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October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities
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October 24, 2013 | Community Solar: It's a beautiful day in the neighborhood | Sarah Johnson Phillips: Challenge and opportunities

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The second event of a three-part Solar Opportunities Series, Fresh Energy’s community solar event introduced community leaders and institutions to this promising new solar-development model, providing …

The second event of a three-part Solar Opportunities Series, Fresh Energy’s community solar event introduced community leaders and institutions to this promising new solar-development model, providing an objective update on the detailed rules currently being written. Learn more at fresh-energy.org/solarseries.

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  • 1. Community Solar Challenges and Opportunities Presented by: Sarah Johnson Phillips October 24, 2013 ● Fresh Energy Solar Opportunities Series Solar Opportunities Series 1
  • 2. To order any of these books please contact Carlene Richardson at (503) 294-9104 or cvrichardson@stoel.com To join the Stoel Rives Renewable Energy mailing list and ensure direct delivery of future alerts, go to www.stoel.com/subscribe. Fresh Energy Solar Opportunities Series 2
  • 3. Project Development Challenges • Community Solar Garden Program Design: – Minn. Stat. §216B.1641 – Xcel Energy Filing – PUC Docket No. E-002/M-13-867 – Value of Solar • Community Solar Garden Project Design: – Partners: Developer/organizer, host site, utility, subscribers, equipment supplier, financing partners, contractor, other experts (engineering, legal, tax, accounting, design). – Siting – Tax Incentives – Securities Regulation Solar Opportunities Series 3
  • 4. Project Development Challenges • Siting – Need affordable, long-term site access, solar access, and grid access. – Rooftops, otherwise low-value land. – Site leases tend to more challenging to negotiate when the host is not the off-taker. – Local ordinances vary widely (setbacks, street-facing roofs, height restrictions, screening). Solar Opportunities Series 4
  • 5. Federal Tax Incentives • Federal Tax Benefits: – High value for solar projects. – High transaction costs/complexity to fully utilize. • Investment Tax Credit (ITC) – – Available for solar if placed in service before 2017. – Credit = 30% of qualified costs of facility (in the year placed in service). • Accelerated Depreciation (tax losses) – – Creates tax losses that may be claimed by owners – 5-year depreciation for solar Solar Opportunities Series 5
  • 6. Federal Tax Incentives • General rule: must be an “owner” to be entitled to tax benefits – Tax benefits cannot be “sold” under U.S. tax law – only available to owners. – An owner must have tax appetite to make use of tax benefits. – Creative tax structures allow “investors” to claim these tax benefits. • Who is an owner? – Partner are owners (partnership flips) – Owners are owners (sale/leasebacks) – Lessees can be treated as owners (inverted lease; tax credits, not tax losses) • Tax-driven project structures can be complex, but likely critical for financing larger community solar gardens. Solar Opportunities Series 6
  • 7. Securities Regulation • What are “securities”? • How are securities regulated? – State and federal registration and disclosure (anti-fraud) requirements. – Compliance can be costly and time-consuming. – Non-compliance can result in civil or even criminal liability. • Why are securities regulated? – Protection against fraud. • Policy Considerations: – Being subject to securities regulation increases transaction costs. – But securities regulations also protect investors from unscrupulous actors. Solar Opportunities Series 7
  • 8. Securities Regulation • Potential Strategies for Community Solar Gardens” – Structure subscriptions not to be “securities”. • Various possible strategies, lots of uncertainty. – Qualify for exemptions from securities registration requirements. • E.g., Regulation D, public entities • But: Exemptions from registration requirements are not exemptions from disclosure requirements (full and accurate disclosure of all material information about a securities offering). • But: qualifying for exemptions may come with limitations, including the type and number of investors and the amount raised. – Register securities. • Transaction costs are significant. Solar Opportunities Series 8
  • 9. Sarah Johnson Phillips Attorney Minneapolis, MN (612) 373-8843 sjphillips@stoel.com Solar Opportunities Series 9
  • 10. QUESTIONS? Fresh Energy Solar Opportunities Series Solar Opportunities Series ● October 2, 2013 10

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