Item 7- Staff Briefing: Proposed Resolution on Changes to Residential Rooftop Solar Rebate Program — original pdf

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Resolution on Changes to Residential Rooftop Solar Rebate Program Richard Génecé Vice President, Customer Energy Solutions Tim Harvey Manager, Customer Renewable Solutions Team February 2025 © Austin Energy Residential Rooftop Solar Program Timeline and Phases Solar Pioneers and Solar Explorers Municipal Solar Solar Education Shared Solar Pilot Solar in Schools GreenChoice Residential and Commercial Incentives Austin-Bergstrom International Airport Community Solar La Loma Community Solar Palmer Event Center Community Solar Green-e Certified Community Solar 1998 2000 2002 2004 2006 2010 2016 2017 2018 2019 2021 Beyond Phase 1 • Stakeholder Engagement • Cultivate Early Adopters • Sow the Seeds for Local Solar Projects • Establish Best Practices • Foster Inclusivity Phase 2 Phase 3 • Broaden Community Engagement • Scale Engagement and Inclusivity • Prepare Interconnection Process for Increased Program Adoption • Leverage Benefits of Decentralized Solar Generation and Storage 2 Customer Renewable Solutions Objectives Safety Uphold local and national code, clarify areas of code that are unclear, inspect thoroughly and with consistency, and promote streamlined inspection process. Increase Adoption Equitably promote safe and streamlined adoption and utilization of renewables and dispatchable energy solutions on the distribution grid while maintaining power quality. Fair Rates Develop fair rates that identify and quantify value, appropriately compensate customers for contributions, are sustainable, and adjust with the market. Consumer Protection Integrate safety nets for customers through program design and education. Contractor Education Engage the contractor community to educate, promote safely installed systems, identify areas for potential improvement, and encourage best practices. Continual Improvement Improve program offerings focusing on customer education and satisfaction, consumer protection, safe installations, and balance of costs and benefits. 3 Summary Response to Proposed Resolution Exploring Implementation 3. Smart Inverters 5A. Battery – Virtual Power Plant 5B. Battery - Incentive Existing in Program 1B. Right Sizing Solar 2A. Warranty 2D. Energy Efficiency 4D. Remote Inspections - Failure Notes Concerns with Implementation Safety & Consumer Protection E. 20% exception F. Not to Exceed 10% 4. Remote Inspections A. Contractor Present B. Submission C. Commissioning Safety 4. Code Enforcement G. National Electric Code only H. Stamp for Battery I. Additional Equipment Checks Consumer Protection & Increase Adoption 1C. Additional Requirements 2B. Cost Estimates Consumer Protection 1A. Education Course & Quiz 2C. Total Solar Resource Fraction Fair Rates 5C. Battery - Additional Incentive for Participation 6. Smart Inverter - Replacement 4 Education Course and Quiz Proposed Resolution Information 1A. AE shall eliminate the solar education course and quiz, replacing it with a digital information flyer and material integrated into the solar and battery installation application process that contains the most useful information, such as an explanation of Value of Solar, how much yearly energy production to expect per panel, explanation of kW vs kWh, and other basic information. • Austin Energy used this approach prior to the education course • Developed education course to ensure customers were better informed • Teaches customers to shop for solar and provides resources • Customers have seen installation cost reductions • • 30-min course and quiz have not been a barrier to $2,500 incentive 100% of customers surveyed last quarter would recommend course 5 Right Sizing Solar Proposed Resolution Information 1B. AE shall not condition rebate approval upon the customer’s current electricity usage. AE should require the contractor to provide values for expected usage and production to the customer. AE may warn the applying customer if proposed arrays exceed a certain percentage of the customer’s present electricity usage, to help the customer understand that they may be buying more solar and/or battery equipment than they may need. • VOS credits can build up • Can be drawbacks to oversizing solar Transformer capacity • • Equity • Export limiting • Austin Energy currently allows for oversizing • within acceptable limits • customer must acknowledge potential drawbacks 6 Additional Requirements Proposed Resolution Information Information 1C. AE shall not place additional requirements on the installation or parts used other than those covered by normal inspection. • New equipment for incentive • Smart Inverters • Export Limiting 7 Warranty Proposed Resolution Information 2A. AE shall specify a minimum set of 10-year warranty provisions that every contractor must offer to be eligible for the rebate list. Installers can offer other provisions beyond that minimum set. • Currently in place • Participating contractors are required to provide a 10-year workmanship and equipment warranty • Customers need to read and understand warranty and provisions 8 Cost Estimates Proposed Resolution Information Information 2B. AE shall provide up-to-date interactive reference solar and battery benchmark cost estimates for a few house types and roof scenarios to give customers a valid point of comparison to evaluate solar contractors’ sales cost quotes. • Not best practice • Always too high or low • Many factors affect price • Multiple Quotes 9 Total Solar Resource Fraction Proposed Resolution Information 2C. AE shall require 75% TSRF (Total Solar Resource Fraction) for 3 kW of the total proposed solar installation, but not for the entire array. AE may require the contractor to calculate the TSRF for the entire array and communicate that estimate to the customer with an explanation of what that means for estimated annual array energy production. • Could lead to customer investments in oversized and underperforming systems • Dissatisfied customers • Aggressive sales practices • Incentive is optional 10 Energy Efficiency Information This is currently part of the education program Proposed Resolution 2D. AE’s solar application process should inform the customer that they could save energy and reduce the size of their solar and/or battery installation if they make the host premises more energy efficient with measures such as attic insulation and heat pumps, and provide a link to AE's energy efficiency audit and implementation process. 11 Smart Inverters Proposed Resolution Information 3. For interconnection agreement, AE shall require all distributed energy inverters to meet the IEEE 1547-2018, Category II standard, with frequency- watt mode, also known as frequency- droop response, enabled. • Austin Energy generally supports and is exploring this recommendation • Smart inverters do not enable resiliency 12 Remote Inspections Proposed Resolution Information Contractor Present 4A. Physical on-site inspections shall be done asynchronously between inspector and contractor (neither party is required to meet at an appointed date and time). • Austin Energy requires the solar inspection be attended by a qualified representative so that they can give inspectors access to energized equipment • Austin Energy explains deficiencies to qualified reps and increase contractors’ understanding of the requirements 13 Remote Inspections Proposed Resolution Information Information Submissions 4B. Solar and battery inspections shall be conducted using an online submission process, with the installer or contractor uploading a set of labeled photographs of the installed equipment to an AE online inspection portal. These photographs must be verifiable as to date and location and address every item that AE specifies as necessary to evaluate the safety and effectiveness of the solar and/or battery installation. Austin Energy has determined virtual inspections are not adequate • Tug and torque tests • Site conditions • Panel Attachments • Wire management • Rapid shutdown 14 Remote Inspections Proposed Resolution Information Commissioning 4C. Online inspection submittals shall include proof that the contractor has conducted an online commissioning test proving successful operation of PV and/or battery system. Failure Notes 4D. AE’s installation approval or failure notes shall be returned to the contractor within two full business days. Currently performed at inspection Deficiencies are communicated to the contractor through email and documented in the permitting system same day currently 15 Remote Inspections Proposed Resolution 20% Exception 4E. If any contractor’s initial online inspection failure rate equals or exceeds 20%, then AE may require those poorly performing contractors' installations to be subject to in- person physical inspection. AE should provide a work quality pathway for poor performing contractors to earn their way back to the online inspection process. Not to Exceed 10% 4F. AE may conduct random physical, on-site inspections to validate the effectiveness and accuracy of the online inspection submittals and the process itself. The sample shall be statistically significant, but may not exceed 10% of all online inspections. Information The current fail rate for all contractors operating in our territory since 2021 is 26% As contractors do not normally achieve a failure rate below 20%, this would exceed 10% at all times 16 Code Enforcement Proposed Resolution Information National Electric Code (NEC) Only 4G. Inspections shall contain no additional requirements beyond “shall meet NFPA 70 National Electrical Code 2023." • NEC 90.4 N (C) Specific Requirements and Alternative Methods. By special permission, the authority having jurisdiction may waive specific requirements in this Code or permit alternative methods where it is assured that equivalent objectives can be achieved by establishing and maintaining effective safety • City Ordinance • Distribution Interconnection Guide • Design Criteria Manual 17 Code Enforcement Proposed Resolution Information No Stamp for Battery 4H. Inspections shall not require stamped engineering drawings for battery installations, as this is extremely uncommon in other Texas utilities, and is not required for solar-only installations. No Additional Equipment Checks 4I. Other than verifying model numbers installed, inspections shall require no additional checks for items that are already covered by manufacturer and vendor Distributed Energy Resource standards, including UL 1741, UL 1973, UL 9540, and IEEE 1547-2018. Stop gap measure • • Requirement will be removed when plan review is in place • Rapid Shutdown • Settings 18 Batteries Proposed Resolution Information Austin Energy is currently exploring VPP functionality and vendor support Virtual Power Plant (VPP) 5A. AE shall release a request for proposal (RFP) for a virtual power plant (VPP) or begin implementing a similar program for the aggregated control of residential batteries and automated demand response measures within Austin Energy’s service territory, including existing and/or future batteries, to provide dynamic grid reliability support, congestion reduction and electric portfolio cost reduction. 19 Batteries Proposed Resolution Information Incentive 5B. AE should establish a set of residential rebates equaling $2,000 for a solar installation, $2,000 for a battery installation, and $5,000 for a combined solar and battery installation, to take advantage of fixed-cost efficiencies of installing these together. The battery must be a minimum of 5 kWh, UL 9540 listed. The level of rebates should be reevaluated and potentially reset no less than every three years. Austin Energy will balance incentive and ongoing participation benefits based on financial analysis and best practices 20 Batteries Proposed Resolution Information Additional Incentive for Participation 5C. The battery rebate should be increased by $25/kWh if customers commit to participate in a compensated energy- management program for the battery to assist in grid services, on a $/kWh basis, for 5 years, even if that program is not available at the time of interconnection. Austin Energy will require customers commitment to participate in a compensated energy-management program to receive any rebate for the purchase of a battery 21 Smart Inverter Proposed Resolution Information Replacement 6. AE shall survey the prevalence and distribution of pre-IEEE 1547-2018-compliant inverters on residential and small commercial solar installations across Austin, and evaluate whether, which, and how many of these should be replaced for grid protection or customer resilience and protection purposes. • Cost exceeds benefit • Overpenetration is not causing power quality issues from older systems • Could void customer warranty 22 Summary Response to Proposed Resolution Exploring Implementation 3. Smart Inverters 5A. Battery – Virtual Power Plant 5B. Battery - Incentive Existing in Program 1B. Right Sizing Solar 2A. Warranty 2D. Energy Efficiency 4D. Remote Inspections - Failure Notes Concerns with Implementation Safety & Consumer Protection E. 20% exception F. Not to Exceed 10% 4. Remote Inspections A. Contractor Present B. Submission C. Commissioning Safety 4. Code Enforcement G. National Electric Code only H. Stamp for Battery I. Additional Equipment Checks Consumer Protection & Increase Adoption 1C. Additional Requirements 2B. Cost Estimates Consumer Protection 1A. Education Course & Quiz 2C. Total Solar Resource Fraction Fair Rates 5C. Battery - Additional Incentive for Participation 6. Smart Inverter - Replacement 23 ©Austin Energy. All rights reserved. Austin Energy and the Austin Energy logo and combinations thereof are trademarks of Austin Energy, the electric department of the City of Austin, Texas. Other names are for informational purposes only and may be trademarks of their respective owners.