THE GPASI: GOOD NEWS FOR THE COMMERCIAL PV MARKET FEB

Transcription

1 Making high-quality, high-power solar cells and modules using U.S.-based technology at affordable costs to address the world s energy needs THE GPASI: GOOD NEWS FOR THE COMMERCIAL PV MARKET FEB

2 SUNIVA IN GEORGIA: OVER 90 SITES & 7+MW INSTALLED Suniva Executives at HQ with First Lady & Georgia Governor Nathan Deal 2

3 TODAY S SPEAKERS Anthony Coker Suniva, Sr. Director, Business Development Ervan Hancock -- Georgia Power, Manager of Renewable & Green Strategies Doug Beebe Key Equipment Finance, Vice President, Energy Finance 3

4 AGENDA GPASI Overview & Benefits for Commercial Customers, Anthony Coker In-depth review of Medium-Scale Solar Agreement & Process - Ervan Hancock Highlights of lease financing plan for GPASI commercial clients - Doug Beebe 4

5 SUNIVA OVERVIEW Manufacturer of high-efficiency, crystalline silicon PV cells & modules 5 High-Efficiency Cells: 19.2+% in production; over 20% in laboratory; roadmap to 22+% by 2014 High-Power Modules: Up to 16+% in production; 60-cell modules up to 270W, 72-cell modules up to 315W Buy American Compliant Modules: one of the highest U.S.-content modules on the market Manufacturing Capacity: 170 MW in the U.S. and expanding in 2013; 500 MW in Asia

6 SUNIVA INVESTOR BACKING Suniva is led by a highly-successful leadership team and backed by quality investors 6

7 SUNIVA & GEORGIA TECH DEEP ROOTS 2007: Suniva Founded 1992: GA Tech University Center of Excellence (UCEP) Established 1992: Dept. of Energy provided funding 1985: PV Program Established at Georgia Tech Deep Roots with GA Tech, Continued Collaboration Suniva has access to over $50M worth of advanced research equipment at UCEP/Georgia Tech Suniva benefits from a budget of over $43M of PV-related research programs funded partly by the U.S. DOE 7

8 SUNIVA & GEORGIA TECH DEEP ROOTS 90 kw rooftop installation on Georgia Tech s Clough Center 8

9 SUNIVA INNOVATION IN THE VALUE CHAIN The solar cell is the DNA of any PV system, and hence the key driver of value Silicon Ingot Wafer Cells Modules Balance of System Solutions Systems Integrators Unique Partnerships 9

10 Efficiency CELL TECHNOLOGY ROADMAP Execution Optimization Innovation Simplification Collaboration < 6months Startup Industry leading performance 2-bus bar cell design ARTisun 17% Proprietary recipes Process optimization Material and equipment improvements 3-bus bar design ARTisun 18.0% Front side emitter improvement Process Simplification ARTisun Select 19.0% Proprietary Cell and Process World s First adopter of Implant ARTisun Select % Advanced Metallization Finer Gridlines Higher efficiency at Lower Cost Full Al BSF N-type Select Plus ARTisun Star 20% Proprietary >20% cell structure Back side improvements NREL certified over 20% ARTisun IBC > 22% N-type substrate Back contact eliminates all shading Integrated front & back side enhancements Simplified 12-step process 2008 We are here

11 QUALITY & RELIABILITY TESTING MODULES ARE FIELD TESTED, CERTIFIED & HAVE PASSED THE HIGHEST LEVELS OF QA TESTING Certification Listed with all leading international agencies Reliability In-house and third party validation UCL Extended Stress Test Passed at Fraunhofer ISE Bankability Audit by Beck/SAIC Passed IEC Salt Spray Extended Severity Level 6 Passed PID free as tested at PV Evolution Labs PAN File verification at PV Evolution Labs Energy Yield Verified by independent labs & field sites Long Term Field Performance Analysis at TUV 100% Hundreds of installs, documented field performance and yields out perform 11

12 ORIGINALLY PROPOSED TO THE PSC 180 Utility + 30 Distributed = 210 MW Total 60MW 10MW

13 THE FINAL ALLOTMENT 120 Utility + 90 Distributed = 210 MW Total The Balance of Any Unused DG A 3x Increase for Commercial Applications 13

14 GPASI DETAILS Georgia Power recently announced its new solar program called the Georgia Power Advanced Solar Initiative (ASI). As approved by the PSC, Georgia Power will purchase 210 MW of solar power via a Power Purchase Agreement (PPA) with: 45 MW of Distributed Generation (5MW expected to be provided to SP1) 60 MW of Utility Scale to be deployed in 2013 and 2014 The Initiative is divided into 3 categories: 1) Small Scale Solar (25% reserved of Distributed Generation) A. Less than or equal to 100 kw B. FIT of $0.13/kWh, 100% sold to Georgia Power for 20 years C. Must be installed within 6 months of acceptance date 2) Medium Scale Solar (Distributed Generation) A. Greater than 100 kw and less than or equal to 1 MW B. $0.13/kWh or an escalating price schedule both over 20 years C. Collateral security required plus system design/layout 3) Utility Scale Solar A. Competitive RFP process B. Must not exceed $0.12/kWh 14

15 THE ASI APPLICATION PROCESS: Evaluation Deadline for application: March 1, 2013 GP to train and register all applicants Applicants trained on software Submission GP to review application package consisting of one-line diagram, textual description, and proof of fee payment Awarding If more than 45 MW of applications received then GP to subject whole batch to a lottery Applications not picked in first 45 MW, to be listed in the order they were received Remaining sites that do not advance stay in the queue for 2014; no refunds given for sites unless the 90 MW is oversubscribed and applicant did not make the queue 15

16 GPASI PROCESS TIMELINE 190 Days Feb. 22 Mar Days On-line Application Process Open Notification of Completeness of Application After Acceptance, Project Completion Participants Conference at Georgia Power 16

17 Georgia Power's Renewable Strategy with Solar Power Presented by Ervan Hancock Renewable Development and Green Strategy Manager Georgia Power Company

18 GEORGIA POWER COMPANY S CIRCLE OF LIFE Constructive Regulation Healthy Capital Spending CUSTOMERS 18 High Reliability Low Prices High Customer Satisfaction

19 GEORGIA POWER ADVANCED SOLAR INITIATIVE (210MW) 1. Distributed Solar Purchase Programs (45MW per year) Small Scale Purchase Program (<100kW)- Customer & Developer Medium Scale Purchase Program (100kW-1000kW)- Customer & Developer 2. Utility Scale Solar RFP Program (60MW per year) Projects selected through RFP with Independent Monitor (IM) Project sizes will range from 1MW-20MW No single project will exceed 20MW 3. Excess Capacity Rolled to 3 rd Year 19

20 DISTRIBUTED SOLAR PURCHASE PROGRAMS Distributed Solar Purchase Programs Small Scale Purchase Program (<100kW) Program will begin 1 st quarter 2013 Targeting up to 11MW annually to be allocated to projects <100kW Must me developed at a GPC customer site No single customer will exceed more than 20% of annual program capacity Program will initially be offered to the SP-1(Green Energy Program) waiting list Simplified interconnection agreement & metering costs Purchase price will include solar avoided costs, capacity benefits along with T&D savings 13cents/kwh 20

21 Distributed Solar Purchase Programs Medium Scale Purchase (100kW-1000kW) Program will begin 1 st quarter 2013 Targeting up to 34MW annually to be allocated to medium sized projects Pricing terms similar to Small Scale Program with two exceptions Fixed escalating and levelized pricing will be offered Additional security may be required More detailed interconnection agreement & potential for additional metering costs No single customer can have more than 20% of annual program capacity Purchase price will include solar avoided costs, capacity benefits along with T&D savings 21 13cents/kwh

22 TIMELINE 1. Filed Program with PSC September 26 th 2. Received PSC Approval on November 20 th Ongoing meetings with solar industry and PSC staff 3. Distributed Generation (DG) program to launch by March 2013 Approach current customers on SP-1 waiting list Begin to receive and process project applications Notify applications no later than April 5 th 4. Utility Scale RFP process to begin January 2013 Expect power purchase agreements (PPA)s to be signed by September

23 RESULTS Places Georgia as a national leader in solar development Develops the largest voluntary portfolio of solar photovoltaic in the country Meets the needs of customers wishing to develop solar at their homes and businesses Diversifies Georgia Power s generation portfolio by adding costeffective solar resources 23 Expands the Georgia solar industry by creating additional opportunities to develop projects in a responsible manner

24 All Arrows in the Quiver Investing in Diversified Fuel Mix Large Scale Solar Biomass Potential Investing in Cost Effective Energy Efficiency Adding Two Zero-Emission Nuclear Power Units Vogtle Units 3 & 4

25 How to finance your solar project in Georgia Doug Beebe Vice President, Energy Finance Classification - 25

26 Key Equipment Finance (KEF) 100% owned by KeyCorp (NYSE: KEY) Among nation s largest, well-capitalized banks Headquartered in Cleveland, OH Organized in Ohio in 1858 Strong balance sheet; $89 Billion in assets Over 1,000 KeyBank branches in 14 states Corporate banking, finance and leasing across U.S. Over 15,000 employees

27 KEF leasing capabilities Customer receives the income from the Georgia Power buyback program with a KEF lease Direct, full-recourse leases and loans Capital lease / Non-tax lease Customer takes the tax benefits of 30% ITC and depreciation Similar to a loan Operating lease / Tax lease KEF takes the tax benefits of 30% ITC and depreciation KEF uses the tax benefits to reduce the lease payment Loans 7 10-year terms Deal size: $250,000 +, no maximum Construction financing available Classification - 27

28 Capital/Non-tax Lease Similar cash flows to a loan Tax benefits Lessee (customer) takes ITC and Depreciation Customer tax appetite necessary Interest component of lease payments is considered an expense Georgia Power buyback income belongs to customer 100% financing of the equipment and installation Asset and liability recorded on customer s balance sheet Customer owns the solar array at end of lease Classification - 28

29 Operating/Tax Lease Tax implications Lessor (KEF) takes ITC and depreciation benefits KEF uses tax benefits to reduce lease payment Georgia Power buyback income belongs to customer 100% financing of equipment and installation Lease payments are considered an expense for tax purposes Asset and liability are recorded on Key s balance sheet Three options for lessee at end of lease: 1. Renew/extend the lease 2. Purchase the equipment at fair market value 3. Remove the system and return to lessor (at lessee s expense) Classification - 29

30 Lease comparison Capital/ Non-tax Tax benefits Lessee KEF Operating/Tax Similar to Loan Long-term rental GP buyback income Lessee Lessee 100% financing Yes Yes Tax deduction Interest portion Lease payment Balance sheet Lessee KEF At lease termination Lessee owns, clear title 3 options: 1. Renew 2. Return 3. FMV purchase Classification - 30

31 Benefits of lease vs. cash purchase KEF offers additional capital source, allowing company to reserve cash for business operations Reinvestment into the company s core business Higher rate of return Lower lease payments improve cash flow Accommodates specific tax and accounting needs Flexible end-of-term options Master Lease agreement expedites internal approval process Classification - 31

32 Additional considerations Proven track record: KEF deals range from 70kW to 8MW Georgia Power buyback income flows directly to customer Fees for legal, appraisal, CPA certification, etc. can be included in the amount financed Lease documentation simplified; primarily facilitated by KEF in-house specialists Relationships developed for all external professional services Funded from KeyCorp balance sheet Classification - 32

33 How to finance your solar project Solar installer contacts KEF with project details Customer provides 3 years financial statements to KEF KEF prepares solar lease proposal and cash flow analysis Customer accepts lease proposal KEF credit team reviews transaction If approved, KEF sends lease documents Sign lease documents and return to KEF KEF provides finance during project construction Solar project completed, KEF funds the solar integrator KEF starts the lease Classification - 33

34 Doug Beebe Key Equipment Finance Classification - 34