Ahead of the Curve: Architectural Solar and How to Pay For It Presented by:
AGENDA Ø Introductions Ø Trends Transforming the Building Industry Ø Innovation Overview: Architectural Solar Ø Innovation Overview: Solar PACE Financing Ø Use Case Ø Take-Aways Ø Q + A
INTRODUCTIONS Rob Watson is an international leader in market transformation for green buildings, known by many as the “founding father of LEED.” Under Rob’s direction, LEED became the largest and fastest-growing international standard by which green buildings are measured. Rob’s inspiring career has seen tenures at the Natural Resource Defense Council. Rob Watson The ECON Group , one of Rob’s various current organizations, is a building optimization company with the unique ability to CEO & Chief optimize both environmental performance and economic return Scientist throughouth the building lifecylce. Their LeenOps platform bridges the gap between building sustainability and the bottom- line.
INTRODUCTIONS Chris Klinga has 10 years of experience as a trained mechanical engineer and licensed structural engineer, deeply involved with integrating the solar and building industries. Through construction experience, work with Solaria and leadership in the Architectural Solar Association, Chris is a driving force bringing about design-driven solar solutions. Chris Klinga Solaria has developed a technology platform that unlocks the potential for solar energy allowing it to be ubiquitously accessed Senior Project through innovative and optimized solar technologies. Solaria is Engineer cutting costs, improving efficiencies and pioneering decentralized power generation, enabling the trend toward sustainable building and supporting the architects and developers involved.
INTRODUCTIONS Joshua Kagan focuses on cultivating channel partnerships and working with direct owners of commercial real estate to create accretive market-based solutions that positively impact the planet and unlock value. Prior to joining CleanFund, he ran the Carbon War Room’s global energy efficiency division. Prior to the War Room, he was a Senior Analyst with cleantech VC firm Atlas Capital Investments. Joshua Kagan CleanFund is a national leader in Commercial PACE financing, solving big challenges for the $60 billion solar and energy VP of Business efficiency market for U.S. commercial buildings. A direct capital Development provider with 100% focus on Commercial PACE, CleanFund offers project financing solutions to both owners and developers of high-performance buildings.
1. TRENDS The innovations driving the building industry towards sustainability
TAKING STOCK The Problem The Solution LEED was a good start, but the Green is the norm in new industry is structurally incapable of construction, though existing stock is delivering full sustainability. stubbornly hard to penetrate. ◍ Still missing the forest for the trees Wellness will be a good hook. Buildings still use the most energy of all sectors, though less than 20 years ago, in spite of adding 30% more floor Multiple innovations in design area. technology and finance coming together to leverage fractal networks.
BUILDING A MOVEMENT Innovations Transforming the Market Industry and the Way We Think ◍ Design tools finally catching up. ◍ Industry needs dramatic consolidation. ◍ Architectural Solar (BIPV) beginning to take-off. ◍ Buildings as strategic assets vs. cost centers. ◍ PACE provides access to better capital. Finally capitalizing sustainability vs. expensing it.
AHEAD OF THE CURVE Ø Big Data or Big Garbage? Ø Self-Sufficiency is Growing Ø Building as Branded Service Inter- and Intra-connection of data-sharing devices is growing wildly, but on a foundation of questionable data. Nonetheless, the network effect will lead to good mix of independence and interdependence. Utilities beware! Emphasis on building services means asset utilization with grow significantly w/opportunity for financial innovation. Good for environment, but new construction will contract— almost exclusively for replacements.
2. ARCHITECTURAL SOLAR Innovative applications maximizing generation and building performance
SOLARIA Solaria transforms conventional PV cells into optimized PV solutions through a proprietary module architecture and manufacturing process Integrated Mfg. Line Silicon PV Cells
SOLARIA PRODUCT SUITE PowerVision ™ PowerXT ™ PowerSpandrel ™ Transparent architectural High Efficiency solar module Architecturally appealing, glass delivers energy with best in class shade opaque solution with industry efficiency and high power tolerance. leading power density. density. Module Module Power Power Area D ensity PV C overage VLT (W atts) (SqFt) (W att/sqft) PowerVision 43% 51% 150 25.0 6.0 PowerS pandrel 100% 0% 350 21.7 16.1 PowerXT 100% 0% 400 22.7 17.6
THE SOLARIA ADVANTAGE Applications Multi-Functional Advantage Solaria Advantage Rooftop PV Efficiency Canopies Shading Weather Barrier Architectural Structures Messaging Window Awnings Appearance Shading Rainscreens Glare Control Bifacial Bird -Safe Capability Balustrades Safety Shading Sloped Glazing Weather Sound Barrier Vertical Spandrel Glazing Bird Barrier Safe Shading Vertical Vision Glazing
ENHANCED BUILDING PERFORMANCE ENABLED BY C-PACE FINANCING Multi-Functional Value Canopies Arch. Struct. Awnings Balustrades Rainscreens Rooftop PV Vision Glass Spandrel Glass Sloped Glazing Most Integrated Least Integrated High Low Market Barriers Market Barriers Applications
COMPELLING ECONOMICS NREL PV Installed Cost Per Sqft (Commercial 200 kW) $100.00 $90.00 $80.00 $70.00 Cost Per SQFT $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $- 2009 2010 2011 2012 2013 2014 2015 2016 * Commercial $64.62 $59.93 $40.96 $35.75 $36.62 $31.00 $30.87 $28.70 Residential $87.23 $76.48 $53.59 $50.39 $45.57 $43.63 $42.46 $40.92 Areas based on module area and average yearly efficiencies outlined in NREL Q1 2016 Benchmark Report (Fu et al. 2016) All figures 2009-2015 Ref. Fu et al. 2016 *2016 data based on .49 cent module price in SEIA Solar Market Insight Report 2016 Q4 and NREL 2015 BOS Data.
INCREMENTAL COST $1.17 / Watt - Baseline Installation Cost * + $0.62 to $3.50/watt Incremental BIPV Module Cost ** $1.79 - $4.67/Watt : Total Incremental Cost ($27-$70/sqft @15.6% Effic.) Traditional Solar Installation Cost (Fu et al. 2016) 5 MW Utility PV = $1.82 100 kW Commercial PV = $2.29/W Residential PV = $2.93/W * Includes typical PV labor without module & racking install (~$0.05/watt or 70% of install labor) ** Cell, encapsulant and additional glass costs.
ITC VALUE Approximate Insulated Curtain Wall Installed Price $80-120 / sqft Typical - $80 / sqft Assumed What is the Tax Basis on a Curtain Wall? There is precedence for 100% but it will vary based on the installation. 50% Assumed in analysis. 100% = $34-$51/sqft 50% = $17-$26/sqft
A SYMBIOTIC RELATIONSHIP ◍ Architectural Solar enables C-PACE to encompass more of a building’s cost ◍ C-PACE enables financing for integrated applications otherwise hard to finance
3. Solar PACE FINANCING Innovative finance solution enabling accretive efficiency and renewable projects in commercial buildings
ABOUT CLEANFUND CleanFund is a nationwide financing platform that solves big challenges for the $60 billion energy efficiency and solar market for U.S. commercial properties. We make renewable energy, water conservation, energy efficiency, seismic strengthening and other building improvements easy and affordable for commercial property owners. Our products leverage a new financial technology – property assessed clean energy ( PACE ) – that is based upon centuries-old land-secured financing. Payments are billed and collected in the form of property taxes.
WHAT IS PACE? ◍ PACE exists because lowering the carbon footprint of the built environment is in the public interest – just like other bond financings that show up on property tax bills (schools, roads, fire stations). ◍ The power of PACE is based upon two simple provisions: Secured as a parcel assessment • Billed and paid via ordinary property taxes • ◍ PACE has achieved strong growth nationwide: Legislation passed in 33 states & D.C. • 45 active PACE programs nationwide • PACE Legislation Passed Active PACE Programs Source: PACENation
WHAT PROBLEMS CAN PACE SOLVE? Barrier Solution Upfront project cost/lack of funds 100% third party financed Tendency that only “low-hanging fruit” Up to 30 year financing enables deep projects get done retrofits to be accretive Property assessment treated as an Inability or unwillingness to take on operating expense, not debt additional debt Split incentives Tenants share cost/savings in NNN leases Transferable to next owner Owner might be selling building
WHAT CAN BE FINANCED? Energy Efficiency Air Sealing & Ventilation Envelope EV Charging Insulation Windows Elevator Modernization HVAC Systems Refrigeration Building Controls Lighting Compressed Air Water Conservation Renewable Energy Low Flow Fixtures Solar Grey/Black Water Wind Rainwater Harvesting Fuel Cell Irrigation & Controls Cogeneration Most Soft Costs Seismic (CA) Permits Seismic strengthening Architectural, Engineering Plans improvements Measurement & Verification may qualify
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