Harry Warren Jr., President of Washington Gas Energy Services, speaks about the viability of solar energy in large-scale commercial projects as the Maryland, DC, Virginia region approaches grid-parity. This presentation was given December 4, 2009 at the Solar Energy Focus Conference: Fall 2009 hosted by the Maryland, DC, Virginia Solar Energy Industries Association (MDV-SEIA) in Gaithersburg, MD. To learn more please visit: www.mdvseia.camp7.org

1. The more things change …
Presentation to the Solar Energy Focus Conference
by
Harry A. Warren, Jr.
President
Washington Gas Energy Services, Inc
December 4, 2009
Energy Services, Inc.

2. 1984
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3. Energy Services, Inc.

4. Energy Services, Inc.

5. Solar PV Balance of System Costs
If solar panels are free, balance of
system costs are too high to make
solar PV grid competitive.
Theodore B. Taylor and Harry Warren - 1984
Energy Services, Inc.

6. Energy Services, Inc.

7. Energy Services, Inc.

8. 2009
Energy Services, Inc.

9. Energy Services, Inc.

10. Energy Services, Inc.

11. Energy Services, Inc.

12. Solar PV Balance of System Costs
If solar panels are free, balance of
system costs are too high to make
solar PV grid competitive.
Harry Warren - 2009
Energy Services, Inc.

13. Tracking the Sun II, The Installed Cost of Photovoltaics in the U.S. from 1998-2008
Ryan Wiser, Galen Barbose, Carla Peterman, Naïm Darghouth
Lawrence Berkeley National Laboratory, October 2009
Energy Services, Inc.

14. Tracking the Sun II, The Installed Cost of Photovoltaics in the U.S. from 1998-2008
Ryan Wiser, Galen Barbose, Carla Peterman, Naïm Darghouth
Lawrence Berkeley National Laboratory, October 2009
Energy Services, Inc.

15. Mini Financial Analysis - Solar PV Project
1 Watt System
No incentives
Capital Cost $ 3.00
Debt Ratio 50%
Pre-tax Cost of Debt 6%
System Life 20 yrs
Tax Rate 35%
$3.00 per watt Annual Output
Power Price $
1.2 kwh
0.40 per kwh
isn’t grid parity Annual Revenue
Operating Expenses
EBITDA
$
$
$
0.48
-
0.48
Depreciation $ 0.15
EBIT $ 0.33
Debt Service $ 0.09
EBT $ 0.24
Taxes $ 0.08
Net Income $ 0.16
After Tax ROE 10.4%
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16. BOS = Non-module costs
“Non-module costs (which may include items such as inverters, other
balance of systems hardware, labor, and overhead).”
“Average non-module costs (which may include such items as
inverters, mounting hardware, labor, permitting and fees, shipping,
overhead, taxes, and profit) shown in Figure 5 were calculated as the
difference between the average total installed cost and the module
price index in each year.”
Tracking the Sun II, The Installed Cost of Photovoltaics in the U.S. from 1998-2008
Ryan Wiser, Galen Barbose, Carla Peterman, Naïm Darghouth
Lawrence Berkeley National Laboratory, October 2009
Energy Services, Inc.

17. Reducing Non-module Costs
• ??????????
• Standardization/modularization of design
– Optimal component matching / economics
– Minimize design work
– Minimize runs
• Don’t oversize for roof
• Optimal tilt
• Project development efficiency
– Client and site selection
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18. Reducing Non-module Costs
• DC to AC to DC?
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19. The more things change …
The closer we get to grid
parity!!
Thanks
Energy Services, Inc.