Go Solar Fest - broward.org

Go Solar Fest - broward.org

Financing, Net Metering, Solar Rights and Insurance Session Net Metering, Interconnection and Solar Rebates John McComb Customer Technology Support Florida Power & Light GO SOLAR Fest FPL Customer Service Customer Technology Support John McComb, P.E., E.C. Jan. 25, 2013

Agenda 4 The FPSC Net Metering rule Net Metering Example Net Metering Interconnection Requirements Net Metering Customers FPL Contact Information The Public Service Commission of Florida sets forth the requirements for interconnecting a renewable energy source

FPSC Rule 25-6.065: Interconnection and Net Metering of Customer-Owned Renewable Generation The rule: Sets forth the conditions required for a renewable energy source to be interconnected with the local utility safely through the customers internal wiring Requires an interconnection agreement between the customer and the utility Defines Net Metering as a metering and billing methodology whereby customer-owned renewable generation is allowed to offset the customers electricity on-site All retail rate customers are eligible it interconnect once they satisfy the program requirements found at www.FPL.com/netmetering 5

Net metering measures both energy used from the grid and excess energy produced that is sent to the grid FPLs meter only measures the excess energy sent to the grid, not the total energy produced by the PV system 6 All renewable energy systems connected to the grid require an interconnection agreement Net Metering Interconnection Agreement An agreement between FPL and a customer, allowing the customer to safely interconnect a renewable energy system to the grid through internal wiring The Interconnection Agreement has different requirements dependent upon the system (tier) size

Tier 1 0 kW to 10 kW AC Tier 2 Larger than 10 kW to 100 kW AC Tier 3 Larger than 100 kW to 2,000 kW AC All retail rate customers are eligible it interconnect once they satisfy the program requirements found at www.FPL.com/netmetering 7 The majority of renewable energy systems meet the Tier 1 requirements Interconnection Agreement Tier 1 Requirements To approve the system to be energized, FPL must have copies of: Application This document includes customer and system information

necessary to approve the interconnection agreement Completed Interconnection Agreement An agreement between FPL and a customer, allowing the customer to safely interconnect a renewable energy source to the grid through internal wiring Building Permit approving the installation of the renewable energy system. This permit must be signed by the local Authority Having Jurisdiction (AHJ) Tier 2 and Tier 3 have additional requirements for insurance and a safety disconnect switch 8 FPL has renewable energy customers throughout its service area Interconnected Customers as of Jan. 15, 2013 Broward

FPL Residential Customers kW 146 870 Commercial Customers kW 9 9,666

65 1,555 1,710 456 9,795 You can contact FPL by email, phone or fax if you have questions on net metering or solar rebates Contact Information www.FPL.com/netmetering Agreements, application and instructions www.FPL.com/solarrebates

Solar rebate reservation information E-mail: [email protected] [email protected] Phone: (305) 387-6614 - Net Metering (800) Dial FPL - Solar Rebates (305) 552-2275 - Net Metering FAX 10 Thank you 11 Florida Power & Lights Financial Incentives and Rebates Joe Acquaviva

Supervisor, Build Smart & Solar Programs Florida Power & Light FPLs Solar Rebate Program Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel FPL offers solar rebate programs for customers who install solar photovoltaic (PV) and solar water heating systems in their homes and businesses FPLs Solar Rebate Programs FPLs solar rebates are part of a five-year pilot program authorized by the Florida Public Service Commission to promote clean solar power and reduce energy consumption

Rebates are limited and will be available on a first-comefirst-served basis Any system components installed prior to FPLs issuance of a rebate reservation will not qualify for the rebate 14 Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel There are four rebate programs that are available to customers Solar Pilot Portfolio Overview Solar Water Heating RESIDENTIAL REBATES BUSINESS

REBATES Solar Photovoltaics RESIDENTIAL REBATES 15 BUSINESS REBATES Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel FPL is offering new rebate programs for customers who install solar photovoltaic and solar water heating systems in their homes and businesses

Residential Solar Water Heating Business Solar Water Heating $1000 per installed solar water heater. One rebate per premise* for the life of the program $30 per 1,000 BTUh/day of the maximum rated output of the installed system; $50,000 maximum rebate amount per premise* for the life of the program (Customers with multiple premises* can receive a maximum combined rebate for their premises* of up to $150,000 per funding year) Residential PV Business PV $2 per watt of the direct current (DC)

rating of the solar panels of a PV system , with maximum rebate of $20,000 per premise.* One rebate per premise* for the life of the program Variable rebate depending on the direct current (DC) rating of the solar panels: $2 per watt for the first 10 kilowatts, $1.50 per DC watt 10 kW up to 25 kW, and $1 per DC watt greater than 25 kW. Up to $50,000 per premise* for the life of the program (Customers with multiple premises* can receive a maximum combined rebate for their premises* of up to $150,000 per funding year) *A premise is defined as a dwelling or business under the control of a single customer where electric utility service terminates. Separate buildings and adjoining buildings in a group of buildings, which have separate FPL electric service, and contain separate dwellings or businesses, are separate premises.

16 Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel Get ready You will need to log-in to your account on www.FPL.com in order to apply for this program, If you are not registered with FPL you will need to register for online access Mark your calendar to go to www.FPL.com/solarrebates You will be prompted to log-in using the username and password that you created for online access to your account 2014 funds will be available in October, 2013, date and time is TBD

17 Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel Get set and go Go to www.FPL.com/solarrebates Select the program youll be applying for 18 Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel PV Checklist

The FPL Rebate Certificate with the FPL customers signature.(can be downloaded at www.FPL.com/solarrebates ) A signed purchase agreement contract for the purpose of the photovoltaic system A document showing the anticipated annual electric production of the proposed system using the PVWatts-1 calculation Digital photos of the installation

Digital photos panel nameplate(s) (sticker located behind the panel that specifies the wattage of the panel) A copy of the contractors invoice Net-metering application A signed Net Metering Interconnection agreement

A copy of the final passed permit, indicating the date the permit was applied for and the date it passed inspection. Permit issued date must be after reservation approval date If your PV system is Tier 2 or 3, proof of insurance 19 Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel PV Checklist

20 Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel Solar Water Heating Checklist 21 The FPL Rebate Certificate with the customers signature; A signed purchase agreement contract for the purchase of the solar

water heating system; Digital photos of the installation Digital photos of the solar collector nameplate(s); A copy of the contractors invoice; and A copy of the final passed permit, indicating the date the permit was applied for and the date it passed inspection. Permit issued & passed date must be after reservation approval date Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel Solar Water Heating Checklist 22 Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel

Summary All information, including Program Standards, are available on www.FPL.com/solarrebates Reservations must be reserved through your online account at www.FPL.com If you do not have online access to your account, register for it before the scheduled solar launch in October, date TBD Obtain a building permit and have the contractor you choose and hire build a system that meets all program standards and requirements When construction is complete, fill out the rebate certificate and provide all required documentation to FPL You will receive the rebate six to eight weeks after your documentation is approved

23 Proprietary & Confidential Information, Attorney-Client Communication / Attorney Work Product Prepared at the Direction of Legal Counsel Know Your Solar Rights George Cavros Energy and Environmental Law Attorney Southern Alliance for Clean Energy

Solar Installations and Insurance Coverage Robert Foote & Susie Krix Furman Insurance Insurance Coverage Essentials for Commercial Building Owners with PV Systems Presenter: Rob Foote, Insurance Advisor/Partner Susie Krix, Insurance Advisor Frank H. Furman Inc., Pompano Beach, Florida January 25 - 26, 2013

26 Who are We? 50 years of insurance and risk management advise to corporations and property owners in Florida The Furman Agency, is a Top 20 Agency as reported by SFBJ. 27 Insurance Coverage Essentials for

Commercial Owners Solar Systems Replacement Cost insurance coverage provision reduces negative financial impact to building Owner, in the event of a Wind or a severe Fire Loss, that may cause severe damage to PV System Replaces Building/PV Equipment New for Old PV= Photovoltaic (PV) 28

Co-Insurance Impact The insured value of the Building must include the replacement cost of the (PV) system If insurance policy requires 90% co-insurance, then insured value of building and PV system must equal 90% todays of replacement value i.e. Building value including PV investment is $1 Million: A major wind event occurs causing a roof blow

claim The property Owner carries $500,000 of insurance coverage then at settlement time = $0.50 on the Dollar 29 Stored Materials? Partially installed PV System Who is responsible? Contractual Risk Transfer Building Owner must either protect the PV on the first party policy insurance policy or contractually transfer risk to PV installer. Potential Exposure Who replaces partially completed (PV) System in the event of an electrical fire during the course of installation? Must address contractually

i.e. building Owner may insist on the PV installer to accept Risk until the system is put to intended use 30 Installation Floater Protects the PV System while on site Who is responsible pays to protect PV equipment? Mounting System Panels Inverters

Does PV Contractor have a Blanket or site specific Installation Floater? 31 Solar System Performance Guarantees Who guarantees the Output? Panel manufacturers warranty How proven and financially stable is the panel manufacturer? PV Contractor/Installer Can a family owned PV contracting firm absorb the efficiency guarantee risk on their balance sheet? 32 Key Components of efficiency

guarantees Identify Percentage of output anticipated/guaranteed to building Owner i.e. 80%, 90% etc. What is financial remedy/consequence to the PV installer/Design firm if output does not reach contractually guaranteed levels? 33 Energy efficiency Guarantees - An emerging exposure for insurance industry, Installer must qualify Balance sheet strength of PV installer Completion track record/experience Time tested PV Components i.e. inverters, panels, auxiliary equipment etc.

Expertise of Design/Engineering firm The number of years of the Guarantee Maintenance and Monitoring of System 34 General Risk Management Recommendations for Building Owners that are contemplating a PV Project Building owner must have a formal written contract with PV installer, transferring risk (away from Owner) to the Installer Invest in Legal Council to draft your contract and do not sign Installers Contract Indemnification Provisions Hold Harmless Provisions Sample Insurance requirements for the PV Contractor: $1 Million General Liability including completed operations/products $1 Million Workers Compensation protection for falls, etc.

$1 Million Automobile Protect Tenants/General Public from Auto Exposure Installation Floater for value of PV system 35 Protect your Home and Control Personal Insurance Cost Solar Energy Systems and Homeowners Insurance Susie Krix Manager Personal Lines Frank H. Furman, Inc. 36

Insurance Most Homeowners Policies already have Solar System coverage included in their Homeowners Policy You should contact your agent if a Solar System is installed and discuss: Value Coverage Increase 37 Insurance Homeowners have the duty.. In case of damage to the solar

system, due to wind or other hazards, to protect property from further penetration damage For coverage to apply Solar System must be attached to the home 38 Controlling the cost of What is the most critical item? insurance Mitigation Inspection

Roof Florida Building Code Windstorm Protection Impact vs. non-Impact Make sure Inspector sees enhancements Homeowner should receive copies of inspection and 39 Rob Foote, Commercial Insurance Advisor Susie Krix Personal Insurance Advisor Frank H. Furman Inc. 1314 E. Atlantic Blvd. Pompano Beach, FL 33060 800-344-4833

Corporate Insurance Homeowners Insurance Bonds Risk Management OSHA Compliance Employee Benefits Programs 40 Finance Solutions for Your Solar Project Wolfgang Beaugrand MAGE Solar Inc. & Florida Alliance for Renewable Energy Board member Finance Solutions for Your Solar Project Wolfgang Beaugrand, MAGE SOLAR USA (Southeast Regional Sales Manager) & Florida Allicance for Renewable Energy (Board Member)

I want Solar today! How do I pay for it? Financing Your Solar PV System Residential When considering purchasing a Solar PV System, there are several financial considerations. What is your budget? System size will be affected your energy consumption but also

buy only what you are comfortable paying. You have the option of cash, loan or lease (only available in some states). Loan examples include: 10-Year or 20-Year FHA Home Improvement Loans, 30Year Refinance Options, and always check with your local bank for finance solutions. Florida Only - Smart Investment in Solar (SIS): 20-year loan for pre-designed residential MAGE SOLAR Solar Systems Leases vary depending on state and installer, but always read the details for the end of the lease do you own, owe FMV (fair market value), or will the array be removed (at your expense or installers)? When you purchase your own Solar PV System, whether by cash or loan, you are eligible for a 30% Income Tax Credit (form 5695). Some states also offer a State Tax Credit. Some utilities offer a rebate or net metering program. 44 SIS Kit Options

All Kits are designed using the MAGE 240 / 6 PL US AC Module powered by a SolarBridge microinverter and utilizing MAGE SYSTEMTEC racking for wind loads of 120 mph* (160 mph wind load available at additional cost). 2.88kW (SIS 3-120 or SIS 3-160) Two rows of six are standard design 4.8kW (SIS 5-120 or SIS 5-160) Two rows of ten are standard design 7.2kW (SIS 7-120 or SIS 7-160) Three rows of ten are standard design 10.08kW (SIS 10-120 or SIS 10-160) Three rows of fourteen are standard design

Transition cables, cable clips, Power Manager (AC Module) and other BOS are included in each of the standard designed kits for a shingled pitched roof. Other roof structures are available at additional fees. 45 30% Federal Income Tax Credit Available 46 Compare Financial Options - Residential Example: Residential System Value $36,000 gross Current bill $200/mo FICO 650 own, 700+ rent/lease 20 Year Term

A Purchase from savings and cash or home equity B 20+ FHA Title 1 Home Improvement Loan ~6.95% C Rent/Lease Equipment Monthly $0

$195 $170 (~3% increase annually) Total Paid $36,000 $46,800 $52,924 Total Interest pd $0

$21,600 $0 Incentive $0 $0 $0 Fed ITC Tax credit - $10,800 - $10,800

$0 Interest tax deduction $0 - $21,600 (dependant on tax rate) $0 Total spent $25,200 $46,800

(minus interest tax deduction) $52,924 Total Owed after payments $0 $0 *$0 to $52,924 (or FMV or removal) Asset Value gain/ loss Home value + System value gain

Home value + System value gain Lien will be placed on home until end of lease Ownership Yes Yes No Finance Options For Commercial End Users* Commercial

Financing* Basic Qualifications > 5 years Terms** Business existing > 5 years 5-12 years Business existing > 3 years 2-7 years Business existing

3 - 7 years 10 (special credit models) Tax Lease Options Loan Amount minimum maximum Lease Amount minimum maximum Yes No $0

$10,000,000 $50,000 $10,000 $5,000,000 Flexible $500,000 $10,000,000 Funding Amount 100% Processing Fee N/A

100% PPA Equity $50,000 $5,000,000 No upper limit $20,000 No upper limit 100% N/A $500

Credited back upon funding *Financing available for MAGE SOLAR PV-Systems only. Specific details should be discussed with REEL. **Dollar amount financed determines terms available. Options available Finance Options for Municipalities and Schools Credit Ratings AA or AAA rated Lease Terms

3 to 30+ Years** Lease Amount Minimum $500,000 Maximum $400,000,000 Buy-Out Option Yes Funding Amount

100% Availability All 50 States Tax-Exempt Lease Yes Tax-Exempt Bonds Yes Taxable Bonds Yes

*Financing available for MAGE SOLAR PV-Systems only **Dollar amount financed determines terms available 49 Finance Options for Installers Program Details Dealer Repayment Terms: 30 or 60 day terms available to qualified installers Payment due in full on day 30 or 60 50 MAGE SOLAR Finance Solutions Partners*

* Financing available for MAGE SOLAR PV-Systems only MAGE SOLAR Are you ready? Let's go! Contact us: MAGE SOLAR Customer Service (877) 311-6243 Toll-free (478) 609-6640 Main Office (478) 275-7685 Fax [email protected] www.magesolar.com 720 Industrial Boulevard Dublin, Georgia 31021 U.S.A.

Overview of Tax Equity Financing Structures for Solar Projects Kamran Idrees Chad Bourne & Parke, LLP Project Financing: the Big Picture Kamran Idrees [email protected] More than one source of capital may be needed to finance a project. Five main capital tiers from least to most expensive:

Free money Government-guaranteed debt Straight debt Tax Equity True Equity Tax Equity The federal government currently pays a significant portion of a renewables projects cost, in the form of tax subsidies.

The main subsidies are: production or investment tax credits; and Depreciation/bonus depreciation. Few developers can use the subsidies efficiently. There are at least 20 active tax equity investors with a number of additional smaller players doing one-off deals. Yields are all over the map from 7% to 22.5%, with a significant premium still in leveraged deals. Depreciation only? Partnerships

Partnership Structures are flexible vehicles designed to achieve multi-investor business goals. Earn a return on their investment from a combination of three sources: Project cash flow Tax credits Tax losses (i.e., depreciation) early in the deal These three revenue streams can be allocated (or distributed) to the partners in different ratios throughout the life of the project. First Period: Investor is allocated 99% of income (loss) and credits

Developer receives all of the cash until it recovers its investment, or a cutoff date Partnership Structure Investors Developer Class A Class B Second Period: Investor is allocated 99% of income (loss) and

credits Investor receives 99% of the cash Project Company LLC Until a pre-negotiated ATIRR is achieved by Investor Third Period: Once the ATIRR is achieved, Developer receives 95% of project cash flows and profits and Investor receives balance of project cash flows and profits Energy Offtaker

Sale-Leaseback An alternative to the partnership structure is to sell and lease back the project. The tax equity investor claims the tax benefits and passes through part of the value in the rent it charges the developer for use of the project. Leases only make sense if one pushes out the lease term to 80% of the expected life and value of the project. The developer must pay full value at the end of the lease if it wants to keep the project. A sale-leaseback may make more sense in cases where the project is expected to be worth significantly more at the end of construction than it cost to build.

Basic Lease Structure Investor (Owner Participant) Lender Equity Loan Repayment of Loan $ Owner/ Lessor Equity Return

Purchase Price Developer Rents $ Assets Lease Pass-through Think of a yo-yo. First, the developer leases the project to a taxable investor for a term of years (e.g., 5 years). Then, the parties elect to pass any tax benefits to or grants the investor. Lastly, when the lease terminates, the developer pulls

control of the project back at zero cost. Note: at no time does the developer lose ownership. Lease Pass-through Developer Lease Investor Rent $$ Claims depreciation and retains ownership

Claims Tax Credits/Grants Market Update Sequestration Cash Grant Payouts Developer fees Tax reform ITC extension Project Financing: the Big Picture Kamran Idrees [email protected]

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