You Don’t Have To Be a Wizard to Understand the Private Financing of Solar Projects APRIL 3-6,...
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Transcript of You Don’t Have To Be a Wizard to Understand the Private Financing of Solar Projects APRIL 3-6,...
You Don’t Have To Be a Wizard to Understand the Private Financing of Solar Projects
APRIL 3-6, 2013, LONG BEACH, CA
These materials have been prepared for the CASBO CBO Professional Council. They have not been reviewed by State CASBO for approval, so therefore are not an official statement of CASBO.
YOU DON'T HAVE TO BE A WIZARD TO UNDERSTAND THE PRIVATE
FINANCING OF SOLAR PROJECTS
CASBO 2013
Presented by:Devon B. Lincoln, Esq.
Trevin Sims, Esq.Adam S. Bauer
THE MAN BEHIND THE THE MAN BEHIND THE CURTAINCURTAIN
• Are there real savings from solar?
• Who’s really investing in yourproject?
PULLING BACK THE CURTAIN
Annual Savings = ((Solar Electricity
Produced x AvoidedUtility Rate) + (Credits and
Incentives)) – Financing Costs
SOLAR ELECTRICITY PRODUCED Variables Include:• Locations: Number and
Insolation• Technology: Guarantee?
Maintenance? Security?• Usage and Energy Efficiency
AVOIDED UTILITY RATE
Usually assumes annual escalation factor
• 3%? 5%? ?%• Who knows where utility rates will
go?
PULLING BACK THE CURTAIN
Annual Savings = ((Solar Electricity Produced x
Avoided Utility Rate) + (Credits and Incentives)) – Financing Costs
CREDITS AND INCENTIVES
• California Solar Initiative (CSI) • Renewable Energy Credits
(RECs)• Prop 39?• Tax equity?
PULLING BACK THE CURTAIN
Annual Savings = ((Solar Electricity Produced x
Avoided Utility Rate) + (Credits and Incentives))– Financing Costs
FINANCING OPTIONS
• Power purchase agreements• Local bond funding• Lease-Purchase• Municipal finance/JPA
PULLING BACK THE CURTAIN ON
Power Purchase Agreements • No Cash Down• Private Entity Is System Owner• Tax Equity Investment• 20-25 Year Term• Limited Termination, Purchase
and Re-Location Rights
PULLING BACK THE CURTAIN ON
Local Bond Funded Project • Community support for project• Project delivery method (Who’s
building it?)• Compare system costs to
“Avoided utility rate”• General fund savings?
PULLING BACK THE CURTAIN ON
Lease-Purchase Financing• Institutional lender• 7 Year term typical• Compare interest rate to
“Avoided utility rate”• Future refi likely
PULLING BACK THE CURTAIN ON
Municipal Partnerships/JPAs• Pooling resources to achieve a
project• Project delivery method: Who’s
building it?• Managing long term
maintenance, ownership issues
PULLING BACK THE CURTAIN ON
Annual Savings = ((Solar Electricity Produced x
Avoided Utility Rate) + (Credits and Incentives)) – Financing Costs
“PAY NO ATTENTION TO THAT MAN BEHIND THE CURTAIN”
Ask the Hard Questions:
• What’s the technology?• Who’s building It? What are the
warranties?• What’s behind the savings
projections?• Can we get credits and
incentives?
“PAY NO ATTENTION TO THAT MAN BEHIND THE CURTAIN”
• Do we have local support?• Who’s profiting from our
project?• Who’s partnering in our
project?
PLEASE NOTE
Disclaimer:These materials and all discussions of these materials are for instructional purposes only and do not constitute legal advice. If you need legal advice, you should contact your local counsel or an attorney at Lozano Smith. If you are interested in having other inservice programs presented, please contact [email protected] or call (559) 431-5600
Copyright © 2013 Lozano SmithAll rights reserved. No portion of this work may be copied, or sold or used for any commercial advantage or private gain, nor any derivative work prepared there from, without the express prior written permission of Lozano Smith through its Managing Partner. The Managing Partner of Lozano Smith hereby grants permission to any client of Lozano Smith to whom Lozano Smith provides a copy to use such copy intact and solely for the internal purposes of such client.