Combining PPAs and PACE: The Path to Commercial Solar Prosperity
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Combining PPAs and PACE: The Path to Commercial Solar Prosperity

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Hear Yann Brandt, Executive Vice President of Development at Demeter Power Group and publisher of the popular and informative daily SolarWakeup (sign up for FREE at SolarWakeup.com), provide unique......

Hear Yann Brandt, Executive Vice President of Development at Demeter Power Group and publisher of the popular and informative daily SolarWakeup (sign up for FREE at SolarWakeup.com), provide unique insight into combining PPAs and PACE for optimum solar project benefits. Be sure to attend this webinar so you can participate in the live Question & Answer session that will follow Yann's presentation.

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  • 1. Combining PPAs and PACE: The Path to Commercial Solar Prosperity Yann Brandt EVP of Development Demeter Power Group August 13, 2013
  • 2. Yann Brandt, Executive VP, Development Yann is the Executive Vice President of Development for Demeter Power. Demeter Power, through its innovative PACE3P financing platform, invests in distributed clean energy projects. PACE3P combines the powerful tools of energy services contracts like PPAs, leases, and shared savings contracts with PACE financing. Yann oversees the group's development relationships contractors, developers and industry associations. He also publishes a daily solar energy news brief widely subscribed on SolarWakeup.com. Speaker Biography 2
  • 3. ©2013 Demeter Power Group, Inc. All rights reserved. Who is Demeter Power? What do we do? Develop, fund and operate solar energy and other distributed generation assets Who are our customers? We work with contractors to develop distributed generation assets exclusively to non- municipal, non-residential buildings in our target geographic markets Company Background Team with expertise in solar, legal, finance and commercial real estate development Created the first Statewide commercial PACE program in Florida Inventors of PACE3P®, the first financing product in the class PACE3P® financing products help commercial buildings “de-meter” from the grid 3
  • 4. ©2013 Demeter Power Group, Inc. All rights reserved. Commercial Solar Opportunity Solar PV Built By End Use Customer In CA Energy Usage By End Use Customer In CA 4 ? ? Residential Commercial Industrial Commercial Commercial Commercia l Commercia l
  • 5. ©2013 Demeter Power Group, Inc. All rights reserved. Lack Of Third-Party Ownership Financing Why The Market Disparity? Residential & Government Sector: credit scores / bond rating used to assess risk Commercial Sector: Currently there is no uniform method to assess (or mitigate) risk 5 Residential Commercial Direct Direct 3rd-Party Owned 3rd-Party Owned How many of your commercial solar deals go unfunded? Why?
  • 6. ©2013 Demeter Power Group, Inc. All rights reserved. What is our product? 6 3rd party ownership of distributed generation systems where our revenue is secured and collected as a property tax assessment PACE3P® PACE Lease® - a fixed annual payment with unlimited upside benefits if and when utility rates increase PACE Shared Savings™ - a low base energy rate with upside benefits together with downside protection
  • 7. ©2013 Demeter Power Group, Inc. All rights reserved. What is PACE? 7 PACE – Property Assessed Clean Energy •PACE uses the same kind of land-secured financing districts that American cities and towns have used for over 100 years to pay for improvements •PACE eligibility begins with a State regulation that outlines how local municipalities can create PACE districts - these PACE districts are our geographic markets •PACENow.org •http://pacenow.org/resources/all-programs/
  • 8. ©2013 Demeter Power Group, Inc. All rights reserved. PACE Service Provider Segments Banks and institutional investors invest or buy portfolios of PACE debt, typically from debt aggregators who benefit from an interest rate spread. Demeter funds projects with private capital for property owners who select PACE3P® solution. Capital includes more than debt Providers of individual project debt. Some debt aggregators also serve as program administrators. Local government or 3rd party administrator creates PACE market as a land-secured financing district. Administrators Demeter PowerDebt Aggregators Banks/Investors Manager of PACE special taxing districts. Handle logistics of approving and collecting PACE assessments.  Several different service providers within PACE market  Demeter provides PACE3P® as a service product unique to the PACE market While we work with administrators and debt aggregators we do not compete with them 8
  • 9. ©2013 Demeter Power Group, Inc. All rights reserved. How PACE3P® Works Demeter manages solar asset & collects revenue as PACE assessments on property tax bill for terms up to 20 years. Demeter funds projects with private capital for property owners who select PACE3P® solution. This PACE district is Demeter’s target “micro-market” for offering PACE3P® finance solutions. Local government or 3rd party administrator creates PACE market as a land-secured financing district. Target PACE Markets Develop ProjectsOffer PACE3P® Collect Revenue Access property-assessed clean energy (PACE) programs, created as special taxing districts.  PACE is approved in over 31 States + D.C. ( > 50% of U.S. market)  Bipartisan political support  Proprietary, tailorable financing solutions: PACE Lease® and PACE Shared Savings™ 9
  • 10. ©2013 Demeter Power Group, Inc. All rights reserved. 10 How is PACE3P® different? Bankable? Bankable! Traditional Solar PPA / Lease  Credit based on each individual customer  Costly to negotiate collateral for every deal  Corporate guarantee typically a non-starter  Change of ownership presents credit risk  Finance only solar-related equipment  Standardization streamlines underwriting  Credit runs with property; automatically assigned upon change of ownership  Finance any building-integrated technology PACE3P®  Credit based on property We finance the building and not the offtaker!
  • 11. ©2013 Demeter Power Group, Inc. All rights reserved. How does an off-taker pay? Payments Listed as a non-ad valorem property tax on the property tax bill Typically listed at the bottom of your property tax bill Non-AdValoremTaxes An additional line item created by a taxing authority such as Fire assessment fees Neighborhood improvements Individual sewer connections PACE charges PACE uses an old financing method to pay for clean energy improvements 11
  • 12. ©2013 Demeter Power Group, Inc. All rights reserved. Where and what can we finance? Where is PACE active with local market? Over 200 Cities in California Statewide in Connecticut Various local areas in Michigan Missouri Florida Washington D.C. See PACENow.org for live updates 12 What technologies are financeable? Solar Battery Storage Fuel Cells Cogeneration Energy Efficiency Most other clean energy products Our focus is financing projects in California and Connecticut but will evaluate projects in other areas with PACE markets
  • 13. ©2013 Demeter Power Group, Inc. All rights reserved. How to work with Demeter Power 1. Register with Demeter Power! www.demeterpower.com/register-with-us 2. Receive a Demeter Contractor Package a. Informational sheets on financing products b. Backup information on relevant PACE market c.Training on how to effectively sell PACE3P® Financing d. Development and contract support from Demeter team 3. Start selling PACE3P® 13
  • 14. ©2013 Demeter Power Group, Inc. All rights reserved. Path to a term sheet? Project Registration www.demeterpower.com/project-registration Project Information Needed (highlights) 1. System Size 2. EPC Cost 3. Expected Production Yield 4. Current mortgage on property 5. Address of property, to see property tax data and PACE eligibility 14
  • 15. ©2013 Demeter Power Group, Inc. All rights reserved. What is your customer’s value proposition? 15 What does the customer want? 1. Savings: what type of discount or future savings are expected? 2. Utility cost stability: how will TOU pricing affect them moving forward? 3. Profits: Is this an investment for the customer? What kind of structure is best? PACE Lease® works well with lower usage customers and those looking to fix their electric costs PACE Shared Savings™ is ideal for high usage customers and those looking for innovative systems that include storage alongside the solar installation To provide term sheets, Demeter must understand from you what the customer wants
  • 16. ©2013 Demeter Power Group, Inc. All rights reserved. What is Demeter’s value proposition? 16 Development 1. Repeatable financial product that you can sell in a geographic market 2. Little to no contract negotiations to stand in the way of development 3. Knowledgeable team ready to help you sell effectively Financing 1. Credit is based on building data – not corporate or personal guarantees 2. Underwriting does not involve customer financial statements 3. Sell a single financing product that provides backlog to your organization
  • 17. ©2013 Demeter Power Group, Inc. All rights reserved. What do we need from you? 17 1. Sell The Value Proposition 2. Understand and sell within geographic markets 3. Know the details about your market utility rate & tariff schedules
  • 18. Yann Brandt EVP of Development Demeter Power Group Office +1-855-336-8700 Cell +1-954-224-4967 ybrandt@demeterpower.com Twitter: @DemeterPower www.demeterpower.com Please enter your questions in the chat window. Questions and Discussion
  • 19. © 2013 Demeter Power Group, Inc. All Rights Reserved 1 Uniform, Scalable Financing For Distributed Solar Energy www.demeterpower.com