Introduction to
Solar
Photovoltaics (PV)

Vikram Aggarwal
Vikram@EnergySage.com
617-396-7243
Agenda

­ 

About	
  EnergySage	
  

­ 

Introduc2on	
  to	
  Solar	
  PV	
  

­ 

Why	
  consider	
  Solar	
  PV?	
  
...
About EnergySage

­ 

Expedia	
  of	
  Solar	
  

­ 

Online	
  comparison-­‐shopping	
  for	
  solar	
  photovoltaic	
 ...
About EnergySage

EnergySage™. |

Confidential Materials

4	
  
Solar Photovoltaic (PV) Systems

Source:	
  	
  Department	
  of	
  Energy	
  

EnergySage™. |

Confidential Materials

5	...
Examples - Commercial

EnergySage™. |

Confidential Materials

6	
  
Why Consider Solar PV?

• 

Lower,	
  predictable	
  energy	
  costs	
  
–  Substan2ally	
  Reduce	
  or	
  Completely	
  ...
Rebates and Incentives
• 

Federal	
  Investment	
  Tax	
  Credit	
  (“ITC”)	
  
–  30%	
  of	
  the	
  installed	
  syste...
Financing Options
Type

Cash
Purchase

Debt
Financed
Purchase

Description

Cash Out of
Pocket

Get
30% ITC

Depreciation
...
Financing Options – Pros/Cons
Option

PROS
• 

Own the system

• 

Maximum financial benefits

• 

Fast & easy process

• ...
Selecting the Right Financing
Option for You

Suitable	
  Roof	
  or	
  
Land	
  for	
  Solar	
  
NO	
  

Consider	
  Othe...
Example of Solar Options*
• 

Massachusetts company
­  Annual cost = $100,000; $2.5M+ over 20 years with 2.5% inflation
­ ...
Example: Cumulative Cash-Flow*

*Rough	
  es2mates	
  only	
  –	
  EnergySage	
  can	
  provide	
  specific	
  cash	
  flow	...
Interested in Solar?

­  Create	
  a	
  property	
  profile	
  at	
  EnergySage.com	
  
­  Receive	
  mul2ple	
  compe22v...
Get Started on EnergySage.com

EnergySage™. |

Confidential Materials

15	
  
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Energysage_Solar for Businesses

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Presentation about why businesses should consider installing solar panel systems and available financing options, including loans, capital leases, operating leases, and power purchase agreements (PPAs)

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Energysage_Solar for Businesses

  1. 1. Introduction to Solar Photovoltaics (PV) Vikram Aggarwal Vikram@EnergySage.com 617-396-7243
  2. 2. Agenda ­  About  EnergySage   ­  Introduc2on  to  Solar  PV   ­  Why  consider  Solar  PV?   ­  Rebates  and  Incen2ves   ­  Financing  Op2ons   ­  Example  Solar  Economics   ­  Ques2ons     EnergySage™. | Confidential Materials 2  
  3. 3. About EnergySage ­  Expedia  of  Solar   ­  Online  comparison-­‐shopping  for  solar  photovoltaic  (PV)  systems   ­  Awarded  SunShot  Award  by  Department  of  Energy     EnergySage™. | Confidential Materials 3  
  4. 4. About EnergySage EnergySage™. | Confidential Materials 4  
  5. 5. Solar Photovoltaic (PV) Systems Source:    Department  of  Energy   EnergySage™. | Confidential Materials 5  
  6. 6. Examples - Commercial EnergySage™. | Confidential Materials 6  
  7. 7. Why Consider Solar PV? •  Lower,  predictable  energy  costs   –  Substan2ally  Reduce  or  Completely  Eliminate  Your  Electric  Bill   –  Reduce  or  eliminate  expensive  demand  charges   •  Great  investment  returns  and  tax  benefits   –  Greater  than  25%  ROI   •  Benefits  to  corporate  brand   –  Customers  and  business  partners  appreciate  sustainability  efforts     –  Good  corporate  ci2zens  and  community  economic  supporters   •  Support  local  economy;  Drive  Job  Growth   •  Reduced  carbon  footprint   EnergySage™. | Confidential Materials
  8. 8. Rebates and Incentives •  Federal  Investment  Tax  Credit  (“ITC”)   –  30%  of  the  installed  system  cost  with  no  cap   –  An  actual  credit  against  your  tax  bill,  not  just  a  reduc2on  in  pre-­‐tax  income   –  Can  be  used  against  prior  year  and  future  projects  (consult  tax  advisor)   •  Accelerated  depreciaKon  tax  benefits   –  Depreciate  the  cost  of  the  system  over  6  years   –  Tax  basis  for  deprecia2on  is  85%  of  the  installed  system  cost   •  Solar  Renewable  Energy  CerKficates  (SRECs)   –  All  power  generated  by  your  solar  PV  system  creates  cer2ficates  that  can  be  sold  to  u2li2es       –  Approximately  $200  per  megawa]  of  power  produced   –  Considered  taxable  income   •  Net-­‐Metering   -  When  you  generate  more  power  than  you  consume,  your  meter  turns  backward  to  provide  a  credit   -  Credit  is  applied  at  night  or  when  solar  power  is  not  being  produced   EnergySage™. | Confidential Materials
  9. 9. Financing Options Type Cash Purchase Debt Financed Purchase Description Cash Out of Pocket Get 30% ITC Depreciation Tax Benefit SREC Income Yes Yes Yes Yes Small down payment Yes Yes Yes None Yes Yes Yes None No No Option None No No No •  Buy the system •  Recoup 50%+ investment in first year through tax incentives •  Borrow to pay for system •  Recoup 50%+ investment in first year through tax incentives •  Fixed monthly payments for 7 to 12 years Capital Lease •  Benefit from tax credits •  Generate SREC income •  Buy-out system at end of term for minimal cost Operating Lease Power Purchase Agreement •  Fixed monthly payments for 7-12 years •  Cost lower than current electricity expense •  Buy-out system at end of term at FMV •  Buy power at rates that are up to 60% lower for a term of 10-20 years •  Buy-out system at end of term at FMV (PPA) EnergySage™. | Confidential Materials
  10. 10. Financing Options – Pros/Cons Option PROS •  Own the system •  Maximum financial benefits •  Fast & easy process •  CONS Operating Lease Power Purchase Agreement •  Potential volatility of SREC values Minimal cash requirement •  Additional debt on balance sheet •  Leverage investment for greater ROI •  Potential volatility of SREC values No initial cash investment •  Smaller financial benefits Tax benefits •  •  SREC income Share financials with solar provider / leasing company •  Capital Lease Significant cash required •  Debt Financed Purchase •  •  Cash Purchase Own the system at end of lease term at minimal cost •  Few solar providers offer capital leases •  Reduce electric bills by up to 60% •  Smaller financial benefit •  No initial cash investment •  •  Option to retain SRECs Share financials with solar provider / leasing company •  Few solar providers offer operating leases •  Reduce electric bills by up to 60% •  Smaller financial benefit •  No initial cash investment •  •  Hedge against rising utility rates Share financials with solar provider / leasing company •  Few solar providers offer PPAs EnergySage™. | Confidential Materials
  11. 11. Selecting the Right Financing Option for You Suitable  Roof  or   Land  for  Solar   NO   Consider  Other   Technologies   YES   Availability  of   Cash  or  Loans   YES   YES   Purchase  with   Cash  or  Loan   NO   NO   Have  Sufficient   Tax  AppeKte   Have  Sufficient   Tax  AppeKte   NO   OperaKng  Lease   or     PPA   YES   Capital  Lease   EnergySage™. | Confidential Materials
  12. 12. Example of Solar Options* •  Massachusetts company ­  Annual cost = $100,000; $2.5M+ over 20 years with 2.5% inflation ­  Consumes 750,000 kWh per year ($0.13/kWh) •  Solution: 600 kW ground-mount system Out  of  Pocket  Costs   Year  1   20  Year  IRR   Payback     (in  Years)   20  Year  Net  Financial   Benefit   Cash  Purchase   ($1.4M)   25%   4   $2.5M   Debt  Financed     Purchase   $600,000   NA   Immediate   $2.2M   Capital  Lease     (10-­‐year)   $600,000   NA   Immediate   $2.0M   OperaKng  Lease   (10-­‐year)   NA   NA   Immediate   $1.5M   PPA     (20-­‐year)   NA   NA   Immediate   $0.6M   OpKon   *Numbers  are  direcKonal  in  nature  only   EnergySage™. | Confidential Materials
  13. 13. Example: Cumulative Cash-Flow* *Rough  es2mates  only  –  EnergySage  can  provide  specific  cash  flow  es2mates  for  your  business   EnergySage™. | Confidential Materials
  14. 14. Interested in Solar? ­  Create  a  property  profile  at  EnergySage.com   ­  Receive  mul2ple  compe22ve  quotes  from  high  quality   providers   ­  EnergySage  advisors  available  to  help  you   ­  Get  a  great  deal  on  solar!   EnergySage™. | Confidential Materials
  15. 15. Get Started on EnergySage.com EnergySage™. | Confidential Materials 15  

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