Distributed Energy Resources (DERs)
DERs are electricity-producing resources or controllable loads that are directly connected to a local distribution system or connected to a host facility within the local distribution system. They include solar PV, ESS, and HVAC or other equipment that utilities can control to regulate peak demand.
Energy Storage System (ESS)
Also known as a battery, ESS can provide substantial savings on your electric bill, provide backup energy, and add value to your property. When charged only with Solar PV, energy Storage systems are eligible for the ITC and Depreciation. ESS will play a huge part in the future of DERs.
Solar Panels 101
Solar PV panels convert sunlight into "Direct Current". Most residential panels have 60 cells and are about 40”x66”; while commercial panels have 72 cells and are 10” longer. Typical 60-cell panels produce about 325W while commercial panels produce about 375W. Panels come in two types: "Poly" or "Mono".
Polysilicon vs Mono-silicon Solar Panels
The amount of waste silicon is less compared to monocrystalline. Polycrystalline solar panels tend to have slightly lower efficiency. Both perform well, but Mono panels are usually preferred when price and available square footage are not an issue
What is string inverter?
A standard inverter (also known as a string-inverter or central inverter) is a standalone box that is typically installed close to your fuse box and electricity meter. A string inverter functions in a series circuit with there usually being 6-10 solar panels in what is known as a "string". Once combined into strings, the inverter converts the combined DC energy to AC energy, the kind of energy supplied by the electric grid. Technically, inverters search for a sine wave that grid’s energy creates and outputs the AC energy with the same wave; this ensures that when you switch between solar and grid supplied energy your lights do not flicker. Some central inverters come with panel level optimizers which help the conversion efficiency and often come with built in safety feature like “module level rapid shutdown”. Panel level optimizers have similar benefits to Micro Inverters but are preferred by ACDC for numerous reasons.
What is a Micro-inverter?
They also convert DC to AC but at the panel level, then send AC energy from the roof. ACDC does not typically using Micro Inverters for a few reasons, most notably, they are a pain to maintain and are not cost effective. Imagine having 300 micro inverters on a roof! Sometimes, it makes sense to use microinverters in situations where there are multiple small arrays, like you would find on a residential roof. Or if there is shading that passes over the array throughout the day. The issue with Micro Inverters is that they must be installed one at a time, so there is no scalability on larger systems and often times are not used on systems larger than 150kW due to their cost. Even still, using panel level optimizers are ACDC’s preferred method when dealing with shading, safety, and optimizing efficiency.
Roof mounted solar panels either on a pitched roof common for residential projects or a flat roof more common for commercial applications.
Ground Mounted Solar
A solar array that is mounted to a structure build specifically and only for solar. This structure typically qualifies for the ITC. Consult your tax advisor for eligibility.
A structure designed provide a structure for solar panels and covered parking. This structure qualifies for the ITC typically, however, LED lighting does not. Consult your tax advisor for eligibility.
Investment Tax Credit (ITC)
The ITC is a federal tax credit that is 26% of the installed price on both home solar and business owned arrays. All equipment necessary for the installation of the solar panels is usually eligible. With the exception for roofs and lighting on Carports. Check with your tax advisor for your eligibility.
Depreciation of Solar Energy Property
With new tax code, businesses are allowed to write off 100% of the depreciation basis in the first year. At a 21% tax rate, the cash value is 18.27% of the installed price. Check with your tax advisor for your eligibility. Depreciation basis = 100% - (ITC percentage / 2)... i.e. 88% = 100% - (26%/2) (for 2020)
Transition Renewable Energy Credits (TRECs)
At their core, TRECs are very similar to SRECs: both incentives are based on the production of your solar panel system, and you receive certificates based on megawatt-hour (MWh) of solar production. However, SRECs and TRECs vary in two important ways: fixed versus variable pricing, and factorization. While Landfill or brownfield installations, as well as, net metered non-residential rooftop or carport have a factor of 1. Net metered Residential: ground mount, rooftop, or carport, and, Net metered non-residential ground mounts have a factor of 0.6.
For the leasee, a Capital Lease is essentially a laon; the leasee is eligible to receive all the tax and environmantal credits the system is eligible for. A Capital lease is a lease agreement in which the lessor agrees to transfer the ownership rights to the lessee after the completion of the lease period. Capital or finance leases are long term and non cancellable in nature. Available for businesses only.
And operating lease and a lease-to-own option that ACDC loves. It is not specific to solar but provides huge benefits to for-profit customers without a tax appetite. In this case, the lender would tax the tax incentives and provide a fixed, interest free payment for 7 or 10 years depending on credit and location for the customer/site. Then at the end of the term, there is a buyout. The buyout is about 85% of the installed price. So in lieu of interest, you split the tax benefits with the bank in an off-balance sheet agreement. The monthly payments are 100% tax deductible and the buyout are eligible for the ITC (most likely 10% by that time). Available for businesses with investment grade credit only.
Power Purchase Agreement (PPA)
An Power purchase agreement is the solar at its lowest on the totem pole where customers pay per kWh produces from the system… Typically PPAs are 0$ upfront and come with an agreed upon rate for energy. Sometimes these rates can change. PPAs should be left to large organizations that have the resources to vet each proposal. There are many pitfalls that can arise from a seemingly fair PPA. The biggest issue ACDC has with PPAs it the assumed inflation rate for utility rates and the subsequent inflation rate for the PPA payments. We feel strongly that many inflations rates used by third parties are unjustified and provide customers very little to no benefits. ACDC provides PPAs in certain use cases but ALWAYS prefers a customer to choose one of our purchase options.
Power Purchase Lease (PPL)
Very similar to a PPA with one main exception. Instead of paying per kWh, customer pay to rent the equipment and keep any energy, and sometimes performance-based incentives produced.
Performance-Based Incentives (PBIs)
PBI are fixed values based per kWh that are earned by either producing energy by a solar or discharging energy by an ESS. They are another way states are rewarding customers for installing Solar and ESS with ACDC Solar.
Massachusett's SMART Program
An newly launched incentive program in Massachusetts that is the next step in DER incentives. It provides both solar PV and ESS PBIs that last between 10-20 years depending customer type. SMART is the culmination of the last few decades of renewable energy incentives. ACDC believes it is one of the best programs ever created.
Non-bypassable charges. (NBCs)
Non-bypassable charges are per-kilowatt hour charges that are built into utility electric rates. They add up to approximately 2-3 cents per kWh and go towards funding energy efficiency, low-income customer assistance, and other related programs.
Behind the Meter (BTM)
Generally speaking, most residential and commercial systems installed are what we call behind the meter, meaning most if not all energy value is applied to the bill of the facility where the energy is generated, and not credits to a third party off-site. This does not mean that if you net-meter energy you are no longer BTM eligible. Net metering is not a factor when determining BTM status. Though the ITC and depreciation are not affected by BTM status, other incentives may be.
What is a Duck Curve?
In utility-scale electricity generation, the duck curve is a graph of power production over the course of a day that shows the timing imbalance between peak demand and renewable energy production. The term was coined in 2012 by the California Independent System Operator. In plain speak, utilities have issues providing energy before solar starts in the morning, and in the evening when solar declines and eventually stops. This is a real and difficult challenge to fix since our grid is dumb, it is very hard for utilities to determine how, when and where to supply energy at any given moment. This problem is the biggest hurdle to widespread renewable energy integration and the only way to combat this is the use of ESS in homes, businesses and Utility owned DER sites. Utilities in California are tackling this problem two ways, more DERs and they are changing how they charge for electricity by making evening electricity more expensive.
Peer to Peer Energy Market
In the near future you will be able to sell your energy in real-time to your neighbors using crypto-currency and state of the art software. This is already being done in New Zealand. Imagine you have a solar PV + storage and you’re on vacation, you can sell any or all of that energy to whomever you want!
Vehicle to X Charging Stations
That’s right, simply plug your electric car into a charging station and choose where to charge, sell or optimize based on your schedule. Say you go to work and plug your car into a V2X charging station. And while you are at work the utility requests energy in your area, you can sell your energy in your electric car to the utility at a peak rate, then charge back up when the rates decrease… mind blown!