2013 SREC Outlook in NJ & MA

Transcription

1 2012 SEIA 2012 SEIA 2013 SREC Outlook in NJ & MA Katie Bolcar Rever, Director Mid-Atlantic States, SEIA Konstantin Braun, Managing Partner, Smart Energy Capita George Ashton, VP and CFO, Sol Systems

2 2012 SEIA Antitrust Reminder As a trade association of competitors, SEIA must comply with and be mindful of antitrust laws. It is important that competitively sensitive matters are not discussed on this call, including product prices or costs; sales terms or conditions; production levels; sales territories; marketing plans; industry forecasts; or bid terms. If any such topic is raised, I will stop the conversation and, if necessary, end the call. For more information, SEIA s antitrust guidelines are available on our website.

3 2012 SEIA Introduction to SEIA SEIA is the voice of the U.S. solar energy industry Founded in ,000 member companies Across the US, including NYSEIA Largest solar companies in the world We promote solar to the State Policy Makers, White House and Congress Working with local chapters and other key industry players at the state level Mission: Build a strong solar industry to power America

4 2012 SEIA SEIA Member Benefits Industry news and research Discounts on SEIA conferences (Solar Power International, PV America) and seminars (Finance Seminar, Installer Safety Seminar, Siting and Permitting Seminar, Solar Market Insight Conference) Free, optional listing in the online SEIA member directory and use of the SEIA member logo Industry leadership opportunities in technology, market and issuebased divisions, working groups and committees A role in the development of legislation and regulations for the solar industry Targeted subject-matter education, plus opportunities to present at SEIA seminars or webinars High-level access to solar industry leadership; networking event sponsorship opportunities

5 2012 SEIA About today s webinar Agenda: Overview of US market SRECs in NJ SRECs in MA Q&A Presenters: Konstantin Braun, Managing Partner, Smart Energy Capital George Ashton, VP and CFO, Sol Systems Disclaimer: Today s webinar is educational in nature. The views expressed are not necessarily the views of SEIA and should be understood as the opinion of the presenters.

6 2012 SEIA Solar in America: Strong and Getting Stronger 119,000 American workers in solar double the number in 2009 at 5,600 companies across the country

7 Billions ($) 2012 SEIA Solar Is an Economic Engine The value of U.S. solar installations is projected to be over $10 billion in 2012, up from $8.6 billion in There are now 119,000 solar workers in the U.S., a 13.2% increase over 2011 employment totals. 1 Value of U.S. Solar Installations U.S. Solar Workforce $12.0 $10.0 $8.0 $6.0 $4.0 $ $ E SEIA Estimate SEIA/GTM Research SEIA Estimate The Solar Foundation 1 The Solar Foundation National Jobs Census 2012

8 Installed Capacity (MWdc) 2012 SEIA Solar Continues to Boom- 684 MW Installed in Q PV demand grew 44% in Q over Q U.S. PV Installations Annual Q1 Q2 Q3 Q4 Projected

9 Installed Capacity (MWdc) 2012 SEIA Another Record Year of Installations Industry projected to install 3,200 MW in 2012, 70% over 2011 s record annual total. One of the fastest growing sectors in the US economy PV Installation Forecast , , , ,194 3, E 2013E 2014E 2015E 2016E Residential Commercial Utility

10 2012 SEIA State Q3 Performance 12 states installed 10 MW or more in Q The Massachusetts s market grew 58% over Q2 2012, driven in part by strong commercial installations California s DG market had a bounce back quarter, with 46% growth over Q State Rank (Q3 PV Installations) California 1 Arizona 2 New Jersey 3 Massachusetts 4 Nevada 5 Maryland 6 Texas 7 North Carolina 8 Hawaii 9 Pennsylvania 10

11 Installed Price ($/W) 2012 SEIA Solar More Affordable Than Ever Average system prices have declined 33% since Q $12.00 Blended Average System Price $10.00 $8.00 $6.00 $4.00 $2.00 $ Q1-Q LBNL "Tracking the Sun IV" SEIA/GTM Research

12 2012 SEIA Solar Market Insight: Q Detailed data on markets in top 25 states plus DC available in full report. Free executive summary provides national aggregate data on installations, pricing, manufacturing and demand forecasts. Full report for sale (50% discount to SEIA members) includes quarterly forecasts as well as detailed market segment and state data.

13 NJ SREC Market Overview December 18, 2012 COPYRIGHT SMART ENERGY CAPITAL Page 13

14 SRPS Requirement as % of Load NJ RPS NJ SRPS Schedule - New vs Previous Requirements 5.500% 4.500% 3.500% 2.500% 1.500% 0.500% EY13 EY14 EY15 EY16 EY17 EY18 EY19 EY20 EY21 EY22 EY23 EY24 EY25 EY26 EY27 EY28 New SRPS Requirement Previous SRPS Requirement Source: SEIA COPYRIGHT SMART ENERGY CAPITAL Page 14

15 NJ RPS Approximately 950 MW installed (end of November 2012) Energy Year % of Load Est. MWh Est. MWdc 2013 N/A 596, % 1,630,000 1, % 1,984,000 1, % 2,227,000 1, % 2,500,000 2, % 2,706,000 2, % 2,824,000 2, % 2,945,000 2, % 3,069,000 2, % 3,195,000 2, % 3,325,000 2, % 3,458,000 2, % 3,595,000 2, % 3,734,000 3, % 3,877,000 3, % 4,024,000 3,353 COPYRIGHT SMART ENERGY CAPITAL Page 15

16 SACP ($) NJ RPS NJ SACP - New vs Previous EY13 EY14 EY15 EY16 EY17 EY18 EY19 EY20 EY21 EY22 EY23 EY24 EY25 EY26 EY27 EY28 New SACP Schedule Previous SACP Schedule Source: SEIA COPYRIGHT SMART ENERGY CAPITAL Page 16

17 Capacity Added (MW) Installed Capacity & 6 Month Moving Average of Capacity Added Jun- 10 Sep- 10 Dec- 10 Mar- 11 Jun- 11 Sep- 11 Dec- 11 Mar- 12 Jun- 12 Sep mos avg 6 mos avg Source: NJCEP COPYRIGHT SMART ENERGY CAPITAL Page 17

18 Cumlative Capacity (MW dc) NJCEP Forecast 1, , ,000.0 Cumulative Installed Capacity By Month (MW dc) Installed Capacity Forecast - High Forecast - Low Period Ending Source: NJCEP COPYRIGHT SMART ENERGY CAPITAL Page 18

19 NJCEP Forecast Energy Yr (RPS Req) Item Low Med High Est Avail (MWh) 704, , ,688 EY2012 (442 GWh) % of RPS Requirement 159.4% 159.4% 159.4% MW Difference EY2013 (596 GWh) EY2014 ( GWh) EY2015 ( GWh) EY2016 ( GWh) Est Avail (MWh) 1,367,488 1,377,688 1,394,288 % of RPS Requirement 229.4% 231.2% 233.9% MW Difference Est Avail (MWh) 2,184,788 2,327,188 2,489,788 % of RPS Requirement 131.6% 140.1% 149.9% MW Difference Est Avail (MWh) 2,239,388 2,632,388 3,058,288 % of RPS Requirement 112.8% 132.6% 154.1% MW Difference Est Avail (MWh) 2,207,388 2,893,988 3,653,288 % of RPS Requirement 99.1% 129.9% 164.0% MW Difference (16.8) ,188.2 Source: NJCEP COPYRIGHT SMART ENERGY CAPITAL Page 19

20 NJ SREC Pricing Current pricing Flat curve in with bid/offer levels in the $80-$100 area Key contributors to excess supply Boom-bust cycle Relative lack of transparency Treasury Cash Grant Structure of EDC programs Going forward Long-term SREC contracts Improved transparency COPYRIGHT SMART ENERGY CAPITAL Page 20

21 NJ SREC Estimated Long-Term Fundamental Value Two pricing scenarios (20 years, no escalation) High total revenue requirement of 26 cents / kwh Low total revenue requirement of 14 cents / kwh Key factors Cost of project (construction + development) kwh production Cost of capital Availability of Federal incentives Common impediments, affecting: Cost of projects design, site costs, interconnection costs, unrelated costs Production levels tilt, orientation, shading, PPA term Cost of capital credit, lack of SREC hedges, lack of fixed-price PPA COPYRIGHT SMART ENERGY CAPITAL Page 21

22 SRECPrices.com Massachusetts Market Update George Ashton III, Vice President & CFO Sol Systems, LLC Solar Market Finance Expertise

23 Our Company Let s Make Solar Simple TM Sol Systems SREC Aggregation & Finance Largest SREC aggregator Trusted partner to thousands of homeowners and businesses 350 developer and installer partners PV and ST portfolio of 35MW Facilitated over $100 million in project financing through SRECs SolMarket Project Development & Finance Innovator in solar energy finance and development 300+ solar projects seeking financing $2.7 billion in aggregate capital seeking projects 300+ SolMarket members 20+ MW of SolMarket projects financed or at term sheet Solar Market Finance Expertise

24 Market Set Up Current Market Rules 6 Month Delay between Minting and Generation SRECs born with current year eligibility July Auction at the end of each compliance year Only owners and Agents can participate in Auction Proposed Rule Changes Concrete ACP schedule Anyone can participate in the Auction Remove Governing Term in RPS formula ACP Supply Auction Market Price Demand $0 Solar Market Finance Expertise 24

25 Capacoty kw Supply / Demand 600,000 MA SREC MARKET DYNAMICS 500, , , , , /1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018 1/1/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/2019 SREC Demand 78,577 81, , , , , , , ,000 SREC Supply 26, , , , , , , , ,000 EOY Capacity - 36, , , , , , , , ,000 Solar Market Finance Expertise 25

26 Market Pricing Spot Market Prices Long Term Prices Term Jan 12 Jul 12 Dec 12 2yr $310 $255 $180 3yr $275 $190 $165 5yr $225 $170 $130 Solar Market Finance Expertise 26

27 Execution Strategies Execution Strategy Availability Risk Reward Spot Market Sales Medium Medium High RFPs Low Low Medium Short Term Contracts Medium Medium Low Upfront SREC Sales Low Low Low Investor Owned Low Low Medium Solar Market Finance Expertise 27

28 SREC Services Market Research Quarterly SREC Market Webinars Monthly SREC Commentary SREC Prices.com Specialized Reports SREC Execution Services SREC Research SREC Strategy Development SREC Monetization Execution Portfolio Management SREC Research SREC Execution SREC Servicing Solar Market Finance Expertise 28

29 2012 SEIA Contact Information Konstantin Braun George Ashton Katie Bolcar Rever