ANATOMY OF A DEAL: FINANCING Peter Y. Flynn, Bostonia Partners
C RITICAL I SSUES n Economics Generation market Renewable Portfolio Standard Federal and state tax incentives n Procurement method: long-term contracting authority is key n Due diligence and pre-procurement work by the Service n Project size and technologies sought n Essentiality of the installation n Track record of the Service and installation Project “champion” n Team must include members with experience and financial strength 2
3 A DDITIONAL C ONSIDERATIONS Potential Issues & Challenges PPA pricing Termination for convenience Recapture during tax benefit period RECs Insolation and shading Potential Complexities Site control Relocation Roof Replacement Novation/assignment Procurement method OMB scoring State utility laws Additional Value Renewable Energy Credits (RECs) – ownership, price, and value Energy Security
R ENEWABLE E NERGY F INANCING S TRUCTURE - ESPC 4 TRUSTEE Solar Facility and ECMs RESA and ECM Payments GOVERNMENT IDIQ Contract Task Order for ECMs Tax Equity Ownership ESCO Construction Funds Energy Services Agreement BOSTONIA (Owner / SPE) BOSTONIA (Owner / SPE) O&M Agreement Tax Benefits RESA / Task Order Assignment Installation Agreement
PPA F INANCING S TRUCTURE 5 Tax Equity Debt Project Equity Tax Equity Debt Project Equity Purchase Price GOVERNMENT PPA Revenue & Tax Benefits Installation O&M Contract Guarantees Project Company (Solar Facility Owner) Project Company (Solar Facility Owner) Solar Developer Solar generated electricity Electricity Payments
EUL F INANCING S TRUCTURE 6 GOV’T Ground Lease EPC FUEL DEVELOPER / SPE TRUSTEE LENDER [TAX] EQUITY O&M Power Sales PPA Payments Debt Service FINANCIER COMMERCIAL OFF-TAKE Power Sales
C ONTACT I NFORMATION Peter Y. Flynn Executive Vice President Direct Main 13