City and County Solar PV Training Program: Module 1

Welcome to module 1 of the city and county
Solar PV training program. My name is Joyce McLaren and I'll be your
host for today. The topic of this module is goal setting & clarification
and today we will talk about different types of goals for renewable energy development,
and the importance of clarifying your priorities as your set out to achieve those goals. Once you have completed this module, you'll
be able to understand the nuances between different types of goals, the importance of
terminology when setting and announcing your goals, the value of formally clarifying your
priorities, and how those priorities may impact procurement options. The information in this module provides a
foundation to all of the topics that will be covered in future modules because a better
understanding of your goals and your priorities will smooth the road as you proceed through
the more practical activities associated with siting a solar project or procuring solar
generation. First let�s look at goals and targets. Increasing numbers of jurisdictions are setting
goals and targets for renewable energy or carbon reduction. You may already have goals that you are working
towards, or you may be in the process of agreeing upon a goal.

But, not all goals are created equal. Each of the goals here is very different. Some goals are stated a percentage of energy
use (like the top two listed on this slide) while others are stated as a capacity goal
(that is, a certain number of MW of installed capacity). These of course differ in the sense that the
capacity goal is implying that you will have physical renewable energy projects installed
to meet your goal, whereas the percentage goal leaves more options open through which
to attain it, such as buying generation or maybe purchasing RE certificates. Furthermore, the top two goals, while they
are both percentage goals, differ in the sense that one has specified electricity whereas
the other one says energy. Energy could be interpreted more broadly to
include transportation or non-electrical heating fuels.

And finally, the goals at the bottom of this
list are more broad, since they aim to limit emissions that are associated with electricity
generation, but are also generated by other sectors and other processes. So certainly the type of goal you have to
meet impacts how you're going to approach the task of planning to meet it and how you're
going to measure success. So let�s look at this in a bit more detail. For your percentage goals, if they are based
on a percentage of your electricity usage, then they are directly linked to the size
of the demand and growth in electrical load will of course necessitate procuring more
renewables in order to attain the goal. Of course, you can limit your load growth
somewhat through efficiency measures, and those are are critical tools in meeting percentage

This all may seem obvious, but the tricky
part is that it is not always easy to anticipate load growth accurately. This is especially true since we expect a
transition to electric vehicles and other electrification measures, and the speed and
extent of that transition is really still a big unknown. So balancing the amount of renewables you
will procure or build over time with the growth of your load over time, in order to maintain
the percentage goal is going to be a constant effort. Unlike the capacity goal, you can�t just
build another gigawatt of solar and be done with it. And even if you achieve your goal one year,
you may have a very high demand the next year due to a particularly hot summer, or if you
don�t generate as much solar as you anticipate due to a particularly rainy summer, you may
not meet your goal. So if you want to be able to say that you
have achieved your goal every single year, rather than maybe on average over several
years, you may need to use something like Renewable Energy Certificates (RECs) as a
balancing mechanism, such that you purchase some certificates at the end of a year to
make up the difference between your renewable energy procurement (or generation) and your
actual electricity demand.

This, by the way, is the way the City of Aspen
handled the issue, as to purchase RECs as a balancing mechanism. Capacity goals, as mentioned before, are perhaps
a bit easier to approach and the metrics for measuring your success are simpler, but there
are fewer options for meeting them since efficiency doesn't count and you are likely held to actually
just constructing projects to meet the goal rather than being able to buy generation or
to buy RECs. Capacity goals may also not have the same
degree of impact over time, unless they are continually updated. As for emissions based goals, these goals
may be quite a bit more complex to approach since there are so many different sources
of emissions, but that may also open up more options for meeting the goal. In relation to renewable energy, one note
of interest is that the use of some renewable fuels, such as biomass and methane captured
from landfills have different impacts on emissions than solar and wind, but are still likely
to result in a net reduction in emissions.

Next I want to revisit something that we touched
on earlier, and this is the importance of terminology. And I�d like to talk about this in the context
of announcing the fact that you have set or have reached your renewable energy goal. This slide shows some examples of phrases
that you might hear in the news. Let�s start with the first two: Our city
uses 100% renewable energy. Or, our city uses 100% renewable electricity. In the first, the word "city" could mean several
things. It could mean everything in city limits, or
just it could just mean the city-owned buildings. You may have seen this issue come out with
regards to the city of Las Vegas recently, after they announced having reached 100% renewables. Some news articles stated that the city was
powered by 100% renewable energy and many people interpreted this to mean all of the
hotels and casinos on the strip, with their lights and their large power use were all
being powered by renewable energy.

And that wasn�t quite the case. What they meant was that the municipal buildings
in Las Vegas are 100% powered by renewable electricity. But that wasn�t always made clear in the
news. Also, as mentioned before the term "energy"
could mean just electricity or it could also include transportation and heating. So if you say energy, just be sure to understand
that it could be interpreted more broadly, and you may want to specify exactly what you
mean. Another statement here clarifies both those
two points, so "city owned buildings use 100% renewable electricity." That way of making the statement is very clear,
exactly what the bounds are and what you mean.

The last statement bring up another term:
net-zero. Net-zero generally means that the electricity
used is equivalent to the electricity generated on-site. So this is generally implying that there is
on-site or at least local renewable energy being generated to off-set the power used
by the building or the buildings. So really here the point is, be careful with
your wording and know you may be implying different things when when you're using different
words. Once a goal is set, and the road mapping for
attaining the goal begins, it�s natural to want to dive in and start identifying options
to meet the goal.

It's easy to jump to questions like, "Which
municipal buildings have good roofs for a solar system?" But taking the time to clarify some definitions
and priorities before embarking on an options analysis can really save you a lot of time
in the end. Clarifying priorities helps draw some boundaries
around the options that you consider when you are creating a road map or a plan. It will reduce the amount of time you spend
analyzing different options. It will ease the decision making process when
you are considering many different variables. And it also increases the transparency in
your decision making process. And this point really is key.

If all stakeholders are involved in the process
of clarifying your priorities, and you use those priorities as a guide to deciding what
action to take, then the final outcome is more likely to be accepted by the full range
of stakeholders. Ideally, a clear connection can be drawn between
the priorities that you all agreed to, and the decision or action that is taken. So let�s take a look at some questions that
you might ask yourself and your stakeholders to clarify your priorities. The first one may sound simplistic. It is defining what is 'renewable energy.' Just as all goals are not created equal, all
renewable energy technologies are not created equal. In cases where you are looking at obtaining
renewable energy generation from a variety of possible resources, it is helpful to identify
which technologies you will consider to be 'renewable' for the purpose of meeting your
goal. Discussing the differences between the technologies
and determining which ones will count toward the goal and which ones may be lower priority,
can help draw some bounds around the options that you'll look for and it will get everyone
on the same page, right from the start.

The graphic shown here indicates the definition
of renewable energy that the City of Aspen, Colorado came to during a City Council process. The Council considered the basic differences
between the technologies that they would likely would need to consider and choose between,
and they prioritized them in terms of their desirability. As you can see, after some deliberation, generation
from solar, wind, geothermal and hydro were all prioritized, while generation from some
other technologies would be considered on a case-by-case basis.

This categorization could have been sliced
in any number of ways. Taking the time to clarify the definition
gave clear direction to the staff that conducted the options analysis, and it also was used
later as a reference point, when the Council came back to decide which options to look
into further. But the definition of 'renewable' is really
just one step in the clarification of priorities, and it may turn out to be the easiest one
to agree upon. On this slide we have a list of many different
possible priorities. Different stakeholders may value these very
differently. What is high on one�s list, may not be important
to another. Cost may be very high priority, or it may
not. In some cases, there may be a requirement
for a certain return on investment, and in other cases, paying a premium over utility
prices may be acceptable. It may be important to you to catalyze the
construction of new renewable projects, and to use local labor or nationally-sourced products
to do so.

Or it may be important to find a solution
that will ensure stable electricity rates or energy resiliency. The point is, that you are unlikely to be
able to find the perfect solution that gives you ALL of these potential benefits of renewable
energy in equal measure. So deciding which ones are of most importance
to your stakeholders will guide you in finding the solution that best meets your individual
needs and wants. So I�ll use the City of Aspen again as an
example. After the city defined the technologies they
wanted to consider as renewable, they also defined their top 3 or 4 priorities from a
list similar to the one here. This was done in a public forum through a
clear process, so it was very transparent to everyone what characteristics they would
be looking for when they compared and weighed the different renewable energy options that
they had available to them.

This is certainly a best practice and should
be an early step in decision making and road mapping for renewable energy development or
procurement. So now let�s look at how these priorities
are going to impact your procurement options. This slide shows several different options
for procuring renewable energy generation. The priorities that you have identified will
influence which of these options you focus on. Starting from the top, Renewable Energy Certificates
(RECs) or credits are hopefully an option you are already familiar with. This is the purchase of the environmental
attributes associated with renewable energy production, separate from the power itself. If your top priority is to catalyze new projects
to be built, for instance, purchasing RECs is unlikely to be the best option to meet
your procurement goal. As mentioned before, however, it would be
a good option for balancing procurement with varying demand. But remember: you can�t claim the environmental
benefits of the Renewable Energy Certificates if you resell them! You must retire them (that is, hold on to

The next two options are also likely to be
familiar. A capital investment, is simply self financing
the installation of a system. This, of course, may not be the best option
for public entities since they can not take advantage of the current tax credits. That problem is solved with the next option
which is a power purchase agreement, which allows you to buy the generation from a system
that is financed and owned by a third-party, which can take advantage of tax credits. A virtual PPA, is a slightly different type
of agreement. The way it works is that a city would agree
to purchase power generated by a third-party owned system at a certain rate, thus helping
the project to get financing. If the third-party sells the power on the
market at a lower rate, then you're going to pay the difference. If they sell the power at a higher rate, then
the city or the county receives the difference.

In either case, city will receive the RECs
from that generation. The last option listed here, is perhaps the
simplist, and that is subscribing to a utility tariff that provides green energy, typically
for a premium. So how do your priorities impact which option
you end up choosing? Say for example that your priority is to catalyze
new renewable projects. With the REC purchase, you are unlikely to
be stimulating new projects. With a standard PPA, you may or may not. But with a virtual PPA, you're more likely
to be supporting a new project to be built and the financing of that system through your
guaranteed price. Of course it would be wise to have that discussion
about your priorities with your potential providers. For example, if you are considering entering
into a PPA with a third party and your highest priority was to support local labor and use
nationally sourced components, then you might want to discuss these topics with the potential
provider early on.

To recap. Let�s go over the best practices that we
covered in this module. First, you're going to want to clarify your
goal. Make sure you understand exactly what the
goal is, how it's phrased, and the different variables that are going to impact your achievement
of that goal. Pay attention to the terminology – how you
talk about the goal, how you talk about achieving the goal, and make sure you understand and
clarify what you mean by that. Clarify the technologies and the project types
that are considered to be eligible as a renewable for meeting the goal, and clarify the priorities,
the things that you want to focus on as you make your decisions, as you find your options
for meeting the goal.

Define the procurement options that are going
to match all of those priorities and be sure along the entire process to engage your stakeholders. Make sure that they have input into the definition
of the renewables and to the clarification of their priorities and that they are on board
with all of the decisions from the beginning. And of course then deliberately use those
definitions and those priorities that you've all decided together as you identify your
options as you go through your analysis and as you come to your final decisions and take
action. By following these best practices you are
getting all of your stakeholders on the same page from the beginning and setting yourself
up for success. Thank you for listening to this module. Don�t forget to fill out the worksheet that
helps you put the learnings from today into your own context. And I look forward to your questions during
the office hours, which will be held on January 31st..

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