Sunrun project policies guidebook

Sunrun project policies guidebook a handy guide about the projects we want (and the ones we don t) CSLB #969975; NJ #13VH07020300

Project Policies Guidebook Sunrun and our partner network put in service nearly $2 million in solar every day in a market we invented and that didn't even exist before 2007. We ve been so successful together because we have rarely compromised on the definition of our core business. Sunrun s core business is to originate, build, and own projects on single-family residential properties in territories where we currently operate, and sell power via a power purchase agreement [or lease panels via a lease agreement] back to the residential customer who owns the property. About 98% of the business that we do with our partners today fits our core business, which is great. The 2% that does not fit, however, has serious negative effects on our ability to scale and continue to grow the category. When we accept projects that fall outside of our core business, here s what happens: Our teams spend days, sometimes weeks, on tasks that do not scale or create long-term company value. There is less time to develop more competitive and innovative product offerings for our core business. We cannot deliver on our promises to our customers. We lose money immediately and in the long run. Along with our partners, leaders from Sunrun s product, operations, customer care, finance, marketing & sales teams reviewed the economics, terms, and system design of many of our 25,000+ systems. They came up with a clear list of the projects that, going forward, Sunrun will buy and those that we won t. We call this list our project policies. Most of the policies are already standard practice. There are a few areas where we ve tightened up the rules. When Sunrun and our partners stick to the business outlined in the project policies, together we: Drive focus around a huge customer segment that allows us to scale and drive profitability. Become more efficient. Can create more attractive and inventive product offerings. Come through for our customers. Meet short and long-term financial and growth goals. Everyone at Sunrun and those who sell & install via our partner network needs to review, understand, and operate by these policies. Our combined success depends upon it. Power forward.! "!

What is included in the current project policies, what is not The policies contained in this guidebook spell out which projects Sunrun will and will not support based on size, location, customer type, building type, design, and incentive program. The policies herein do not cover: Rules for post-origination agreement and customer modifications, change order rules, payment and signature requirements, installation practices, equipment (AVL), and credit issues. We will make this guidebook available electronically to partner management and everyone who sells Sunrun as well as those who oversee the building of our projects. We will make revisions on a quarterly basis and ensure that updated versions are readily accessible. Questions or comments on the project policies should be directed to Account Managers and/or Sales Managers/Directors.! #!

The policies! Our project policies are all about getting it right. We need to get the right: Project information Legal & code compliance Customers Building types Locations System design Incentive program types Right project information When selling a Sunrun project, you and your team must supply us with accurate site and customer information in the Sunrun proposal tool from the get-go. This includes, importantly, accurate electricity usage and utility bill information for all customers. Being on the right side of the law and up to code Sunrun will not buy systems on properties where a customer is knowingly engaged in activities that are against local, state, or Federal law. Projects must also meet all local and national building & electrical code requirements in design and construction. Right customer type Sunrun only provides our solar service to owners of residential properties. Sunrun does not buy projects for non-profit or commercial customers or properties. o A note on LLC s: Sunrun does not sell to Limited Liability Corporations, unless the LLC is a single person with a single tax ID. Customer must submit LLC incorporation documents for review and, if approved, the agreement will be Prepaid. Sunrun will not make any milestone payments until the Prepayment amount is received. Sunrun will buy projects for residential properties held by a Trust. We require a special sign-off process, however, for these properties: The first five pages of the Trust document must be sent to us for review before the deal is counter-signed by Sunrun. o A note on Trusts: Sunrun will not support projects for a category of Trusts known as irrevocable trusts. Sunrun needs everyone who is on the title of the home to sign the agreement. However, for married couples, only one of the two has to sign, since the home is held as communal property. Right building type Sunrun does not buy projects on buildings with multiple units, even if a single individual owns all the units. Sunrun does not buy projects on mobile homes or other non-permanent properties.! $!

o A note on non-permanent properties: Sunrun only buys projects on carports, trellises, or manufactured or prefabricated homes if partner supplies stamped plans from a license Civil or Structural Engineering with full calculations on structural integrity. Right areas Sunrun buys projects only in utilities where we operate. Sunrun does not buy projects in areas zoned exclusively for commercial/ industrial use. Sunrun does not buy projects in locations where zoning does not permit solar. Sunrun requires Account Manager approval for properties that are located less than 500 feet from a golf course. Right system design * Sunrun ground-mounted systems must be designed and built exclusively to hold solar panels. o A note on ground mounts: Sunrun does not buy projects that include a structure designed for the purpose of shade, cover, or any other nonphotovoltaic-related end. Sunrun does not buy projects greater than 30kW or less than 2kW DC (or as specified by constraints placed in the proposal tool) per a single residential address. Sunrun does not buy projects that share a Sunrun meter with any other system. Sunrun requires one Sunrun meter per Sunrun agreement. Sunrun does not buy projects where solar electricity will exceed more than 100% of the customer s previous 12 months of utility electricity usage. Sunrun does not buy projects that use reverse racks or compound tilts. Sunrun does not buy projects that require interconnection with 3-phase electrical services. Sunrun does not buy projects designed to serve as a battery back-up or storage system. All Sunrun systems must be directly connected to the grid, and all energy produced must be fully back-fed into the grid. Sunrun will buy projects with multiple systems on the same property as long as the projects stick to our system size, local building codes, usage, and other requirements. There is an additional review process necessary to approve multiple systems on a single project.! Right incentive program type Incentives that have not been previously approved and applied for by Sunrun cannot be included in the pricing of projects we buy. This includes local or municipal incentive programs. Project components that are non-investment tax credit eligible, such as fences around ground mounts or main electrical panel upgrades, cannot be included in the pricing of projects we buy.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! &!Please see the Sunrun Installer Handbook for more details on proper system design.!! %!

Applying the project policies: Can the following potential customers get Sunrun solar? A homeowner who lives close to a golf course Answer: Maybe. If the property is greater than 500 feet from the course, you are good to go. If the customer lives within 500 feet of the golf course, you ll need special approval from your Account Manager. Send your AM detailed information about the location of the house in relation to the golf course, including aerial maps. Sunrun needs to know, essentially, if golf balls are likely to hit the roof plane that will be holding the solar panels. If the home is directly behind the teeing ground, for example, golfers will be driving balls away from the home. If it is along the fairway, the balls may be more likely to hit the roof. Why: Sunrun replaces broken equipment. If the panels are at risk of being hit by golf balls, there s a greater chance that we ll have to replace broken panels on a regular basis. This is neither good for the customer nor good for Sunrun, because the system will not work as we ve said it should, and the project is very expensive. A homeowner who lives in a utility where Sunrun doesn t operate Answer: No. We may be able to service the individual in the future if we decide to enter that utility area. Why: We have to carefully review and understand all the variables in a given utility to provide a great customer experience. This understanding takes time and effort. Moreover, some laws or regulations may not allow Sunrun to offer solar service to customers within a given utility. We carefully select the utilities where the customer value proposition is best. Homeowner who is on a discounted utility rate in his or her utility Answer: Yes. We strongly recommend that customers who have a discounted rate sign up for Sunrun s prepaid payment plan to ensure savings. Why: We must make sure that all customers are paying less to Sunrun for power than they do to their electric utility. Prepaid is the best, most economical way that also makes business sense for those already on discounted electric rates to achieve savings. Person who lives in a condominium Answer: No. Sunrun does not own projects on buildings with multiple units. Why: Providing solar service on condos and other buildings with multiple units requires additional legal and contractual work, such as easement agreements. These additional contracts and processes are not currently part of our standard agreements and are cost prohibitive compared to our core product. Husband, wife, and son who all co-own a home together, and all three are on the title of the home Answer: Yes. The son and one of the spouses must sign the agreement. Why: When all owners sign the agreement, we reduce the risk of service transfer headaches and high cost. It also represents a better customer experience if all building owners are informed of the agreement from the get-go.! '!

A homeowner whose home is held in a Trust Answer: Maybe. We require a special sign-off process for properties held in a Trust. Partners must obtain the first five pages of the Trust document and send those in with the deal packet for our review before the deal is counter-signed by Sunrun. Why: Sunrun must make certain that we are contracting with the appropriate person responsible for the Trust. We are not able to support irrevocable Trusts, as this would require multiple signatures from the Trustor and beneficiaries. We are able to work with revocable trusts, as long as the grantor/trustor/settlor signs the Sunrun agreement and passes credit. Homeowner whose home is held in an LLC Answer: Maybe. Sunrun does not contract with LLCs, unless the LLC is a single person with a single tax ID. Customer must submit LLC incorporation documents for review and, if approved, the agreement will be Prepaid. Sunrun will not make any milestone payments until the Prepayment amount is received. Why: If an LLC goes bankrupt, then Sunrun cannot enforce the agreement. Properties incorporated into LLC s are often protected from collection in the event of bankruptcy. Homeowner lives in a prefabricated home Answer: Maybe. Sunrun can only service systems that are on permanent structures. Manufactured or pre-fabricated homes are accepted only after Sunrun review of stamped plans from a licensed Civil or Structural Engineer with full calculations for structural integrity. Why: International Building Code specifies that rooftop components such as photovoltaics cannot be added to a structure that doesn t have a permanent foundation. There is often also additional risk and expense associated with projects on nonpermanent homes. A homeowner who wants to install solar on his carport Answer: Maybe. Similar to prefabricated homes, Sunrun systems installed on a trellis or carport structure can only be accepted after Sunrun review of plans stamped by a licensed Civil or Structural Engineer with full calculations of structural integrity. Why: Carport or trellis must be certified structurally sound to hold a photovoltaic system or they represent extra risk for homeowner, Sunrun, and partner alike. A homeowner who wants to use a solar ground mount as a carport Answer: No. Sunrun ground-mounted systems must be designed and erected exclusively to house and/or hold solar panels. Ground mounts shall not be designed or erected for the purposes of shade, cover, or for any other non-pv-related aim. Why: If the structure that will hold the solar panels does not already exist and it will be intended to do more than simply hold the panels, we won t support the project. We run the risk of losing investment tax credit with structures built for more than holding panels, meaning we can t accurately price or effectively pay for the project. Homeowner who wants a battery back-up system for solar Answer: No. Sunrun does not purchase battery back-up or storage systems. All Sunrun systems must be directly connected to the grid, and all energy produced must be fully back-fed into the grid.! (!

Why: Batteries are expensive and increase risk. Projects bought by Sunrun cannot take on any liability associated with a homeowner's battery system. Furthermore, a battery system connected to the solar facility could void equipment warranties. Homeowner who wants a ground mount, but doesn t want to pay separately for a required fence around the ground mount system Answer: No. Fences are not ITC-eligible and will not be wrapped into the cost of the Sunrun project. Note that fencing requirements for ground mounts are based on local building codes. Sunrun relies on partners to stay current on local building codes in areas of their operation. Why: Partners must charge customers separately for non-itc eligible components of the system. This is similar to the current policy with main electrical panel upgrades A nature center that wants to go solar Answer: No. Sunrun does not buy projects for non-profits or commercial entities. Why: Non-profits and commercial customers introduce a different level of risk for service transfer, credit, and variability in utility rates. Commercial buildings typically require equipment and system design review that Sunrun does not provide and cannot verify for quality metrics. They also often require separate, more extensive permitting and interconnection processes and costs. The monetary and opportunity costs of serving this business far outweigh the benefits. Homeowner who is in a home that has 3-phase power Answer: No. Sunrun does not purchase systems installed on sites that have 3-phase electrical services. Why: 3-phase, 208/120Y or 480/277Y power is used mostly on non-residential buildings instead of split-phase 120/240. This requires different design techniques and different code-standards that Sunrun does not have the equipment or knowledge to manage properly. A homeowner lives in a utility that offers neighborhood or virtual net metering. Answer: Maybe. Sunrun will not purchase projects that cover greater than 100% of customer usage in general and/or in order to share electricity with a separate property owner. There must be only one utility meter associated with each customer address and at least one Sunrun meter associated with each customer address. This policy holds for a customer with multiple utility meters associated with their account and their property. Why: Policies that allow customers with behind-the-meter generation to share their generation with another utility meter (usually another customer) are unstable contractually and have an uncertain future. The complexity and instability of the rate schedules put the customer experience at risk. Homeowner currently who lives in a utility that offers a Feed-In-Tariff (FIT) and wants to use the FIT with Sunrun Answer: No. Sunrun does not participate in FIT s such that Sunrun receives the FIT payments. Sunrun cannot receive FIT payments at this time. Why: Feed-In-Tariffs require sale of electricity to the utility. Sunrun solar service is structured to sell electricity to the customer behind the meter and require the customer to net energy meter.! )!

Homeowner who lives in a utility where Sunrun operates, and their city offers a local rebate or incentive Answer: Yes. Remember, however, that incentives that have not been previously approved and applied for by Sunrun cannot be included in the pricing of projects we buy. This includes local or municipal incentive programs. Why: Sunrun supports local incentive programs, but cannot participate in all of them. If Sunrun is not participating in a local rebate, and you think we should, please ask your Account Manager for the local incentive worksheet. Once you complete the worksheet, we ll take it into consideration. A homeowner who wants two Sunrun systems on the same property Answer: Maybe. Sunrun will buy and install multiple systems on a single property and with a single customer provided: The reason for multiple systems is contained to unique property requirements such as multiple distant buildings on single property, multiple utility meters (remember: only one utility meter per Sunrun system!). Each Sunrun system is electrically independent. Each Sunrun system is metered and billed separately in a separate contract. The aggregate size and production of the Sunrun facilities on the property complies with the maximum size and offset rules for a single Sunrun system. The aggregate pricing of the contracts complies with Sunrun pricing rules for the total offset and system size. Sunrun signoff requires an in-depth audit by our operations team to verify that the above requirements are met. Why: Having multiple bills and agreements is a more complex sale and creates more complications with the customer experience. The reasons for multiple Sunrun systems must be limited to requirements due to property layout, not pricing objectives. Sunrun s usage offset and size rules are meant to be per property as the risks they intend to cover are generally applicable per property. Homeowner wants to add another Sunrun system to an existing Sunrun system. Answer: Maybe. We will need to evaluate a few aspects of the customer s current situation to make sure the incremental solar is a good customer value proposition. Specifically, we will determine that: The system and customer have at least 1 year of operating history. The aggregate size and production of the Sunrun facilities on the property complies with the maximum size and offset rules for a single Sunrun system. The aggregate pricing of the multiple Sunrun agreements complies with Sunrun pricing rules for the total offset and system size. The new system is electrically independent from each existing Sunrun and other distributed generation system. The new Sunrun system is metered and billed separately in a separate agreement. We will also take into account the customer s credit and payment performance with Sunrun. The additional system must be electrically and contractually independent from the original system. Why: Again, multiple systems on a single property are complex. We need to make sure the complexity is justified and presents a good customer experience.! *!

Homeowner with a roof that will only fit a system that is 1.5 kw DC in size Answer: No. Minimum size of Sunrun system is 2 kw DC. Why: The upfront and ongoing project costs are, per unit, generally higher for small systems. For example, it is a better value proposition for the customer and for Sunrun if the customer does not pay a tiny monthly bill for 20 years. A customer who wants a system sized at 120% of their current usage Answer: No. Sunrun does not buy projects that offset more than 100% the maximum of a customer s electricity usage Why: It is a poor customer experience to purchase power above the rate of electricity the customer would otherwise pay. Customers with oversized systems represent significant payment risk. In the event the home changes ownership, the likelihood of a challenging service transfer process is greater when systems are oversized, as savings amounts are often less and Sunrun rates higher than anticipated.! +!