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					  The Lakeland Electric Business Model
         for Solar Water Heating

              “Solar For Lakeland”


         Solar 2011
American Solar Energy Society
                                 Jeff Curry
  Raleigh, North Carolina
                                 Lakeland Electric
       May 19, 2011



             1
             Solar For Lakeland:
          Solar Option to Electricity
•   Fuel switching offer for Lakeland customers
•   LE customers who live in their own homes
•   For customers who prefer not to purchase SHW
•   Domestic Hot Water Only (not for pools & spas)
•   Monthly energy charge is $34.95
•   Equal to ~ 275 KWh at current prices



               2
 Lakeland Electric Customer Poll - 2009
If your local utility offered a program where you could purchase solar energy
instead of electricity to run your hot water heater, how likely would you be to
participate in the program if it required no out-of-pocket cost for the equipment
and the solar energy cost you about $1 per day?

   VERY LIKELY         SW LIKELY     NOT LIKELY      DK
      43%                31%           23%                  3%

If the introductory cost of that solar energy was exempt from any future price
increases and would never go up for a period of twenty years, how likely would
you be to participate?

    VERY LIKELY        SW LIKELY      NOT LIKELY  DK
       56%               26%            15%      3%

                   3
        Solar For Lakeland:
   Residential Solar Water Heating
Benefits to customer:
      •   No up-front costs
      •   Additional storage (i.e. – more gallons)
      •   Zero maintenance costs
      •   Price protection for 20 years
      •   Fully transferable



               4
              Solar For Lakeland:
         Customer Acknowledgements

•   Customer must allow the installation of a solar panel
•   Customer does not own the solar hardware
•   Solar components are investor owned
•   Customer signs an Access Agreement




                 5
Solar Energy Line Item




 6
            Solar For Lakeland:
      Residential Solar Water Heating
Key system features:
        •   Thermostat controller with pump
        •   Isolation valves
        •   Back-up heating element
        •   Heating element timer to maximize savings
        •   Anti-scald valve
        •   Redundant freeze protection
        •   Performance metering

                7
    Solar Meter History




8
Performance Indicator




9
Auto-alert to Program Mgr’s Attention




        10
Mass-Distributed Energy Generation
      using Solar Hot Water

 •   High impact utility energy project
 •   Benefits the energy generation and delivery systems
 •   Allow for 20,000 participants
 •   Equivalent to one enormous PV farm
 •   Woven into the fabric of the community




          11
                        Lessons Learned
Is Solar Thermal Energy a “service” or a “product”?
      • Customers perceive product as a tangible commodity
      • Referring to energy as a service is a “disservice” to solar

  Supply side device vs. Conservation measure
    • With meter -      SHW becomes a supply side device
    • W/O meter -       SHW stays on the dark side
    • As a supply side device the cost of SHW competes well
      with all other renewable energy options
    • As a conservation measure SHW is one of the
      more costly measures


                   12
         Utility Motives vs. Direct Purchase
     Utility-owned SHW:                    Customer-owned SHW:
•   Extended monthly payments          •   Short payback period
•   Optimizes btu consumption          •   Encourages btu reserve
•   Avoids surplus energy production   •   Promotes surplus energy production
•   Favors slight daily backup use     •   Inhibits any backup energy usage
•   Standard system sizing             •   Custom system sizing
•   Disfavors any overheating          •   Indifferent to overheating
•   Service-free as long as possible   •   Service-free through warranty period

    Preference: Undersized systems         Preference: Oversized systems




                      13
The chronology:
  •   1995   -   SHW proposed as “off-grid DG” to FSEC
  •   1996   -   Market research: The Melior Group
  •   1997   -   FEO grant awarded to LE
  •   1997   -   Installed 1st utility-metered system
  •   1999   -   Finished monitoring of 1st system
  •   1999   -   First ever SHW utility bill printed
  •   2007   -   End of pilot stage
  •   2007   -   Shift away from utility-owned SHW
  •   2009   -   Signed vendor contract
  •   2010   -   Launched program

                 14
               Out-source Contract:
               ReGenesis Power, Inc
    Vendor provides:            Utility provides:
•   Capital & procurement   •   Customer service
•   Site surveys            •   Meter reading
•   Installation            •   Billing & collections
•   Maintenance             •   Widespread customer base




                15
                                        LAKELAND ELECTRIC SOLAR HOT WATER OPTIONS


                                                                                    DIRECT SHW SALES                           DIRECT SHW SALES
                                               SHW SERVICE                                                                      with FINANCING

                                       SHW Service requires no capital          A direct sale from a solar contractor   Lakeland Electric provides low to no
                                       outlay by customer or Lakeland           who is leveraging Lakeland Electric’s   interest rates for financing the installation.
                                       Electric. Service fees are locked-in     SHW awareness campaign.                 Homeowner's must qualify through
                                       and never increase. Economic savings                                             Lakeland Electric’s financing program prior
                                       can accrue at the beginning of service                                           to sale and installation.
                                       and continue to grow as energy costs
                                       rise over time.



Reduces "Peak Demand" Energy
Generation Requirements by                             YES                                      YES                                         YES
Lakeland Electric



Requires Lakeland Electric Financial                 NONE                                     NONE
Commitment                                         REQUIRED                                 REQUIRED
                                                                                                                                            YES

Requires Lakeland Electric                           NONE                                     NONE
                                                                                                                        FINANCIAL MANAGEMENT REQUIRED
Infrastructures Investment                         REQUIRED                                 REQUIRED

Down Payment by Customer for                         NONE
the System and Installation                        REQUIRED
                                                                                                YES                                         YES

                                                                                No Immediate Economic Benefits but      Economic Benefits based on Financing
Financial Benefits                     Immediate and Long-Term Economic
                                                                                Long-Term Benefits Based on Usage       Agreement with
to Customer                            Benefits Based on Usage
                                                                                and Price Paid                          Lakeland Electric

Ownership and Maintenance
Responsibilities                        NONE REQUIRED MAINTAINED                    OWNER HAS MAINTAINANCE                     OWNER HAS MAINTAINANCE
                                              BY SERVICE PROVIDER                      RESPONSIBILITIES                           RESPONSIBILITIES
     The End




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