With moratorium for natural gas in place for a good portion of Cape Cod, Cape Light Compact has been working with several agencies to come up eith efficient heating options.

1. Cape Cod Targeted Heating
and Cooling Assistance
Overview for Cape Cod Commission – Ad Hoc Working Group
March 6, 2015
DPU / DOER / MassCEC / Cape Light Compact / National Grid

2. 2
Cape Cod Situation
• 5-7 year moratorium on new natural gas
interconnections for parts of Cape Cod
• Parts of Cape Cod & Islands have no access
to natural gas
• Increased electricity prices
• Residents seeking cost-effective alternatives
for space and water heating
Approach: DPU convened relevant agencies,
utilities, and organizations to develop a
coordinated strategy to meet customer needs
for alternatives during moratorium
Natural Gas Moratorium Towns
Additional Cape & Islands Towns
Background & Approach

3. Alternative Heating Strategy
1. Outreach: immediately engage with Cape Cod customers, organizations, and
trade groups
• First phase targets residential customers, commercial customers in second phase
2. Informational resources: create and offer consumers neutral data on alternative
heating options
3. Existing incentives: promote existing efficiency and renewables rebates and
financing options
4. Renewable heating: MassCEC promotes deployment of renewable heating
technologies, including
Timeframe: Throughout duration of moratorium
3

4. Technologies
Options for space heating, cooling and Domestic Hot Water
4

5. Natural Gas
Space heating and Domestic Hot Water
• Standard technology
• Not currently available to most Cape Cod customers
• Conversion moratorium projected to be in place for 5-7 years (National Grid)
5

6. Electric Resistance
Space heating and Domestic Hot Water
• Standard technology
• Easy and cheap install and maintenance, but highest energy cost of all
technologies due to low efficiency
6

7. Fuel Oil
Space heating and Domestic Hot Water
• Standard technology
• Requires ongoing oil delivery, but available Cape-wide
7

8. Propane, then Natural Gas
Space heating and Domestic Hot Water
• Specific scenario in which residence first converts to propane and
then to natural gas when moratorium is lifted (assumed 7 years)
• Cheap and easy conversion from Propane to Natural Gas ($300)
• Only relevant for towns where natural gas distribution is available
8

9. Air Source Heat Pump
Space heating and cooling
• Mini-split systems are easy and quick to install (no ductwork)
• Lowest upfront cost of the renewable heating options
• Also provides A/C
• Effectiveness depends on building lay-out (number and size of rooms)
9

10. Ground Source Heat Pump
Space heating and cooling
• Very high installation cost, though significant incentives available
• Need for expert installer (limited installer pool locally), right underground
conditions for well drilling
• Also provides A/C
10

11. Pellet Boiler
Space heating and Domestic Hot Water
• Boiler and heat distribution technology is similar to Natural Gas and
Fuel Oil, making it a good retrofit candidate
• Central heating system with automated pellet feed
• Requires bulk pellet delivery (~3x per year) - currently limited on the Cape
• Need to have space for fuel storage
11

12. Heat Pump Water Heater
Domestic Hot Water
• Very efficient electric water heater
• Mass Save rebate available
• Best when it can be placed in basement or garage
12

13. Solar Thermal and PV
Space heating, Domestic Hot Water and electricity
• Solar PV: offsetting electric consumption, making it a good
combination with heat pumps
• Solar thermal: supplemental source of heating for domestic hot water
and/or space heating
• High upfront cost, very low operational costs, and incentives available
13

14. Data
Cost scenario’s and Greenhouse Gas emissions
14

15. Analysis of Residential Customer Costs
Financial analysis conducted for alternative technologies
• Typical existing home on Cape Cod
• Installation costs as Cape Cod specific as possible
• Operational costs (20 years) based on current energy rates and EIA projections
• Available state and federal incentives
• Sensitivity scenarios
• Electric and gas rates and heat pump costs
• Duration of moratorium
15
Disclaimer: the analysis
included here is generic and
for illustration purposes
only. Actual costs will vary
based on project specifics.

16. Customer Scenarios
• Comparisons
• Upfront and Lifetime costs
• Greenhouse Gas emissions
16
New Build: type of heating/cooling system
needs to be decided
Retrofit: existing heating system needs to
replaced
With/Without cooling With/Without cooling
Heating distribution system needed Heating distribution system already exists
Include Domestic Hot Water heater Replace existing Domestic Hot Water heater

17. Upfront cost for heating, hot water and cooling
New home, including A/C, including incentives
17
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000

18. Upfront cost for heating, hot water
Retrofit of existing home, no A/C, including incentives
18
$-
$10,000
$20,000
$30,000
$40,000
$50,000

19. Lifetime cost for heating, hot water and cooling
New home, including A/C, including incentives
19
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000

20. 20
-70% -60% -50% -40% -30% -20% -10% 0%
Electric Resistance
Fuel Oil
Fuel Oil/Solar Hot Water
Fuel Oil/Solar Combi
Ground Source Heat Pump
Biomass/Solar Hot Water
Biomass/Solar Combi
Biomass Pellets
Propane/Natural Gas
Natural Gas
Ground Source Heat Pump/Solar PV
Air Source Heat Pump
Air Source Heat Pump/Solar PV
Lifetime cost compared to Electric Resistance
New home, including A/C, including incentives

21. 21
-70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40%
Electric Resistance
Fuel Oil
Fuel Oil/Solar Hot Water
Fuel Oil/Solar Combi
Ground Source Heat Pump
Biomass/Solar Hot Water
Biomass/Solar Combi
Biomass Pellets
Propane/Natural Gas
Natural Gas
Ground Source Heat Pump/Solar PV
Air Source Heat Pump
Air Source Heat Pump/Solar PV
Lifetime cost compared to Fuel Oil
New home, including A/C, including incentives

22. 22
-60% -40% -20% 0% 20% 40% 60% 80% 100%
Electric Resistance
Fuel Oil
Fuel Oil/Solar Hot Water
Fuel Oil/Solar Combi
Ground Source Heat Pump
Biomass/Solar Hot Water
Biomass/Solar Combi
Biomass Pellets
Propane/Natural Gas
Natural Gas
Ground Source Heat Pump/Solar PV
Air Source Heat Pump
Air Source Heat Pump/Solar PV
Lifetime cost compared to Natural Gas
New home, including A/C, including incentives

23. Lifetime cost for heating, hot water
Retrofit of existing home, no A/C, including incentives
23
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000

24. 24
Lifetime cost compared to Electric Resistance
Retrofit, no A/C, including incentives
-70% -60% -50% -40% -30% -20% -10% 0%
Electric Resistance
Ground Source Heat Pump
Fuel Oil
Fuel Oil/Solar Hot Water
Fuel Oil/Solar Combi
Air Source Heat Pump
Biomass/Solar Hot Water
Biomass/Solar Combi
Biomass Pellets
Propane/Natural Gas
Ground Source Heat Pump/Solar PV
Air Source Heat Pump/Solar PV
Natural Gas

25. 25
Lifetime cost compared to Fuel Oil
Retrofit, no A/C, including incentives
-60% -40% -20% 0% 20% 40% 60% 80%
Electric Resistance
Ground Source Heat Pump
Fuel Oil
Fuel Oil/Solar Hot Water
Fuel Oil/Solar Combi
Air Source Heat Pump
Biomass/Solar Hot Water
Biomass/Solar Combi
Biomass Pellets
Propane/Natural Gas
Ground Source Heat Pump/Solar PV
Air Source Heat Pump/Solar PV
Natural Gas

26. 26
Lifetime cost compared to Natural Gas
Retrofit, no A/C, including incentives
0% 20% 40% 60% 80% 100% 120% 140% 160% 180%
Electric Resistance
Ground Source Heat Pump
Fuel Oil
Fuel Oil/Solar Hot Water
Fuel Oil/Solar Combi
Air Source Heat Pump
Biomass/Solar Hot Water
Biomass/Solar Combi
Biomass Pellets
Propane/Natural Gas
Ground Source Heat Pump/Solar PV
Air Source Heat Pump/Solar PV
Natural Gas

27. Annual Greenhouse Gas emissions
Space heating and Domestic Hot Water
27
0.0
2.0
4.0
6.0
8.0
10.0
12.0
TonsCO2/year

28. Customer outreach
Strategies
28

29. Alternative Heating Strategy
1. Outreach: immediately engage with Cape Cod customers, organizations, and trade groups:
• Cape Cod Commission ad-hoc committee,
• building contractors/realtors associations,
• municipal officials, etc.
2. Informational resources: create and offer consumers neutral data on alternative heating options
• Central web landing page and customer triage (Cape Light Compact) - http://www.capelightcompact.org/ccoptions/
• Informational handout (Cape Light Compact, National Grid)
• Renewable heating concierge service (MassCEC)
3. Existing incentives: promote existing efficiency and renewables rebates and financing options
4. Renewable heating: MassCEC promotes deployment of renewable heating technologies, including
• Coordinating with local groups organizing bulk purchasing
• Supporting targeted marketing
• Identifying industry gaps and supporting workforce training efforts
Timeframe: Throughout duration of moratorium
29

30. Additional Slides
Background information
30

31. 31
Acronym
ER Electric Resistance
FO Fuel Oil
NG Natural Gas
LP-NG Propane converted to Natural Gas after 7 years
FO/SHW Fuel Oil with additional Solar Hot Water
FO/SolCombi Fuel Oil with Solar Combi for space heating and domestic hot water
BIO Biomass pellet boiler
BIO/SHW Biomass pellet boiler with Solar Hot Water
BIO/SolCombi Biomass pellet boiler with Solar Combi for space heating and domestic hot water
GSHP Ground Source Heat Pump
GSHP/PV Ground Source Heat Pump with Solar PV
ASHP Air Source Heat Pump
ASHP/PV Air Source Heat Pump with Solar PV

32. Customer Scenarios
HVAC
technologies
modeled for new
buildings and
retrofit of existing
buildings
32
Note: policy may need to
be clear on fuel switching
and/or savings
adjustments from
eventually switching fuels
Space heating Domestic Hot Water
Natural Gas Secondary heater
Fuel Oil Secondary heater
Electric resistance Electric Storage Water Heater
Temporary shift to Propane and then to
Natural Gas in 7 years
Secondary heater
Air Source Heat Pump Heat Pump Water Heater
Ground Source Heat Pump Heat Pump Water Heater
Biomass Pellet boiler Secondary heater
Additional to Fuel Oil, Biomass
Solar Combi System Solar Hot Water
Additional to Air Source and Ground Source Heat Pumps
Solar PV

33. Calculation details
• Sensitivity scenarios
• High electricity rate: 30% higher than EIA long term outlook
• High natural gas rate: 30% higher than EIA long term outlook
• High ASHP install cost: 50% higher than average cost of $4,000/unit
• Low ASHP install cost: 25% lower than average cost of $4,000/unit
• NG moratorium duration: 5 and 9 years versus assumed 7 years
• Solar Installation assumptions
• Solar domestic hot water: serves 60% of annual DHW load
• Solar combi system: serves 40% of annual heating and DHW load
• Solar PV system: 7kW financed with low interest loan
33

34. 34
Source: DOER Markets Division, data as of 1/31/2015 looking out to 2026

35. Base Case
35
New Construction – incl. A/C
Technology
Net Present
Cost
Capital Cost
20-yr
Operating
Cost
Electric Resistance $ 83,867 $ 11,250 $ 115,696
Fuel Oil $ 66,319 $ 23,250 $ 73,263
Fuel Oil/Solar Hot Water $ 66,087 $ 26,470 $ 67,781
Fuel Oil/Solar Heating $ 62,461 $ 36,900 $ 45,243
Ground-Source HP $ 58,815 $ 36,150 $ 38,569
Biomass/Solar Hot Wat. $ 58,669 $ 28,970 $ 51,338
Biomass/Solar Heating $ 58,464 $ 39,400 $ 34,540
Biomass Boiler $ 58,069 $ 25,750 $ 55,424
Propane to Natural Gas $ 56,967 $ 22,750 $ 53,311
Natural Gas $ 45,768 $ 21,750 $ 41,095
Ground-Source HP w/ PV $ 44,085 $ 36,150 $ 14,102
Air-Source HP $ 43,750 $ 12,650 $ 50,139
Air-Source HP w/ PV $ 29,019 $ 12,650 $ 25,672
Retrofit – excl. A/C
Technology
Net Present
Cost
Upfront
Cost
20-yr
Operating
Cost
Electric Resistance $ 75,407 $ 4,500 $ 112,483
Ground-Source HP $ 48,421 $ 26,150 $ 37,192
Fuel Oil $ 48,334 $ 6,500 $ 70,049
Fuel Oil/Solar Hot Water $ 48,103 $ 9,720 $ 64,567
Fuel Oil/Solar Heating $ 44,477 $ 20,150 $ 42,029
Air-Source HP $ 42,531 $ 12,650 $ 48,211
Biomass/Solar Hot Wat. $ 40,685 $ 12,220 $ 48,124
Biomass/Solar Heating $ 40,479 $ 22,650 $ 31,326
Biomass Boiler $ 40,084 $ 9,000 $ 52,210
Propane to Natural Gas $ 38,983 $ 6,000 $ 70,049
Ground-Source HP w/ PV $ 33,690 $ 26,150 $ 12,725
Air-Source HP w/ PV $ 27,800 $ 12,650 $ 23,744
Natural Gas $ 27,783 $ 5,000 $ 37,881

36. Greenhouse Gas Emissions
36
Relative to NG
Electric Resistance 54%
Fuel Oil 40%
Fuel Oil/Solar Hot Water 29%
Propane to Natural Gas 24%
Natural Gas 0%
Fuel Oil/Solar Heating -16%
Air-Source Heat Pump -34%
Ground-Source Heat Pump -49%
Biomass Boiler -50%
Biomass/Solar Hot Water -54%
Biomass/Solar Heating -70%
ASHP/GSHP & PV -100%

37. 37
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Net Present Cost (20y) - New Construction
Base Case, incl. A/C Base Case, excl. A/C

38. 38
$-
$20,000
$40,000
$60,000
$80,000
$100,000
Net Present Cost (20y) - Retrofit
Base Case, incl. A/C Base Case, excl. A/C

39. Sensitivity scenarios
Testing sensitivity to electric and natural gas rates, as well as ASHP install cost
39

40. 40
$-
$20,000
$40,000
$60,000
$80,000
$100,000
Net Present Cost (20y) - New Construction
Base Case, incl. A/C High electricity - incl. A/C High natural gas - incl. A/C

41. 41
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Net Present Cost (20y) - New Construction
Base Case, incl. A/C High ASHP - incl. A/C Low ASHP - incl. A/C

42. 42
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Net Present Cost (20y) - Retrofit
Base Case, incl. A/C High ASHP - incl. A/C Low ASHP - incl. A/C

43. 43
$-
$20,000
$40,000
$60,000
$80,000
$100,000
Net Present Cost (20y) - Retrofit
Base Case, incl. A/C High electricity - incl. A/C High natural gas - incl. A/C

44. 44
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Net Present Cost (20y) - Retrofit
Base Case, excl. A/C High electricity - excl. A/C High natural gas - excl. A/C

45. 45
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
Net Present Cost (20y) - Retrofit
Base Case, excl. A/C High ASHP - excl. A/C Low ASHP - excl. A/C

46. Moratorium Length Sensitivity
46
LP-NG / Net Present Cost
incl. A/C excl. A/C incl. A/C excl. A/C
New Construction
Base Case $ 56,967 $ 48,507
Longer Moratorium $ 58,828 $ 50,368 103% 104%
Shorter Moratorium $ 55,092 $ 46,631 97% 96%
Retrofit
Base Case $ 47,444 $ 38,983
Longer Moratorium $ 49,304 $ 40,844 104% 105%
Shorter Moratorium $ 45,384 $ 36,923 96% 95%
Longer Moratorium = Moratorium is 9 years instead of 7 years
Shorter Moratorium = Moratorium is 5 years instead of 7 years

47. 47
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Net Present Cost (20y) - New Construction
Base Case, incl. A/C Longer Moratorium, incl. A/C Shorter Moratorium, incl. A/C

48. Air Source Heat Pump with Solar PV – Upfront Investment
• Ideal combination of PV with efficient electric heating/cooling option
• Revenue from SRECs not included
48
Solar Installed Cost: $31,500 7 kW System @$4.50/watt
Heat Pump Installed Cost: $11,000 3 – 1 Ton Systems
Total Installed Cost: $42,500
Cool Smart® Rebates: ($1,500) (3 - $500 rebates)
CEC ASHP Rebates: ($2,250) (3 - $750 rebates)
MA Personal Income Tax Credit: ($1,000) (15% Solar Installed Cost, up to $1000)
Federal Investment Tax Credit: ($7,875) (30% Solar Installed Cost)
Net Owner Investment: $29,875
Heat Pump Net Investment: $7,250 (Financed through Mass Save HEAT loan)
Solar PV Net Investment: $22,625 (Financed with DOER Solar Loan?)

49. Technology Summaries
Additional discussion of alternatives
49

50. Natural Gas
• Standard technology
• Low install cost, easy/low cost maintenance
• Natural gas prices currently low and predicted to remain low
• Cooling requires additional A/C installed
• New construction requires distribution system to be installed
• Not currently available to most Cape Cod customers
• Conversion moratorium projected to be in place for 5-7 years (National Grid)
50

51. Electric Resistance
• Standard technology
• Easy and cheap install and maintenance, not location sensitive
• Highest energy cost of all technologies due to low efficiency
• Cooling requires additional A/C installed
51

52. Propane, then Natural Gas
• Specific scenario in which residence first converts to propane and
then to natural gas when moratorium is lifted (assumed 7 years)
• Lifetime cost savings compared to Fuel Oil (15-20%) or Electric
Resistance (35-50%)
• New construction requires distribution system to be installed
• Cheap and easy conversion from Propane to Natural Gas ($300)
• Requires installation and rental of propane tank ($100 per year)
• Cleaner burning fuel than Fuel Oil
• Cooling requires additional A/C installed
52

53. Air Source Heat Pump
• Mini-split systems are easy and quick to install (no ductwork)
• Lowest upfront cost of the renewable heating options
• Energy bill impact:
• Compared to Electric Resistance: lowers electricity use by X2, X3
• Compared to fossil fuels: increases electricity use, but heating cost savings
compared to Fuel Oil/Propane, not compared to Natural Gas
• Effectiveness depends on building lay-out (number and size of rooms)
• Also provides A/C
• Does not require installation of distribution system for new
construction
53

54. Ground Source Heat Pump
• Very high installation cost, though significant incentives available
• Need for expert installer, right underground conditions for well
drilling
• Limited installer pool locally
• Energy bill impact:
• Compared to Electric Resistance: lowers electricity use by X3, X4
• Compared to fossil fuels: increases electricity use, but lowest operational
heating costs of all technologies
• Also provides A/C
54

55. Pellet Boiler
• Boiler and heat distribution technology is similar to Natural Gas and
Fuel Oil, making it a good retrofit candidate
• Need to have space for fuel storage
• Relatively high upfront cost, though significant incentives available
• Maintenance required, but limited
• Bulk pellet delivery on the Cape currently limited
• Cooling requires additional A/C installed
• New construction requires distribution system to be installed
55