RENU ENERGY

Transcription

RENU ENERGY

RENU ENERGY
Solar Business Plan
2011-2012
Confidential and proprietary information of Renu Energy, Inc.
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TABLE of CONTENTS
EXECUTIVE SUMMARY
Company Highlights
Business Description
Management
Company Background
Mission Statement
Marketing, Sales & Customers
Competition
Funding Requested
Financial Projections
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MARKET OVERVIEW
The Opportunity
Our Solution
Technology Partnership
Our Products and Services
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EXECUTIVE TEAM
Management Team
Board Members
Contacts
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BUSINESS STRATEGY
Competitive Advantages
Risks
Future Business
Exit Strategy
Summary
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PHOTOVOLTAICS (PV)
Overview
Current Development
Worldwide Installed Photovoltaic Totals
Applications of PV Solar
Financial Incentives of PV Solar Projects
Environmental Impacts
Energy Payback Time & Energy Returned on Energy Invested
Advantages of PV Solar
Economics of PV Solar
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POLYCRYSTALLINE SILICON – USES IN THE GLOBAL MARKET
Solar Panels
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RENU ENERGY SOLAR ARRAY DEVELOPMENT.
APPENDICES
Project Timeline Per Site
Financial Proforma
Current Solar Project Pipeline
Location Map of Solar Project Pipeline
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COMPANY HIGHLIGHTS
Contact Information
Renu Energy, Inc.
401 Mathers Lane
Branchburg, NJ 08853
NJ office: 908-425-0089
CA office: 877-876-7421
FL office: 941-244-7907
www.renuenergy.com
[email protected]
Management Team
Larry Bestor Chairman/CEO
David Baker President
Neal Zislin VP Engineering
Industry
Solar / Renewable Energy
Company Resources
3 Offices
< 10 Employees
Year Founded
2007
Type of Entity
C-Corporation
EXECUTIVE SUMMARY
Business Description
Renu Energy’s vision is that solar energy will become a significant distributed source of
electricity for energy consumers in the future. Decentralized renewable energy is now
recognized as being essential towards achieving key national objectives and interests for
improving the quality of our lifestyle resulting from economic stability, affordable access
to energy resources, environmental sustainability, upholding foundation of national
values without compromise, reduced global military presence and alignment of
government positions and programs to country’s values. Renu Energy removes the
primary obstacle for commercial energy users by providing the capital investment and
construction expertise required, but at no initial capital investment or annual equipment
maintenance cost to the property owner. Renu Energy secures low cost access to real
estate (rooftops or land) from property owners and offers benefits to property owners with
substantial offsets to electricity costs up to 100%. Renu Energy retains all rights to
rebates, investment tax credits, solar renewable energy credits and all other state and
federal financial incentives plus the cash flow resulting from sales of excess electricity.
Renu Energy secures a perpetual or long-term easement from the property owners for
solar-generated electricity. Renu Energy keeps abreast of commercially available
technologies that enhance the performance of solar arrays and applies its technical
judgment in designing the optimal systems for the particular applications. Renu Energy
partners with installers, photovoltaic panel manufacturers, financiers and property owners
to secure cost effective, commercially viable solar systems. Our contracted solar backlog
has grown substantially from 2MW ($10 million) to 10MW ($50 million) in the last six
months. We expect similar growth in the next 6-9 months provided we have the proper
investment banking partner(s).
Management
Renu Energy’s management team has a deep commitment to expanding the adoption of
renewable energy in general and solar in particular in support of improving people’s
lifestyles through the use of sustainable energy resources. Three partners of the
Company’s management team have over 60 years of combined energy sector-specific
experience and had shared business relationships in the renewable energy and software
marketing arenas prior to joining together in Renu Energy. Bios of the management
team can be found in the body of the business plan and on our company website.
Company Background
Renu Energy was founded in 2007 with its charter of being a project developer and integrator of renewable energy
technologies. Renu Energy’s primary office is located in Ventura, CA with satellite offices in New Jersey and Florida.
The company is focused on decentralized solar-generated electricity in those markets where the public policy,
financial incentives and regulatory landscape provide the best economic incentives for investments in solar systems.
We have identified New Jersey as the primary market in which to establish our commercial presence. The enactment
of a Solar Renewable Portfolio Standard that imposes significant financial penalties on electricity providers serving
the retail market that do not achieve compliance with electricity production from solar generation milestones creates
the headroom for attractive investments in solar. Renu Energy continues to evaluate other markets in North America
that are fertile for solar investments. Renu Energy has and will continue to develop partnerships with installers, solar
equipment manufacturers, property owners and financiers in bringing these solar projects to fruition. Renu Energy
had completed the design of a $50 million, 11 megawatt solar project for a major, multi-national manufacturing
company.
Mission Statement
Enable the commercial and residential consumer to enjoy the benefits of receiving electricity from a renewable
resource by removing the primary obstacle of an upfront investment in the solar system.
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Marketing, Sales and Customers
The potential market for solar system installations is $1-2 trillion based on the installed electricity generating capacity
operating in the US (EIA, 2007). The total capacity of solar-generated electricity through 2009 is approximately
2,100 MW (SEIA) which represents about 0.2% of peak summer electrical demand. The federal government through
grants and loans under the American Recovery and Reinvestment Act is stimulating research, development and
commercialization of solar technologies and systems. Several states are offering financial incentives to install solar
systems. Renewable Portfolio Standards (RPS) mandating that solar-generated electricity comprise specified
percentages of overall delivered electricity have spurred the creation of solar renewable energy credits (SRECs) and
a mechanism for generators and suppliers to trade these credits.
Renu Energy has targeted its projects in New Jersey, where an enforceable RPS has been established for solar and
market pricing for solar-generated electricity is buttressed by either alternative compliance payments or by
contractual feed-in tariffs set by the state’s utility regulatory agency. The targeted customer base is the population of
property owners offering large areas of real estate and consuming low amounts of electricity, such as self-storage
and warehouse owners. Benefits to the property owners are a substantial reduction in electricity costs (up to 100%)
which improves the owner’s profitability. Renu Energy earns SRECs from the generation of electricity from solar and
revenue from sales of the excess electricity to the grid. Renu Energy has approximately 10 MW of solar generated
capacity currently under contract with New Jersey property owners.
Competition
Examples of Renu Energy’s current competitors are:
1) self-investing property owners,
2) companies providing turnkey solar systems with financing arrangements such as GroSolar and Recurrent Energy
(recently purchased by Sharp for $300 million.)
3) companies owning and operating solar systems and selling electricity to the property owner or local utility
company under Power Purchase Agreements such as SunEdison.
Access to capital in order to make the investment in solar has proven to be a pervasive barrier to most commercial
property owners. For the segment of property owners that Renu Energy is targeting (large commercial properties with
relatively small electricity usage), the capital investment is comparable to what they might invest in building another
commercial building. Renu Energy’s value proposition is that electricity obtained from the solar system will be
available for free to the property owner, or partially free in combination with pricing that is discounted from their retail
electric rate. The full-range of benefits to a property owner under the Renu Energy solar program entails the
reimbursement of 100% of electrical costs including purchases of electricity from the grid outside of daylight
operating hours. Renu Energy’s selective targeting of qualified (< 5 year or newer) commercial properties enables us
to offer a superior value proposition to the property owner while retaining profitability for Renu Energy and its
investor/ owners.
Funding Requested – Use of Funds
Renu Energy is seeking $20 million of equity to launch its current backlog of solar projects in New Jersey. The
investment may be made as equity in the company, or in the portfolio of solar projects. This initial investment would
be used procure equipment and progress these initial solar projects to operational status plus support operational
expenses of the company. Renu Energy currently has a backlog of nearly10 million watts of solar generation capacity
which will require $50 million of capital investment to become fully operational. There are another 7 million watts (MW)
of capacity undergoing due diligence to become a future addition to the solar project pipeline.
Financial Projections
Fiscal Year
MW DC Capacity
2012
9.5
2013
29.5
2014
49.5
2015
49.5
2016
49.5
Revenue ($MM)
6.6
20.5
34.3
28.1
28.1
EBITDA ($MM)
5.7
17.6
29.5
23.3
23.2
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MARKET OVERVIEW
The Opportunity:
America currently imports over 60% of its oil, nearly double the amount it imported in 1973. Global unrest, coupled
with recent terrorist activity in the US and the Middle East, continues to put America at risk for its energy needs by
jeopardizing its energy supplies. Collateral damage to the health and vitality of the US are diversion of money and
loss of life associated with military operations whose strategy is linked to securing energy supplies, compromising
national values through publicly supporting undemocratically elected regimes whose sovereign countries control
large fossil fuel reserves and debasing US dollar currency due to an unfavorable balance of trade from becoming so
highly dependent on fossil fuels imported from unstable & potentially unfriendly sovereign countries. The combustion
of fossil fuels contributes to increases in mercury, carbon dioxide and other greenhouse gas concentrations in the
atmosphere, the effects of which, over time may create adversity for marine life.
Our Solution:
Renu Energy is striving to make the United States energy self-reliant by providing clean, safe, renewable energy
sources to replace our dependence on fossil fuels. To help meet the country's growing energy needs, Renu Energy
has planned a renewable energy program which is currently being implemented by people and companies all over
the world.
Clean renewable fuels - Renu Energy believes the production and distribution of clean fuels produced in America
are essential to a cleaner environment, and a national energy policy that eliminates the need for foreign wars based
on control of foreign oil and natural gas reserves.
To this end, Renu Energy provides its customers with competitively priced alternative sources of renewable energy
such as solar systems for electricity and heat production. As well, the company plans to sell Renewable Energy
Credits (REC’s) for its solar projects as an integral part of the global economy’s transition to clean, renewable energy.
The company’s primary business growth plans over the next 3 years are contained within this Business Plan. Future
needs for additional capital for growth over the next 3 years include the following:
1) design and engineering of mid-range (1MW-50MW) photovoltaic and solar thermal power projects ($3M)
2) implementation of large scale distributed commercial solar and solar power production agreements (PPA)
with private and public utility customers ($10M-$300M)
Information - Renu Energy provides education, consulting, and informational services for business and government
leaders, and citizens-at-large interested in energy independence.
Technology Partnership
Renu Energy believes it is essential to produce, distribute, and consume energy in environmentally responsible ways.
To this end, the company partners with leading scientists, engineers, and companies around the world who are
pioneers and leaders in renewable energy and alternative fuels. These people include scientists of the University of
Wisconsin, the Foundation on Economic Trends, the National Renewable Energy Laboratory (NREL), and many
other organizations dedicated to developing economically viable, renewable sources of energy.
Renu Energy continuously monitors developments in the major areas of clean, renewable energy, focusing on the
latest technological advances in solar generation, energy storage, biofuels, and hydrogen as viable alternative
energy sources.
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Our Products and Services
Solar Design and Consulting Services - Our primary contribution to the field of alternative energy implementation
has been showing people how to employ integrated design to make efficiency yield expanding returns. We are
playing a key role in speeding transitions to clean, safe, and competitive energy supplies based on distributed energy
resources (decentralized, fuel production and energy production using renewable fuels).
Solar Electrical Generation - The production and use of energy efficiently is a focus of Renu Energy since its
inception. Most of our present activities grew out of a strategy of targeting sectors with the lowest real estate costs,
for which we design, engineer, install and operate commercial solar power plants, and enter into power purchase
agreements (PPA) for sale of clean electrical power to local utility companies or to property owners.
EXECUTIVE TEAM
Management Team
Larry Bestor – Chairman and CEO
Over the past 15 years, Mr. Bestor has been actively involved in a number of industry leading ventures. As founder
or co-founder, Mr. Bestor led the creation of several industry leading, innovative organizations including ATI
Networks, MovieCentral and Renu Energy. His focus has been on pioneering new companies that offer innovative,
breakthrough products that provide consumers more choice, more convenience, and more control. Prior to founding
ATI Networks, he was a financial advisor with American Express Financial Services. Mr. Bestor attended the
University of Wisconsin School of Engineering and Marian College, where he later served on the Marian College
Advisory Board. He also serves as a director of Gulf Coast Preservation Society, a 501c3 activist environmental
organization devoted to protecting the oceans and educating people about issues facing the Gulf of Mexico.
David Baker – President / Chief Operations Officer
Mr. Baker previously served as Director of Manatee Investments and President of Frantech Licensing, an
international technology licensing and import/export company that has completed over $1 billion in sales to Asia and
Europe. He is proficient with marketing on a global level, assisting with business solutions, applications, technology
developments and financial services. Mr. Baker is certified with the Center for International Trade Development,
Export Small Business Development Corp. and the Department of Commerce. He is also a member of the World
Trade Center and has served organizations as governor, president and director. In 1996, Mr. Baker received the
"Outstanding Young Californian" award. Recently he has taken an active role in furthering alternative energy
research by joining an elite group of scientists, engineers, and innovators that are creating ways to make America
energy independent by their participation in Renu Energy.
Neal S. Zislin – VP Chemical Engineering
Mr. Zislin most recently had been Global Director Manufacturing Engineering for Firmenich, a $2.5 billion company
that is one of the world’s top two fragrance and flavors producers, with responsibility for identifying opportunities for
implementing energy efficiency improvements, renewable energy technologies and maintenance excellence
programs. Prior to this role, Mr. Zislin had been Regional Director of Engineering for Firmenich having responsibility
for five North American manufacturing sites. He had been involved in identifying and implementing process
optimization, introducing new products from development into manufacturing, transitioning production-scale
processes from one site to another, assisting Production in troubleshooting operational problems, recommending and
implementing yield and throughput improvements, designing, managing and constructing new or modifying existing
process units, ensuring high equipment reliability through implementing a preventative/predictive maintenance
program and root cause analysis of equipment failures, and sustaining an acceptable level of risk management
through conducting process hazard reviews, documenting management of change and overseeing compliance to
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process safety management. Prior to Firmenich, Neal joined Degussa Corporation Electronics Materials Division as
Director of Engineering having responsibility for all engineering functions within the South Plainfield manufacturing
plant including production support, process optimization and process design for new unit operations and products.
While he was at Degussa, Neal also served as Director of Quality, where he was responsible for driving compliance
with ISO 9000 certification requirements and spearheading continuous improvement programs. Neal started his
career with British Petroleum (BP) and has been engaged in challenging and rewarding assignments in polymers
process development, process safety, alternate energy business development, technology portfolio management,
pilot plant operations management and refining and petrochemical process development management.
Neal Zislin graduated from Cornell University with a BS degree in chemical engineering and earned a masters
degree in chemical engineering and an MBA with concentrations in manufacturing operations and marketing both
from Case Western Reserve University.
Board Members
Diego Belmonte – Solar Project Development Advisor
Mr. Belmonte founded Environmentally Sound Energy (ESound Energy). ESound Energy provides specialized
consulting services for developing and financing renewable energy projects throughout the world. Before founding
ESound Energy, Diego was President and CEO of Fotowatio USA, the U.S. subsidiary of Fotowatio Renewable
Ventures (FRV), one of the world’s leading solar energy companies, based in Spain. Diego helped establish FRV’s
U.S. operations which owns over 100 megawatts of solar energy projects and oversaw business strategy where he
participated in securing key partnerships, including among others General Electric Financial Services. Previously,
Diego was at the Inter-American Development Bank, a Washington D.C.-based international financial organization
where he worked on public and private financing infrastructure projects, including in the renewable energy sector.
Diego holds a M.A. in Environmental Engineering obtained in Spain, and a B.S. in Environmental Sciences from the
University of California, Santa Barbara.
Roger Efird – North American Solar Systems Sales Advisor
For the past 20 years, Mr. Efird has been actively involved in solar module sales, distribution, and marketing. Mr.
Efird is current President of Suntech America and also serves on its board of directors. Prior to becoming head of
Suntech America, Roger was responsible for the successful rollout of BP Solar’s worldwide marketing. Mr. Efird is a
well known veteran of the solar energy industry with prior business experience in senior management, marketing,
strategic planning, business development, and sales. During his tenure with BP Solar, Roger was responsible for
negotiating BP Solar's successful supply agreement with Home Depot. In his role as President of Suntech America,
Roger has grown annual US sales.
Dr. Mark Daugherty – Bio-fuels Advisor
Dr. Daugherty is one of the country's leading biodiesel fuel scientists, with over 25 years of experience in energy
research and development. Prior to joining the Advisory Board of Renu Energy, Dr. Daugherty served as the CEO of
Virent Energy Systems, where he led the team that set up a new reforming technology for the production of hydrogen
from biomass. Prior to Virent, Mark was the Chief Scientist at Enable Fuel Cell Corp. where he supervised the
development of fuel cell technologies licensed from Los Alamos National Laboratory. Earlier he served as a Principal
Investigator at Los Alamos National Laboratory and as R&D Manager at Superconductivity, Inc. Mark has over 25
technical publications. He holds a PhD in Mechanical Engineering from UW Madison and a JD from Boalt Hall School
of Law at UC Berkeley.
Contacts
Florida office: (941) 244-7907 | California office: (877) 876-7421 | E-mail: [email protected]
Website: www.renuenergy.com
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BUSINESS STRATEGY
Competitive Advantages
Our initial focus is to establish a competitive position as a solar developer, owner and operator of solar systems in
the New Jersey market. New Jersey presently offers the most attractive financial incentives for investment in solargenerated electricity. New Jersey has enacted Renewable Portfolio Standards for class 1, class 2 and solar
renewable energies. Particularly with respect to solar, significant alternative compliance payment penalties have
been enacted to foster investments in solar-generated electricity by either the power producers who serve retail
customers or third party developers or property owners from whom power producers can purchase credits. The
milestone quantities of electricity that must originate from solar-generation escalate from 300 gigawatt-hours
representing 0.5% of forecasted total electricity demand to nearly 5,300 gigawatt-hours representing 5% by 2026.
Alternative compliance payments started at $700/million watt-hours and decrease by 2.6%/year until 2016, at such
time the payment schedule will be extended. The valuation of the solar renewable energy credits (SRECs) are driven
by the supply and demand of the marketplace with a ceiling price set by the alternative compliance payment. By the
end of 2010, nearly 300 MW of solar-generated electricity capacity have become operational. Over the last two years,
there has been a significant increase in announced solar capacity residing in the pipeline. It is expected that within
the next 1-2 years, the supply and demand balance for SRECs to comply with the RPS milestones will have reached
equilibrium. Once this dynamic has been achieved for three consecutive years with decreasing market settlement
pricing for SRECs, the milestone targets of future years will be ratcheted upward by 20%.
NJ is a net importer of electricity into the state (approximately 30%) and has experienced bottlenecks in the
transmission trunks serving NJ from surrounding states and the Midwest. The electricity being imported into NJ is
generated primarily from coal and nuclear as the primary resources. Electricity produced from coal creates increased
discharges of toxic contaminants and greenhouse gases. Investments to enlarge the number of conductors on
existing transmission circuits or establish new transmission networks requires significant capital investment,
acquisition of environmental permits and, in many cases, precipitates tension with local communities over the
unaesthetic appeal of transmission towers and sub-stations and relinquishment of right-of-ways to accommodate
new transmission networks. The political and environmental climate in New Jersey is steadfastly supportive of
continued investments in capacity generated from solar and other renewable energy resources.
Renu Energy’s objective has been to secure the least expensive real estate on which to install our solar systems.
We have accomplished that by targeting a specific segment of commercial operations with relatively new (< 5 years
old), level rooftops and in which the demand for electricity is relatively small. The inducement to secure access to
the rooftop ranging from 25 years to perpetuity is to offer the property owner free electricity through the first 15 years
and then to sell the electricity at a discount to retail under a Power Purchase Agreement (PPA) going forward.
Commercial warehouse-type buildings satisfy these criteria and we have secured over 1 million square feet of rooftop
under contract from property owners. This equates to a pipeline of 10 MW of solar-generated electricity capacity.
The pipeline of projects is located across three EDC territories in the northern, central and southern areas of NJ.
Growth potential of this business will be realized from targeting other segments of commercial operations that share
similar building rooftop characteristics such as distribution warehouses.
Renu Energy will provide free electricity to the property owners in the least expensive manner by coupling the
generation of this portion of the electricity to net metering. Approximately 10-15% of the total solar generated
capacity planned to be installed for this initial 10 MW will be earmarked for the property owner and delivered under
the net metering program. Where the property owner may have multiple utility accounts on the same property, Renu
Energy will consolidate them into one utility account to maximize the leverage of the net metering program. The
remaining 85-90% of the solar generated capacity is sold under PPA or into the wholesale market. SRECs are
earned on 100% of the electricity that is generated from Renu Energy’s solar systems. The design of the solar arrays
will permit flexibility in switching a percentage of the installed capacity between disposition under net metering and
PPA/wholesale to accommodate future changes in the demand for electricity by the property owner. Any electricity
demand by the property owner in excess of its baseline (within a reasonable range) will be sold by Renu Energy
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under a PPA. Demand that exceeds the upper bound of which Renu Energy is willing to provide from the solar array
will be purchased by the property owner from the EDC or third party LSE.
The permits to interconnect must be granted by the local electric distribution company (EDC) and the organization,
PJM, which administers and controls the orderly movements of electricity through the regional transmission network
that includes New Jersey. Procedures have been established that guide the interconnection permit process. The
lead time for obtaining an interconnection permit from the EDC spans about 2 months. The lead time for obtaining
an interconnection permit from the PJM may span from 4-6 months depending on the entry point within the queueforming cycle. Given the scale of Renu Energy’s projects at each property location, 150-700 KW, it is not expected
that any material upgrades to the EDC’s distribution network will be incurred. The expectation is that the
interconnection requests will be subjected to a standard level of technical review on the potential impact to the
distribution network with respect to operational reliability, safety and energy quality.
Earning SRECs will occur based on the number of watt-hours of electricity that are generated. One SREC equals
one million-watt hours or one thousand kilowatt-hours. The General Attribute Tracking System (GATS) is the
designated authority by the NJ Office of Clean Energy to oversee and facilitate the crediting and debiting of SRECs
among its members. Renu Energy intends to register as a member of GATS to transact SREC sales. Renu Energy
also intends to hedge the valuation of its SRECs by entering into contracts with load serving entities (LSEs) for sales
of SRECs at negotiated pricing over 3-10 year periods to mitigate the uncertainty of the market. These contracts
may be facilitated through direct negotiations between Renu Energy and LSEs, through intermediary brokers or by
participation in periodic auctions conducted by the EDCs.
We have intentions of establishing solar installation projects in other locations offering attractive financial incentives
such as Ontario, Canada and several states which are in the process of enacting solar-generated electricity
standards. We are projecting being able to complete 20 MW/year of installed solar capacity. Our limitation to
realizing this plan is project financing.
Risks
Market Valuations of SRECs – Sale of SRECs constitutes a significant contribution to revenues. The risk is the

market driven price based on the relative supply and demand for SRECs to achieve RPS compliance by the
LSEs. Entering into a 3, 5 or 10-year hedging position definitively quantifies a significant percentage of the
revenue stream.
Interconnection Permits – The risk is that the proposed interconnection point may be a distribution line that, with
the affixed generation, would exceed the bounds that define safe and reliable operability today. The resolution
would entail the developer having to make an investment to upgrade that circuit to accommodate the incremental
generation capacity. The scale of the solar capacities intended for each individual property is quite modest in
comparison to the capacity of the distribution circuit. It is expected that none of these projects will trigger such a
finding.
Market Valuations of Electricity – Second contributor to revenues is the sale of electricity. Renu Energy has
modeled its financial position based on selling excess electricity into the wholesale market at the prevailing local
marginal pricing. This is the most conservative valuation that is realistically to be encountered. Renu Energy will
be pursuing PPAs with LSEs and, if successful, expects to realize a greater value for the electricity.
Performance of Solar Arrays – Renu Energy has modeled the quantity of electricity to be generated by the solar
arrays based on key input parameters of latitude, azimuth orientation, degree of shading and the incorporation
into the solar array design of performance enhancing third party equipment. The technologies for all of the
selected equipment are commercially proven. The performance of the solar panels is warranted by the
manufacturers for 25 years and the third party manufacturers warrant their equipment for 15 years.
Local Building Authority Permits – Conversations with numerous local building authority inspectors have
confirmed that compliance to the National Electrical Code requirements and certifications from structural
engineers on the rooftop loadings are sufficient to receive construction permits. Renu Energy has received
verbal confirmations from several of the building design companies that its intended solar array design can be
accommodated by the building rooftops. Renu Energy intends to install only electrical equipment that has
received the appropriate certifications from the IEEE and national standards code organizations recognized by
OSHA.
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Future Business
Once a solid financial position has been created from the ownership, operation, or sale of these solar systems, Renu
Energy intends to exploit the knowledge of its research on emerging technologies in the renewable energy sector.
Renu Energy will be targeting to secure near-commercial game-changing technologies through exclusive licenses
that it can further develop and commercialize. The projected result is that Renu Energy would generate a competitive
advantage with renewable energy technology offering enhanced energy storage, production of bio-fuels from waste
cellulosic feedstocks or electricity from biomass conversion.
Exit Strategy
There are several possible exit strategies which Renu Energy would entertain within 3-5 years. By continuing our
success in enlarging the project portfolio, Renu Energy grows to a scale that makes it an attractive candidate to be
acquired by a larger competitor or utility company. Another option is that Renu Energy elects to initiate an IPO and
become a public company. A third option is for Renu Energy to sell its entire holdings to a buyer who desires to
expand into the solar arena.
Summary
America’s economy is dependent on abundant, affordable energy. Federal and state mandates for renewable energy
imposed on utilities and other companies with large carbon footprints have created a multi-billion dollar opportunity
for Renu Energy, its customers and its investors. Our air and water, as well as the health and security of our nation’s
citizens depend upon its migration to clean forms of energy. Renu Energy is focused on continuing to play an
important role in the nation’s migration from imported fossil fuels to its use of clean renewable sources of energy.
Like many people, including America’s new President-elect, we believe America’s energy independence is essential
to insuring America’s security and restoring its economic prosperity.
Our vision for America’s energy future and for Renu Energy’s role in that future has been an ambitious one from the
start and continues with the new administration in the US committed and focused on the growth of renewable energy
sources away from fossil fuels. Beginning with bio-fuels distribution and design of large scale solar based power
systems, Renu Energy’s entré into the renewable energy business was, continues to be focused on the sale of
products and technologies that are both environmentally sustainable and profitable from a business standpoint. Our
continuing focus is on driving down operating costs in order to deliver maximum value to our customers and highest
return to our shareholders.
We believe that by continuing to design large scale solar power systems for corporate users and utility companies,
there are valuable profit opportunities for Renu Energy. Specifically, by designing and engineering affordable solar
based energy systems for utilities and businesses, as well as providing the essential energy storage devices for
renewable energy systems, Renu Energy aims to become an integral supplier and distributor in the renewable
energy value chain over the coming decade.
Last, by creating more jobs for American’s and selling raw materials to solar manufacturers, an investment in Renu
Energy becomes an investment in economic stability for the USA and its citizens. We believe you will agree that an
investment in Renu Energy is a sound investment in America’s clean energy future.
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PHOTOVOLTAICS
Overview
Photovoltaics (PV) is the field of technology and research related to the application of solar cells for energy by
converting sunlight directly into electricity. Due to the growing demand for clean sources of energy, the manufacture
of solar cells and photovoltaic arrays has expanded dramatically in recent years.
Photovoltaic production has been doubling every two years, increasing by an average of 48 percent each year since
2002, making it the world’s fastest-growing energy technology. At the end of 2009, according to European
Photovoltaic Industry Association, cumulative global installed capacity was 22,900
megawatts. Roughly 90% of this generating capacity consists of grid-tied
electrical systems. Such installations may be ground-mounted (and sometimes
integrated with farming and grazing) or built into the roof or walls of a building,
known as Building Integrated
Photovoltaic or BIPV for short.
Financial incentives, such as
preferential feed-in tariffs for solargenerated electricity, and net
metering, have supported solar PV
installations in many countries
including Australia, Germany, Japan,
and the United States. 19 states plus
DC within the US have renewable
portfolio standards with specific
targeting of solar energy.
Photovoltaic 'tree' in Styria, Austria
Photovoltaics are best known as a method for generating solar power by using solar cells packaged in photovoltaic
modules, often electrically connected in multiples as solar photovoltaic arrays to convert energy from the sun into
electricity. To explain the photovoltaic solar panel more simply, photons from sunlight knock electrons into a higher
state of energy, creating electricity. The term photovoltaic denotes the unbiased operating mode of a photodiode in
which current through the device is entirely due to the transduced light energy. Virtually all photovoltaic devices are
some type of photodiode.
Solar cells produce direct current electricity from light, which can be used to power equipment or to recharge a
battery. The first practical application of photovoltaics was to power orbiting satellites and other spacecraft, but today
the majority of photovoltaic modules are used for grid connected power generation. In this case, an inverter is
required to convert the DC to AC. There is a smaller market for off-grid power for remote dwellings, roadside
emergency telephones, remote sensing, and cathodic protection of pipelines.
Cells require protection from the environment and are packaged usually behind a glass sheet. When more power is
required than a single cell can deliver, cells are electrically connected together to form photovoltaic modules, or solar
panels. A single module is enough to power an emergency telephone, but for a house or a power plant the modules
must be arranged in arrays. Although the selling price of modules is still too high to compete with grid electricity in
most places, significant financial incentives in Japan and then Germany and Ontario, Canada triggered a huge
growth in demand, followed quickly by production.
Perhaps not unexpectedly, a significant market has emerged in urban or grid-proximate locations for solar-powercharged storage-battery based solutions. These are deployed as stand-by systems in energy deficient countries like
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India and as supplementary systems in developed markets. In a vast majority of situations such solutions make
neither economic nor environmental sense, any green credentials being largely offset by the lead-acid storage
systems typically deployed.
The EPIA/Greenpeace Advanced Scenario shows that by the year 2030, PV systems could be generating
approximately 2,600 TerraWatt hours of electricity around the world. This means that, assuming a serious
commitment is made to energy efficiency, enough solar power would be produced globally in twenty-five years’ time
to satisfy the electricity needs of almost 14% of the world’s population.
Current Development
The most important issue with solar panels is initial capital cost (installation and materials). Newer alternatives to
standard crystalline silicon modules include casting wafers instead of sawing, thin film (CdTe, CIGS, amorphous Si,
microcrystalline Si), concentrator modules, 'Sliver' cells, and continuous printing processes. Due to economies of
scale solar panels get less costly as people use and buy more — as manufacturers increase production to meet
demand, the cost and price is expected to drop in the years to come. By early 2010, the average cost per installed
watt for a residential sized system was about $5.50 to $7.00, including panels, inverters, mounts, and electrical items.
In 2006 investors began offering free solar panel installation in return for a 25 year contract, or Power Purchase
Agreement, to purchase electricity at a fixed price, normally set at or below current electric rates. It is expected that
by 2012 over 90% of commercial photovoltaics installed in the United States will be installed using a power purchase
agreement. The current market leader in solar panel efficiency (measured by energy conversion ratio) is SunPower,
a San Jose based company. Sunpower's cells have a conversion ratio of 23.4%, well above the market average of
12-18%. However, advances past this efficiency mark are being innovated by engineers at MIT and the California
Institute of Technology, and efficiencies of 42% have been achieved at the University of Delaware and at Spectrolab,
a division of Boeing.
Worldwide Installed Photovoltaic Totals
World solar photovoltaic (PV) market installations reached a record high in 2009. The three leading countries
(Germany, Japan and the USA) represent nearly 89% of the total worldwide PV installed capacity. Germany was the
fastest growing major PV market in the world during 2006 and 2007, when over 1.3 Gigawatts of peak PV power was
installed. The German PV industry generates over 10,000 jobs in production, distribution and installation. By the end
of 2006, nearly 88% of all solar PV installations in the EU were in grid-tied applications in Germany. The balance is
off-grid (or stand alone) systems. Photovoltaic power capacity is measured as maximum power output under
standardized test conditions (STC) in "Wp" (Watts peak). The actual power output at a particular point in time may be
less than or greater than this standardized, or "rated," value, depending on geographical location, time of day,
weather conditions, and other factors. Solar photovoltaic array capacity factors are typically under 20%, which is
lower than many other industrial sources of electricity. Therefore the 2006 installed base peak output would have
provided an average output of 1.2 GW (assuming 20% × 5,862 MWp). This represented 0.06 percent of global
demand at the time. The largest markets for future growth of solar over the next decade are expected to be the
United States, China, and India.
Applications of PV Solar
PV Power Stations
Solar array at Nellis Air Force Base. These panels track the sun in one axis.
The 14 MW Nellis Solar Power Plant is the largest solar photovoltaic system in North
America, and is located within Nellis Air Force Base in Clark County, Nevada, on the
northeast side of Las Vegas. The Nellis solar energy system will generate in excess
of 25 million kilowatt-hours of electricity annually and supply more than 25 percent of
the power used at the base.
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At left is the Dahej, India solar thermal power system for electrical and
steam power production designed by Renu Energy adjacent to the new
Firmenich chemical plant in Dahej, India. The Firmenich-India plant will
produce 3 million watts of electricity and 4 million watts of steam when
completed.
Several large photovoltaic power plants were completed in Spain during
2008: the Parque Fotovoltaico Olmedilla de Alarcon (60 MW), Parque Solar
Merida/Don Alvaro (30 MW), Planta solar Fuente Álamo (26 MW), Planta
fotovoltaica de Lucainena de las Torres (23.2 MW), Parque Fotovoltaico
Abertura Solar (23.1 MW), Parque Solar Hoya de Los Vincentes (23 MW),
the Solarpark Calveron (21 MW), and the Planta Solar La Magascona
(20 MW).
Topaz Solar Farm is a proposed 550 MW solar photovoltaic power plant which is to be built northwest of California
Valley in the USA at a cost of over $1 billion. Built on 9.5 square miles (25 km2) of ranchland, the project would utilize
thin-film PV panels designed and manufactured by OptiSolar in Hayward and Sacramento. The project would deliver
approximately 1,100 gigawatt-hours (GW·h) annually of renewable energy. The project is expected to begin
construction in 2010, begin power delivery in 2011, and be fully operational by 2013.
High Plains Ranch is a proposed 250 MW solar photovoltaic power plant which is to be built by SunPower in the
Carrizo Plain, northwest of California Valley.
There have been 12 solar projects announced for construction in California totaling 5,670 MW. These projects range
in size from 45 MW to 1,000 MW and represent diverse technologies as thin film PV, crystalline PV and concentrated
solar power using a heated fluid to produce steam to generate electricity. Four solar projects totaling 900 MW have
been announced for installation in Nevada and one solar project of 375 MW has been announced for installation in
Arizona.
PV in Buildings
Building-integrated photovoltaics (BIPV) are increasingly incorporated into new domestic and industrial buildings as a
principal or ancillary source of electrical power, and are one of the fastest growing segments of the photovoltaic
industry. Typically, an array is incorporated into the roof or walls of a building and roof tiles with integrated PV cells
can now be purchased. Arrays can also be retrofitted into existing buildings; in this case they are usually fitted on top
of the existing roof structure. Alternatively, an array can be located separately from the building but connected by
cable to supply power for the building.
Where a building is at a considerable distance from the public electricity supply (or grid) - in remote or mountainous
areas – PV may be the preferred possibility for generating electricity, or PV may be used together with wind, diesel
generators and/or hydroelectric power. In such off-grid circumstances batteries are usually used to store the electric
power.
In locations near the grid, however, feeding the grid using PV panels is more practical, and leads to optimum use of
the investment in the photovoltaic system. This requires both regulatory and commercial preparation, including netmetering and feed-in agreements. To provide for possible power failure, some grid tied systems are set up to allow
local use disconnected from the grid. Most photovoltaics are grid connected.
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PV in Transport
PV has traditionally been used for auxiliary power in space. PV is rarely used to provide motive power in transport
applications, but is being used increasingly to provide auxiliary power in boats and cars. Recent advances in solar
cell technology, however, have shown the solar cell's ability to deliver significant hydrogen production, making it one
of the top prospects for alternative energy for automobiles in the future.
PV in Standalone Devices
PV was used frequently to power calculators and novelty devices until a decade or so ago. Improvements in
integrated circuits and low power LCD displays made it possible to power such devices for several years between
battery changes, making PV use less common. In contrast, solar powered remote fixed devices have seen increasing
use recently in locations where significant connection cost makes grid power prohibitively expensive. Such
applications include parking meters, emergency telephones, temporary traffic signs, and remote guard posts &
signals.
Rural Electrification
Developing countries where many villages are often more than five kilometers away from grid power have begun
using photovoltaics. In remote locations in India a rural lighting program has been providing solar powered LED
lighting to replace kerosene lamps. The solar powered lamps were sold at about the cost of a few months’ supply of
kerosene. Cuba is working to provide solar power for areas that are off grid. These are areas where the social costs
and benefits offer an excellent case for going solar though the lack of profitability could relegate such endeavors to
humanitarian goals.
Solar Roadways
A 45 mi (72 km) section of roadway in Idaho is being used to test the possibility of installing solar panels into the road
surface, as roads are generally unobstructed to the sun and represent about the percentage of land area needed to
replace other energy sources with solar power. Utilities are taking advantage of real estate occupied by utility poles
to install individual solar panels. This is an emerging example of distributed solar panel being practiced on an
expanded scale.
Financial Incentives for PV Solar Projects
The political purpose of incentive policies for PV is to encourage the formation and growth of an industry where the
cost of PV is above grid parity, to allow it to achieve the economies of scale necessary to reach grid parity. The
policies are implemented to promote national energy independence, high tech job creation and reduction of CO2 and
other greenhouse gas emissions.
At the end of 2008, the United States Congress extended the 30% federal renewable tax credit for 8 years, thereby
making investments in renewable energy projects attractive and the potential for millions of new jobs in renewable
energy companies. Cash equivalent to the 30% federal renewable tax credit that is available under the American
Recovery and Reinvestment Act (ARRA) was also extended until the end of 2011.
Three incentive mechanisms are used (often in combination):
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Investment Subsidies: the authorities refund part of the cost of installation of the system,
Feed-in Tariffs (FIT): the electricity utility buys PV electricity from the producer under a multiyear contract at a
guaranteed rate.
Renewable Energy Certificates ("RECs")
Net Metering: utility credits the customer/generator for the solar-produced electricity in excess of immediate
usage for electricity demand that exceeds solar production at another time
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With investment subsidies, the financial burden falls upon the taxpayer, while with feed-in tariffs the extra cost is
distributed across the utilities' customer bases. While the investment subsidy may be simpler to administer, the main
argument in favor of feed-in tariffs is the encouragement of quality. Investment subsidies are paid out as a function of
the nameplate capacity of the installed system and are independent of its actual power yield over time, thus
rewarding the overstatement of power and tolerating poor durability and maintenance. Some electric companies offer
rebates to their customers, such as Austin Energy in Texas, which offers $4.50/watt installed up to $13,500.
With feed-in tariffs, the financial burden falls upon the consumer. They reward the number of kilowatt-hours produced
over a long period of time, but because the rate is set by the authorities, it may result in perceived overpayment. The
price paid per kilowatt-hour under a feed-in tariff exceeds the price of grid electricity. Net metering refers to the case
where the price paid by the utility is the same as the price charged. Net metering is particularly important because it
can be done with no changes to standard dual-mode electricity meters, which accurately measure power in both
directions and automatically report the difference, and because it allows homeowners and businesses to generate
electricity at a different time from consumption, effectively using the grid as a giant storage battery. As more
photovoltaics are used, ultimately storage will need to be provided, sometimes in the form of pumped hydro-storage.
Normally, with net metering deficits are billed each month, while surpluses are rolled over to the following month and
paid annually.
Where price setting by supply and demand is preferred, RECs can be used. In this mechanism, a renewable energy
production or consumption target is set, and the consumer or producer is obliged to purchase renewable energy from
whoever provides it the most competitively. The producer is paid via an REC. In principle this system delivers the
cheapest renewable energy, since the lowest bidder will win. However, uncertainties about the future value of energy
produced are a brake on investment in capacity, and the higher risk increases the cost of capital borrowed.
The Japanese government through its Ministry of International Trade and Industry ran a successful program of
subsidies from 1994 to 2003. At the end of 2004, Japan led the world in installed PV capacity with over 1.1 GW.
In 2004, the German government introduced the first large-scale feed-in tariff system, under a law known as the
'EEG' (Erneuerbare Energien Gesetz) which resulted in explosive growth of PV installations in Germany. At the
outset the FIT was over 3x the retail price or 8x the industrial price. The principle behind the German system is a 20
year flat rate contract. The value of new contracts is programmed to decrease each year, in order to encourage the
industry to pass on lower costs to the end users. The program has been more successful than expected with over
1GW installed in 2006 and 2007. Political pressure is mounting to decrease the tariff to lessen the future burden on
consumers.
Subsequently Spain, Italy, Greece and France introduced feed-in tariffs. None have replicated the programmed
decrease of FIT in new contracts though, making the German incentive relatively less and less attractive compared
to other countries. The French FIT offers a uniquely high premium (EUR 0.55/kWh) for building integrated systems.
California, Greece, France and Italy have 30-50% more insolation than Germany making them financially more
attractive.
In 2006 California approved the 'California Solar Initiative', offering a choice of investment subsidies or FIT for small
and medium systems and a FIT for large systems. The small-system FIT of $0.39 per kWh (far less than EU
countries) expires in just 5 years, and the alternate "EPBB" residential investment incentive is modest, averaging
perhaps 20% of cost. All California incentives are scheduled to decrease in the future depending as a function of the
amount of PV capacity installed.
At the end of 2006, the Ontario Power Authority (Canada) began its Standard Offer Program, the first in North
America for small renewable projects (10KW or less). This guarantees a fixed price of $0.80 CDN per kWh over a
period of twenty years for solar projects <10 KW. Unlike net metering, all the electricity produced is sold to the OPA
at the SOP rate. The generator then purchases any needed electricity at the current prevailing rate (e.g., $0.055 per
kWh). The difference should cover all the costs of installation and operation over the life of the contract. This program
has now been expanded to renewable energy projects > 10 KW and the feed-in-tariff pricing for rooftop-mounted
solar arrays range from $0.54CDN to $0.71CDN per kwh
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The price per kilowatt hour or per peak kilowatt of the FIT or investment subsidies is only one of three factors that
stimulate the installation of PV. The other two factors are insolation (the more sunshine, the less capital is needed for
a given power output) and administrative ease of obtaining permits and contracts.
Unfortunately the complexity of approvals in California, Spain and Italy has prevented comparable growth to
Germany even though the return on investment is better.
In some countries, additional incentives are offered for Building Integrated (BIPV) compared to stand alone PV.
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France + EUR 0.25/kWh (EUR 0.30 + 0.25 = 0.55/kWh total)
Italy + EUR 0.04-0.09 kWh
Germany + EUR 0.05/kWh (facades only)
Environmental Impacts
Unlike fossil fuel based technologies, solar power does not lead to any harmful emissions during operation, but the
production of the panels leads to some amount of pollution. This is often referred to as the energy input to output
ratio. In some analysis, if the energy input to produce it is higher than the output it produces it can be considered
environmentally more harmful than beneficial. Also, placement of photovoltaics affects the environment. If they are
located where photosynthesizing plants would normally grow, they simply substitute one potentially renewable
resource (biomass) for another. It should be noted, however, that the biomass cycle converts solar radiation energy
to chemical energy (with significantly less efficiency than photovoltaic cells). When solar panels are placed on the
sides of buildings, fences, or on rooftops or in deserts, they are purely additive to the renewable power base.
Greenhouse Gases
Life cycle greenhouse gas emissions are now in the range of 25-32 g/kWh and this could decrease to 15 g/kWh in
the future. For comparison, a combined cycle gas-fired power plant emits some 400 g/kWh and a coal-fired power
plant 915 g/kWh and with carbon capture and storage some 200 g/kWh. Only nuclear power and wind are better,
emitting 6-25 g/kWh and 11 g/kWh on average. Using renewable energy sources in manufacturing and transportation
would further drop photovoltaic emissions.
Toxic Residues
Cadmium
One issue that has often raised concerns is the use of cadmium in cadmium telluride solar cells (CdTe is only used in
a few types of PV panels). Cadmium in its metallic form is a toxic substance that has the tendency to accumulate in
ecological food chains. The amount of cadmium used in thin-film PV modules is relatively small (5-10 g/m²) and with
proper emission control techniques in place the cadmium emissions from module production can be almost zero.
Current PV technologies lead to cadmium emissions of 0.3-0.9 microgram/kWh over the whole life-cycle. Most of
these emissions actually arise through the use of coal power for the manufacturing of the modules, and coal and
lignite combustion leads to much higher emissions of cadmium. Life-cycle cadmium emissions from coal are 3.1
microgram/kWh, lignite 6.2, and natural gas 0.2 microgram/ kWh.
*Note: If electricity produced by photovoltaic panels were used to manufacture solar modules instead of electricity
from burning coal, cadmium emissions from coal power usage in the manufacturing process could be entirely
eliminated.
Mercury Toxicity from Burning Coal
Mercury exposure and toxicity is far more common than most of us tend to think. Our environment has become
highly contaminated with mercury as a result of the burning of fossil fuels, particularly coal, for energy. Mercury
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normally occurs in the Earth's crust, but is released either by burning coal, or through incineration of mercurycontaining equipment such as thermometers, blood pressure cuffs, electrical switches, thermostats and computer
chips. Coal-burning for heat, electric power plants and medical waste incineration are the two biggest sources of
mercury contamination in our environment.
When mercury is burned, it enters the atmosphere as mercury vapor, and then is carried downward with rain,
contaminating our rivers, lakes, streams, groundwater, and eventually our oceans. A recent study in Massachusetts
showed that the mercury content of rainwater was actually higher than the existing mercury levels in our lakes and
ponds. Rather than cleaning our water supply, rain was actually adding to the mercury contamination.
To make matters worse, mercury is consumed by fish and concentrated as one moves up the food chain. Small fish
eat plankton and algae contaminated with mercury; bigger fish eat the smaller fish, and even bigger fish eat the big
fish. As a result, the largest predatory fish in the ocean have the highest mercury levels. The fish known to harbor the
highest levels of mercury include the large, predatory marine fish such a tuna, swordfish, mahi-mahi, halibut, shark,
salmon, tilefish and king mackerel.
Regular consumption of these fish is the greatest source of mercury exposure and toxicity in humans. The body also
very readily absorbs mercury that comes in this form from fish, increasing the body's level and total burden of
mercury. Unfortunately, mercury is very slowly and very poorly eliminated by our bodies. Over time, and with
continued consumption of fish, our mercury levels climb steadily. Eventually, enough mercury is deposited in vital
organs to cause organ failure and illness.
The serious toxicity of mercury has been known for many years. The expression "mad as a hatter" arose as a result
of felt hat makers commonly being exposed to mercury and suffering the effects of mercury poisoning. This mercury
exposure led to the common symptoms known as "erethism", and consisted of shakiness or tremor, anxiety or
excitability, memory loss, headaches, insomnia, and mental decline.
Nowadays, mercury toxicity is thought to be a possible cause of Parkinson's disease, Alzheimer's-like brain failure,
heart failure, heart arrhythmias and irregularities, and certain cancers. Unfortunately, unlike most poisons, which
cause illness very soon after ingestion or exposure, mercury toxicity is a chronic, insidious and slowly progressive
disorder. Often by the time symptoms occur, there is already a heavy mercury burden in the body with quite
substantial and possibly irreversible damage.
Energy Payback Time and Energy Returned on Energy Invested
The energy payback time is the time required to produce an amount of energy as great as what was consumed
during production. The energy payback time is determined from a life cycle analysis of energy.
Another key indicator of environmental performance, tightly related to the energy payback time, is the ratio of
electricity generated divided by the energy required to build and maintain the equipment. This ratio is called the
energy returned on energy invested (EROEI). Of course, little is gained if it takes as much energy to produce the
modules as they produce in their lifetimes. This should not be confused with the economic return on investment,
which varies according to local energy prices, subsidies available and metering techniques.
Life-cycle analyses show that the energy intensity of typical solar photovoltaic technologies is rapidly evolving. In
2000 the energy payback time was estimated as 8 to 11 years, but more recent studies suggest that technological
progress has reduced this to 1.5 to 3.5 years for crystalline silicon PV systems.
Thin film technologies now have energy pay-back times in the range of 1-1.5 years (S.Europe). With lifetimes of such
systems of at least 30 years, the EROEI is in the range of 10 to 30. They thus generate enough energy over their
lifetimes to reproduce themselves many times (6-31 reproductions, the EROEI is a bit lower) depending on what type
of material, balance of system (or BOS), and the geographic location of the system.
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Advantages of PV Solar
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The 89 petawatts of sunlight reaching the earth's surface is plentiful - almost 6,000 times more than the 15
terawatts of average power consumed by humans. Additionally, solar electric generation has the highest
power density (global mean of 170 W/m²) among renewable energies.
Solar power is pollution free during use. Production end wastes and emissions are manageable using
existing pollution controls. End-of-use recycling technologies are under development.
Facilities can operate with little maintenance or intervention after initial setup.
Solar electric generation is economically superior where grid connection or fuel transport is difficult, costly or
impossible. Examples include satellites, island communities, remote locations and ocean vessels.
When grid-connected, solar electric generation can displace the highest cost electricity during times of peak
demand (in most climatic regions), can reduce grid loading, and can eliminate the need for local battery
power for use in times of darkness and high local demand; such application is encouraged by net metering.
Time-of-use net metering can be highly favorable to small photovoltaic systems.
Grid-connected solar electricity can be used locally thus reducing transmission/distribution losses
(transmission losses were approximately 7.2% in 1995).
Once the initial capital cost of building a solar power plant has been spent, annual operating costs are
extremely low compared to existing power technologies.
Compared to fossil and nuclear energy sources, very little research-money has been invested in the
development of solar cells, so there is much room for improvement. Nevertheless, experimental high
efficiency solar cells already have efficiencies of over 40% and efficiencies are rapidly rising while mass
production costs are rapidly falling.
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Economics of PV Solar
US average daily solar energy insolation received by a latitude tilt photovoltaic cell. In
photovoltaics, solar value added chain is characterized by the steps from sand/raw
silicon to the completed solar module and photovoltaic system promotion and
installation.
Power Costs
The PV industry is beginning to adopt levelized cost of energy (LCOE) as the unit of
cost. The results of a sample calculation can be found on pp. 52, 53 of the 2007 DOE
report describing the plans for solar power 2007-2011. For a 10 Megawatt plant in Phoenix, AZ, the LCOE is
estimated at $0.15 to 0.22/kWh.
The table below illustrates the calculated total cost in US cents per kilowatt-hour of electricity generated by a
photovoltaic system as function of the investment cost and the efficiency, assuming some accounting parameters
such as cost of capital and depreciation period. The row headings on the left show the total cost, per peak kilowatt
(kWp), of a photovoltaic installation. The column headings across the top refer to the annual energy output in
kilowatt-hours expected from each installed peak kilowatt. This varies by geographic region because the average
insolation depends on the average cloudiness and the thickness of atmosphere traversed by the sunlight. It also
depends on the sun’s path relative to the panel and the horizon.
Table showing average cost in cents/kWh over 20 years for solar power panels
Solar Insolation
Cost $/kWp
2400
2200
2000
1800
1600
1400
1200
1000
800
200 $/kWp
0.8
0.9
1.0
1.1
1.3
1.4
1.7
2.0
2.5
600 $/kWp
2.5
2.7
3.0
3.3
3.8
4.3
5.0
6.0
7.5
1000 $/kWp
4.2
4.5
5.0
5.6
6.3
7.1
8.3
10.0
12.5
1400 $/kWp
5.8
6.4
7.0
7.8
8.8
10.0
11.7
14.0
17.5
1800 $/kWp
7.5
8.2
9.0
10.0
11.3
12.9
15.0
18.0
22.5
2200 $/kWp
9.2
10.0
11.0
12.2
13.8
15.7
18.3
22.0
27.5
2600 $/kWp
10.8
11.8
13.0
14.4
16.3
18.6
21.7
26.0
32.5
3000 $/kWp
12.5
13.6
15.0
16.7
18.8
21.4
25.0
30.0
37.5
3400 $/kWp
14.2
15.5
17.0
18.9
21.3
24.3
28.3
34.0
42.5
3800 $/kWp
15.8
17.3
19.0
21.1
23.8
27.1
31.7
38.0
47.5
4200 $/kWp
17.5
19.1
21.0
23.3
26.3
30.0
35.0
42.0
52.5
4600 $/kWp
19.2
20.9
23.0
25.6
28.8
32.9
38.3
46.0
57.5
5000 $/kWp
20.8
22.7
25.0
27.8
31.3
35.7
41.7
50.0
62.5
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POLYCRYSTALLINE SILICON – USES IN THE GLOBAL MARKET
A rod of semiconductor-grade polysilicon.
Polycrystalline silicon (or semicrystalline silicon, polysilicon, poly-Si, or simply
poly in context) is a material consisting of multiple small silicon crystals.
Polycrystalline cells can be recognized by a visible grain, a “metal flake effect”.
Polycrystalline silicon can be as much as 99.9999999% pure. Silicon is most
often companioned with oxygen to form sand. When the oxygen is stripped from
the silicon, crude polycrystalline silicon remains. Ultra-pure poly is used in the
semiconductor industry, starting from poly rods that are five to eight feet in length.
In microelectronic industry (semiconductor industry), poly is used both at the
macro-scale and micro-scale (component) level. At the macro scale, polysilicon
is used as a raw material entering a process in which single crystals are grown
(see Czochralski process, Bridgeman technique, Float-zone silicon).
At the component level, polysilicon has long been used as the conducting gate material in MOSFET and CMOS
processing technologies. For these technologies it is deposited using low-pressure chemical-vapor deposition
(LPCVD) reactors at high temperatures.
Solar Panels – (see also photovoltaics overview)
Polycrystalline silicon is also a key component of solar panel construction. The photovoltaic solar industry is growing
rapidly, but had been very limited in 2006-2008 due to severe shortages and allocations of the polysilicon material.
Beginning in 2006, now over half of the world's supply of polysilicon is being used for production of renewable
electricity solar power panels. There are currently only twelve factories of solar grade polysilicon in the world (in Dec.
2008).
Monocrystalline silicon is slightly higher priced and slightly more efficient than multi-crystalline.
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RENU ENERGY
NEW JERSEY SOLAR ARRAY DEVELOPMENT
In-Service Date
Our projection is that the solar arrays would become operational 8-9 months after working capital funds
sufficient to permit completion of detailed engineering design and acquisition of permits have been received.
Timeline of key activities with critical path delineation is attached.
NJ Solar Microgrid
Timeline & Budget
Capacity
Portfolio consists of 17 properties owned by six unrelated property owners located in northern, central and
southern New Jersey. Solar arrays are to be mounted on the rooftops of several buildings located at each
distinct site. Installed capacity at each property ranges from 150 to 1070 KW DC. Projected total installed
capacity at all 17 properties is 9.5-10 MW DC.
Equipment Cost
Solar array will consist of numerous crystalline solar panels, performance boosting auxiliary equipment such
as microinverters, transformers and balance of system components that will total $3.00/watt DC.
System Cost
Total installed cost of the solar arrays is projected to be $5.00/watt DC or $47.5-$50 million for the entire 9.510 MW portfolio.
Construction Financing Costs
Primary contribution to construction financing costs is the working capital needed to compensate the subcontractor for the total installation costs which is projected to be $1.50/watt DC or $14.2-$15 million. Financing
costs will be dependent on the sources of funds, terms and conditions on interest rates and the length of time
required to secure long-term financing.
Transaction Costs
During the project development phase, it will be necessary to incur transactional costs involving the delivery of
professional services and fees to secure permits. We expect to receive professional services with the detailed
engineering design, engineer’s seal certifying building structures and legal overview of various contracts. It
will be necessary to submit fees for securing the utility interconnection approvals and the construction permits
from the local building authorities. Total transaction costs are projected to be approximately $0.21/watt or $2
million.
Projected 1st Year’s Output
Projected output in year 1 is 13.8 million kilowatt-hours.
Output Degradation
We are expecting deterioration in the electrical output from the solar panels at 0.5%/year.
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22
Annual Operating Costs
Total annual operating costs are budgeted at $0.07/kwh or $960,000/year.
Maintenance & Repair
Budgeted at 1% of total installed capital per year, $475,000 or $0.034/kwh.
Insurance
Budgeted at 0.4% of total installed capital per year, $190,000 or $0.014/kwh.
Management Services
Budgeted at $50,000 per year or $0.0036/kwh.
Operating Reserve
Budgeted at $50,000 per year or $0.0036/kwh.
Property Rental Fee
Arrangements have been made to provide property owners owning15 of 17 properties with free
electricity equivalent to their baseline electricity demand in 2010. This equates to approximately 2.5%
of total revenues, $195,000 or $0.014/kwh. We will be entering into a power purchase agreement for
50% and 100% of electricity used at the other two properties.
PPA Status and Term
We will be entering into a 15-year contract with the property owners to provide free electricity. After this period,
we expect to negotiate another 10-year contract in which electricity is provided to the property owner at a
discount to the retail price. We have signed letters of intent with the six property owners. Specific terms for
the delivery of electricity to the property owner are to be included in the contract.
Initial PPA Rate
We are projecting that the initial PPA rate to the property owner will be at a discount of 15-25% from retail.
Sales of excess generated electricity will be sold at the local marginal pricing value through the regional
wholesale market operated by PJM, under PPA contract with the local distribution company as allowed under
PURPA or under PPA contract with a load serving entity.
PPA Rate Escalation
We are expecting the PPA and local marginal pricing rates to escalate at 2.5%/year.
Solar Renewable Energy Credits
Initial SREC Pricing
We are projecting market values for SRECs at $435/SREC.
Initial SREC Term
3 years.
SREC Commission
3.5% contract value.
Subsequent SREC Pricing
We are projecting net market values for SRECs at $350/SREC.
Subsequent SREC Term
12 years.
22
23
Residual Value
We considered residual value to be zero. In reality, since the warranty of the solar equipment is 25 years, the
electricity output will be at 93% of design after 15 years. The residual value will be equal to the present value
of future cash streams from electricity sales up to a designated performance limit minus the decommissioning
costs.
Federal Tax and Grant Assumptions
Our financial analysis treats the project as a standalone entity in which tax losses are carried forward to be
applied against tax liabilities that would be incurred in future years. Ownership arrangement could be
structured in which operating margins, depreciation and tax liabilities would flow through the project entity to
the owner entities so that tax credits could be utilized sooner. We are including the 30% investment tax credit
as a cash flow to the project that occurs during year one.
Depreciation
Project assets are depreciated over six years using the accelerated cost recovery schedule.
SREC Income
We are projecting SREC income to equal $6.0 million/year for the initial three years and then $4.5 - $4.7
million/year thereafter.
Investment Tax Credit
We are including the 30% investment tax credit as a cash flow to the project that occurs during year one.
Tax Rate
We have assumed a tax rate of 36%.
State/Federal Grants
No federal or state grants are included.
Financial Pro Forma
See attachment.
9.5MW Solar
Microgrid Financial Pro
23
PROJECT TIMELINE PER SITE
TIME ZERO OCCURS UPON PROJECT FINANCING/FUNDING
RED SIGNIFIES CRITICAL PATH;
HATCHED SIGNIFIES COMPLETION
WEEK #
PRE-FUNDED
COMPLETIONS
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
CREATED DATABASE OF ALL SELF STORAGE WAREHOUSES IN NJ
ANALYSES OF PROPERTY SITES - CONFIRMATION OF ZONING ORDINANCES & ENVIRONMENTAL REVIEWS
DEVELOPED BUSINESS STRATEGY FAVORABLY POSITIONING COMPANY WITHIN REGULATORY LANDSCAPE
PRESENTATION/DISCUSSION VALUE PROPOSITION WITH PROPERTY OWNERS
EXECUTED LOIs WITH PROPERTY OWNERS
CONFIRMED ROOFTOP STRUCTURAL SUPPORT WITH BUILDING DESIGNERS
COMPLETED CONCEPTUAL DESIGNS ROOFTOP SOLAR SYSTEMS
BID PROPOSALS RECEIVED FROM INSTALLERS & EQUIPMENT VENDORS
NEGOTIATIONS WITH INDEP POWER PRODUCERS & BROKERS ELECT & SREC SALES
SCOPED OUT PATHWAYS TO SECURE INTERCONNECTION PERMITS FROM PJM & EDCs
RECEIPT OF OFFERS TO PURCHASE SRECs
RECEIPT OF PROJECT FUNDING
EXECUTE FINAL LONG-TERM CONTRACTS WITH PROPERTY OWNERS
EXECUTE CONTRACTS SREC SALES
EXECUTE CONTRACTS FOR ELECTRICITY SALES
THROUGH PJM OR EDC UNDER PURPA
ENGINEERED DESIGN
SPECIFY MODULES, INVERTERS
PREPARE LAYOUT DRAWINGS
PREPARE ONE-LINE DRAWING
PREPARE SITE DRAWING SHOWING LOCATION SOLAR SYSTEM
OBTAIN ENGINEERING SEALS FOR STRUCTURAL ACCOMMODATION & ELECTRICAL DESIGN
EVALUATE & SELECT INSTALLERS
RESPONSIBLE FOR OBTAINING LOCAL PERMITS
SUBMIT INITIAL PAPERWORK FOR SREC REGISTRATION APPROVAL TO PROCEED
♦
RECEIVE SRP ACCEPTANCE LETTER
SUBMIT REQUEST FOR PJM INTERCONNECTION APPROVAL
REGISTER MEMBERSHIP IN PJM MARKET
SUBMIT REQUEST FOR EDC INTERCONNECTION APPROVAL UNDER NET METERING
PROCURE PV EQUIPMENT & ARRANGE FOR STAGING ON-SITE
SUBMIT APPLICATION TO SECURE ELIGIBILITY TO RECEIVE 1603 MONEY
DELIVERY PV EQUIPMENT
INSTALL PV SYSTEM
ARRANGE INSPECTIONS BY LOCAL BUILDING AUTHORITY
INCLUDES STATE LICENSED ELECTRICAL INSPECTOR, UTILITY
UTILITY ISSUING OF PERMIT TO OPERATE - INSTALL OF DUAL-MODE METER
ELIGIBLE TO EARN SRECs
RECEIVE 1603 MONEY FROM US TREASURY
SUBMIT FINAL PAPERWORK PACKET TO NJ OFFICE OF CLEAN ENERGY (OCE)
INCLUDE UTILITY INTERCONNECTION APPROVAL
INCLUDE LOCAL BUILDING AUTHORITY APPROVAL
INCLUDE PERMIT TO OPERATE NOTICE
RECEIVE NJ CERTIFICATION NUMBER
REGISTER ON GATS SREC TRACKING SYSTEM
24
PROJECT TIMELINE PER SITE
TIME ZERO OCCURS UPON PROJECT FINANCING/FUNDING
RED SIGNIFIES CRITICAL PATH;
HATCHED SIGNIFIES COMPLETION
WEEK #
PRE-FUNDED
COMPLETIONS
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
CREATED DATABASE OF ALL SELF STORAGE WAREHOUSES IN NJ
ANALYSES OF PROPERTY SITES - CONFIRMATION OF ZONING ORDINANCES & ENVIRONMENTAL REVIEWS
DEVELOPED BUSINESS STRATEGY FAVORABLY POSITIONING COMPANY WITHIN REGULATORY LANDSCAPE
PRESENTATION/DISCUSSION VALUE PROPOSITION WITH PROPERTY OWNERS
EXECUTED LOIs WITH PROPERTY OWNERS
CONFIRMED ROOFTOP STRUCTURAL SUPPORT WITH BUILDING DESIGNERS
COMPLETED CONCEPTUAL DESIGNS ROOFTOP SOLAR SYSTEMS
BID PROPOSALS RECEIVED FROM INSTALLERS & EQUIPMENT VENDORS
NEGOTIATIONS WITH INDEP POWER PRODUCERS & BROKERS ELECT & SREC SALES
SCOPED OUT PATHWAYS TO SECURE INTERCONNECTION PERMITS FROM PJM & EDCs
RECEIPT OF OFFERS TO PURCHASE SRECs
RECEIPT OF PROJECT FUNDING
EXECUTE FINAL LONG-TERM CONTRACTS WITH PROPERTY OWNERS
EXECUTE CONTRACTS SREC SALES
EXECUTE CONTRACTS FOR ELECTRICITY SALES
THROUGH PJM OR EDC UNDER PURPA
ENGINEERED DESIGN
SPECIFY MODULES, INVERTERS
PREPARE LAYOUT DRAWINGS
PREPARE ONE-LINE DRAWING
PREPARE SITE DRAWING SHOWING LOCATION SOLAR SYSTEM
OBTAIN ENGINEERING SEALS FOR STRUCTURAL ACCOMMODATION & ELECTRICAL DESIGN
EVALUATE & SELECT INSTALLERS
RESPONSIBLE FOR OBTAINING LOCAL PERMITS
SUBMIT INITIAL PAPERWORK FOR SREC REGISTRATION APPROVAL TO PROCEED
RECEIVE SRP ACCEPTANCE LETTER
SUBMIT REQUEST FOR PJM INTERCONNECTION APPROVAL
REGISTER MEMBERSHIP IN PJM MARKET
SUBMIT REQUEST FOR EDC INTERCONNECTION APPROVAL UNDER NET METERING
PROCURE PV EQUIPMENT & ARRANGE FOR STAGING ON-SITE
SUBMIT APPLICATION TO SECURE ELIGIBILITY TO RECEIVE 1603 MONEY
DELIVERY PV EQUIPMENT
INSTALL PV SYSTEM
ARRANGE INSPECTIONS BY LOCAL BUILDING AUTHORITY
INCLUDES STATE LICENSED ELECTRICAL INSPECTOR, UTILITY
UTILITY ISSUING OF PERMIT TO OPERATE - INSTALL OF DUAL-MODE METER
ELIGIBLE TO EARN SRECs
♦
RECEIVE 1603 MONEY FROM US TREASURY
SUBMIT FINAL PAPERWORK PACKET TO NJ OFFICE OF CLEAN ENERGY (OCE)
INCLUDE UTILITY INTERCONNECTION APPROVAL
INCLUDE LOCAL BUILDING AUTHORITY APPROVAL
INCLUDE PERMIT TO OPERATE NOTICE
RECEIVE NJ CERTIFICATION NUMBER
♦
REGISTER ON GATS SREC TRACKING SYSTEM
25
9.5 MW NJ MICROGRID - PROJECT PRO FORMA - 100% INCOME TAX CREDITS USED AS EARNED
Y0
Y1
Y2
Y4
Y5
Y6
Y7
Y8
Y9
Y10
Y11
13,787
13,787
0.041
Y3
13,718
13,718
0.042
13,649
13,649
0.043
13,581
13,581
0.044
13,513
13,513
0.045
13,446
13,446
0.046
13,378
13,378
0.048
13,311
13,311
0.049
13,245
13,245
0.050
13,179
13,179
0.051
13,113
13,113
0.052
Y13
13,047
13,047
0.054
12,982
12,982
0.055
12,917
12,917
0.057
12,853
12,853
0.077
12,788
12,788
0.079
12,724
12,724
0.081
12,661
12,661
0.083
12,597
12,597
0.085
12,534
12,534
0.087
Y12
Y14
Y15
Y16
Y17
Y18
Y19
Y20
Y21
ELECTRICITY GENERATED
Electricity (M KWH)
Electricity ($/KWH)
-0.5%
2.5%
13,856
13,856
0.040
ELECTRICITY PURCHASED
Electricity (M KWH)
Electricity ($/KWH)
2.5%
0
0
0.040
0
0
0.041
0
0
0.042
0
0
0.043
0
0
0.044
0
0
0.045
0
0
0.046
0
0
0.048
0
0
0.049
0
0
0.050
0
0
0.051
0
0
0.052
0
0
0.054
0
0
0.055
0
0
0.057
0
0
0.058
0
0
0.059
0
0
0.061
0
0
0.062
0
0
0.064
0
0
0.066
12828
0
12828
1,028.4
12758
0
12758
1,028.4
12690
0
12690
1,028.4
12621
0
12621
1,028.4
12553
0
12553
1,028.4
12485
0
12485
1,028.4
12417
0
12417
1,028.4
12350
0
12350
1,028.4
12283
0
12283
1,028.4
12217
0
12217
1,028.4
12150
0
12150
1,028.4
12084
0
12084
1,028.4
12019
0
12019
1,028.4
11954
0
11954
1,028.4
11889
0
11889
1,028.4
11824
0
11824
1,028.4
11760
0
11760
1,028.4
11696
0
11696
1,028.4
11632
0
11632
1,028.4
11569
0
11569
1,028.4
11506
0
11506
1,028.4
TOTAL ELECTRICITY DELIVERED
Retail Electricity (M KWH)
Wholesale Electricity (M KWH)
Host Facility (M KWH)
SREC MARKET VALUE
Market Value ($/SREC)
TOTAL REVENUES ($000)
Generated Electricity ($000)
Renewable Energy Credits ($000)
Purchased Electricity ($000)
Host Facility Usage($000)
PPA Host Facility Electricity ($000)
0.0%
435
-
0.0%
2.5%
6,582
554
6,027
-
-
2.5%
435
6,563
565
5,997
-
435
6,544
576
5,967
-
350
5,365
588
4,777
-
350
5,353
600
4,753
-
350
5,341
612
4,730
-
350
5,330
624
4,706
-
350
5,319
636
4,682
-
350
5,308
649
4,659
-
350
5,297
662
4,636
-
350
5,287
675
4,613
-
350
5,278
688
4,589
-
350
5,268
702
4,567
-
350
5,260
716
4,544
-
350
5,251
730
4,521
-
0
987
987
-
0
1,006
1,006
-
0
1,026
1,026
-
0
1,047
1,047
-
0
1,067
1,067
-
0
1,089
1,089
-
GENERATION CAPACITY, AC
Solar Powered Generation Capacity (MW AC)
Cumulative Solar Powered Generation Capacity (MW AC)
8.55
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
GENERATION CAPACITY, DC
Solar Powered Generation Capacity (MW DC)
Cumulative Solar Powered Generation Capacity (MW DC)
9.50
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
5.00
47,535
47,535
0
23,768
23,768
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
6,582
100%
6,563
100%
6,544
100%
5,365
100%
5,353
100%
5,341
100%
5,330
100%
5,319
100%
5,308
100%
5,297
100%
5,287
100%
5,278
100%
5,268
100%
5,260
100%
5,251
100%
987
100%
1,006
100%
1,026
100%
1,047
100%
1,067
100%
1,089
100%
2,826
475
165
1,901
285
2,760
475
169
1,831
285
2,689
475
173
1,756
285
2,612
475
177
1,674
285
2,528
475
182
1,586
285
2,437
475
186
1,491
285
2,339
475
191
1,388
285
2,232
475
196
1,277
285
2,117
475
200
1,157
285
1,993
475
205
1,027
285
1,858
475
211
887
285
1,712
475
216
736
285
1,554
475
221
572
285
1,383
475
227
396
285
1,199
475
232
206
285
760
475
285
760
475
285
760
475
285
760
475
285
760
475
285
760
475
285
3,755
57%
6,655
1,426
8,081
3,802
58%
10,648
2,282
12,930
3,855
59%
6,389
1,369
7,758
2,754
51%
3,827
820
4,647
2,825
53%
3,827
820
4,647
2,904
54%
1,930
414
2,343
2,991
56%
-
3,086
58%
-
3,190
60%
-
3,305
62%
-
3,429
65%
-
3,566
68%
-
3,714
71%
-
3,876
74%
-
4,053
77%
-
226
23%
-
246
24%
-
266
26%
-
286
27%
-
307
29%
-
328
30%
-
3,903 1,405 2,498 -
1,893 681 1,211 -
1,821
656
1,166
-
561
202
359
-
2,991
1,077
1,914
-
3,086
1,111
1,975
-
3,190
1,149
2,042
-
3,305
1,190
2,115
-
3,429
1,235
2,195
-
3,566
1,284
2,282
-
3,714
1,337
2,377
-
3,876
1,395
2,481
-
4,053
1,459
2,594
-
226
81
145
-
246
88
157
-
266
96
170
-
286
103
183
-
307
111
196
-
328
118
210
-
INVESTMENT CAPITAL CAPACITY ($/WATT)
CAPITAL INVESTMENT ($000)
Solar Powered Generation Capacity ($000)
Equity - FMV
Equity Infusion
Debt/Trade Credit
COST OF ELECTRICITY SOLD ($000)
Electricity Distribution & Transmission
Purchased Electricity @ Wholesale
0.0%
2.5%
2.5%
GROSS MARGIN ($000)
As % of total sales
OPERATING EXPENSES ($000)
Maintenance Expense
Host Facility Electricity
Interest on Debt
Operating Expense
2.5%
OPERATING MARGIN ($000)
As % of Sales
Depreciation
Adjusted Depreciation
Depreciation Applied Against Taxes
-
NOPBT ($000
Income Taxes
NOPAT ($000)
Income Tax Credit Carryforward
TAX CREDITS ($000)
Investment Tax Credits
Cumulative Investment Tax Credits
-
30.0%
14,261
14,261
EBITDA ($000)
EBITDA/MW CAPACITY ($000)
Gross Fixed Assets (incl. Land)
Cumulative Gross Fixed Assets
Accumulated Depreciation
47,535
47,535
-
4,326 1,557 2,768 -
9,127 3,286 5,842 -
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
5,657
662
5,634
659
5,611
656
4,428
518
4,411
516
4,395
514
4,379
512
4,363
510
4,347
508
4,332
507
4,316
505
4,301
503
4,287
501
4,272
500
4,258
498
226
26
246
29
266
31
286
33
307
36
328
38
47,535
8,081
47,535
21,010
47,535
28,768
47,535
33,415
47,535
38,061
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
26
Net Income
Depreciation
Debt/Trade Credit Repayment
Partners' Capital Contributions
INCREMENTAL PRE-TAX FREE CASH FLOW - EQUITY
CUMULATIVE PRE-TAX FREE CASH FLOW - EQUITY
-
14,261
23,768
9,507
9,507 -
-
2,768 8,081
875 2,880
6,627 -
INCREMENTAL AFTER-TAX FREE CASH FLOW - EQUITY
CUMULATIVE AFTER-TAX FREE CASH FLOW - EQUITY
-
23,768
23,768 -
18,698
5,070
Adjusted Discounted FCF - Equity
-
23,768
CUMULATIVE DISCOUNTED FCF
-
23,768 -
5,842 12,930
945 2,857
3,770 -
2,498 7,758
1,021 2,834
936
1,211 4,647
1,103 1,651
715
1,166
4,647
1,191 1,634
2,349
359
2,343
1,286 1,618
3,967
6,143
1,073
4,239
5,312
2,332
7,644
2,290
9,934
18,698
6,143
4,239
2,332
2,290
1,416
525
475
422
365
305
241
173
100
23
145
157
170
183
196
210
5,070
1,073
5,312
7,644
9,934
11,350
11,875
12,350
12,772
13,137
13,442
13,683
13,856
13,956
13,979
14,123
14,281
14,451
14,634
14,830
15,040
1,416
11,350
1,914
1,389 1,602
5,568
525
11,875
1,975
1,500 1,586
7,154
475
12,350
2,042
1,620 1,570
8,725
422
12,772
2,115
1,750 1,555
10,279
2,195
1,890 1,540
11,819
2,282
2,041 1,525
13,344
2,377
2,204 1,510
14,854
2,481
2,381 1,496
16,349
2,594
2,571
1,481
17,831
145
226
18,057
157
246
18,303
170
266
18,569
183
286
18,855
196
307
19,162
210
328
19,490
365
13,137
305
13,442
241
13,683
173
13,856
100
13,956
23
13,979
145
14,123
157
14,281
170
14,451
183
14,634
196
14,830
210
15,040
Discounted Debt/Trade Credit Repayment
-
-
875 -
945 -
1,021 -
1,103 -
1,191 -
1,286 -
1,389 -
1,500 -
1,620 -
1,750 -
1,890 -
2,041 -
2,204 -
2,381 -
2,571
-
-
-
-
-
-
Cumulative Disc Debt/Trade Credit Repayment
-
-
875 -
1,821 -
2,842 -
3,944 -
5,135 -
6,421 -
7,811 -
9,311 -
10,931 -
12,681 -
14,571 -
16,612 -
18,816 -
21,196 -
23,768 -
23,768 -
23,768 -
23,768 -
23,768 -
23,768 -
23,768
33,275 -
13,701 -
6,613 -
Cumulative Disc FCF Total Capital Invested
-
INCREMENTAL AFTER-TAX FREE CASH FLOW
EQUITY DISCOUNTED PAYBACK
TOTAL CAPEX DISCOUNTED PAYBACK
EQUITY IRR
TOTAL CAPEX IRR
(NPV+DISCOUNTED CAPEX)/DISCOUNTED CAPEX
-
47,535
1.8
3.4
24.2%
5.7%
1.59
0
-
% ELECTRICITY AVAILABLE
18.5%
DC:AC CONVERSION
90.0%
% EQUITY OWNERSHIP
RETAIL DELIVERED PRICE ELECTRICITY PER KWH
8,265
10,179
12,154
14,196
16,311
18,505
20,788
23,165
25,645
28,239
28,384
28,541
28,711
28,894
29,091
29,301
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.00
0.39
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
19,573
7,088
5,260
3,435
3,481
2,702
1,914
1,975
2,042
2,115
2,195
2,282
2,377
2,481
2,594
145
157
170
183
196
210
2
6,027
5,997
2,768 -
8,610 -
3
4
5
6
7
5,967
4,777
4,753
4,730
4,706
11,108 -
12,319 -
13,485 -
13,126 -
11,212 -
8
9
10
11
4,682
4,659
4,636
4,613
9,237 -
7,195 -
5,080 -
2,885 -
16
17
18
19
20
21
4,589
12
4,567
13
4,544
14
4,521
15
0
0
0
0
0
0
603
1,774
4,255
6,848
6,993
7,150
7,321
7,504
7,700
7,910
100%
$0.130
WHOLESALE PRICE ELECTRICITY PER KWH
$0.040
RETAIL DISTRIB COST ELECTRICITY PER KWH
$0.070
WHOLESALE DISTRIB COST ELECT PER KWH
$0.000
DISCOUNT FACTOR TO RETAIL PRICE
15.0%
ANNUAL ROOFTOP RENTAL; % REVENUES
2.5%
SREC MARKET VALUE
SREC MARKET VALUE PRESENT
SREC THRESHOLD VALUE
$435
$435
$100
35%
25%
MAINTENANCE
1.00%
FAIR MARKET PRICE ($/DC WATT)
BUILT-UP COST BASIS ($/DC WATT)
EQUIPMENT ($/DC WATT)
INSTALLATION ($/DC WATT)
ENGINEERING ($/DC WATT)
PERMITTING ($/DC WATT)
COMMERCIAL CONTRACTS ($/DC WATT)
FINANCIAL CONTRACTS ($/DC WATT)
DEVELOPMENT FEE ($/DC WATT)
$5.00
$5.00
$3.00
$1.00
$0.045
$0.030
$0.09
$0.02
$0.82
TOTAL TRADE CREDIT REPAYMENT REQD, $000
EQUITY INFUSION REQUIRED, $000
5,562
0.00
1.00
$0.200
RETAIL SUPPLY PRICE ELECTRICITY PER KWH
ELECTRICITY USAGE DURING DAYLIGHT HOURS
DISCOUNTED PPA ELECTRICITY PRICE FROM RETAIL
2,082
0.83
1.00
1
DISCOUNTED SRECS @ 30 YEARS
Cumulative Net Income
1,354
1.00
$19,035
$4,775
EQUITY
DEBT
INTEREST ON DEBT
TERM OF DEBT; YEARS
50.0%
50.0%
8.0%
15.0
OPERATING, ($/DC WATT)
$0.030
INCOME TAX RATE
36.0%
DISCOUNT RATE
DISCOUNT RATE SUPPLEMENT
0.0%
0.0%
INVESTMENT TAX CREDITS
30%
27
Y22
Y23
Y24
Y25
Y26
Y27
Y28
Y29
Y30
ELECTRICITY GENERATED
Electricity (M KWH)
Electricity ($/KWH)
12,472
12,472
0.089
12,409
12,409
0.091
12,347
12,347
0.094
12,286
12,286
0.096
12,224
12,224
0.098
12,163
12,163
0.101
12,102
12,102
0.103
12,042
12,042
0.106
11,982
11,982
0.108
ELECTRICITY PURCHASED
Electricity (M KWH)
Electricity ($/KWH)
0
0
0.067
0
0
0.069
0
0
0.071
0
0
0.072
0
0
0.074
0
0
0.076
0
0
0.078
0
0
0.080
0
0
0.082
11443
0
11443
1,028.4
11381
0
11381
1,028.4
11319
0
11319
1,028.4
11257
0
11257
1,028.4
11196
0
11196
1,028.4
11135
0
11135
1,028.4
11074
0
11074
1,028.4
11013
0
11013
1,028.4
10953
0
10953
1,028.4
TOTAL ELECTRICITY DELIVERED
Retail Electricity (M KWH)
Wholesale Electricity (M KWH)
Host Facility (M KWH)
SREC MARKET VALUE
Market Value ($/SREC)
TOTAL REVENUES ($000)
Generated Electricity ($000)
Renewable Energy Credits ($000)
Purchased Electricity ($000)
Host Facility Usage($000)
PPA Host Facility Electricity ($000)
0
1,110
1,110
-
0
1,132
1,132
-
0
1,155
1,155
-
0
1,178
1,178
-
0
1,201
1,201
-
0
1,225
1,225
-
0
1,249
1,249
-
0
1,274
1,274
-
0
1,300
1,300
-
GENERATION CAPACITY, AC
Solar Powered Generation Capacity (MW AC)
Cumulative Solar Powered Generation Capacity (MW AC)
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
0.00
8.55
GENERATION CAPACITY, DC
Solar Powered Generation Capacity (MW DC)
Cumulative Solar Powered Generation Capacity (MW DC)
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
0.00
9.50
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
5.00
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,110
100%
1,132
100%
1,155
100%
1,178
100%
1,201
100%
1,225
100%
1,249
100%
1,274
100%
1,300
100%
OPERATING EXPENSES ($000)
Maintenance Expense
Host Facility Electricity
Interest on Debt
Operating Expense
760
475
285
760
475
285
760
475
285
760
475
285
760
475
285
760
475
285
760
475
285
760
475
285
760
475
285
OPERATING MARGIN ($000)
As % of Sales
Depreciation
Adjusted Depreciation
Depreciation Applied Against Taxes
350
32%
-
372
33%
-
394
34%
-
417
35%
-
441
37%
-
465
38%
-
489
39%
-
514
40%
-
539
41%
-
NOPBT ($000
Income Taxes
NOPAT ($000)
Income Tax Credit Carryforward
350
126
224
-
372
134
238
-
394
142
252
-
417
150
267
-
441
159
282
-
465
167
297
-
489
176
313
-
514
185
329
-
539
194
345
-
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
14,261
EBITDA ($000)
EBITDA/MW CAPACITY ($000)
350
41
372
43
394
46
417
49
441
52
465
54
489
57
514
60
539
63
Gross Fixed Assets (incl. Land)
Cumulative Gross Fixed Assets
Accumulated Depreciation
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
47,535
40,405
INVESTMENT CAPITAL CAPACITY ($/WATT)
CAPITAL INVESTMENT ($000)
Solar Powered Generation Capacity ($000)
Equity - FMV
Equity Infusion
Debt/Trade Credit
COST OF ELECTRICITY SOLD ($000)
Electricity Distribution & Transmission
Purchased Electricity @ Wholesale
GROSS MARGIN ($000)
As % of total sales
TAX CREDITS ($000)
Cumulative Investment Tax Credits
28
Net Income
Depreciation
Debt/Trade Credit Repayment
Partners' Capital Contributions
INCREMENTAL PRE-TAX FREE CASH FLOW - EQUITY
CUMULATIVE PRE-TAX FREE CASH FLOW - EQUITY
224
350
19,840
238
372
20,212
252
394
20,606
267
417
21,024
282
441
21,464
297
465
21,929
313
489
22,418
329
514
22,932
345
539
23,471
INCREMENTAL AFTER-TAX FREE CASH FLOW - EQUITY
CUMULATIVE AFTER-TAX FREE CASH FLOW - EQUITY
224
15,264
238
15,502
252
15,755
267
16,022
282
16,304
297
16,601
313
16,914
329
17,243
345
17,588
Adjusted Discounted FCF - Equity
CUMULATIVE DISCOUNTED FCF
Discounted Debt/Trade Credit Repayment
Cumulative Disc Debt/Trade Credit Repayment
Cumulative Disc FCF Total Capital Invested
INCREMENTAL AFTER-TAX FREE CASH FLOW
224
238
252
267
282
297
313
329
345
15,264
15,502
15,755
16,022
16,304
16,601
16,914
17,243
17,588
-
-
-
-
-
-
-
-
-
23,768 -
23,768 -
23,768 -
23,768 -
23,768 -
23,768 -
23,768 -
23,768 -
23,768
29,525
29,763
30,015
30,282
30,565
30,862
31,175
31,504
31,849
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
224
238
252
267
282
297
313
329
345
EQUITY DISCOUNTED PAYBACK
TOTAL CAPEX DISCOUNTED PAYBACK
EQUITY IRR
TOTAL CAPEX IRR
(NPV+DISCOUNTED CAPEX)/DISCOUNTED CAPEX
Cumulative Net Income
22
23
24
25
26
27
28
29
30
0
0
0
0
0
0
0
0
0
8,134
8,372
8,625
8,892
9,174
9,471
9,784
10,113
10,458
% ELECTRICITY AVAILABLE
DC:AC CONVERSION
% EQUITY OWNERSHIP
RETAIL DELIVERED PRICE ELECTRICITY PER KWH
RETAIL SUPPLY PRICE ELECTRICITY PER KWH
WHOLESALE PRICE ELECTRICITY PER KWH
RETAIL DISTRIB COST ELECTRICITY PER KWH
WHOLESALE DISTRIB COST ELECT PER KWH
DISCOUNT FACTOR TO RETAIL PRICE
ANNUAL ROOFTOP RENTAL; % REVENUES
SREC MARKET VALUE
SREC MARKET VALUE PRESENT
SREC THRESHOLD VALUE
ELECTRICITY USAGE DURING DAYLIGHT HOURS
DISCOUNTED PPA ELECTRICITY PRICE FROM RETAIL
MAINTENANCE
FAIR MARKET PRICE ($/DC WATT)
BUILT-UP COST BASIS ($/DC WATT)
EQUIPMENT ($/DC WATT)
INSTALLATION ($/DC WATT)
ENGINEERING ($/DC WATT)
PERMITTING ($/DC WATT)
COMMERCIAL CONTRACTS ($/DC WATT)
FINANCIAL CONTRACTS ($/DC WATT)
DEVELOPMENT FEE ($/DC WATT)
TOTAL TRADE CREDIT REPAYMENT REQD, $000
EQUITY INFUSION REQUIRED, $000
EQUITY
DEBT
INTEREST ON DEBT
TERM OF DEBT; YEARS
OPERATING, ($/DC WATT)
INCOME TAX RATE
DISCOUNT RATE
DISCOUNT RATE SUPPLEMENT
INVESTMENT TAX CREDITS
29
NEW JERSEY SOLAR PROJECT LOCATIONS
COUNTY
ATLANTIC
BURLINGTON
BURLINGTON
CAMDEN
CAMDEN
MAP
CODE
A
B
C
D
E
SELF STORAGE FACILITY
SITE NAME
GALLOWAY
PLANET SELF STORAGE - BURLINGTON
WILLINGBORO
HADDON STORAGE
PLANET SELF STORAGE - LINDENWOLD
CAMDEN
CAPE MAY
GLOUCESTER
GLOUCESTER
GLOUCESTER
HUNTERDON
F
G
H
I
J
K
BLACKWOOD
RIO GRANDE
GLASSBORO
MULLICA HILL
WEST DEPTFORD
PLANET SELF STORAGE - CLINTON
MIDDLESEX
MONMOUTH
PASSAIC
WARREN
WARREN
WARREN
L
M
N
O
P
Q
US STORAGE CENTERS
HOWELL
CLIFTON SELF STORAGE
PLANET SELF STORAGE - PHILLIPSBURG
PLANET SELF STORAGE - WASHINGTON
STEWARTSVILLE STORAGE
FOOTPRINT
(GROSS)
104,500
35,225
123,100
15,400
52,400
FOOTPRINT
(AVAIL FT2)
85,100
30,443
104,900
11,500
26,915
NJ
NJ
NJ
NJ
NJ
NJ
104,000
64,000
111,500
121,300
111,400
20,630
88,300
47,900
97,300
104,000
94,300
11,656
NJ
NJ
NJ
NJ
NJ
NJ
34,230
95,400
32,500
50,400
72,920
40,600
30,567
70,512
28,700
39,866
60,523
34,632
1,189,505
967,114
CITY
Galloway
Burlington
Burlington
Haddon Twnshp
Lindenwold
STATE
NJ
NJ
NJ
NJ
NJ
Blackwood
Rio Grande
Sewell
Mullica Hill
West Deptford
West Clinton
Piscataway
Howell
Clifton
Phillipsburg
Washington
Stewartsville
PHASE 1
PHASE 2
PHASE 3
30
NEW JERSEY SOLAR PROJECT SITES MAP
31

RENU ENERGY

Transcription

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