$0 down pay as you go solar

Transcription

1 $0 down pay as you go solar

2 The Proposition Clean energy, from your own roof, that s more affordable than the grid a no brainer!

3 Heading

4 Solar Adoption is on a High Tech Trajectory: US Cell Phone Market Source: CTIA The Wireless Asscoiation

5 Pay-as-you-go solar Lease finance with performance guarantee: you pay a fixed amount every month, with annual adjustments to match performance PPA: The solar company owns the solar panels. You pay for the electricity. In both cases, no large upfront payment means more people can go solar How it works in the US: year lease Sungevity owns and maintains system Customer gets clean solar power A typical homeowner saves about 15% net with $0 down in their first year MONTHLY SAVINGS Before Solar SolarLease Utility Bill $287 $106 SolarLease Payment $146 Total Monthly Cost $287 $252 Net Monthly Savings $35 $300 $200 $100 $0 OLD UTILITY BILL SOLARLEASE PAYMENT NEW UTILITY BILL

6 Why Solar Leasing works in US 30% federal government tax incentive interested investors What has worked in Australia = Idea of $0 down cash-flow positive is very attractive What hasn t worked in Australia Solar loan is perceived as debt Solar loan is not cash flow positive Friction in the credit approval process

7 Market share growth in California from March 2011 to February 2012 Source: The Daily Energy Report

8 The US industry Third-party-owned solar pumped more than $938 million into California s economy in Source: Sunrun & PV Solar Report Third-party finance is set to propel the growth of the solar residential market in the US from $1.3 billion in 2012 to $5.7 billion in Source: GTM Research report This model was rare five years ago!

9 Major Financial Players Are Going Big on Solar Recent Investments Credit Suisse US Bancorp MetLife Kohlberg Kravis Roberts Google GE Dupont Capital Dynamics US Bank & East West Bank Berkshire Hathaway $5.7B Recently announced investments $109B Saudi Arabia s 20-year solar investment plan Dollars Invested ($millions)

10 High cost of funds Lack of debt finance Hurdles in Australia Currently requires straight equity (industry participants or private investors) Lack of simple customer credit check processing Sungevity s Experience In the US 97% go for financed solar Trialing 7 year solar payment plan here - struggle to be cash-flow positive To be attractive offer has to be cash-flow positive from Day 1 Need a smooth transition into and out of the finance process People are wary of debt 52% sample interested in a PPA model

11 What s required for success You need to have in place: Rigorous credit control & assessment of end customer Simple, online, instant credit assessment of customer Billing systems Accurate monitoring systems Longer term agreement with customer Longer term finance to enable cash flow positive proposition (Currently at 5-7 year money) Bankable product - recognised manufacturers with reliable warranties A shift in perception by the market

12 The good news is Pay-as-you-go solar is off the ground here in Australia Today there are many people working on financed solar products We re educating about solar as an asset class Banks, investors and the market are starting to understand this new asset class No longer an un-trodden path To make it work in the future we need $0 down cash-flow positive

13 Sungevity s ONLINE SUNSHINE Remote Solar Design & the iquote Process iquote includes: Pay-as-you-go cost Savings PAYG vs. Buying Environmental impacts Sungevity can then install, manage, and maintain through life of agreement

14 14 Sungevity Monitoring

15 To buy or not to buy that is the question! We re giving consumers options Do consumers want to own generation assets? Ownership isn t necessarily for everyone Solar as a service can bring solar to more Australians, not only because it eliminates the upfront cost, but also because PPA remove the hassles of ownership.

16 Benefits of pay-as-you-go Benefits to the industry Ongoing relationship with the customer Greater control over the solar performance Creates a greater market reach Steady return on investment Benefits to the consumer $0 upfront cost = accessibility Solar power is cheaper than grid power Immediate Savings Warranty & maintenance handled by Sungevity

17 Get ready for the Rooftop Revolution Solar has barely scratched surface of $2.2 trillion market! A game changer for solar industry and retail electricity industry New investment opportunities for investors Great return profile for superannuation funds Innovating renewable energy financing Creating an investment vehicle for direct investment into 1000 s of solar generators

18 Nick Lake Managing Director