John Lushetsky, Program Manager of the Solar Energy Technologies Program at the DOE Office of Energy Efficiency and Renewable Energy, presented on April 19, 2010 at the GW Solar Institute Second Annual Symposium. more information at http://solar.gwu.edu/Symposium.html

1. Challenges to Solar as a Leading Solution to Climate and Energy Problems George Washington University Solar Institute | April 19, 2010 John LushetskyProgram ManagerSolar Energy Technologies ProgramU.S. Department of Energy

2. Challenges to Solar Costs Hardware Installation and other soft costs Access to land, transmission, and financing Grid Integration 2

3. SETP is focused on enabling high penetration of solar energy technologies Slide 3 3

4. Solar Vision Study Goals of the study Evaluate the technical, economic, and environmental feasibility of meeting 10-20% of electricity demand from solar energy technologies by 2030; and Identify technology Research, Development, Demonstration, Deployment (RD3) and Policy options that could be employed to help achieve this vision. Scope of Study Includes PV (central and distributed), CSP, and Solar Water Heating/Cooling. Committee Members and Working Group Over 100 participants from Industry, National Labs, and DOE Scheduled for release in mid-2010

7. Standard financial assumptions overestimate LCOE due to combination of tax effects and higher cost of capital than in the market.* No state, local or utility incentives are included. The range in residential PV LCOE is due to different insolation and financing conditions. For a complete list of assumptions, see DOE Solar Cost Targets (2009 – 2030), in process. ‡ The electricity rate range represents one standard deviation below and above the mean U.S. residential electricity prices. $ The system is located in Phoenix, AZ and financed with a real cost of capital of 7.0%. The capital recovery factor does not take into account the ITC or financing tax preferences.

10. Standard financial assumptions yield LCOE estimates that are towards the high end of the program’s range due to excluding the 10% ITC and depreciation* Assumes IOU or IPP ownership of PV, and thus the LCOE includes the taxes paid on electricity generated. Includes 5-year MACRS but not state or local incentives. The range in utility PV LCOE is due to different insolation and financing conditions. For a complete list of assumptions, see DOE Solar Cost Targets (2009 – 2030), in process. ‡ The electricity rate range represents one standard deviation below and above the mean U.S. wholesale electricity prices. § The 2009 CA MPR includes adjustments by utility for the time of delivery profile of solar (low case: SDG&E, mid case: PG&E, high case: SCE).

11. Historical and Projected PV Learning Curve

12. Reaching Grid Parity Targets will require advances in all system components

14. Create and modify curricula and align them to highest standards

15. Create replicable training models for local instructors

16. Use innovative approaches such as online tools and mobile labs

17. Leverage resources and share best practicesREGIONS: Northeast Northern Mid-Atlantic Southern Mid-Atlantic Southeast Midwest South-Central Rocky Mountain California/Hawaii Providers Partnership The Energy Institute at HCC - Northeast Florida Solar Energy Center at UCF

18. Slide 10 25 Solar America Cities Partnerships

19. Solar Guide for Local GovernmentsPublished in July 2009 Slide 11 Solar Powering Your Community: A Guide for Local Governments Provides policy and program descriptions, implementation tips and options, and real life examples in areas of: Organizing and strategizing efforts Accelerating demand through policies and incentives Updating and enforcing local rules and regulations Engaging utilities Creating jobs and supporting economic development Accelerating demand through outreach and education Leading by example with installations on government properties www.solaramericacities.energy.gov/resources

22. Standard financial assumptions overestimate LCOE due to excluding the 10% ITC and depreciation, and higher capital intensiveness.CSP LCOE with standardized financial assumptions * Assumes IOU or IPP ownership of CSP, and thus the LCOE includes the taxes paid on electricity generated. Includes 5-year MACRS but not state or local incentives. The range in utility CSP LCOE is due to different technologies, capacity factors and financing conditions. For a complete list of assumptions, see DOE Solar Cost Targets (2009 – 2030), in process. ‡ The electricity rate range represents one standard deviation below and above the mean U.S. wholesale electricity prices. § The 2009 CA MPR includes adjustments by utility for the time of delivery profile of solar (low case: SDG&E, mid case: PG&E, high case: SCE).

24. Demonstrations of operating facilities fully representative of utility-scale systems.

25. Project selected based on technology performance and cost and environmental benefit evaluated by qualified engineering and financial companies.

27. Successful demonstrations may qualify for DOE Loan Guarantee.

28. Site planning and infrastructure and transmission arranged under DOE leadership.

30. Hawaii – Rule 14h (Docket #2010-0015) and Feed-In-Tariff (Docket #2008-0273)These rules could limit market penetration of distributed and centralized solar

31. High Penetration Solar Deployment Arizona Public Service Company - Study the impacts of 1.5 MW of photovoltaic (PV) generation connected to a typical residential feeder Commonwealth Edison Company - Evaluate consumer reactions when a utility provides advanced metering and price signals for electric power with PV, without PV, and with both PV and energy storage Florida State University - Identify the need for technical solutions to address any issues identified with high-penetration levels of grid-connected photovoltaics including protection, control strategies, and technologies National Renewable Energy Laboratory - Utilize modeling and simulation, laboratory testing, and field demonstrations to determine the effect of high penetrations of up to 500 MW of mostly commercial scale rooftop PV systems on electrical distribution systems Sacramento Municipal Utility District - Determine the value of advanced metering infrastructure, PV, and the additional value of storage University of California San Diego - Develop advanced modeling tools and electric power control strategies to optimize electric power value and to mitigate the impact of PV-sourced electricity on existing microgrids and the SmartGrid Virginia Polytechnic Institute and State University - Evaluate both existing and prototype power conditioners designed at Virginia Tech to identify cost-effective approaches to address issues associated with high-penetration PV systems

32. Solar Vision StudyPreliminary Key Messages & Insights For both 10% and 20% scenarios, major technology breakthroughs are not required for PV and CSP. 10% scenario is achievable with the current electricity infrastructure; 20% scenario would require significant transmission expansion and grid operations advancement. Siting poses significant, but not insurmountable, challenges to achieving the 20% scenario. Financing growth on supply chain/corporate side is not an issue, however, on the project side will need to move beyond tax equity markets to meet targets. Slide 16 Preliminary Results Not for official release

33. Thank You John LushetskyProgram ManagerSolar Energy Technologies ProgramU.S. Department of Energy john.lushetsky@ee.doe.gov 202-287-1685 www.solar.energy.gov 17