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Net Metering in Country ‘X’
Prepared by: Distributed Energy
Confidential - Distributed Energy Pte Ltd
The State of the Power Sector in Country X
§ Country X electricity tariff was estimated to
be about 22.2% more expensive, compared
to the highest electricity tariff of other East
African Community (EAC) countries
§ Country X per capita electricity
consumption (30 kWh) is the lowest in the
East African Community (EAC)
§ Reduce the carbon intensity of the grid by
25% by 2025.
§ US$7 billion would be required to finance
Country X power sector investment plans
from 2013 to 2025
Confidential - Distributed Energy Pte Ltd
Investment and Enabling Environment
Biggest Issues and Bottlenecks Progressive Way Forward
Misalignment of power supply & demand
Technical assistance and capacity building
for energy sector
Limited financing for off-grid companies
Limited affordability of electricity solutions
for rural households
Transaction advisory services and financial
mobilization
Support in on-and off-grid energy policy
development and implementation
Confidential - Distributed Energy Pte Ltd
Understanding Net Metering
§ Net Metering is a billing mechanism in which a self-generating customer can inject the surplus into the grid and receives a
compensation on his/her electricity bill
§ Net Metering, in essence, allows small scale renewable energy power producers to “bank” or “store” their electricity in
times of over-production (e.g. for solar energy during peak production in the day) in the national grid
Confidential - Distributed Energy Pte Ltd
Net Metering is a Net benefit
Macro-Level Micro-Level
§ Stimulate country-wide economic growth
§ Protecting the electric grid
§ Encourage substantial private investment into RE
§ Reduce demand for electricity during peak
periods
§ Help stabilize energy supply infrastructure
§ Diversification of Country X’s energy resource mix
§ Reduce interconnection and administrative costs
§ Giving customers control over their electricity
bills
§ Financial credit for extra solar power
produced
§ Encourages consumers to play an active role
in alternative energy production
§ Encourage conservation and efficiency
§ Reduce carbon footprint
Confidential - Distributed Energy Pte Ltd
Why is Net Metering particularly suitable for so-called
emerging countries?
Unable to meet the
energy demand
because of insufficient
generation capacities in
particular during peak
hours
High grid electricity
prices, declining solar
PV costs improves cost
competitiveness –
providing the rationale
for net-metering
Increased
Government led
policies facilitating
renewable energy
generation and
sustainable
development
In countries with large
solar potential & ambitious
renewable energy targets,
rooftop solar is being
looked at as a major
means to achieve a
significant portion of the
RE targets
Confidential - Distributed Energy Pte Ltd
How will Net Metering fit within a traditional grid model?
§ Net Metering Programs - encourage
renewable growth, clean energy
investments. Net Metering schemes
have proved to be effective to jump-
start distributed generation markets.
§ Implementation of a well designed
decoupling mechanism that will
encourage utilities to promote
energy efficiency, competitive pricing
and distributed generation
technologies.
§ Increasing RE portion in the
electricity mix
Confidential - Distributed Energy Pte Ltd
Relevance of Net Metering in Country X
SWOT Analysis
§ Increased generation capacity
§ Improved access to energy ( clean and modern source)
§ Diversification of the energy mix; on the long term: more
decentralized generation with less dependence on a few big power
plants ( increase of network stability), requires less transmission
capacity
§ Promotion of small-scale private investment
§ Increase in building value
§ Strengthening the solar sector / job creation
Strengths Weaknesses
§ Reduced profit for the distribution company (but: depends on their
own generation cost and tariff level)
§ Associated administrative costs (adaptation of customer
management)
§ Possible technical constraints
§ Urban growth
§ String sunshine
§ Dependency on Imports / Supply instability
§ Inability to invest in new large-scale power plants
§ Service improvement objectives (e.g. Electricity access / Electrical
losses / Load shedding)
§ Political objectives (Renewable energy development and Sustainable
City)
§ Decrease of PV equipment cost
§ More and more experience feedback
Opportunities Threats
§ Political instability
§ Inappropriate regulation
§ Lobbying of distribution companies
§ Inefficient data management system
§ Poor coordination / Lack of skills of actors
§ Inability of client to invest (limited access to investment funds)
§ Availability of new low-cost fossil energy source
Source : IED analysis from various sources, and discussions with experts
Confidential - Distributed Energy Pte Ltd
The Economic Case to be made for Net Metering
The economic case is primarily
built on the fact that certain
renewable energy generation
costs have reached, or will
shortly reach, grid parity in many
emerging countries.
Confidential - Distributed Energy Pte Ltd
The Regulatory / Policy Case to be made for Net Metering
For the energy authorities in Country X, the regulatory/policy case is based on the following reasons
Complimentary to
feed-in tariffs, RPS
and a wider array of
key energy incentives
that will promote RE
growth
Increased renewable
energy generation =
savings on fuel
imports, job creation
and carbon financing
options
Decentralized
generation and
modern inverters
can assist in
stabilizing the grid
Unable to meet the
energy demand
because of
insufficient generation
capacities in
particular during peak
hours
Confidential - Distributed Energy Pte Ltd
Scaling Renewable Electricity Capacity and Achieving Energy
Independence in Country X
The Government of Country X is targeting 100% electricity access by 2024 - 52% on-grid connections and 48% off-grid.
Incentive for RE in energy mix via net
metering
Diversify energy supply, reducing
dependence on imported fuels and greater
energy security
Catalyst for Country X’s Rural
Electrification Strategy and other RE
targets
Source: International Renewable Energy Agency
Confidential - Distributed Energy Pte Ltd
Economic opportunities resulting from Net Metering in Country X
Potential economic impacts
§ Training
§ Technical / legal expertise / support for the
§ Implementation of policies
§ Provision of hardware and IT solution
§ Financial schemes
§ Economic stimulation via renewable energy
investments
RE and energy efficiency programs
Stimulating deployment of distributed solar energy
systems at the residential and commercial scale
Potential economic impacts New business models
Cash payment < Lease - to own >
Sale / Purchase
agreement
§ Purchase at one
time
§ The customer
owns the system
§ Payment at or
directly after
installation
§ None / Low initial
contribution from
the client
§ The customer
becomes the
owner of his
system after a
rental period
§ Regular payments
usually for 3 to 7
years
§ None / Low initial
contribution from
the client
§ The installer owns
the system. The
property can be
transferred to the
client (prosumer)
after a certain
period (typically 5
years)
§ Regular payments
(from client to the
installer) for
generated energy
Confidential - Distributed Energy Pte Ltd
Environmental Benefits of Net Metering
By facilitating distributed renewable energy development on-site, net-metering accesses the greatest benefits of
renewable energy without one of its most significant environmental costs – the space requirement for utility-scale
renewable projects
Land and Water use
Reduction in GHG emissions
Local and regional air pollution decline.
Confidential - Distributed Energy Pte Ltd
Improved Country Image - Become a Leader
Robust Demand via
Policy Support
Increasing
Investments
Competitive
Advantage
Continued implementation of
policies catered towards
incentivizing RE deployment
and green marketing will
attract a broader range of
investors and businesses
Position yourself to investors,
consumers and the global
economy as a forward-thinking
country that is keen on
achieving its economic growth
targets without compromising
sustainability targets
Leapfrog the environmental
challenges developed countries
faced in pursuit of economic
stability and showcase Country
X’s economy as one where
businesses are able to align
sustainable practices with
profitability
Confidential - Distributed Energy Pte Ltd
Net Metering in USA
§ As of July 2016, 41 states have mandatory NEM policies.
§ By 2018, renewable energy accounted for 18% of the country’s electricity generation.
§ Solar generation (including distributed) is projected to climb from 11 percent of total U.S. renewable generation in 2017 to
48 percent by 2050, making it the fastest-growing electricity source
Confidential - Distributed Energy Pte Ltd
NEM Lessons Learned - Case Study - Arizona
Initial NEM Policy Current NEM Policy Future
*Rooftop solar customers can choose from four rate design options that include a time–of-use rate plan with a grid access charge or a demand-based rate plan
without a grid access charge. The settlement does not include a mandatory demand charge
§ Under previous NEM policy,
customers were credited full retail
rate ($0. 13-$0. 14/kWh).
§ Utilities and other rate payers
argued that a full NEM retail rate
resulted in a cost shift.
§ In march 2017, Arizona Public
Service Co. and a Group of solar
interests filed a settlement on rate
design and rooftop solar
compensation with the Arizona
corporation commission, following
years of contentions debate
§ Under the new agreement, the
rooftop solar customer will be paid
$0.129/kWh for excess energy
exported to the grid. * Export rate
will fall 10% annually, but
customers will lock in rates for 10
years at sign up.
§ Solar energy consumed by end
users valued at ~$0.105/kWh, with
a lower rate for demand charge rate
options, likely in the $0. 096-
$0.078/kWh range.
§ New settlement includes a 20-years
grandfathering period for customers
who file for interconnection before
rate case decision.
§ This deal being passed has given
distributed generators, especially
the solar industry, economic clarity
when building new projects.
§ After years of disagreement,
Arizona utilities and solar backers
seem to agree on this settlement
Confidential - Distributed Energy Pte Ltd
Net Metering in Europe
§ Practiced in 4 countries – Belgium, Denmark, Greece, and Italy
§ In 2018, European countries gave their endorsement to a binding EU-wide renewable energy target of a minimum of 32%
of gross final consumption by 2030
Confidential - Distributed Energy Pte Ltd
Denmark - A Renewable Energy Leader in EU
§ Since 2001, net-metering policies, along with other policies (RD&D and capital grants) have been applied to promote RE
growth.
§ Denmark is expected to generate 69% of its energy from renewable sources by 2022, making it the world leader.
§ The net-metering program helped diversify Denmark's energy generation infrastructure by stimulating development of
many smaller power sources using renewable fuel
Confidential - Distributed Energy Pte Ltd
Impact of Net Metering on State Utility Company
Distributed renewable power properly managed with net-metering, can enhance the stability of the state’s energy infrastructure
Benefits to the utility Cost to the Utility
Low implementation cost
Avoided energy purchases
Avoided T&D losses
Avoided capacity purchases
Avoided T&D investments and O&M
Avoided RES generation purchases
Reliability benefits
Poor implementation by private players
NEM bill credits
Program administration
Cross – subsidy impact
Tariffs not reflecting fixed costs
Connection/approval costs (meter, technical, inspection,
etc.)
Power planning /system reconfiguration
Confidential - Distributed Energy Pte Ltd
Policy
Regulation
Agreement
with utilities
Technical
expertise
Regulatory
capacity
Success Factors for Net-metering
Net-metering should form part of overall policy and planning, providing clear market signals
Energy regulations must make provision for net-metering, clearly setting out the energy sources
& technologies
Utilities that will be affected by net-metering should agree to accept and "buy" electricity
generated by net-metered systems
Technical capacity is needed, both at regulatory and utility level, to ensure the proper application
and management of net-metering standards
Regulatory authorities need to have the capacity to ensure that net-metering policies and
regulations are properly implemented
Confidential - Distributed Energy Pte Ltd
Roadmap – Framework for Implementation of Net Metering
§ Start simple - start with studies followed
by a pilot phase
§ Adapt regulatory framework as the
number of prosumers increases
§ Be clear and precise - detail the
conditions of eligibility, the connection
procedure, the responsibilities of each
§ Simplify administrative procedures as
much as possible
§ Strengthen distribution companies’ skills
§ Optimize the compensation scheme
§ Only compensate the injected energy
§ Ensure the payment of taxes on electricity
consumption
§ Prevent customers from becoming IPP
§ Monitor the implementation of laws
Confidential - Distributed Energy Pte Ltd
Proof of Concept - Where to start
§ Priority on developing domestic power generation capacity by promoting development of renewable energy sources
that will facilitate increased availability of energy services
§ Net-metering development can be split into two phases
§ To those whose investment capacities are relatively high
§ To every type of user
§ Proof of concept to scale up – the capital of Country X inhabits about one-tenth of the country’s population, has the
largest concentration of economic activity and consumes almost 50% of total electricity in the country
Confidential - Distributed Energy Pte Ltd
Other considerations to accelerate renewable market -
Accelerated Depreciation
Case study - USA - modified accelerated cost
recovery system (MACRS)
Established in 1986, MACRS has assigned a five-year useful life to most
renewable energy property
IMPACT
§ Reduction in tax liability
§ Accelerates rate of return on RE projects - significant driver for solar industry
§ Lower consumer electricity costs, create high-paying jobs, enhance energy
independence, reduction in GHG emission
§ Encouraged and facilitated greater private investments into RE technology
CONCLUSIONS
§ Replacing MACRS with linear depreciation reduces investor return by nearly 25%
§ Reduces time period of capital expenditure recovery.
§ Faster return on capital means lower risk premium and reduction in returns
requirement to make new RE projects attractive
§ MACRS offer an important hedge against interest rate risk – leveraging the
federal financing advantage to facilitate private investment
§ Encourage local companies to make new investments in RE technology
Confidential - Distributed Energy Pte Ltd
Other considerations to accelerate renewable market -
Guaranteed Low Cost Financing
Case Study - USA Department of Energy Loan
Programs Office (LPO)
Manages a portfolio comprising more than $30 billion of loans, loan guarantees,
and conditional commitments covering more than 30 large-scale
energy infrastructure projects
IMPACT
§ Previous RE projects unable to obtain commercial financing due to perceived
risks now have full financial support.
§ State-wide RE targets in terms of deployment and avoided GHG emissions on
track.
§ Accelerated growth of distributed RE technology, particularly solar and wind
§ LPO recently initiated the Renewable Energy and Efficient Energy Projects
Solicitation - $ 4.5 billion in loan guarantees to support smaller-scale RE and
energy efficient projects.
§ Available for 5 catalytic technology areas:
§ Advanced Grid Integration and Storage
§ Drop-in Biofuels
§ Waste-to-Energy
§ Enhancement of Existing Energy Facilities
§ Efficiency Improvements
Thank You
Get in Touch :
Sudhakar K S
Co-Founder
sudhakark@de.energy
+971 52 914 5768
Mathew Mazhuvanchery
Co-Founder & CEO
mathewm@de.energy
+91 80781 19247

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The case for net metering in Country 'X'

  • 1. Net Metering in Country ‘X’ Prepared by: Distributed Energy
  • 2. Confidential - Distributed Energy Pte Ltd The State of the Power Sector in Country X § Country X electricity tariff was estimated to be about 22.2% more expensive, compared to the highest electricity tariff of other East African Community (EAC) countries § Country X per capita electricity consumption (30 kWh) is the lowest in the East African Community (EAC) § Reduce the carbon intensity of the grid by 25% by 2025. § US$7 billion would be required to finance Country X power sector investment plans from 2013 to 2025
  • 3. Confidential - Distributed Energy Pte Ltd Investment and Enabling Environment Biggest Issues and Bottlenecks Progressive Way Forward Misalignment of power supply & demand Technical assistance and capacity building for energy sector Limited financing for off-grid companies Limited affordability of electricity solutions for rural households Transaction advisory services and financial mobilization Support in on-and off-grid energy policy development and implementation
  • 4. Confidential - Distributed Energy Pte Ltd Understanding Net Metering § Net Metering is a billing mechanism in which a self-generating customer can inject the surplus into the grid and receives a compensation on his/her electricity bill § Net Metering, in essence, allows small scale renewable energy power producers to “bank” or “store” their electricity in times of over-production (e.g. for solar energy during peak production in the day) in the national grid
  • 5. Confidential - Distributed Energy Pte Ltd Net Metering is a Net benefit Macro-Level Micro-Level § Stimulate country-wide economic growth § Protecting the electric grid § Encourage substantial private investment into RE § Reduce demand for electricity during peak periods § Help stabilize energy supply infrastructure § Diversification of Country X’s energy resource mix § Reduce interconnection and administrative costs § Giving customers control over their electricity bills § Financial credit for extra solar power produced § Encourages consumers to play an active role in alternative energy production § Encourage conservation and efficiency § Reduce carbon footprint
  • 6. Confidential - Distributed Energy Pte Ltd Why is Net Metering particularly suitable for so-called emerging countries? Unable to meet the energy demand because of insufficient generation capacities in particular during peak hours High grid electricity prices, declining solar PV costs improves cost competitiveness – providing the rationale for net-metering Increased Government led policies facilitating renewable energy generation and sustainable development In countries with large solar potential & ambitious renewable energy targets, rooftop solar is being looked at as a major means to achieve a significant portion of the RE targets
  • 7. Confidential - Distributed Energy Pte Ltd How will Net Metering fit within a traditional grid model? § Net Metering Programs - encourage renewable growth, clean energy investments. Net Metering schemes have proved to be effective to jump- start distributed generation markets. § Implementation of a well designed decoupling mechanism that will encourage utilities to promote energy efficiency, competitive pricing and distributed generation technologies. § Increasing RE portion in the electricity mix
  • 8. Confidential - Distributed Energy Pte Ltd Relevance of Net Metering in Country X SWOT Analysis § Increased generation capacity § Improved access to energy ( clean and modern source) § Diversification of the energy mix; on the long term: more decentralized generation with less dependence on a few big power plants ( increase of network stability), requires less transmission capacity § Promotion of small-scale private investment § Increase in building value § Strengthening the solar sector / job creation Strengths Weaknesses § Reduced profit for the distribution company (but: depends on their own generation cost and tariff level) § Associated administrative costs (adaptation of customer management) § Possible technical constraints § Urban growth § String sunshine § Dependency on Imports / Supply instability § Inability to invest in new large-scale power plants § Service improvement objectives (e.g. Electricity access / Electrical losses / Load shedding) § Political objectives (Renewable energy development and Sustainable City) § Decrease of PV equipment cost § More and more experience feedback Opportunities Threats § Political instability § Inappropriate regulation § Lobbying of distribution companies § Inefficient data management system § Poor coordination / Lack of skills of actors § Inability of client to invest (limited access to investment funds) § Availability of new low-cost fossil energy source Source : IED analysis from various sources, and discussions with experts
  • 9. Confidential - Distributed Energy Pte Ltd The Economic Case to be made for Net Metering The economic case is primarily built on the fact that certain renewable energy generation costs have reached, or will shortly reach, grid parity in many emerging countries.
  • 10. Confidential - Distributed Energy Pte Ltd The Regulatory / Policy Case to be made for Net Metering For the energy authorities in Country X, the regulatory/policy case is based on the following reasons Complimentary to feed-in tariffs, RPS and a wider array of key energy incentives that will promote RE growth Increased renewable energy generation = savings on fuel imports, job creation and carbon financing options Decentralized generation and modern inverters can assist in stabilizing the grid Unable to meet the energy demand because of insufficient generation capacities in particular during peak hours
  • 11. Confidential - Distributed Energy Pte Ltd Scaling Renewable Electricity Capacity and Achieving Energy Independence in Country X The Government of Country X is targeting 100% electricity access by 2024 - 52% on-grid connections and 48% off-grid. Incentive for RE in energy mix via net metering Diversify energy supply, reducing dependence on imported fuels and greater energy security Catalyst for Country X’s Rural Electrification Strategy and other RE targets Source: International Renewable Energy Agency
  • 12. Confidential - Distributed Energy Pte Ltd Economic opportunities resulting from Net Metering in Country X Potential economic impacts § Training § Technical / legal expertise / support for the § Implementation of policies § Provision of hardware and IT solution § Financial schemes § Economic stimulation via renewable energy investments RE and energy efficiency programs Stimulating deployment of distributed solar energy systems at the residential and commercial scale Potential economic impacts New business models Cash payment < Lease - to own > Sale / Purchase agreement § Purchase at one time § The customer owns the system § Payment at or directly after installation § None / Low initial contribution from the client § The customer becomes the owner of his system after a rental period § Regular payments usually for 3 to 7 years § None / Low initial contribution from the client § The installer owns the system. The property can be transferred to the client (prosumer) after a certain period (typically 5 years) § Regular payments (from client to the installer) for generated energy
  • 13. Confidential - Distributed Energy Pte Ltd Environmental Benefits of Net Metering By facilitating distributed renewable energy development on-site, net-metering accesses the greatest benefits of renewable energy without one of its most significant environmental costs – the space requirement for utility-scale renewable projects Land and Water use Reduction in GHG emissions Local and regional air pollution decline.
  • 14. Confidential - Distributed Energy Pte Ltd Improved Country Image - Become a Leader Robust Demand via Policy Support Increasing Investments Competitive Advantage Continued implementation of policies catered towards incentivizing RE deployment and green marketing will attract a broader range of investors and businesses Position yourself to investors, consumers and the global economy as a forward-thinking country that is keen on achieving its economic growth targets without compromising sustainability targets Leapfrog the environmental challenges developed countries faced in pursuit of economic stability and showcase Country X’s economy as one where businesses are able to align sustainable practices with profitability
  • 15. Confidential - Distributed Energy Pte Ltd Net Metering in USA § As of July 2016, 41 states have mandatory NEM policies. § By 2018, renewable energy accounted for 18% of the country’s electricity generation. § Solar generation (including distributed) is projected to climb from 11 percent of total U.S. renewable generation in 2017 to 48 percent by 2050, making it the fastest-growing electricity source
  • 16. Confidential - Distributed Energy Pte Ltd NEM Lessons Learned - Case Study - Arizona Initial NEM Policy Current NEM Policy Future *Rooftop solar customers can choose from four rate design options that include a time–of-use rate plan with a grid access charge or a demand-based rate plan without a grid access charge. The settlement does not include a mandatory demand charge § Under previous NEM policy, customers were credited full retail rate ($0. 13-$0. 14/kWh). § Utilities and other rate payers argued that a full NEM retail rate resulted in a cost shift. § In march 2017, Arizona Public Service Co. and a Group of solar interests filed a settlement on rate design and rooftop solar compensation with the Arizona corporation commission, following years of contentions debate § Under the new agreement, the rooftop solar customer will be paid $0.129/kWh for excess energy exported to the grid. * Export rate will fall 10% annually, but customers will lock in rates for 10 years at sign up. § Solar energy consumed by end users valued at ~$0.105/kWh, with a lower rate for demand charge rate options, likely in the $0. 096- $0.078/kWh range. § New settlement includes a 20-years grandfathering period for customers who file for interconnection before rate case decision. § This deal being passed has given distributed generators, especially the solar industry, economic clarity when building new projects. § After years of disagreement, Arizona utilities and solar backers seem to agree on this settlement
  • 17. Confidential - Distributed Energy Pte Ltd Net Metering in Europe § Practiced in 4 countries – Belgium, Denmark, Greece, and Italy § In 2018, European countries gave their endorsement to a binding EU-wide renewable energy target of a minimum of 32% of gross final consumption by 2030
  • 18. Confidential - Distributed Energy Pte Ltd Denmark - A Renewable Energy Leader in EU § Since 2001, net-metering policies, along with other policies (RD&D and capital grants) have been applied to promote RE growth. § Denmark is expected to generate 69% of its energy from renewable sources by 2022, making it the world leader. § The net-metering program helped diversify Denmark's energy generation infrastructure by stimulating development of many smaller power sources using renewable fuel
  • 19. Confidential - Distributed Energy Pte Ltd Impact of Net Metering on State Utility Company Distributed renewable power properly managed with net-metering, can enhance the stability of the state’s energy infrastructure Benefits to the utility Cost to the Utility Low implementation cost Avoided energy purchases Avoided T&D losses Avoided capacity purchases Avoided T&D investments and O&M Avoided RES generation purchases Reliability benefits Poor implementation by private players NEM bill credits Program administration Cross – subsidy impact Tariffs not reflecting fixed costs Connection/approval costs (meter, technical, inspection, etc.) Power planning /system reconfiguration
  • 20. Confidential - Distributed Energy Pte Ltd Policy Regulation Agreement with utilities Technical expertise Regulatory capacity Success Factors for Net-metering Net-metering should form part of overall policy and planning, providing clear market signals Energy regulations must make provision for net-metering, clearly setting out the energy sources & technologies Utilities that will be affected by net-metering should agree to accept and "buy" electricity generated by net-metered systems Technical capacity is needed, both at regulatory and utility level, to ensure the proper application and management of net-metering standards Regulatory authorities need to have the capacity to ensure that net-metering policies and regulations are properly implemented
  • 21. Confidential - Distributed Energy Pte Ltd Roadmap – Framework for Implementation of Net Metering § Start simple - start with studies followed by a pilot phase § Adapt regulatory framework as the number of prosumers increases § Be clear and precise - detail the conditions of eligibility, the connection procedure, the responsibilities of each § Simplify administrative procedures as much as possible § Strengthen distribution companies’ skills § Optimize the compensation scheme § Only compensate the injected energy § Ensure the payment of taxes on electricity consumption § Prevent customers from becoming IPP § Monitor the implementation of laws
  • 22. Confidential - Distributed Energy Pte Ltd Proof of Concept - Where to start § Priority on developing domestic power generation capacity by promoting development of renewable energy sources that will facilitate increased availability of energy services § Net-metering development can be split into two phases § To those whose investment capacities are relatively high § To every type of user § Proof of concept to scale up – the capital of Country X inhabits about one-tenth of the country’s population, has the largest concentration of economic activity and consumes almost 50% of total electricity in the country
  • 23. Confidential - Distributed Energy Pte Ltd Other considerations to accelerate renewable market - Accelerated Depreciation Case study - USA - modified accelerated cost recovery system (MACRS) Established in 1986, MACRS has assigned a five-year useful life to most renewable energy property IMPACT § Reduction in tax liability § Accelerates rate of return on RE projects - significant driver for solar industry § Lower consumer electricity costs, create high-paying jobs, enhance energy independence, reduction in GHG emission § Encouraged and facilitated greater private investments into RE technology CONCLUSIONS § Replacing MACRS with linear depreciation reduces investor return by nearly 25% § Reduces time period of capital expenditure recovery. § Faster return on capital means lower risk premium and reduction in returns requirement to make new RE projects attractive § MACRS offer an important hedge against interest rate risk – leveraging the federal financing advantage to facilitate private investment § Encourage local companies to make new investments in RE technology
  • 24. Confidential - Distributed Energy Pte Ltd Other considerations to accelerate renewable market - Guaranteed Low Cost Financing Case Study - USA Department of Energy Loan Programs Office (LPO) Manages a portfolio comprising more than $30 billion of loans, loan guarantees, and conditional commitments covering more than 30 large-scale energy infrastructure projects IMPACT § Previous RE projects unable to obtain commercial financing due to perceived risks now have full financial support. § State-wide RE targets in terms of deployment and avoided GHG emissions on track. § Accelerated growth of distributed RE technology, particularly solar and wind § LPO recently initiated the Renewable Energy and Efficient Energy Projects Solicitation - $ 4.5 billion in loan guarantees to support smaller-scale RE and energy efficient projects. § Available for 5 catalytic technology areas: § Advanced Grid Integration and Storage § Drop-in Biofuels § Waste-to-Energy § Enhancement of Existing Energy Facilities § Efficiency Improvements
  • 25. Thank You Get in Touch : Sudhakar K S Co-Founder sudhakark@de.energy +971 52 914 5768 Mathew Mazhuvanchery Co-Founder & CEO mathewm@de.energy +91 80781 19247