Andy Black
            “Advanced Payback &                                          Solar Financial Analyst
              ...
Andy Black
                                                                                    Solar Financial Analyst
   ...
FINANCING & ADVANCED
      FINANCIAL ANALYSIS METHODS                                                                     ...
Agenda                                                                 System Variables in More Depth

                  A...
Reducing Demand Charges - NJ+                                                                                     RECs, Gr...
California Electric Rates




                                                                                            ...
SCE Time Of Use
        PG&E Residential Tiered Rates                                                                     ...
Getting Perspective                                                          Sensitivity In The New Bill
                 ...
CSI Incentives:                                                                                                           ...
Rebate Tax Interactions                                                                  Commercial Rebate Taxation
      ...
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
"Advanced Payback
Upcoming SlideShare
Loading in …5
×

"Advanced Payback

1,444 views
1,386 views

Published on

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,444
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
84
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

"Advanced Payback

  1. 1. Andy Black “Advanced Payback & Solar Financial Analyst (408) 428 0808 Financing Solar Projects” andy@ongrid.net Solar Living Institute: September 24, 2007, Long Beach, CA, 8:30am-12noon Contact: Solar Living Institute: www.solarliving.org, 707 744 2017 to register 8:00 Check-in 8:30 Introductions Advanced Solar Financial Analysis Analysis Variables in Greater Depth TOU Case Studies Break, Q & A Choosing Rebates vs. PBIs Financing with Leasing & PPAs Formal Conclusion, Final Q & A Interactive Examples (for those who wish to stay) Using the OnGrid Solar Financial Analysis Tool 12 Noon We must be done by 12:00 (add’l questions outside) Diligence: Heights by great men reached and kept were not obtained by sudden flight, but they, while their companions slept, were toiling upward in the night. - Henry Wadsworth Longfellow
  2. 2. Andy Black Solar Financial Analyst “Advanced Payback & (408) 428 0808 Financing Solar Projects” andy@ongrid.net Solar Living Institute: September 24, 2007, Long Beach, CA, 8:30am-12noon Contact: Solar Living Institute: www.solarliving.org, 707 744 2017 to register Abstract: This advanced workshop will go into further depth regarding the financial analysis methods (Internal Rate of Return (IRR), Cash Flow analysis, and Appraisal Resale Value), involving interactive examples and real case studies using the OnGrid Solar Financial Analysis Tool (both residential & non-residential). The session will also include a discussion on financing medium and large commercial, government, and non-profit projects using various lease and PPA structures. The class is designed for the deal makers: the sales staff and their management, and the customers purchasing staff and management, for the purpose of encouraging the flow of good quality deals between informed partners. It is strongly recommended that students have completed or have equivalent knowledge of the “PV 212: Payback: The Financial Case for Solar” class, and that they have strong familiarity with the Full or free Demo version of the “OnGrid Solar Financial Analysis Tool” (license agreement required, visit www.ongrid.net/payback to get the free demo). Good familiarity with the various parts and screens of the OnGrid Tool will greatly enhance the experience and understanding of these complex topics as we work though them on-screen in class. Example scenarios may include residential & non-residential Time-of-Use rate schedules with and without solar, Demand Charges, Changing Rate Schedules, adjustments to Tilt and Orientation of the array, Shading. Students are encouraged to submit case studies in advance for discussion. Students may wish to bring a laptop computer (Mac or PC) to follow along with the interactive scenarios. All students are encouraged to receive a free copy of the demo version of this software tool before the class (license agreement required). Biography: Andy Black is a Solar Financial Analyst & Purchasing Consultant (Broker) and the owner of OnGrid Solar. OnGrid Solar provides financial analysis software to solar installers to help them make the financial case for solar electricity to their customers. Andy has more than ten years of design, consulting, teaching, sales, and research experience in solar. He specializes in demonstrating the financial payback of solar electricity systems. He is a NABCEP certified solar installer. Andy Black is a member of the Board of Directors of the American Solar Energy Society and serves as Chapters Representative. He is also a member of the Board of Directors of the Northern California Solar Energy Association and serves as its Treasurer. Andy’s formal education includes a Bachelor’s in Electrical Engineering from Penn State University, a Master’s in Electrical Engineering from University of Southern California, and a Marketing Certificate at the University of California. His training in solar electricity includes Solar Energy International’s intensive photovoltaic coursework and more than a dozen specialty courses in solar electric and related fields. He presents regularly on the financial analysis of solar electricity to audiences nationwide. Andy is also the groundskeeper and servant for a cat at his home in San Jose, CA. Contact Info: Andy Black, CEO OnGrid Solar 4175 Renaissance Dr #4, San Jose, CA 95134 (408) 428 0808 andy@ongrid.net www.ongrid.net Registration: Solar Living Institute, www.solarliving.org, 707 744 2017
  3. 3. FINANCING & ADVANCED FINANCIAL ANALYSIS METHODS Introductions & Thanks FOR PV SYSTEMS Solar Living Institute Andy Black Our hosts: Lindsay Dailey & Jamie Eldrett Solar Financial Consultant Solar Power 2007 & Payback Analysis Software Andy Black, OnGrid Solar Solar Financial Analyst & Marketer Solar Financial Analysis & Sales Software Solar Living Institute Fall 2007 You for coming! Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 2 Quick Survey - Quick Survey - Who’s Here? Here Friday for Regular Payback Class? Your Goals for Today? Existing dealer / installers Learn about payback for general knowledge Owners, not doing sales Want to use payback in selling / grow Salesperson for dealer / installer business Including owners if you do sales New or hopeful dealer / installers Want to learn about / have the OnGrid Solar Government Financial Analysis & Sales Tool Customers / end users Want to increase your knowledge to develop Manufacturers your own tool Others? Other goals? Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 3 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 4 About OnGrid Solar Learn More 12 Years involved with Solar Visit www.ongrid.net 5 Years as solar salesman Upcoming classes & events Articles on Payback Now a Consultant PowerPoint Presentations Solar Financial Analysis The OnGrid Tool (Free Demo) Technical Sales & Marketing Training Solar Today & ASES - discount offer Solar Resource Guide Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 5 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 6 1
  4. 4. Agenda System Variables in More Depth Advanced Solar Financial Analysis Demand Charges Analysis Variables in Greater Depth RECs TOU Case Studies Tier 1-5 Inflation Choosing Rebates vs. PBIs Time-of-Use (TOU) Choices & Issues Financing with Leasing & PPAs Commercial Tax Issues Interactive Examples using the OnGrid Tool Questions preferred at points marked: Please focus on Payback Questions? Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 9 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 10 Demand Profile vs. Demand Charges Applies only to Large users Solar Production Commercial and Agricultural On a per kW basis (load, not usage) TYPICAL Size of the wire, power plant for peak usage BUILDING DEMAND DEMAND & PRODUCTION SOLAR PRODUCTION 7am 12noon 5pm Based on highest 15 minute average any time during each HOUR billing month Questions? Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 11 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 12 Reducing Demand Charges - PG&E Reducing Demand Charges - SCE Difficult for solar to offset demand Difficult for solar to offset demand Clouds, spikes in usage not during solar Clouds, spikes in usage not during solar hours, inverters tripping offline hours, inverters tripping offline A10 & E19 have Demand Charges GS-2-B, GS-3-B have high Demand Charges A6 is non-Demand rate GS-2-A, GS-3-A have lower charges Switch from A10 & E19 to eliminate demand Switch to “Option A” rate Add control systems ~$30K+ Add control systems ~$30K+ Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 13 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 14 2
  5. 5. Reducing Demand Charges - NJ+ RECs, Green Tags, TRCs Difficult for solar to offset demand RECs = Renewable Energy Credits Clouds, spikes in usage not during solar hours, inverters tripping offline TRC = Tradable Renewable Certificates In future, switch to non-Demand rate? Green Tags = RECs = TRCs = S-RECs Add control systems ~$30K+ What are these? The green value part of a solar kWh Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 15 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. 17 What Are RECs? REC Value The green part of a solar, wind or RECs have value to other consumers other renewable kWh Those who can’t get solar directly Electricity (kWh) Utilities who need it to get into compliance with emissions Generating Plant requirements. (kWh) Value ranges from 1¢ to 25¢/kWh Green Tags (kWh) Depends on location, type & term Depends on state mandate for S-RECs Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 18 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. 19 CA REC Value NJ REC Value REC sale value can be added to other value REC sale value can be added to other value generated by the system to calculate payback, etc. generated by the system to calculate payback, etc. Not included in any examples here Included in examples at 20¢ for 14 years Likely 1¢ to 5¢/kWh in California - same as Wind Challenges in aggregating from small systems Must give up “Green Attributes” & claims Estimated/calculated RECs used Challenges in aggregating from small systems The best performing systems produce the most The best performing systems produce the most RECs RECs Double counting in sales Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 20 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 21 3
  6. 6. California Electric Rates Cents per kilowatt-hour Residential, Small Business, and Electric Rates & Inflation Large Business Sectors 1970 to 2001* 16.00 14.00 Electric Rates increased 6.7% /yr 12.00 Residential 10.00 1970-2001 Compound Average 8.00 1982 Small Business CPI/Inflation was 3.5% since 1981 6.00 4.00 Large Business CPI: Consumer Price Index 2.00 - Inflation can only occur in Tier 3-5 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Residential 2.23 2.31 2.46 2.63 3.37 3.64 3.82 4.23 4.48 4.47 5.86 6.51 7.67 7.12 7.07 7.78 7.94 8.04 8.54 9.45 9.98 10.79 11.08 11.30 11.43 11.61 11.32 11.32 11.32 11.32 11.32 14.40 Small Business 1.71 1.81 1.92 2.09 2.74 2.98 3.28 4.11 4.47 4.46 6.14 6.59 7.43 7.31 7.52 8.06 8.25 8.01 8.24 8.64 8.98 9.59 9.92 9.99 10.36 10.26 9.78 9.78 9.78 9.78 9.78 14.37 Large Business 0.99 1.03 1.13 1.28 1.96 2.29 2.60 3.23 3.67 3.74 5.47 6.18 7.25 6.77 6.68 7.51 7.38 6.95 6.88 7.13 7.28 7.58 7.59 7.33 7.09 7.37 6.93 6.93 6.93 6.93 6.93 11.42 All rate hikes exaggerated for large users Source: Prepared by the CPUC Energy Division. Dataset from Energy Information Administration (EIA), DOE/EIA-0376(95), State Energy Price and Expenditure Report, 1995, Tables 36-38. 1996 through 2000 reflects AB 1890 frozen rates. 2001 rates include 4 cent increase in SCE and PG&E Rates. *Rates only for SCE and PG&E. California Public Utilities Commission Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 22 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. 23 asa Tier 5, 36¢ s California Electric Rates asf sf Tier 4, 31¢ Residential, Small Business, and Large Business Sectors 1970 to 2001* f asdf Time of Use Choices & Issues PG&E 2001 f Tier 5, 26¢ Tier 4, 24¢ Several TOU structures: Cents per kilowatt-hour Tier 3, 22¢ 16.00 Tier 3, 17¢ df PG&E & SDG&E: TOU with Tiers asf 14.00 12.00 Residential a Tier 2, 13¢ Tier 2, 13¢ vs. non-TOU with Tiers sdf Tier 1, 11¢ Tier 1, 11¢ 10.00 8.00 1982 Small Business PG&E 2007 SCE: TOU w/o Tiers vs. non-TOU with Tiers 6.00 4.00 Large Business Most other places: TOU vs. non-TOU (no 2.00 - 1970 19711972 1973 1974 1975 19761977 1978 1979 19801981 1982 19831984 1985 1986 1987 19881989 19901991 1992 19931994 19951996 1997 1998 1999 20002001 tiers in either) Residential 2.23 2.31 2.46 2.63 3.37 3.64 3.82 4.23 4.48 4.47 5.86 6.51 7.67 7.12 7.07 7.78 7.94 8.04 8.54 9.45 9.98 10.7911.0811.3011.4311.61 11.3211.3211.32 11.3211.3214.40 Small Business 1.81 1.92 2.09 2.74 2.98 3.28 4.11 4.47 4.46 6.14 6.59 7.43 7.31 7.52 8.06 8.25 8.01 8.24 8.64 8.98 9.59 9.92 9.99 10.3610.269.78 9.78 9.78 9.78 9.78 14.37 1.71 Large Business 1.03 1.13 1.28 1.96 2.29 2.60 3.23 3.67 3.74 5.47 6.18 7.25 6.77 6.68 7.51 7.38 6.95 6.88 7.13 7.28 7.58 7.59 7.33 7.09 7.37 6.93 6.93 6.93 6.93 6.93 11.42 0.99 Source: Prepared by the CPUC Energy Division. Dataset from Energy Information Administration (EIA), DOE/EIA-0376(95), State Energy Price and Expenditure Report, 1995, Tables 36-38. 1996 through 2000 reflects AB 1890 frozen rates. 2001 rates include 4 cent increase in SCE and PG&E Rates. Questions? *Rates only for SCE and PG&E. Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions?24 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. 25 Time of Use: PG&E & SDG&E PG&E Rates PG&E E1: Tiered only - no TOU PG&E & SDG&E: Base Rate $0.1143 per kWh + Tier Increments Tier 2 increment over Tier 1 $ 0.01559 per kWh Tiers don’t affect TOU choice/results Tier 3 increment over Tier 1 Tier 4 increment over Tier 1 $ 0.11292 per kWh $ 0.20289 per kWh Tier 5 increment over Tier 1 $ 0.25004 per kWh Choose TOU based only on usage pattern PG&E E6 & E7: TOU + Tiers Tiers are on total usage, TOU is separate Rate = Base Rates + Tier Surcharges PG&E E6 PG&E E7 Summer Peak $ 0.20865 per kWh $ 0.29372 per kWh Summer PartPeak $ 0.11174 per kWh Summer OffPeak $ 0.09418 per kWh $ 0.08664 per kWh Winter Peak $ 0.11472 per kWh Winter PartPeak $ 0.12413 per kWh Winter OffPeak $ 0.10042 per kWh $ 0.08966 per kWh Tier 2 increment over Tier 1 $ 0.01559 per kWh Tier 3 increment over Tier 1 $ 0.11292 per kWh Tier 4 increment over Tier 1 $ 0.20289 per kWh Tier 5 increment over Tier 1 $ 0.25004 per kWh Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 26 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 27 4
  7. 7. SCE Time Of Use PG&E Residential Tiered Rates Residential TOU-D-1 & TOU-D-2 35.0¢ Residential Tiered Usage Before Solar Residential Time-of-Use Pricing Periods 30.0¢ Sunday Monday Tuesday Wednesday Thursday Friday Saturday 25.0¢ 26¢/kWh Midnight - 10am Off-Peak Off-Peak Off-Peak Off-Peak Off-Peak Off-Peak Off-Peak Cents per kWh surcharge 20.0¢ 10am - 6pm Off-Peak Peak Peak Peak Peak Peak Off-Peak 15.0¢ 6pm - Midnight Off-Peak Off-Peak Off-Peak Off-Peak Off-Peak Off-Peak Off-Peak 10.0¢ 11¢/kWh 5.0¢ base charge 33% of the day is Peak 0.0¢ … when most people are away from home Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Off-Peak rates are Nights, Mornings & Weekends Surcharge currently +25¢/kWh for Tier 5 … when most people are home & using Base is 11¢/kWh Top is 36¢/kWh Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 29 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 30 SCE Rates TOU & Solar SCE D: Tiered only - no TOU Solar can only produce during day SCE TOU-D-1 & TOU-D-2 Time-Of-Use only TOU hours subject to Daylight Savings Time No Tiers, but there is “baseline credit” in TOU-D-1 Noon-6pm clock time on meter = 11am-5pm solar time SCE D (Domestic Tiered) SCE TOU-D-1 (Domestic TOU) SCE TOU-D-2 (Domestic TOU) Baseline Quantity: 309 kWh/mo Baseline Quantity: 309 kWh/mo Baseline Quantity: 309 kWh/mo 10am-6pm on meter = 9am-5pm solar Tier 1: 11.6 ¢/kWh Summer Peak: 36.7 ¢/kWh Summer Peak: 30.2 ¢/kWh Tier 2: 13.7 ¢/kWh Summer Off-Peak: 18.9 ¢/kWh Summer Off-Peak: 16.3 ¢/kWh Solar production peaks during Peak Tier 3: 22.7 ¢/kWh Tier 4: 26.3 ¢/kWh Winter Peak: 21.5 ¢/kWh Winter Peak: 18.5 ¢/kWh Sufficient PV sizing (but less than total usage offset) Tier 5: 30.0 ¢/kWh Winter Off-Peak: 17.8 ¢/kWh Winter Off-Peak: 15.6 ¢/kWh must turn meter backwards on peak. Baseline Credit: 5 ¢/kWh Baseline Credit: 0 ¢/kWh So at some point in PV size, customer only pays “off- Excluding Solar: peak” rates High user almost always saves on TOU - lower average rate TOU is better if “off-peak” is lower than customer’s Low user almost always saves on non-TOU average non-TOU rate Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 31 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 32 Estimating Peak Usage SCE & Solar How Is Energy Used? SCE D (Domestic Tiered) SCE TOU-D-1 (Domestic TOU) SCE TOU-D-2 (Domestic TOU) Baseline Quantity: 309 kWh/mo Tier 1: 11.6 ¢/kWh Baseline Quantity: 309 kWh/mo Summer Peak: 36.7 ¢/kWh Baseline Quantity: 309 kWh/mo Summer Peak: 30.2 ¢/kWh Who’s home during Peak? Tier 2: 13.7 ¢/kWh Summer Off-Peak: 18.9 ¢/kWh Summer Off-Peak: 16.3 ¢/kWh Tier 3: 22.7 ¢/kWh Tier 4: 26.3 ¢/kWh Winter Peak: 21.5 ¢/kWh Winter Peak: 18.5 ¢/kWh What are they doing? Tier 5: 30.0 ¢/kWh Winter Off-Peak: 17.8 ¢/kWh Winter Off-Peak: 15.6 ¢/kWh Air Conditioning Climate? Into the evening? Baseline Credit: 5 ¢/kWh Baseline Credit: 0 ¢/kWh Ability/willingness to shift usage? With ~30% or more Solar Solar Pool Heating? Most customers do better on TOU TOU-D-1 is generally better for Solar Large Base-load usage is good: Better selling & buying, plus Baseline Credit Refrigeration, electronics, servers, hot tub Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 33 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 34 5
  8. 8. Getting Perspective Sensitivity In The New Bill Only 6 to 8 hours are peak: 25% - 33% Impact of being off 5-10% in peak Even w/ AC, what’s a reasonable peak %? estimation 40-50%-60% max in homes Examples in OnGrid Tool Much higher in businesses Note: The other 67-75% of the day also needs energy OnGrid is working on a calculator to help estimate TOU peak & off-peak usage Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 35 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 36 Agenda Advanced Solar Financial Analysis System Variables in More Depth TOU Examples TOU Case Studies Choosing Rebates vs. PBIs Financing with Leasing & PPAs Interactive Examples using the OnGrid Tool Break? Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 37 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 39 CSI Incentives: EPBB Rebate Choosing Between EPBB: Expected Performance Based Buydown EPBB Rebates Upfront Rebate to reduce initial system cost & Amount adjusted for Expected Performance: Tilt, Orientation, Shading, Location Performance Based EPBB Calculator: www.csi-epbb.com Incentives (PBIs) Systems under 100kW only (Rebate option) Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 40 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 41 6
  9. 9. CSI Incentives: CSI Trigger Tracker EPBB Payments (per Watt) PBI Payments (per kWh) Performance Based Incentive or PBI Step Statewide MW in Step Residential Commercial Government / Non-Profit Residential Commercial Government / Non-Profit 1 50 n/a n/a n/a n/a n/a n/a PBI: Performance Based Incentive 2 3 4 70 100 130 $2.50 $2.20 $1.90 $2.50 $2.20 $1.90 $ $3.25 $2.95 $2.65 $ $0.39 $0.34 $0.26 $0.39 $0.34 $0.26 $0.50 $0.46 $0.37 $ 5 160 $1.55 $1.55 $2.30 $0.22 $0.22 $0.32 Incentive paid over time based on actual 6 7 190 215 $1.10 $0.65 $1.10 $0.65 $1.85 $1.40 $0.15 $0.09 $0.15 $0.09 $0.26 $0.19 performance 8 9 10 250 285 350 $0.35 $0.25 $0.20 $0.35 $0.25 $0.20 $1.10 $0.90 $0.70 $0.05 $0.03 $0.03 $0.05 $0.03 $0.03 $0.15 $0.12 $0.10 Automatically accounts for real loss factors Customer Current MW Unused MW from Total MW Issued Conditional Total MW MW Under Administrator in Class Step Previous Step in Step Reservation Available Review Required for systems over 100kW PGE Residenti a l 2 Step 10.1 0 2.93 13.0 3 Letters (MW) 8.96 4.07 5.81 Non- 4 38.1 0 5.93 44.0 3 13.1 0 30.9 3 11.5 8 Optional for under 100kW (PBI option) SCE Residenti a l Residenti a l Non- 2 10.6 0 0.07 10.6 7 3.16 7.51 1.99 4 40.1 0 0.91 41.0 1 7.31 33.6 9 12.1 0 Residenti a l Residenti a l 2 2.40 0.00 2.40 1.36 1.04 0.92 CCSE Non- 3 6.90 0.04 6.94 6.10 0.84 5.04 Residenti a l Trigger Tracker website: http://www.sgip-ca.com/ Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 42 Fall 2007 - SLI As of 9/11/07 Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. 43 CSI PBI: Requirements EPBB & PBI Taxation Must use 2% accurate IDR (Interval Data Recording) Residential meters Probably neither are taxed Up front cost: ~$1,000-$2,500 IRS Sect 136 (Res only) Must subscribe to meter reading & reporting service Monthly fees ~$15/mo Commercial Must supply ISP, phone or cellular connection Both are probably taxed Monthly fees ~$15/mo Rebate taxation affects ITC basis and depreciation Ineligible for 1% metering cost limit Disclaimer: I’m not a CPA or lawyer, and am not providing tax advice. All PBI must have metering regardless of cost Seek qualified professional help Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 44 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 45 Residential PBI Taxation EPBB & PBI Taxation Not clear if exempted under Section 136 Residential Is not a rebate, but is a utility payment for Probably neither are taxed “energy efficiency” IRS Sect 136 (Res only) Needs more investigation Commercial Both are probably taxed Makes a significant difference in choice vs. Rebate taxation affects ITC basis and depreciation rebate Disclaimer: I’m not a CPA or lawyer, and am not providing tax advice. Installers or manufacturers probably won’t accept Seek qualified professional help the PBI payments, and that probably wouldn’t avoid tax anyway, but would hide the 1099 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 46 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. 47 7
  10. 10. Rebate Tax Interactions Commercial Rebate Taxation If the rebate is non-taxable, the federal If commercial, make rebate taxable* tax credit is on amount after rebate Then tax credit and depreciation are on amount before rebate If rebate is taxable, then federal tax credit Worth more to pay tax on rebate, then get 30% is on amount before rebate credit and depreciation on rebate Depreciation is on tax credit basis, minus 1/2 of the federal tax credit amount I.e. 85% of pre-rebate system cost *SEIA Tax Manual: www.seia.org Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 49 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 50 Tax Credit & Depr. Example Tax Credit & Depr. Example Non-Taxed Rebate Taxed Rebate $150K System Cost $150K System Cost -$50K Rebate -$50K Rebate $100K Net Cost After Rebate +21.5K Rebate Tax ($50K * 43%) -$30K Tax Credit Value (30% of $100K) -$45K Tax Credit Value (30% of $150K) -$36.6K Depr Value (85% of $100K * 43%) -$54.8K Depr Value (85% of $150K * 43%) =$33.4K Net Cost =$21.7 Net Cost 43% = combined federal & state tax rates Financing & Advanced Financial Analysis for PV Financing & Advanced Financial Analysis for PV Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 51 Fall 2007 - SLI © 2007 OnGrid Solar. All rights reserved. 52 Tax Credit & Depr. Example PBI Taxation: Commercial Non-Taxed Rebate Taxed Rebate Almost certainly taxable $150K System Cost $150K System Cost Does not provide same benefit as making -$50K Rebate -$50K Rebate rebate taxable (as in previous examples) +21.5K Rebate Tax $100K Net Cost After Rebate Doesn’t affect basis -$30K Tax Credit Value -$45K Tax Credit Value PBIs have lower IRR for San Jose area -$36.6K Depr Value (85K * 43%) -$54.8K Depr Value (127.5K * 43%) customers =$33.4K Net Cost =$21.7 Net Cost Gets better w/ higher production Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 54 Fall 2007 - SLI Financing & Advanced Financial Analysis for PV © 2007 OnGrid Solar. All rights reserved. Questions? 55 8

×