CT Public Act No Opportuni8es in Solar PV. July 28, 2011

Transcription

1 CT Public Act No Opportuni8es in Solar PV July 28, 2011

2 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

3 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

4 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

5 Historical Commercial Electricity Prices Price (cents/kwh) Massachusetts New Jersey New York Connecticut Pennsylvania Year Source: Energy InformaEon Assn.

6 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 6

7 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)

8 Operating Structure of a Typical Utility Scale Solar Project Sponsor Tax Investor 100% 100% General Partner LLC/Partnership Agreement Limited Partner Services could be bundled in turnkey contract Power / REC Purchaser Power Purchase Agreement Project Management Agreement PROJECT Additional Equity Contribution Agreement O&M Agreement PV Supply Agreement O&M Provider PV Supplier Land Owners Land Lease & Easements Interconnection Agreement Financing Agreements/ Leases Supply Agreement Installation Agreement Inverter Supplier Transmission Company ITC/Grant Lenders/Lessor PV Installer U.S. Dept. of Treasury U.S. Dept. of Energy 3

9 Customer View 8 PhosEnergy SPE PPA kwh Customer Net Metering We make it simple

10 The PHOSEnergy PPA Overview

11 PhosEnergy Development Process Timeline SurePath Solar sm PPA Timeline Preliminary Assessment Financing, Incentive Application Design, Engineering, Permitting, Procurement Installation, Approvals, Interconnection Operation and Maintenance 2 to 4 weeks 3 to 6 months 3 to 6 months To 25 years LOI PPA Construction Starts System Online 33

12 Recent Project Review 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: 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

13 Site View Map of School with loca8on of arrays Legend - School Property - Site of Solar Array

14 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

15 Contact PhosEnergy LLC Wayne Moore John Millard Manasquan, NJ Harsord, CT mob