1. How Small Developers and EPC Contractors Can Add PPA Financing to their Arsenals John Langhus, VP Business Development Midwest Solar Expo 2019
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2. Summary Overview
New Energy Equity is an end-to-end solar project developer
Initial feasibility and project development
Design and engineering
Transaction execution and funding
Legal and agreement execution
Construction and commissioning
Operations & maintenance, asset management
Focused on 500 kW - 10 MW C&I distributed generation projects
Headquartered in Annapolis, MD
Over $300MM in total project value (more than 150MW commissioned)
100% partner-driven growth
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3. Power Purchase Agreement
Power Purchase Agreement (PPA)
Standard industry document
Contract period: 20–25 Years
Typical contract length: Pages
Electricity rate: Fixed with a yearly escalator (ex. $.10/kWh, 2.5%)
End of term options
Renewal of PPA / Removal of system / Fair market value purchase
SRECS and Environmental Attributes
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4. New Energy Equity Advantages for PPAs
Low cost of capital – access to a variety of financial resources drives a lower cost of capital;
Competitive pricing – our low cost of capital and efficient transaction processes helps us offer highly competitive take-out financing prices;
Solar incentive expertise – our multi- state experience allows us to optimize state and federal incentives while protecting parties from unseen risks to get the best return from the transaction;
Financial transaction expertise – our background in investment banking provides expertise in financial engineering, due diligence, and transaction execution;
Flexible credit screening – our diverse investor base allows for more flexibility on credit requirements for PPA customers;
Support for underserved markets – we target projects in the underserved solar commercial sector from 500kW to 10MW;
Technical capability and experience – our engineers optimize system design for greatest solar production, high reliability, and top investment returns;
Extensive internal transaction resources – our in-house legal and financing team provides fast, responsive, and efficient transaction processes – keeping transaction costs low and project completion rates high;
Flexible equipment selection – we leverage large-scale procurement relationships for partners to bring big savings to small projects;
The personal approach – our “easy button” mentality allows us to move quickly
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5. Partner Roles in Solar Financing
System Owner owns and operates the solar installation for the PPA term
The Host Customer signs a Power Purchase Agreement and Site Lease with the System Owner
The Host Customer purchases solar electricity from the project for a period of years
System Owner hires an experienced construction partner to engineer and construct the solar system
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6. Customer Benefits Reduction of electricity costs
Up to 10% savings on electricity costs in first year
Predictable energy rates
Fixed electricity prices over the year contract period
Positive environmental impact
Reduction of greenhouse gas emissions from electricity usage
Positive community impact
Construction is completed with a local workforce providing additional jobs and positive economic impacts to the local economy
No capital expenditure or system maintenance obligations
No initial or ongoing capital expenditure or operating costs
System Owner is responsible for system maintenance and operation
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7. Roles and Responsibilities
Each Partner stays focused on its strengths
Developer / Construction
System Owner
Host Customer
Project Development
Capital Investment
Execute PPA and Site Lease
Engineering and Permitting
Develop PPA and Site Lease
Approve System Design and Layout
Execute Construction Agreement
Develop EPC Agreement
Provide Assistance with Permitting and Interconnection
Manage Construction
Maintain Net Metering Agreement
System Commissioning
Purchase Electricity
O&M / Asset Management
End of Term Options
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8. Transaction Benefits / Risks
While PPAs do not come without risks, New Energy Equity has the experience to provide a predictable savings with no upfront capital.
System Owner Benefits
System Owner Risks
Host Customer Benefits
Host Customer Risks
Return on Investment
Capital Investment / Interest Rates
Reduction of Electric Spend
Long Term Contract (20-25 Years)
Long Term Contractual Revenue Stream
Solar Renewable Energy Credits
Electricity Cost Predictability
Tax / Policy Changes
Tax Advantages
Electricity Production
Community Benefits
Lower Utility Energy Rates
Limited Distraction from Core Operations
Host Customer Credit
Positive PR Impact
Construction
Educational Benefits
O&M / Warranty / Insurance
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9. Permitting and Procurement
Project Timeline
Typical project length from initial meeting through system commissioning is 6-9 months
Project Development
Preliminary engineering
Electricity usage and spend analysis
Initial proposal
Initial utility and permitting diligence
2 - 4 Months
Project
Execution
Interconnection Application
Negotiation and Execution of PPA and Site Lease
Detailed engineering study
Project funding
1 - 2 Months
Permitting and Procurement
Financial close for system owner
Procurement of materials
Submit for permits
Interconnection approval
1 - 2 Months
Construction
Initial Site Prep
Mobilization
Racking, Module and Electrical Installation
Submit for approval to operate
1 - 2 Months
System Commissioning
Final punch-list items
System testing
Interconnection approval
30 – 60 Days
Total Process: 6 – 12 Months
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10. Conclusion Offering PPAs can turbocharge your business No money down
More options, for more customers
Larger projects with the same resources
Read more about us at
Questions?
John Langhus (802)
New Energy Equity LLC © 2019 All Rights Reserved