What is a solar energy paradise: In technical terms, a paradise in solar energy is the region with a combination of … HIGH SOLAR IRRADIATION and HIGH ELECTRICITY PRICES. But in “financial terms”, a solar energy paradise needs another keystone … LOW “WACC” (Weighted Average Cost of Capital), which means the combination of Relative low “Cost of Debt”, Moderate to Low “Return of Equity”and Adequate Credit/Equity Ratio. Let's see if the island of Curaçao meets these requirements

1. Curaçao,
“the
Solar
Energy
Caribbean
Paradise”
Dr.
Arnoldus
M.
van
den
Hurk
Mir
arnold@vandenhurkmir.com
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
1

2. “Insert
de
Video”
…
only
2
minutes
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
2

3. Comments
about
the
video
•
...
970
Trillion
of
kWh
of
energy
falling
from
the
skies
every
day
...
• That
means
about
....
200
Trillion
USD
falling
from
the
skies
every
day
(in
a
Curaçao’s
feed-­‐in
tariff
price)
– Or
…
3.13
Ymes
2011’s
world
GDP
• That
means
about
...
6,200
Trillion
every
month
– Or
about
…
100
Ymes
the
2011’s
world
GDP
• That
means
about
...
52
quadrillion
of
US
dollars
falling
every
year
– Or
about
…
800
Ymes
the
2011’s
world
GDP
• During
25
years
of
the
average
of
an
investment
Solar
PV
project,
– over
than
1.3
quinYllion
of
dollars
of
potenYal
income
are
waiYng
for
investors
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
3

4. What
is
a
solar
energy
paradise?
• In
technical
terms,
a
paradise
in
solar
energy
is
the
region
with
a
combinaYon
of
…
– HIGH
SOLAR
IRRADIATION
– HIGH
ELECTRICITY
PRICES
• But
in
“financial
terms”,
a
solar
energy
paradise
needs
another
keystone
…
– LOW
“WACC”
(Weighted
Average
Cost
of
Capital),
which
means
the
combinaYon
of
• RelaYve
low
“Cost
of
Debt”
• Moderate
to
Low
“Return
of
Equity”
• Adequate
Credit/Equity
RaYo
• Let's
see
if
the
island
of
Curaçao
meets
these
requirements
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
4

5. What
are
the
key
points
to
become
a
Solar
Photovoltaic
Paradise
?
• The
following
keystones
must
be
mastered
in
order
to
succeed
in
the
investment
of
a
solar
photovoltaic
plant
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
•
Solar
Resources
-­‐
IrradiaYon
kWh/m2
Electricity
Prices,
present
and
future
Right
selecYon
of
type
of
solar
energy
technology
and
EPC
A
good
system
Performance
RaYo
Professional
OperaYon
&
Maintenance
Land
/Rookop
Rental
Insurances
Corporate
and
Income
Tax
Loan
amounts
and
interest
rates
Debt
/
Equity
RaYo
and
WACC
Would
you
like
to
know
how
these
key
issues
affect
the
Internal
Rate
of
Return
on
an
investment
in
a
1
MWp
installaYon
at
Curacao?
–
Shall
we
go!!
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
5

6. 1. Solar
Resources:
kWh/m2
• The
model
is
based
on
1
MW
installaYon
– Debt/Equity
RaYo
of
50/50%
– Cost
of
Debt
5.72%
-­‐
Return
of
Equity
11.43%
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
6

7. 2a.
Electricity
current
Prices
•
Average
electricity
prices
can
be
derived
for
market
segments.
In
general,
electricity
prices
are
a
funcYon
– of
fuel
cost,
capital
cost,
labour
cost,
grid
cost,
energy
taxes,
energy
subsidies,
greenhouse
gas
(GHG),
emission
cost
and
profit
margins
of
generaYon,
transmission
and
distribuYon
companies.
•
We’ll
compare
how
the
electricity
tariffs
of
other
ciYes
would
affect
the
IRR
in
a
PV
Solar
Curaçao
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
7

8. 2b.
Electricity
Prices
…
future
trends
• Future
trends
on
electricity
price
in
Curaçao
– Based
on
tariff
evoluYon
of
last
decade,
the
current
tariff
prices
trend
points
to
a
yearly
basis
increase
of
4.793%
during
next
25
years
• How
sensible
it
would
be
the
IRR
to
other
changes
in
tariff
evoluYon
in
1
MW
PV
Solar
plant?
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
8

9. 3.
SelecYon
of
the
appropriate
solar
energy
technology
and
EPC
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
9

10. 4.
System
Performance
RaYo
• How
the
Performance
RaYo
affect
on
the
Profitability
of
a
PV
System
and,
consequently,
the
IRR:
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
10

11. 5.
OperaYon
&
Maintenance
• O&M
are
not
so
expensive
than
in
other
power
electricity
generaYon
opYons
(wind,
fossil
fuels,
etc.)
– This
factor
also
implies
a
lower
impact
over
the
IRR
than
in
other
studied
variables
Sensi&bily*analysis*O&M*vs*IRR*
35,00%)
30,00%)
25,00%)
20,00%)
15,00%)
10,00%)
5,00%)
0,00%)
Scenario)1)
Scenario)2)
Scenario)3)
Scenario)4)
O&M)(%)Net)Income))
9,50%)
7,04%)
3,52%)
2,50%)
IRR)
28,75%)
29,54%)
30,23%)
30,98%)
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
11

12. 6.
Land
/Rookop
Rental
• How
land
rental
affect
on
the
profitability
of
1
MW
PV
system
at
Curaçao?
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
12

13. 7.
Insurances
• How
cost
of
insurances
affect
on
the
profitability
of
1
MW
PV
plant
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
13

14. 8.
Corporate
&
Income
Tax
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
14

15. 9.
Interest
rates
• How
the
interest
rates
affect
the
IRR
of
an
solar
PV
investment
in
…
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
15

16. 10.
Debt
/
Equity
RaYo
• How
Debt/Equity
RaYo
affects
on
the
investment
structure
for
1
MW
PV
and
the
WACC
rate:
– 5.33%
cost
of
debt
and
10.66%
return
on
Equity
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
16

17. Savings
and
Real
Estate
implicaYons
• Some
Real
Estate
products
are
linked
to
economic
business
development
(e.
g.
an
Hotel,
a
warehouse,
etc.)
• An
hotel
like
the
Marrioq
with
an
installaYon
of
1
MW
of
solar
would
supply
between
25
–
30%
total
amount
o
electricity
during
25
years
– With
SAVINGS:
more
than
21
million
$US
– REAL
ESTATE:
increase
of
5.6
million
$US
in
yearly
hotel
valuaYon
(that
balances
the
price
o
the
PV
facility)
• Isn’t
amazing?
This
is
the
power
of
the
Sun
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
17

18. PV
Americas
Paradise
Map
2010
• GRAPHIC
OF
THE
STUDY
OF
Q-­‐Cells
Curaçao
(0.235)
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
18

19. PV
Americas
Paradise
Map
2020
Curaçao
(0.342)
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
19

20. CONCLUSIONS
–
The
Candidates
and
the
winner
is
…
FRANKFURT
LOS
ANGELES
BARCELONA
CURAÇAO
1.
RadiaYon
4
2
3
1
2.
Electricity
Prices
3
2
4
1
5.
O&M
3
4
1
2
6.
Land
costs
4
1
2
3
7.
Insurances
3
4
1
2
8.
Corporate
Tax
3
4
2
1
9.
Interest
Rate
1
2
4
3
10.
Debt
/Equity
2
1
4
3
76,19%
100,00%
RATIO
69,57%
80,00%
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
20

21. “Insert
de
Video,
again”
…
for
for
those
who
have
been
late
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
21

22. Coming
back
to
video
•
•
•
•
•
•
...
2.70
billion
of
kWh
of
energy
fall
from
the
skies
every
day
to
Curaçao
…
....
850
millions
of
USD
fall
from
the
Curaçao’s
skies
every
day
(current
Curaçao’s
Feed-­‐in
Tariff)
– Which
means
the
30%
of
the
Curaçao
GDP
(2008)
...
24.8
billion
of
dollars
every
month
– Which
means
close
to
12
Ymes
the
Curaçao
GDP.
– Or
close
to
200
million
dollars
per
capita
(Curaçao)
...
302,54
billion
of
dollars
every
year
to
Curaçao
– Which
means
…
0.5%
of
2011’s
world
GDP
with
only
the
0.002%
of
the
world
populaWon
– Or
2,153
million
dollars
per
CAPITA
(Curaçao)!!
During
25
years
of
the
average
of
an
investment
Solar
PV
project,
over
than
7.56
trillion
of
dollars
will
fall
to
Curaçao
Island
in
terms
of
potenYal
solar
electricity
at
current
prices
– Thanks
to
the
energy
of
the
sun,
during
next
25
years,
the
11.6%
of
current
World
GDP
will
fall
in
this
Caribbean
Paradise
named
Kursao.
Good
we
can’t
see
it
–
Bad
we
don’t
use
it
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
22

23. EPILOGUE:
Alexander
&
Diogenes
Corinth,
Greece,
340
B.
C.
Alexander
the
Great
addressed
Diogenes
with
greeYngs,
and
asked
if
he
wanted
anything
…
Diogenes
replied
"Yes,
stand
a
li]le
out
of
my
sunshine.”
And
then,
Alexander
says:
If
I
were
not
Alexander,
I
should
wish
to
be
Diogenes
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
23

24. Mi
sYma
Kòrsou!!!
Dank
u
wel
Thank
you
Gracias
Gràcies
Obrigado
Danki
!
arnold@vandenhurkmir.com
Arnold
Holding
Ltd.
(c)
2012
-­‐
Curaçao,
"The
Solar
Energy
Caribbean
Paradise"
24