CT  Public  Act  No.  11-­‐80  –  Opportuni8es  in  Solar  PV    July  28,  2011      

The  Company  •  Independent  solar  power  producer  (IPP).    We  develop,  build,  own  

and  operate  solar  PV  systems  for  customers  with  no  upfront  capital  cost  to  them  

•  Use  Power  Purchase  Agreement  (PPA)  model  to  deliver  clean,  renewable  power  at  cost-­‐effecEve  prices  below  retail  electricity  rates  

•  UElize  best-­‐of-­‐breed  technology,  act  on  customer  behalf  to  provide  a  turnkey  package  of  services  

 •  In  solar  and  renewables  since  2003  

–  Developed  more  than  40  solar  PV  systems,  dozens  of  related  energy  projects  –  RooOop,  ground-­‐mount,  brownfield,  landfill  and  carport  systems  experience  –  Recently  developed  6MW  project  for  leading  NJ  independent  school  

Team  Members  §  John  B.  Millard,  Founder/  Licensed  Architect  Systems  design  §  P.  Wayne  Moore,  Finance  and  OperaEons  

§  Thin  film/brownfield/landfill/WWTF  specialist  §  PhD.,  technology  scienEst  §  Professional  PV  Engineer  §  Full  back  office  and  operaEonal  support  staff  

Outside  Professional  Team:  •  Leading  investment  bank  –  tax  equity,  bank  debt,  financial  

structuring  •  Leading  solar  panel  manufacturer  •  Leading  BOP  suppliers  

Why  Solar  Electricity?  •  Sun  power  is  abundant,  clean  and  reliable;  solar  panels  are  made  from  

silicon,  the  2nd  most  abundant  material  from  the  earth  

•  Solar  PV  power  generaEon  does  not  produce  noise,  emissions  or  toxic  fumes;  system  components  can  be  recycled  

•  Systems  produce  power  for  20+  years,  with  minimal  maintenance  

•  Solar  is  cost-­‐effecEve,  with  strong  investment  returns  to  owners      •  Creates  new  manufacturing  jobs  and  offers  opportunity  to  re-­‐train    

•  Avoids  poliEcal  tension  and  economic  dependency  of  fossil  fuels  

•  Can  revitalize  assets  such  as  brownfield  sites,  rooOops,  parking  lots  

Historical  Commercial  Electricity  Prices  

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2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

Pric

e (c

ents

/kW

h)

Massachusetts New Jersey New York Connecticut Pennsylvania

Year

Source:  Energy  InformaEon  Assn.  

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Boeom  Line  Up  Front •  These  projects  are  complicated  

–  Land  availability  and  use  issues    –  Environmental  impact  

–  Financial  and  credit  analyEcs  –  Technology  risk  –  Regulatory  risk  –  Performance  risk  

–  Heavy  structuring,  document  intensive  

–  Permigng  risk  

–  Work  to  be  done  interpreEng  the  new  law  

Overview  of  the  PPA  Structure  •  Power  Purchase  Agreement  provides  an  aeracEve  financial  

structure:  

Key  Features  •  No  capital  outlay  •  UElizes  all  tax  and  other  incenEves  •  No  ZREC  or  commodity  risk  •  Immediate  break  even  •  Provides  a  hedge  against  future  price  increases  •  Long-­‐term  (15-­‐20  years)  •  Matches  peak  load  (load  shedding)  

3

PROJECT

Power / REC Purchaser

Lenders/Lessor

Limited PartnerGeneral Partner

Financing Agreements/Leases

Transmission Company

InterconnectionAgreement

Tax InvestorSponsor

100% 100%

LLC/Partnership Agreement

LandOwners

Project ManagementAgreement

Additional Equity Contribution Agreement

O&MProvider

Operating Structure of a Typical Utility Scale Solar Project

U.S. Dept. ofTreasury

U.S. Dept. of Energy

ITC/Grant

Services could be bundled in

turnkey contract

Land Lease & Easements

Power PurchaseAgreement

O&MAgreement

PV Supplier

PV Installer

InstallationAgreement

Inverter Supplier

PV SupplyAgreement

Supply Agreement

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Customer  View  

PhosEnergy  SPE  

Customer Net

Metering

PPA   kWh  

…  We  make  it  simple  

The  PHOSEnergy  PPA  Overview  

PhosEnergy  Development  Process  Timeline  

SurePath Solarsm PPA Timeline

Financing, Incentive Application

Design, Engineering, Permitting, Procurement

Installation, Approvals, Interconnection

Operation and Maintenance

PPA

3 to 6 months 3 to 6 months To 25 years

System Online

LOI

2 to 4weeks

Pre

limin

ary

Ass

essm

ent

Construction Starts

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­  Host      Leading  NJ  Independent  School  ­  LocaEon:    5  miles  south  of  Princeton,  NJ  ­  Credit:    Aa3  by  Moody’s  ­  Endowment:  >  $50  million  ­  Students:    >  800  

Solar  Project  ­  Project  size:    6.239  MW  single-­‐axis  sun  tracking  array  ­  Land  Use:      40  acres  ­  Project  Cost:    $35  million  dollars  ­  Structure:      20  yr  PPA,  Partnership  Flip  with  Leverage  ­  SRECs:      Five  year  forward  sales  contact  with  

         investment  grade  credit  

­  Scope:      Permigng,  legal,  engineering,  design,            financing,  construcEon,  procurement,            earthwork,  foundaEons,  electrical,            interconnecEon,  operaEons,  management,            monitoring,  SREC  operaEons  

 

Recent  Project  Review  

Map  of  School  with  loca8on  of  arrays  

Legend  

-­‐School  Property  

-­‐Site  of  Solar  Array  

Site  View  

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 Conclusions  

§  Documents  and  structures  are  crucial  components  for  all  parEes—using  the  right  financing  vehicle  cannot  be  overstated    

§  Understand  your  markets  –  ZRECs,  incenEves,  energy  prices  to  determine  what  revenues  are  available  and  what  technologies  are  best  suited  for  geographic  locaEons.  

§  Only  sound  projects  with  quality  parEcipants  and  strong  cash  flow  will  get  done.  

§  Work  with  public/private  mentality  and  remain  adapEve  and  flexible.  

§  Long  term  PPAs  are  essenEal  for  financing  since,  despite  improving  condiEons  capital  is  sEll  precious  and  investors  sEll  risk  averse.  

§  Projects  conEnue  to  rely  on  federal  tax  benefits  and  these  incenEves.  

§  This  is  an  excellent  Eme  to  plan  for  2012.  

Contact  PhosEnergy  LLC  

 Wayne  Moore  John  Millard  

 Manasquan,  NJ    08736  Harsord,  CT    06105  860.985.4456    mob  

800.387.1981