ct#public#act#no.#11080#–opportuni8es#in#solar#pv# …power / rec agreemen purchaser...
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CT Public Act No. 11-‐80 – Opportuni8es in Solar PV July 28, 2011
The Company • Independent solar power producer (IPP). We develop, build, own
and operate solar PV systems for customers with no upfront capital cost to them
• Use Power Purchase Agreement (PPA) model to deliver clean, renewable power at cost-‐effecEve prices below retail electricity rates
• UElize best-‐of-‐breed technology, act on customer behalf to provide a turnkey package of services
• In solar and renewables since 2003
– Developed more than 40 solar PV systems, dozens of related energy projects – RooOop, ground-‐mount, brownfield, landfill and carport systems experience – Recently developed 6MW project for leading NJ independent school
Team Members § John B. Millard, Founder/ Licensed Architect Systems design § P. Wayne Moore, Finance and OperaEons
§ Thin film/brownfield/landfill/WWTF specialist § PhD., technology scienEst § Professional PV Engineer § Full back office and operaEonal support staff
Outside Professional Team: • Leading investment bank – tax equity, bank debt, financial
structuring • Leading solar panel manufacturer • Leading BOP suppliers
Why Solar Electricity? • Sun power is abundant, clean and reliable; solar panels are made from
silicon, the 2nd most abundant material from the earth
• Solar PV power generaEon does not produce noise, emissions or toxic fumes; system components can be recycled
• Systems produce power for 20+ years, with minimal maintenance
• Solar is cost-‐effecEve, with strong investment returns to owners • Creates new manufacturing jobs and offers opportunity to re-‐train
• Avoids poliEcal tension and economic dependency of fossil fuels
• Can revitalize assets such as brownfield sites, rooOops, parking lots
Historical Commercial Electricity Prices
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2.00
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20.00
Pric
e (c
ents
/kW
h)
Massachusetts New Jersey New York Connecticut Pennsylvania
Year
Source: Energy InformaEon Assn.
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Boeom Line Up Front • These projects are complicated
– Land availability and use issues – Environmental impact
– Financial and credit analyEcs – Technology risk – Regulatory risk – Performance risk
– Heavy structuring, document intensive
– Permigng risk
– Work to be done interpreEng the new law
Overview of the PPA Structure • Power Purchase Agreement provides an aeracEve financial
structure:
Key Features • No capital outlay • UElizes all tax and other incenEves • No ZREC or commodity risk • Immediate break even • Provides a hedge against future price increases • Long-‐term (15-‐20 years) • Matches peak load (load shedding)
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PROJECT
Power / REC Purchaser
Lenders/Lessor
Limited PartnerGeneral Partner
Financing Agreements/Leases
Transmission Company
InterconnectionAgreement
Tax InvestorSponsor
100% 100%
LLC/Partnership Agreement
LandOwners
Project ManagementAgreement
Additional Equity Contribution Agreement
O&MProvider
Operating Structure of a Typical Utility Scale Solar Project
U.S. Dept. ofTreasury
U.S. Dept. of Energy
ITC/Grant
Services could be bundled in
turnkey contract
Land Lease & Easements
Power PurchaseAgreement
O&MAgreement
PV Supplier
PV Installer
InstallationAgreement
Inverter Supplier
PV SupplyAgreement
Supply Agreement
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Customer View
PhosEnergy SPE
Customer Net
Metering
PPA kWh
… We make it simple
The PHOSEnergy PPA Overview
PhosEnergy Development Process Timeline
SurePath Solarsm PPA Timeline
Financing, Incentive Application
Design, Engineering, Permitting, Procurement
Installation, Approvals, Interconnection
Operation and Maintenance
PPA
3 to 6 months 3 to 6 months To 25 years
System Online
LOI
2 to 4weeks
Pre
limin
ary
Ass
essm
ent
Construction Starts
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Host Leading NJ Independent School LocaEon: 5 miles south of Princeton, NJ Credit: Aa3 by Moody’s Endowment: > $50 million Students: > 800
Solar Project Project size: 6.239 MW single-‐axis sun tracking array Land Use: 40 acres Project Cost: $35 million dollars Structure: 20 yr PPA, Partnership Flip with Leverage SRECs: Five year forward sales contact with
investment grade credit
Scope: Permigng, legal, engineering, design, financing, construcEon, procurement, earthwork, foundaEons, electrical, interconnecEon, operaEons, management, monitoring, SREC operaEons
Recent Project Review
Map of School with loca8on of arrays
Legend
-‐School Property
-‐Site of Solar Array
Site View
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Conclusions
§ Documents and structures are crucial components for all parEes—using the right financing vehicle cannot be overstated
§ Understand your markets – ZRECs, incenEves, energy prices to determine what revenues are available and what technologies are best suited for geographic locaEons.
§ Only sound projects with quality parEcipants and strong cash flow will get done.
§ Work with public/private mentality and remain adapEve and flexible.
§ Long term PPAs are essenEal for financing since, despite improving condiEons capital is sEll precious and investors sEll risk averse.
§ Projects conEnue to rely on federal tax benefits and these incenEves.
§ This is an excellent Eme to plan for 2012.
Contact PhosEnergy LLC
Wayne Moore John Millard
Manasquan, NJ 08736 Harsord, CT 06105 860.985.4456 mob
800.387.1981