Game-changer Solar Business Model Innovation

Transcription

1 Game-changer Solar Business Model Innovation DAVID ARFIN April 12, 2016 Lyon, France

2 An Unlikely Innovator I never cared about a kilowatt or kwh rates, corporate tax credits, accelerated depreciation, utility meters Nor had I heard about ITC, RECs or partnership flips Inconvenient Truth got this entrepreneur thinking driven to both do good and do well Middle of home roof replacement. Received 3 Quotes for solar; best was a 33-year simple payback ($15k to help the environment?) Researched: why anyone went solar?

3 Policy/ Investment/ Innovation Nascent industry. Been around 30+ years. Unknown consumer technology. Expensive. Unaesthetic Immature industry - lack of investment downstream. Policy environment generally positive* Core economics were sound, but not a no-brainer. Thinking inside industry was stale. In addition to lower priced panels we needed a game changer. And it s only the beginning

4 Residential Solar as a Service 1. Qualified homeowner signs lease 4

5 Residential Solar as a Service 5 2. Qualified installers design and complete project

6 Residential Solar as a Service 3. Lessor receives benefit streams (ITC, rebates, SRECs, lease/ppa payments, depreciation, etc.) & allocates efficiently among financing partners 6

7 Residential Solar as a Service Residential Solar Lease A Game Changer 7

8 % of Installed Capacity 3rd Party System Ownership by Region 100% 90% 80% 70% AZ CA MA MD 60% 50% NJ NY 40% 30% 20% 10% 0% Sources: CSI Database, accessed 03/13/13; MA SREC Program, accessed 03/13/13; Arizona Public Services, & Salt River Project accessed 12/12/12 (APS), 03/25/13 (SRP); Maryland Energy Administration (03/12/13)

9 Consequence : Staggering Growth Rates April 22,

10 Energy Technologies for As a Service Lighting improvement - Enlighted Building efficiency Carbon LightHouse United Wind solarlease for wind Micro CHP in NYC Phoebus (heat exchange) Energy Storage as a Service

11 Global phenomenon

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13 It s all About Risk

14 Why Does Solar Leasing* work? Morphs the selling process from overcoming barrier of upfront capital cost to offering a low-cost substitute for grid electricity Shifts risk / responsibility from homeowner to responsible third-party service provider Aligns solar electricity with traditional utility payment lease/ppa payments structures (i.e. heat, electricity, phone, cable) Often a Immediate, visible reduction in bills Lock-in rates and/or guaranteed production** Allows homeowners to do the right thing without having to 14 write a large (or any) check upfront

15 Ener-Pacte Shifts Risks from Farmers to Investors

16 Reduce Investor Risk Senior Debt Junior Debt Diversification & Aggregation Since we manage PV assets all over Europe, we diversify risk. There is one credit line for several projects, the default of one project doesn t impact the payback Project SPV 1 Ener-Pacte Holdings Coverage Ratio Since we increase the debt periods until the end of the Feed-intariff (typically by 5 additional years) the Coverage Ratio for Senior Debt is > 150 % and for Junior debt > 200 % Project SPV 2 Project SPV n Process We install clear and transparent processes for the management of assets. OPEX are payed directly by holding so there is no risk of not being covered

17 Rates Profile and Uncertainty electricity price (cents/kwh) rate risk 10 residential tier historical training data simulations CONFIDENTIAL 13

18 Measuring and Reducing Risks Type of Risk Performance Risk Credit Risk Transfer Risk Rate Risk Will the promised amount of electricity be delivered? Will customer pay? What happens if the customer moves? How will future electricity rates change? Typically borne by... EPC Investor Developer Customer Customer Investor Managed by... Technology, maintenance Credit screen Contract Contract Goal: Put risks in the hands of those most able to deal with them CONFIDENTIAL 5

19 THANK YOU!