Business and Contract Strategies for Solar PV Systems in Roofing Applications Final Report May 15, 2011

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1 Business and Contract Strategies for Solar PV Systems in Roofing Applications Final Report May 15, 2011 David Riley, Associate Professor Penn State Department of Architectural Engineering Executive Summary Research was initiated to build upon a collaborative relationship born through the support of NRCA, the Center for Environmental Innovation in Roofing (CEIR) and Penn State in the field of roof integrated solar energy systems. The research s purpose is to explore the opportunities that exist in the solar energy market for the roofing industry and identify strategies and tactics for roofing contractors to enter the solar market. Initial research methods included interviews with leaders in the roofing industry who had made strong entries into the solar market, the organization of a solar energy conference at Penn State, the observation of and interaction with roofing and solar industry leaders, and the analysis of emerging Department of Energy (DOE) and federal energy policy. Interviews with industry leaders revealed significant optimistic views of the market, trends in integration and the market share the roofing industry likely can secure through the integrated marketing of solar roof systems. A survey of the solar and roofing industry through conference and convention activities revealed the emerging trends of partnerships between roofing manufacturers and the solar industry and acknowledged the need for robust technical solutions that accounted for roof system and solar system performance. Rapid growth and advancements in new technologies indicate that work force training and continuing education would need to play a significant role in the success of the solar industry brought about a shift in the scope of this project to support the development of strategic partnerships in response to the new administration and mounting evidence that training and work force development were becoming vital to the solar market growth. Five DOE programs were pursued in , which included a partnership with CEIR and Penn State including the Mid Atlantic Solar Education and Resource Center, the GridStar Smart Grid Workforce Development Center, a Roof Integrated Solar Research demonstration program, the National Energy Leadership Corps and the Greater Philadelphia Regional Innovation Cluster. Each of these efforts will be used to support emerging partnerships and collaboration among Penn State, NRCA and CEIR. Recommended next steps include the aggressive development of the RISE program and continued partnerships between new centers and the NRCA, The Roofing Industry Alliance for Progress and CEIR teams and the joint pursuit of a national roof integrated solar education and research center to be located at the Philadelphia Navy Yard. Business and Contract Strategies Penn State Center for Sustainability Page 1

2 Introduction This research was commissioned by the Center for Environmental Innovation in Roofing (CEIR) to examine contract strategies for various types of solar photovoltaic systems in building integrated applications including low slope roofing, steep slope roofing and glazing integrated systems. The research s primary goals were to examine the roles of roofing contractors and electrical contractors in the marketing, installation and maintenance of solar systems in these applications and to identify areas of distinction between these trades. Since the inception of this project, the solar industry and roofing industry have evolved rapidly, and as a result, a shift in the nature of this project to that of strategic partnership exploration was agreed upon by the leadership of NRCA, CEIR and Penn State. This project is currently being drawn to a close to recognize the need to re examine the nature of the relationship between NRCA and CEIR based upon the success achieved in securing more extensive resources to support rooftop solar research and training efforts. This report summarizes the nature of the data collection and interactions used to formulate a set of observations and strategic recommendations in the fields of rooftop solar industry advancement, research and training programs. A summary of the scope of work and related research activities is provided. A set of observations and recommendations is provided in bullet point format in topics of a 1) solar and energy efficiency roadmap for the roofing industry, 2) best practices experienced by roofing contractors who have entered the solar market and 3) the solar technology pipeline. A summary of new initiatives that have emerged based on success in grant funding also is provided. Two targeted recommendations for future activities, including the promotion of the RISE program and potential expanded collaboration in a National Solar Roofing Research and Education Center, are described. A brief appendix summarizing key features of energy legislation also is provided. Scope of Work The original scope of work for this project was defined as an assessment of the best contracting and related business development practices leading to the expanded role of the roofing industry in the solar energy market. Research has included the exploration of factors influencing the solar energy market and its effects on the roofing industry. The research focused on roof integrated solar applications and the collection of lessons learned from established roofing contractors who have previously adopted solar business models. Based on internal initiatives of CEIR and NRCA and the potential to leverage this project to obtain additional resources, two additional activities were performed to help advance the presence of the roofing industry in the solar market. The first addition to the work scope was initiated in the summer of 2009 and included the aggressive pursuit of additional resources in response to multiple programs emerging from the DOE. This activity leveraged support from this project to prepare five interrelated solar and energy efficiency proposals to DOE between July 2009 and May The second addition to the project scope was the early involvement in strategic planning and program design of the RISE program and RoofPoint program that will shape future initiatives to advance the roofing industry in the solar and energy efficiency markets. Business and Contract Strategies Penn State Center for Sustainability Page 2

3 Research Methods The research approach included variable forms of interaction with members of the solar and roofing industry to gather the input and experiences, as well as the judgments of experts in multiple fields. Six primary research activities were used to conduct this research: Monitor Policy Developments and Work Force Issues As policies are shaped by the current administration, their effects on the solar industry and roofing industry are being monitored and explored. Many initiatives of the new administration and DOE are focused on the expansion of the solar industry through research, expansion of manufacturing facilities and the development of the solar workforce. Case Studies of Roofing Contractors Entering the Solar Industry Case studies, interviews and site visits of roofing contractors who have entered the solar market were conducted. These interviews with leading NRCA members and project case studies helped to shape and add detail to the factors contributing to the roofing industry s positioning with respect to the solar market and the best practices emerging based on the experience of early adopters. The perspectives and lessons from these sources were also used to demonstrate a grasp of the roofing industry s effect on the solar and energy efficiency markets in the statements of need and proposed scopes of work in DOE proposals submitted to expand and extend the efforts of this project. Solar Energy Conference A conference/symposium designed to draw together experts in policy, finance, workforce and technology strategies in the solar industry was held May 6 7, 2009, at Penn State University. This conference resulted in the identification of key solar industry trends in the areas of new technologies, work force development and policy development. Multiple speakers and agency representatives who participated in the conference have since become valuable resources for advice and partnerships that have been capitalized upon to pursue additional grant funding. DOE Funding Proposal Partnerships A series of green building and renewable energy research grants were pursued in 2009 and 2010 to leverage the emerging partnership between Penn State and NRCA and CEIR. Research and work force development proposals to DOE included the specific needs and perspective of the roofing industry and have been successful at generating new resources to expand upon the initial partnership. Successful DOE awards include the Northern Mid Atlantic Solar Education and Resource Center ($2 million), the GridStar Smart Grid Education and Training Center ($5 million), the National Energy Leadership Corps Building America Team ($1.5 million), and the Greater Philadelphia Regional Innovation Cluster in Energy Efficient Buildings ($129 million). Solar Roofing Summit Meeting A meeting was held June 23, 2010, including representatives from the NRCA, CEIR and Penn State. The meeting s purpose was to explore the need and feasibility of a national solar roofing training effort and potential collaboration with Penn State in a manner that would cultivate the co location of solar integrated roofing and training programs. The results of this meeting included an acknowledgment that training and educational programs in rooftop solar were needed; however, the means, leadership and form of collaboration on these efforts required further discussion. Business and Contract Strategies Penn State Center for Sustainability Page 3

4 Rooftop Solar Curriculum Testing In the Spring of 2011, the research team developed a curriculum module for a 40 hour solar training course that focused upon solar roof integration. This module drew upon multiple NRCA and CEIR resources, as well as the hands on teaching methodology being implemented in the Northern Mid Atlantic Solar Education and Resource Center. The initial offering of this course took place May 5 9, 2011, and included the completion of a full roof assessment by participants and the presentation of contract strategies for engaging qualified roofing professionals in rooftop solar installations. Results Summary The project s results are summarized in the following five categories: 1) Solar and Energy efficiency Roadmap, 2) Best Practices of Early Adopters, 3) Technology Pipeline, 4) Pursuit of expanded resources through DOE grant funding and 5) Recommendations for Next Steps: Part 1: Solar and Energy efficiency Roadmap The rapid growth of solar energy and energy efficiency markets has created volatility, uncertainty and a scramble for market share. Although the industry can still be considered in its infancy, patterns and trends have emerged that are likely to have sustaining effects. A summary of factors affecting the growth of the solar market and the resultant entry strategies that can be adopted by roofing contractors are provided below. Finance models and policy The single most significant factor affecting the feasibility of solar project is the effect of state level incentives and policies that can complement federal tax incentives and rebates. The solar market is thus emerging on a state by state basis. The trajectory of support leading to strong market typically include renewable energy portfolio requirements that mandate percentages of renewables, grant programs to spark the creation of solar businesses and talents, followed by a steady and reliable renewable energy credit program. Work Force Development Significant work force shortages exist and have become barriers to market growth. These shortages range from skilled trades to professional engineering and design professionals. In response, DOE has created multiple new efforts to help cultivate the growth of a qualified solar workforce. Certification programs and credentials are emerging with increasing specific task analysis descriptions. The variable perspectives of the roofing industry, electrical industry and traditional solar industry fuel debate about ownership of work and appropriate credentials. It is expected that the roofing and electrical industry will develop marketing materials, credentials and training programs that will threaten the viability of specialty firms that focus strictly on solar installation. Business and Contract Strategies Penn State Center for Sustainability Page 4

5 PV Systems Technology Traditional framed solar modules continue to dominate the market; however, because of the high material and labor cost of traditional aluminum racking systems, new forms of thin sheets are gaining popularity, particularly in southern states. Thin film applications are currently lagging behind expected market penetration. An increase in the integration of monitoring systems will continue to expand because of the ability of these systems to spot underperforming modules and arrays that threaten the financial return on investment of solar installations. Solar Roof Integration Applications of Building Integrated Photovoltaics (BIPV) that incorporate roof membranes as a substrate require more extensive product development and integration between solar and roofing manufacturers. This relatively small market is expected to expand rapidly as these partnerships, testing programs and installation standards can be developed to ensure of systems performance and durability. Racking, assembly and constructability Up to 40 percent of the labor associated with a solar installation can be attributed to racking systems assembly. Many opportunities for improvements exist in the constructability of racking systems and roof integration. As the cost of PV modules has recently been reduced, more attention is being paid to constructability, part list reduction and labor efficiency associated with racking systems. Energy efficiency integration A challenge to solar integration firms is the lack of expertise in packaging renewable energy investments with energy efficiency improvements. Roofing contractors have a key competitive advantage in the combined design, planning, financing and installation of projects that combine enhancements of roof energy performance, durable roof membranes and renewable energy installation. Part 2: Best Practices of Early Adopters Lessons learned from early adopters of solar businesses by roofing contractors include marketing, financing, contracting, warranty and service programs. Financial services: A prerequisite to entering the solar market is a full understanding of the regional tax incentives and grant programs available. Until the costs of traditional energy sources rise, these incentives are the key to project profitability. Warranty Alignment: Roof replacement projects provide excellent opportunities to market solar installations to building owners. The alignment and packaging of roof system warranties with solar property warranties makes good sense to most building owners. Although requiring more advanced energy analysis and modeling to assess the combination of improved insulation with a new roof and solar system can improve the overall energy performance and resulting profitability of solar installation projects. Business and Contract Strategies Penn State Center for Sustainability Page 5

6 Service Integration: Early adopters consistently trend towards an integrated business model to complete solar projects due to the complexities of projects and the strong relationship between project financing and project profitability. Margin stacking from third parties was cited as the biggest threat to project profitability. Alliances between roofing contractors and solar manufactures continue to expand as a result. Technology Integration: Value added opportunities exist among new forms of solar technology and roofing materials. Direct applied materials such as those from UniSolar and Lumeta require testing and performance verification between the bonding of solar materials and membranes. The performance of Solynrda solar modules also is tied to the roof membrane. Roofing companies should seek to understand and capitalize on systems that can be packaged as a system with roofing materials. Constructability: Profit margins have been shifting from panel manufacturers to installers. The constructability and labor saving features of different forms of rooftop solar mounting systems and racking hardware can have a significant effect on profitability. Recent racking system innovation such as the ZEP Solar System dramatically reduce parts list and labor costs of module rack assembly and installation. Electrical contractor: Early adopters of solar systems in the roofing industry have formed alliances with electrical contractors or in some cases added electricians to their employee ranks. A common practice is for roofing firms to install modules and connect strings of modules, leaving electricians to tie systems together and make connections to the building electrical system. Certifications: Certification programs have been a key to marketing reliable solar installation services, but because of confusion and obfuscation in actual solar qualifications, certifications have not proven to be reliable sources of installation services. Incentive programs are currently moving away from the early certification program of the North American Board of Certified Energy Practitioners (NABCEP) to requirements that seek 40 hour training and installation experience combined with the use of licensed electricians. The landscape of certification and training programs continues to evolve. Business and Contract Strategies Penn State Center for Sustainability Page 6

7 Part 3: Technology Pipeline A summary of developing solar PV and racking technologies that will effect the cost and profitability of roof system installations is provided below including an assessment of the likely effect of these developments on the roofing industry. Roof membrane integrated PV Systems: Traditional photovoltaic modules that require racking systems continue to dominate the market, but an increasing number of products have surfaced that are designed for direct roof application. These systems eliminate the high material and labor costs of racking systems and can reduce the installation time of PV arrays up to percent (strong effect). Rooftop BIPV: It has been estimated that 90 percent of solar installations will be on rooftop applications. Although in many cases allowing for larger installations, minimal overall cost/installed watt savings is achieved with ground mount systems. Key sources of cost savings include the proximity of electrical infrastructure on roof applications and reduced racking costs of rooftop systems. PV technologies that are designed to embrace the connectivity with roofing materials are thus likely to grow (strong effect). Micro inverters: Micro inverters, which convert DC current from PV modules directly to AC current, are quickly penetrating the residential and commercial market with only one current producer in the market (Enphase). Costing $150 $190/PV module, micro inverters eliminate the need for large inverters and thus dramatically simplify grid connectivity. The also reduce the requirements for high voltage DC safety measures and can improve system performance by minimizing shading effects. In addition, micro inverters enable future expansion of arrays with minimal complexity (strong effect). Energy economic modeling tools: Improvements in energy assessment tools and energy economic modeling are allowing for solar project proposals that weave improved energy efficiency and solar energy generation with project financing strategies and utility tariff rate structures. Tools range from basic calculators that help to screen projects for feasibility to complex energy models designed to produce investment grade energy pro forma (medium effect: 1 5 years). Energy storage: One of the single biggest barriers to broad scale renewable energy deployment is the need to manage the interaction of sporadic distributed energy generation with the existing electrical grid. A key strategy to overcoming this barrier is to use energy storage technologies that can levelize energy loads. In response, new forms of low cost energy storage systems are rapidly being introduced to the market (long term effect: 5 10 years). Energy Management and Demand Control: The biggest success story in the smart grid arena is demand response technology, which enabled load shifting to reduce high cost peak loads on the grid. Energy management controls can help reduce loads on demand and also maximize the Business and Contract Strategies Penn State Center for Sustainability Page 7

8 value of energy storage and renewable energy production systems. Control systems that can enable building energy systems to respond to a price signal from utilities or demand reduction brokers are emerging quickly in commercial and industrial markets but lagging in residential markets due to unclear economic models (long term effect: 5 10 years). Part 4: Pursuit of expanded resources through DOE grant funding In response to the federal government s priorities in energy efficiency and renewable energy and the related goals of the 2009 American Recovery and Reinvestment Act (ARRA), DOE has initiated multiple new and expanded investments in energy technology and related work force development initiatives. In response, this project s effort was shifted away from the initial focus topics to the strategic pursuit of expanded funding that would amplify and enhance efforts by Penn State and NRCA and CEIR. Five grant proposals were developed and submitted between July 2009 and May of Each proposal was crafted to support a central set of strategic goals developed to facilitate the pursuit of a national presence in the energy efficiency and renewable energy fields for Penn State and key industry partners. In addition, each proposal was crafted to contribute to a consolidated effort to develop a new Clean Energy Campus at the Philadelphia Navy Yard. The 1,200 acre Navy Yard site is a city within a city with a master plan guiding its development. A central feature of the master plan is the Clean Energy Campus aimed at making the Navy Yard and the Greater Philadelphia region a global headquarters for clean energy technology and policy. The Navy Yard's size, its extensive utility infrastructure including an independent electric grid, and diverse building stock, combined with its future development capacity, make it the ideal location for a national energy efficient building initiative. Penn State engagement at the Navy Yard in Philadelphia has been under way since 2005 as a demonstration of the Engineering Innovation Program of the University, in addition to the combined effort to contribute to the Navy Yard Clean Energy campus. The following integrated strategic goals were used to shape the energy research and work force development efforts: Develop strategic partnerships with industry: Fund pipelines for talent through industry partnerships and consortia. Focus on Train the Trainer programs in work force development: Cultivate instructors credentials at all levels of professional and skilled trade training and educational programs. Build joint training and research facilities: They can jointly serve system performance research, curriculum development and educational and training programs. Create innovative paths to attract talent: Bring new talent into this energy efficiency and renewable energy fields. Business and Contract Strategies Penn State Center for Sustainability Page 8

9 Proposal Summaries and Status Mid Atlantic Solar Resource and Training Center: On July 29, 2009, a proposal was submitted for the DOE Recovery Act Solar Market Transformation program. The proposal detailed a collaborative effort to promote the development of a solar energy work force as a part of a national consortium of solar training centers dedicated to coordinated training, professional development, and continuing education for the photovoltaic and solar heating and cooling workforce. The proposal included the collaboration between Penn State and CEIR in the development of national standards for rooftop solar installation. This project was awarded to Penn State in October 2009 and was formally initiated with a contract in April Currently, the project team is focused on curriculum development and the early phases of forming a collaborative network between the nine awardees. More information about this program can be found at the website for the Penn State program: Solar Integrated Roofing Research and Demonstration Project: On Aug. 15, 2009, a proposal was submitted to the DOE Advanced Building Energy Efficiency Technology program. This proposal sought resources to convene a team inclusive of Penn State, the solar industry and the roofing industry in the development of a high visibility demonstration and testing program that would focus on the examination of the performance of roof integrated solar materials. This project also will help build unique links between the solar industry, roofing materials suppliers and roofing contractors. This project has not been funded but has been retained by DOE for future consideration. GridStar Smart Grid Education and Resource Center: On Nov. 30, 2009, a proposal was submitted to the DOE Energy Workforce Solicitation seeking to support new initiatives related to the smart grid workforce. The proposal developed by Penn State sought support to convene a team of industry and work force partners to shape educational and training programs related to the smart grid including topics of power distribution, energy management, cyber security, distributed energy generation and vehicle to grid integration. A key element of this project is the investment in online education and training infrastructure to facilitate the capture and distribution of key lessons and content from a breadth of topical experts and smart grid demonstration programs currently in progress across the U.S. This project was selected for funding in April 2010 and awarded as a contract on Aug. 9, 2010, and is still in the early phases of initiating activities. Further information about this project and website is available at National Energy Leadership Corps: On May 30, 2010, a proposal was submitted to DOE to form a new research team in the DOE Building America program that will be dedicated to advancing the ways home energy audits and retrofits are completed. The National Energy Leadership Corps (NELC) will seek to expand the bandwidth of home energy auditing and the breath of retrofit measures beyond the currently narrow focus of home weatherization programs. In June 2010, the Penn State led team was notified it had been selected to contract negotiations and team formation with an anticipated start date of Sept. 30, 2010, and potential project funding of $1.5 million. This project will engage Penn State and Business and Contract Strategies Penn State Center for Sustainability Page 9

10 its partners directly with the leadership team at DOE and NREL who are responding to the Recovery through Retrofit challenge developed in the Office of the Vice President and the White House Counsel for Environmental Quality. This program will help engage materials suppliers, builders and homeowners in more productive and informed measures to improve home energy efficiency and conservation. Greater Philadelphia Regional Innovation Cluster on Energy Efficient Buildings: On Aug. 10, 2010, Penn State was selected to receive $129 million during the next five years from several federal sources, including DOE, and an additional $30 million from Pennsylvania to create an Energy Innovation Hub at the Philadelphia Navy Yard. The award is expected to spur real innovation and job growth for Philadelphia, the region and the nation. The Greater Philadelphia Innovation Cluster (GPIC) includes 11 academic institutions, two DOE laboratories, five high profile global industry partners, regional economic development agencies and community colleges. Philadelphia's Energy Innovation Hub is one of three Hubs that will receive funding this year from the federal government. The other two hubs focus on nuclear energy and developing fuel from sunlight. Partners in this Penn State led energy initiative include: Bayer Material Science; Ben Franklin Technology Partners of Southeast Pennsylvania; Carnegie Mellon University; Collegiate Consortium; Delaware Valley Industrial Resource Center; Drexel University; IBM Corp.; Lawrence Livermore National Laboratory; Morgan State University; New Jersey Institute of Technology; Philadelphia Industrial Development Corporation; PPG Industries; Princeton University; Purdue University; Rutgers University; Turner Construction; United Technologies Corp.; University of Pennsylvania; University of Pittsburgh; Virginia Tech; and Wharton Small Business Development Center. Still in the early stages of development, the leadership of the GPIC Hub is now seeking to develop collaborative research teams that include top industry researchers and industry partners to address practical and integrated challenges to the retrofit of existing buildings and design of new highperformance buildings. Part 5: Recommendations for Next Steps The increased value of energy efficiency and renewable energy in the building industry has resulted in the emergence of multiple opportunities in the roofing industry. This project has offered an opportunity for a collaborative approach among Penn State and NRCA and CEIR to explore these opportunities and grow capacity to pursue more aggressive research projects that will advance the effect on the roofing industry. By leveraging the seed funding provided through this project to secure DOE support, the collaborative relationship among NRCA and CEIR and Penn State is now positioned to have more significant effects in the energy and renewable energy marketplace. The leadership of the Penn State Architectural Engineering program and Center for Sustainability place a high value in continued collaboration with NRCA, CEIR and the leadership of the roofing industry in two specific pursuits: the deployment and promotion of the RISE program and the co development of a national solar roofing research and education center. Business and Contract Strategies Penn State Center for Sustainability Page 10

11 RISE Program Education and Training The Roof Integrated Solar Energy (RISE) professional program developed by CEIR represents a strategic initiative to formalize and validate the substantial role of the roofing industry in the expanding solar energy market. In support of this effort, the Northern Mid Atlantic Solar Education and Resource Center will seek to provide training and certification support for the RISE program and also help propagate the technical practices and installations standards developed by NRCA that pertain to rooftop solar installations. Solar Roofing Research and Education Center The emergence of new rooftop building integrated photovoltaic products and applications has created a demand for research on performance and durability factors in addition to the need for basic and specialty training. This need is particularly important for solar systems that are intended to supplant or that have strong connectivity/bonding to roof membrane products. In response, NRCA is currently exploring the idea of creating a solar training infrastructure specifically designed to support educating roofing industry workers in the safe, effective and efficient installation of high quality rooftop BIPV installations. In support of this effort, Penn State will seek to capitalize on the DOE funding from the Mid Atlantic Solar Education and Resources Center and the GridStar Center at the Philadelphia Navy Yard with the design and construction of an infrastructure to support rooftop solar installation training. In addition, Penn State will seek to collaborate with NRCA and CEIR in the pursuit of additional DOE funding intended to support staff and research personnel for the proposed training center. Acknowledgments The research team at Penn State would like to extend our appreciation to William Good, executive vice president, NRCA; Jim Hoff, research director, CEIR and Craig Silvertooth, executive director, CEIR for the cooperative efforts to initiate this project and guide the collaborative efforts leading to the successful pursuit of leveraged research and work force development funding. We also would like to thank the interview participants who helped to shape the early trajectory of this research with their input as early adopters in the solar industry: William Collins, William Wallace Collins LLC; Terry Tamminen, president and founder, Generation Advisors; Ralph Velasquez, executive director of sustainability, Tremco, Inc.; Dick Gillenwater, manager advanced projects, Carlisle Syntec and Mike Williams, senior marketing manager plastics, Dow Chemical Co. For more information, or to participate in this research and related efforts, please contact: Dr. David Riley Penn State Department of Architectural Engineering (814) driley@engr.psu.edu Business and Contract Strategies Penn State Center for Sustainability Page 11

12 Appendix A: Summary of Federal Energy Legislation Emergency Stabilization Act of 2008 American Recovery and Reinvestment Act of 2009 American Clean Energy and Security Act of 2009 not passed American Clean Energy Leadership Act of 2009 not passed Emergency Economic Stabilization Act of 2008 Extends expired and expiring tax incentives for renewable energy, energy efficient building upgrades, and appliance and equipment purchases Extends Commercial Building Tax Deduction (CBTD) through 2013 CBTD allows owners to claim a deduction of up to $1.80 per square foot for upgrades resulting in 50 percent savings over ANSI/ASHRAE/IESNA Standard for upgrades in: HVAC, Lighting and Building Envelope Five year extension allows owners time to plan and execute upgrades Creates new credits through 2016 for: Combined Heat and Power (CHP) Small Wind Energy Geothermal Heat Pumps Establishes provisions for Energy Conservation Bonds issued by states and local governments to conduct energy conservation projects Establishes residential tax credits for: Energy Saving Appliances Energy Efficient Homes On Site Renewables Solar Investment Tax Credit Extend 8 years until percent Investment Tax Credit No Cap On Residential ITC In Addition To Other Incentives and Depreciation Also includes fuel cells and microturbines Alternate Energy Production Tax Credit $0.02/kWh Extended Depending On Technology Applies to: Wind (2010) Geothermal (2011) Closed Loop Biomass (2011) Solar (2011) Hydropower (2011) Landfill Gas (2011) Trash Combustion (2011) Marine (Waves, Tides and Currents) (2012) Adds accelerated depreciation period for: Smart Meters Smart Grid Systems Business and Contract Strategies Penn State Center for Sustainability Page 12

13 Extends program providing tax exempt bond designation to designated green building and sustainable design projects on brownfields Extends expired business research credit through 2009 ARRA 2009 Status 70 percent of the ARRA 2009 $787 billion of stimulus money to be spent by end of FY Most of stimulus money will be released in FY 2010 starting in Oct. 1 Purpose of ARRA 2009 was to stimulate job growth National double digit unemployment expected to continue Pending Energy and Environmental Legislation Increased Building Efficiency Requirements Utility Renewable Energy Standards (RES) Carbon Cap and Trade Smart Grid Other Provisions Carbon Neutral Buildings and Zero Energy Buildings (ZEBs) AIA 2030 Challenge sets the goal for carbon neutral buildings by 2020 ASHRAE plans to create a Net Zero guide for building design and construction by 2020 U.S. Department of Energy s (DOE) Building Technologies Program has set a goal of zero energy buildings by 2025 ASHRAE/IESNA Standard Energy Standard For Buildings Except Low Rise Residential Buildings ASHRAE/USGBC/IESNA Standard 189 Standard for the Design of High Performance Green Buildings Except Low Rise Residential Buildings Addresses the same five major categories as the LEED rating systems Intended to apply to same categories of buildings covered by International Energy Conservation Code (IECC) and ASHRAE/IESNA 90.1 Additional requirements beyond LEED NC requirements Use as a basis for infrastructure development Business and Contract Strategies Penn State Center for Sustainability Page 13