment schedules and single-line diagram; building simulation program reports such as Micropas, equest, EnergyPro, DOE-2, and VisualDOE; or detailed engineering calculations. SHADING A system is considered to have minimal shading if no obstruction is closer than a distance of twice its height. Obstructions include any roof equipment, neighboring trees, poles, buildings, or other objects. Landscaping should be evaluated at the expected mature height. If there are obstructions, then a shading analysis is required. Submittals may include a table showing distance to height ratios per orientation, photo of a Solar Pathfinder, or printouts from the Pathfinder Assistant, or Solmetric SunEye, or like equipment. Shading results shall be used to estimate the annual energy production. Incentives will be adjusted based on shading analysis. Shading inputs are entered within the PowerClerk application tool. SMUD provides a tool that generates the input values from a Solmetric SunEye file.

7 5 SYSTEM WARRANTY All systems must have a minimum 10-year warranty provided in combination by the manufacturer and installer to protect the purchaser against defective workmanship, system or component breakdown, or degradation in electrical output of more than fifteen percent from their originally rated electrical output during the 10-year period. The warranty must cover the entire solar generating system, including PV modules (panels) and inverters, and provide for no-cost repair or replacement of the system or system components, including any associated labor during the warranty period. Proof of warranty can be demonstrated in the executed solar purchase contract, lease or power purchase agreement. Contractor warranty for the photovoltaic modules shall cover a minimum of 20 years against degradation of performance below 80% of original output under standard test conditions (STC). The contractor shall provide a written one-year warranty against roof leaks from date of completed installation. Self-installed systems must have a minimum 10-year warranty on the equipment to be installed to protect the purchaser against breakdown or electrical output degradation of major system components. In this case, the warranty need not cover the labor costs associated with removing or replacing major components because any repairs would be done by the self-installer or at the self-installer s expense. PERFORMANCE METERS All systems will be installed with a performance meter. The meter socket will be provided by the installer. The meter will be provided by SMUD at no cost. It is highly encouraged to contact SMUD prior to installation to coordinate meter location and equipment specifications. Information regarding interconnection can be obtained at the following web site: Exception: Performance meters are not required on SolarSmart Homes with pre-approval and builder contract in place. Production data for each installation will be provided to SMUD on an agreed upon method and period. PERMANENCY Equipment is intended to be in place for the duration of its useful life. Only permanently installed systems are eligible for incentives. This means that the PV system must demonstrate adequate assurances of both physical and contractual permanence prior to receiving an incentive. Physical permanence is to be demonstrated in accordance with industry practice for permanently installed equipment. Equipment must be secured to a permanent surface. Any indication of portability, including, but not limited to, temporary structures, quick disconnects, unsecured equipment, wheels, carrying handles, dolly, trailer, or platform, will deem the system ineligible. INSPECTIONS & CERTIFICATION SMUD generally performs two inspections for each project. The first is made after the Reservation Request Form and required documents are delivered to SMUD. This initial inspection establishes the accuracy of the application with respect to shading, array tilt and orientation, and physical location. The second inspection is performed after receipt of the Incentive Claim Form after the project is installed. This inspection will document final equipment specs and system characteristics along with compliance with SMUD s Interconnection Guidelines. This is not a

8 6 formal NEC compliance inspection, however wiring inconsistencies or electrical connections may be addressed. If a system fails an inspection, the contractor will have 60 calendar days to bring the system into compliance. Contractors who fail two inspections will be on probation, wherein every project will be inspected. If the contractor on probation fails a third inspection, the entity will be disqualified from participating in the SMUD PV Program for one year. A Cert Sheet will be required for systems receiving EPBI payments. See Attachment. All systems smaller than 100kW are to use the supplied sheet. Systems larger than 100kW can submit system certification documents but all required information must be noted and highlighted (isolation, voltage, short circuit current, string size, etc) SMUD s inspection rules and procedures will conform to the CEC s GUIDELINES FOR CALI- FORNIA S SOLAR ELECTRIC INCENTIVE PROGRAMS (SENATE BILL 1), SECOND EDITION (Appendix 2 and part of this Handbook). INCENTIVE CALCULATION The customer can choose one of the following options regardless of the size of the system or whether it is serving a residential or commercial account: An up-front incentive based on the expected performance of the system as determined by the equipment rated capacity, array tilt, tracking, orientation, and shading. This option is known as the expected performance-based incentive, or EPBI. A stream of payments for energy produced by the system over a span of 5 or 10 years. The incentive will be a flat cents-per-kwh payment for all output from the system. This option is known as the performance-based incentive, or PBI. PBIs will be the only option provided for systems not owned by the SMUD (Host) customer. Residential systems will be offered the 5-year PBI only. How EPBIs and PBIs Are Calculated EPBI. The expected performance-based incentive is an up-front buydown based on estimated performance, taking into account the major factors that affect performance of the specific installation (i.e., components, orientation, tilt, shading). Basically, the EPBI tool calculates the rebate for a proposed system based on a comparison with an optimally designed system, as defined in chapter 4 of the CEC s SB1 Guidelines, available at To the extent that a system deviates from optimal design, the incentive is reduced or increased as appropriate by the calculator. The contractor will enter the system s characteristics as part of the on-line incentive reservation request. The incentive to be awarded will be calculated automatically by SMUD s web-based incentive application tool ( PowerClerk ) and this information will be immediately available to the contractor. This estimated incentive will later be verified by a pre-installation field inspection. Once SMUD and the installation contractor have accepted a common performance estimate, SMUD will reserve the incentive for the project.

9 7 PBI. PBIs pay for kwh produced by the system instead of the kw capacity installed. PBIs are offered for 5-year or 10-year terms in Output of the system will be measured by SMUD and the incentive will be paid monthly by check. Customers who remove systems while PBI payments are being made can continue to receive incentive payments once the panels are reinstalled within the District. The down-time period will be added to the contract duration and will not reduce the total number of monthly payments received. SMUD prefers that reinstallation occur within 6 months, but exceptions will be made if circumstances warrant. The customer must complete new interconnection and net metering agreements at the new address. If the house or business is sold, the new owners can continue to receive a PBI if they complete new interconnection and net metering agreements. CODES AND STANDARDS The installation must comply with Federal and State Department of Energy (DOE) standards. ASHRAE, City and County building codes, ASTM, Uniform Mechanical Code (UMC), National Electric Code (NEC), Uniform Building Code (UBC), California Building Code (CBC) and manufacturer installations specifications, as appropriate. Installed systems must meet the highest industry standards in terms of safety, workmanship, reliability, and performance. SMUD requires proof of appropriate City/County/State building permit for residential PV installations. Installation shall be considered complete when the relevant City/County building permit has been signed off by the relevant authority, and a PV System Certification Sheet is received by SMUD. Any damage caused by the contractor or workers to customer s property or premises shall be repaired at contractor s expense. ENERGY EFFICIENCY Refer to Chapter 5 in the CALIFORNIA ENERGY COMMISSION GUIDELINES FOR CALI- FORNIA S SOLAR ELECTRIC INCENTIVE PROGRAMS (SENATE BILL 1) SECOND EDITION. Summary and documentation requirements are stated below. New Construction Residential Subdivisions - All homes will meet the current standard of SMUD s SolarSmart New Home Program. Call Wade Hughes for Single customer homes Minimum of 15% better than current Title 24 o Title 24 CF-1R Form required at time of application Commercial Minimum of 15% better than current Title 24 Equipment or appliances installed under the building contract will be Energy Star labeled o All Title 24 compliance documents submitted for building permit

10 8 Existing Buildings Specific information about energy efficiency measures shall be provided to the building owner. The intent of the information is for the person who is responsible for paying the utility bill and the person who is responsible for building operations to receive information on: 1) their building s energy use, 2) energy efficiency investigation options for their buildings, and 3) possible energy efficiency improvements. SMUD will provide information to the building owner/manager/ratepayer before the design and installation of any proposed photovoltaic system to enable the building owner/manager/ratepayer to make informed decisions on energy efficiency investments. The building owner/manager/ratepayer shall sign and provide to SMUD a copy of the signed disclosure that certifies that this information was provided to him and identifies which, if any, energy efficiency measures will be taken. If measures are to be installed after the installation of the solar energy system, then the building owner/manager/ratepayer shall declare on the disclosure when the measures are expected to be installed. For existing commercial buildings with conditioned floor area of less than 100,000 square feet and for existing residential buildings, an energy efficiency audit shall be conducted. SMUD allows on line or telephone audits. Building owners, managers, and/or ratepayers shall be responsible for submitting a copy of the audit results with their solar incentive applications. The information and disclosure shall be provided to the building owner/manager/ratepayer via a Webbased information portal or paper format. The building owner/manager/ratepayer shall complete and sign the disclosure form and submit a copy to the program administrator. Residential SMUD customers must perform an on-line audit or telephone audit prior to the PV incentive application approval. The SMUD customer performing the on-line audit ( will the audit to solarpv@smud.org. The SMUD customer may also receive a telephone audit by calling a SMUD energy advisor at The customer must also sign the Residential Energy Efficiency Disclosure Agreement and submit to SMUD with application. Commercial Benchmarking For solar energy systems to be eligible for incentives when installed to serve an existing commercial building, the energy use intensity (EUI) shall be benchmarked using Portfolio Manager or the equivalent energy performance rating for building types that cannot receive a rating by Portfolio Manager. Portfolio Manager can be accessed on the Internet at [ Building types that are not able to receive an energy performance rating using Portfolio Manager, shall be benchmarked using the Energy Commission s equivalent energy performance rating system. Retrocommissioning Retrocommissioning shall be required for all existing commercial buildings that are 100,000 square feet or larger and have a benchmark rating of less than 75, or an equivalent energy performance rating as determined by the Energy Commission. Retrocommissioning is required to

11 9 begin no later than one year after the completion of the installation of the PV system. Systems to be retrocommissioned include but are not limited to: Heating, ventilation, and air conditioning systems and controls. Lighting systems and controls. Daylighting systems and controls. Domestic hot water systems and controls. Renewable energy systems and associated equipment and controls. Process equipment and appliances specific to hospital, restaurant, and hotel/motel operations. Refrigeration in supermarket and refrigerated warehouses. Equipment repairs and adjustments and cost effective energy efficiency measures identified in the building retrocommissioning assessment shall be implemented to improve the building s energy performance rating. If a building is improved to exceed a rating of 75, further energy efficiency measures are not required. If equipment/appliance replacement is recommended during the retrocommissioning process, the replacement shall be made with ENERGY STAR equipment or appliances, or equipment or appliances that qualify for utility energy efficiency incentives, whichever is more efficient. For buildings equal to or larger than 100,000 square feet and with a benchmark or equivalent energy performance rating of less than 75, retrocommissioning, equipment repairs and adjustments, and energy efficiency improvements that are identified through a retrocommissioning assessment shall either be completed prior to or in conjunction with the installation of the solar energy system. Alternatively, retrocommissioning shall be committed to be completed at a later date by the building owner/manager/ratepayer through a Commitment Agreement. The Commitment Agreement shall indicate when the retrocommissioning will begin, and commit the owner/manager/ratepayer to complete equipment adjustments, or cost-effective efficiency improvements identified in the retrocommissioning assessment. The retrocommissioning shall begin no later than one year after the completion of the installation of the PV system. Energy Efficiency Exceptions for Existing Commercial Buildings The specific energy efficiency requirements in these Guidelines for existing commercial buildings are not required for the following: Agricultural and industrial facilities which are not covered by Portfolio Manager or the Energy Commission s equivalent benchmark rating are not required to be benchmarked. Energy efficiency is not required to be addressed when solar energy systems are not serving electricity to a building. The energy audit, benchmarking and retrocommissioning are not required for buildings that have complied with Title 24 requirements for newly constructed buildings during the last 12 months prior to applying for the solar energy incentive; proof of Title 24compliance shall be included with the solar energy system incentive application. Retrocommissioning is not required for existing commercial buildings that have a current ENERGY STAR label. Retrocommissioning is encouraged but not required for PBI applicants.

12 10 COMMERCIAL APPLICATION MILESTONE Incentive levels will be reserved for Applications made with executed contracts. The following project milestones must also be met: Projects less than 250 kw: SMUD Interconnection Application will be made within 3 months Copy of Building Permit Application and plan check fee payment will be submitted to SMUD within 6 months Project will complete within 9 months Projects greater than 250 kw: SMUD Interconnection Application will be made within 6 months Copy of Building Permit Application and plan check fee payment will be submitted to SMUD within 9 months Project will complete within 12 months New construction projects any size: Since contractor and customer contracts do not apply with new construction projects, incentive levels will be reserved with the following documents: commitment letter from the host customer project schedule Project progress reports will be made every 3 months to document incorporation of PV installation in project design Incentive reservations will be held for 18 months Self installed projects any size: Since contractor and customer contracts do not apply with this model, incentive levels will be reserved with the following documents: commitment letter from the host customer project schedule Project progress reports will be made every 30 days Copy of Building Permit Application and plan check fee payment will be submitted to SMUD within 9 months Project will complete within 12 months Shy of meeting the above project milestones, reserved incentives (along with associated kw capacity) will return to the original step level in which it was reserved. SMUD has the discretion to reallocate the unused capacity in the following methods: Add the capacity to other PV Program goals Move projects reserved in a lower incentive level up to the higher rate. This will be performed in an unbiased manner and be based on a projects initial completed application date Hold and avail the capacity and associated incentive level for the benefit of non-profit companies

13 11 HOW TO PARTICIPATE To be eligible for an incentive, the Applicant must receive a confirmed reservation notice letter from SMUD prior to the Applicant receiving final interconnection authorization and incentive reservation amount. The Applicant must meet all minimum equipment and performance requirements, solar energy system design and installation standards, and energy efficiency requirements prior to receiving an incentive. If a project cancels due to not meeting the reservation period, the Applicant must reapply to the SMUD PV Incentive Program. All solar electric systems receiving incentives under the SMUD PV Incentive Program must be connected to the local electric utility s distribution system. The interconnection, operation, and metering requirements for solar systems shall be in accordance with SMUD s rules for customer generating facility interconnections. To connect a solar system to the utility distribution system, Host Customers, and/or System Owners will be required to execute certain documents such as, but not limited to, Interconnection Agreement and Net Energy Metering Agreement. SMUD will use PowerClerk, an on-line application tool similar to the one used with the California Solar Initiative. The table below summarizes the basic rebate provision process. RESIDENTIAL APPLICATIONS Applicant Submits Reservation Request Via PowerClerk; Applicant enters Host Customer, System Owner, Installer, system components & design characteristics in PowerClerk. Incentive is automatically calculated. Applicant submits, prints, & obtains applicable signatures on SMUD Reservation Request Form. Applicant sends signed request & required documentation to SMUD o PV Electrical Interconnection Agreement o Net Metering Payment agreement o Single line drawing o PV module layout o Copy of executed contract for system purchase and installation o Energy Efficiency Documentation (July 1, 2009) o Loan Documents if applicable Loan Application Loan Agreement and Disclosure Financing Statement Notice of Right to Cancel PowerClerk status becomes Reservation Request Submitted. SMUD Confirms Reservation Request reviews application documents reviews one-line drawing reviews financing application if applicable

14 12 pre-installation inspection may be made, system characteristics (shading, orientation, tilt) may be adjusted in PowerClerk. Adjustments to characteristics will modify incentive amount. Upon favorable review of the above, SMUD confirms the reservation request and notifies the applicant by letter. PowerClerk status becomes Confirmed Reservation. Applicant Requests Final Inspection After receiving notice of the Confirmed Reservation and completing the system installation, the Applicant notifies SMUD and requests final inspection. To do this, the Applicant: enters as-built system components & characteristics in PowerClerk. Adjustments to characteristics will modify incentive amount sends required documentation to SMUD: o SMUD Solar PV Contractor Installation Certification (if EPBI) o Proof of Building Department Final Inspection o Completed SMUD Certification Sheet PowerClerk status becomes Final Inspection. SMUD Performs Final Inspection reviews submitted documentation inspects the system and adjusts system characteristics in PowerClerk if applicable requests installation of meters so customer can begin net metering PowerClerk status becomes Final Submittal. Applicant Submits Incentive Claim Form Once the project status reaches Final Submittal, Applicant: enters Payee in PowerClerk if not done previously submits, prints, & obtains applicable signatures on SMUD Incentive Claim Form. sends form to SMUD PowerClerk status becomes Incentive Claim Request Review SMUD Processes Incentive Claim Request & meters are set receives claim form Net Metering and Interconnection Agreements mailed to appropriate parties Notifies SMUD Billing approves payment verifies meters have been installed PowerClerk status becomes Completed.

15 13 COMMERCIAL APPLICATIONS Applicant Submits Reservation Request Via PowerClerk; Applicant enters Host Customer, System Owner, Installer, system components & design characteristics in PowerClerk Incentive is automatically calculated Applicant submits, prints, & obtains applicable signatures on SMUD Reservation Request Form. Applicant sends signed request & required documentation to SMUD o SMUD Generating Facility Interconnection Application with required documentation (SMUD-2655) o Copy of contracts pertinent to the purchase, installation, and/or financing of PV system and/or PPA Agreement o Single line drawing o Drawing(s) showing proposed module layout o Short Form C/I Financing Application (SMUD-2835) if applicable o Energy Efficiency Documentation (Required effective July 1, 2009) PowerClerk status becomes Reservation Request Submitted. A. No supporting documents: If supporting required documents are not submitted with Reservation Request Form, the Project will remain in Reservation Request Review status until all documents are submitted. Incentives calculated at time of application are not guaranteed to be available. If required documents are not received within 30 days, the application will status will become cancelled. SMUD Confirms Reservation Request reviews application documents reviews one-line drawing reviews financing application if applicable pre-installation inspection may be made, system characteristics (shading, orientation, tilt) may be adjusted in PowerClerk. Adjustments to characteristics will modify incentive amount Upon favorable review of the above, SMUD confirms the reservation request and notifies the applicant by letter. PowerClerk status becomes Confirmed Reservation. Applicant Requests Final Inspection After receiving notice of the Confirmed Reservation and completing the system installation, the Applicant notifies SMUD and requests final inspection. To do this, the Applicant: enters as-built system components & characteristics in PowerClerk. Adjustments to characteristics will modify incentive amount sends required documentation to SMUD: o Proof of Building Department Final Inspection

16 14 o PV Electrical Interconnection Agreement (SMUD-2529) o Net Metering Payment Agreement (SMUD-2528) o Completed Certification Sheet o SMUD Solar PV Contractor Installation Certification if EPBI PowerClerk status becomes Final Inspection. SMUD Performs Final Inspection reviews documentation inspects the system and adjusts system characteristics in PowerClerk if applicable. Adjustments to characteristics will modify incentive amount requests installation of meters so customer can begin net metering PowerClerk status becomes Final Submittal. Applicant Submits Incentive Claim Form Once the project status reaches Final Submittal, Applicant: enters Payee in PowerClerk if not done previously submits, prints (right click within form and click print), & obtains applicable signatures on SMUD Incentive Claim Form. sends form to SMUD PowerClerk status becomes Incentive Claim Request Review SMUD Processes Incentive Claim Request & meters are set receives claim form Net Metering and Interconnection Agreements mailed to appropriate parties Notifies Billing approves payment verifies meters have been installed PowerClerk status becomes Completed

17 15 DETAILS ON NET METERING The District offers a rate option for customers who install a PV system on their own side of the meter and to interconnect it with the District electrical distribution system. In such a system, PV generation is used immediately by the customer or fed into SMUD s distribution system if PV production exceeds the customer s consumption. The final meter reading for billing purposes is the net difference between consumption and generation over the billing period. Figures 1 and 2 illustrate the interaction of site generation and energy use over a 12-month period. Figure 1 shows the relationship of site energy consumption and site generation by month, with both peaking during the summer. Figure 2 illustrates the same use from the net metering perspective. Between June and October, the site is a net generator, with the renewable system generating more electricity than the site consumes. This net generation kwh is best illustrated as the negative area on the chart. During the remaining months, the site is a net consumer of electricity, represented as the positive area in the chart.

18 16 Net-metered customers will receive billing credits for generation energy delivered to the District. For rates with tiered-level charges, the credits are equal to any net energy generated during the billing period multiplied by the tier-level charges, beginning with Tier 1. Net energy generated in excess of the Tier 1 quantity will be multiplied by subsequent tier-level charges. For time-of-use rates, the credits are equal to the TOU charges for the energy recorded in each TOU period. Commercial customers who are charged separately for demand may experience reductions in this charge when the electricity produced by the PV system coincides with the customer peak load. These cost reductions will be automatically registered on the customer s revenue meter. Net-metered customers are exempt from SMUD standby charges. When annual net generation exceeds net consumption over a 12-month period, customers can choose either to carry the credit forward (in which case it will be counted at the retail value) OR sell the excess back to SMUD.

19 17 ADDITIONAL PROGRAM REQUIREMENTS The California Energy Commission authors and publishes the Guidelines for California s Solar Electric Incentive Programs (Senate Bill 1). This document is incorporated entirely (with the exception of Chapter 6, Reporting Requirements) into the SMUD s PV Incentive Handbook. As a condition of participation in the SMUD PV Program, the Host Customer and System Owner must acknowledge and agree to the following terms and conditions, which supplement and are in addition to the program requirements described throughout this Handbook and the Contract attached to the Reservation Request Form. Eligibility: The SMUD PV Program is funded by SMUD utility customers and administered by SMUD for customers within its service territory. Eligible participants in the SMUD PV Program must be current electric distribution customers of SMUD at the facility ( Project Site ) where the solar system (the Project ) will be installed. Incentives: If the Project is installed as described on the Reservation Request Form and all Program and Contract terms and conditions are complied with, including timely submission of all documents described in the SMUD PV Program Handbook, SMUD will pay an incentive to the entity designated as the incentive recipient. SMUD reserves the right to modify or cancel the incentive if the actual installation of the solar system does not meet the SMUD PV Program guidelines, if the solar energy system fails inspection, and/or if the documents submitted fail to meet the requirements of the SMUD PV Program Handbook. Authority to Install System: The Host Customer and System Owner represent that they have the authority to install the generating system at the Project Site, or have obtained the permission of the legal owner of the Project Site, to install the generating system. System Owner and Host Customer shall, at their own expense, obtain and maintain all licenses and permits needed to perform work on the Project. Program Database: The Host Customer and System Owner shall agree to allow all information provided as part of the reservation claim process to be entered into a statewide database that will permit tracking of application for this and other incentive programs. Access to this database will be limited to SMUD, CSI Program Administrators, and the California Energy Commission. Disclosure of Other Incentives: The Host Customer and System Owner understand that other program rebates, grants, forgiven loans, financial incentives, post-installation agreements, Renewable Energy Credits (aka RECs, Green Credits, etc.), and performance payments are other incentives and must be disclosed as soon as those agreements or payments are made. Withdrawal: The Host Customer and System Owner agree that either of them may withdraw from the Project for any reason by providing written notice of such withdrawal to SMUD. In the event the Host Customer or System Owner so withdraws, this Agreement will be cancelled and the Host Customer alone will retain sole rights to the incentive reservation and corresponding incentive reservation number assigned to this Reservation Request Form. To preserve such incentive reservation and corresponding reservation number, Host Customer must submit a new Reservation Request Form at the same time written notification of withdrawal from the Project is provided to SMUD. Host Customer understands that if all available funds are reserved for other Projects, the Host Customer cannot increase the originally reserved incentive amount. Host Customer also understands that submitting a new Reservation Request Form will not move or alter the Proof of Project Advancement Milestone Date provided by SMUD, if any. Host Customer further understands that if Host Customer fails to re-submit a Reservation Request Form at the time of Project withdrawal, this Application will be terminated in its entirety by SMUD and any previously reserved incentive funding will be released. In that instance, Host Customer must apply for a new incentive reservation should Host Customer still wish to participate in the Program. No Endorsement by SMUD: Host Customer and System Owner understand that SMUD s review of the project described herein (Project) and authorization for SB1, Solar electric incentive funding shall not be construed as confirming or endorsing the qualifications of the Applicant or any person(s) involved with the Project, including but not limited to the Project installer(s), designer(s), or manufacturer(s); endorsing the Project design; or as warranting the economic value, safety, durability or reliability of the Project. The

20 Host Customer is solely responsible for the Project, including selection of any designer(s), manufacturer(s), contractor(s), or installer(s). Host Customer and System Owner understand that they, and any third parties involved with the Project, are independent contractors and are not authorized to make any representations on behalf of SMUD. Host Customer and System Owner shall not use SMUD s corporate name, trademark, trade name, logo, identity, or affiliation for any reason, without prior written consent of SMUD. Audit Rights: SMUD reserves the right to verify project costs were incurred as indicated in the documents submitted, as set forth in detail in the SMUD PV Program Handbook. Dispute Resolution: The parties to this Contract shall attempt in good faith to resolve any dispute arising out of or relating to this Contract promptly by negotiations between SMUD or his or her designated representative and an executive of similar authority from System Owner and/or Host Customer. Either party must give the other party or parties written notice of any dispute. Within thirty (30) calendar days after delivery of the notice, the executives shall meet at a mutually acceptable time and place, and shall attempt to resolve the dispute. If the matter has not been resolved within thirty (30) calendar days of the first meeting, any party may pursue other remedies, including mediation. All negotiations and any mediation conducted pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations, to which Section of the California Evidence Code shall apply, and Section is incorporated herein by reference. Notwithstanding the foregoing provisions, a party may seek a preliminary injunction or other provisional judicial remedy if in its judgment such action is necessary to avoid irreparable damage or to preserve the status quo. Each party is required to continue to perform its obligations under this Contract pending final resolution of any dispute arising out of or relating to this Contract. Assignment: Neither System Owner nor Host Customer shall assign its rights or delegate its duties without the prior written consent of SMUD or its assignee, if any, except in connection with the sale or merger of a substantial portion of its assets. Any such assignment or delegation without the prior written consent of SMUD or its assignee, if any, shall be null and void. Consent to assignment shall not be unreasonably withheld or delayed. System Owner and Host Customer must provide assurance of the success of a Project if assigned by providing any additional information requested by SMUD. No Third Party Beneficiaries: This Contract is not intended to confer any rights or remedies upon any other persons other than the undersigned Parties hereto. 18

21 19 CURRENT PROGRAM CONTRACT TERMS CONTRACT TERMS AS INCLUDED IN THE RESERVATION FORM The Host Customer and System Owner wish to install a solar system described on the Reservation Request Form and receive the benefits of the SMUD PV Incentive Program. In consideration of Host Customer s and System Owner s participation in the Program and the promises set forth below, Host Customer and System Owner agree to the following: 1. SMUD PV Program Handbook Requirements: By execution of this document, System Owner and Host Customer each certifies that 1) they have received and read a copy of the SMUD PV Program Handbook; 2) the Project meets all Program eligibility requirements; and 3) that the System Owner and Host Customer agree to abide by the rules and requirements set forth in the SMUD PV Program Handbook. Such Handbook requirements are incorporated herein by reference as though set forth in full in this contract. 2. Indemnification: To the greatest extent permitted by applicable law, Host Customer and System Owner agree to indemnify, defend, and hold harmless SMUD, its affiliates, subsidiaries, current and future parent companies, officers, managers, directors, agents, and employees from all claims, demands, losses, damages, costs, expenses, and liability (legal, contractual, or otherwise), which arise from or are in any way connected with any: (1) injury to or death of persons, including but not limited to employees of SMUD, Host Customer, System Owner, or any third party; (2) injury to property or other interests of SMUD, Host Customer, System Owner, or any third party; (3) violation of local, state, or federal common law, statute, or regulation, including but not limited to environmental laws or regulations; (4) strict liability imposed by any law or regulation; or (5) generation system performance shortfall; so long as such injury, violation, strict liability, or shortfall (as set forth in (1) - (5) above) arises from or is in any way connected with the Project, including Host Customer s, System Owner's, or any third party s performance or failure to perform with respect to the Project, however caused, regardless of any strict liability or negligence of SMUD, their officers, managers, or employees, excepting only such loss, damage, or liability that is caused by the willful misconduct of SMUD, its officers, managers, or employees. 3. Limitation of Liability: SMUD shall not be liable to System Owner, Host Customer or to any of their respective contractors or subcontractors for any special, incidental, indirect or consequential damages whatsoever, including, without limitation, loss of profits or commitments, whether in contract, warranty, indemnity, tort (including negligence), strict liability or otherwise arising from SMUD s performance or nonperformance of its obligations under this Contract. 4. Term & Termination: The Term of this Contract shall begin on the date that the last Party signs it, and shall continue for ten years, unless terminated earlier pursuant to the operation of this Contract, or unless modified by written agreement of the Parties. The Contract may be terminated by SMUD in the event (a) System Owner or Host Customer fails to perform a material obligation under this Contract and System Owner or Host Customer fails to cure such default within 20 days of receipt of written notice from SMUD, or (b) any statement, representation or warranty made by System Owner or Host Customer in connection with the Program or this Contract is false, misleading or inaccurate on the date as of which it is made. The termination of this Contract shall not operate to discharge any liability which has been incurred by either Party prior to the effective date of such termination.

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