trends in the competitive marketplace for business ...€¦ · uncertainties that could cause...
TRANSCRIPT
Trends in the Competitive Marketplace for
Business Customers -Solar PV
CBIA/CPES Joint Conference
October 2013
Safe Harbor
With the exception of historical information, the matters disclosed in this presentation
are forward-looking statements. Such statements involve certain risks and
uncertainties that could cause actual results to differ materially from those in the
forward-looking statements. Potential risks and uncertainties are described in the
Company’s filings with the Securities and Exchange Commission (SEC), including its
2012 Form 10-K, and Q1 2013 Form 10-Q, in addition to the risks and uncertainties
described on page 26 of this presentation. These forward-looking statements
represent the Company’s judgment as of the date of this presentation. The Company
disclaims, however, any intent or obligation to update these forward-looking
statements.
This presentation also includes non-GAAP financial measures. You can find a
reconciliation of each of these non-GAAP measures to the most directly comparable
GAAP financial measure in our earnings press release filed on Form 8-K with the
SEC and posted in the Investor Relations portion of our web site at www.memc.com.
Company Highlights
SunEdison is a Global Leader in Semiconductor Products and Solar
Energy
Formed in 1959
Listed on NYSE (SUNE), Member of Fortune 1000
5,000+ employees in 25 global locations
Manufacturing plants on 3 continents
1.03 GW of PV interconnected worldwide
2.7 GW of projects in pipeline
KEY MILESTONES
1959 Monsanto Electronic Material Company
formed
1962 CZ silicon crystal process developed
1975 First commercial production of 100mm
wafers
1995 MEMC I.P.O. on the NYSE
2003 SunEdison signs first solar PPA (Power
Purchase Agreement)
2006 Announced entry into solar wafer market on
a large scale
2009 MEMC acquires leading solar project
developer SunEdison
2010 Acquired Solaicx and Continuous
Czochralski (CCZ) technology
2010 SunEdison builds largest PV plant in
Europe (70 MW)
2011 MEMC announces solar cell and module
partnerships
2013 MEMC changes name to SUNEDISON
Diversified Business Segments
Some ≈100 kW – 1 MW
Commercial and Industrial
Rooftops
Systems Integrators for PV
Rooftops owned by building
owners, funds
PPA programs for different
hosts: commercial,
industrial, public sector
Below ≈100 kW
Residential and Small
Commercial
Based on a Certified
Installers Program
Premium customer services:
training, logistic, financing,
software, after-sales
Residential & Small
Systems
Commercial Rooftops
Large scale ground-mount
projects
Distributed generation for
Utilities
Development, engineering,
construction and O&M
services
Construction and long-term
financing
Premium guarantees
Utility Scale
Price Declines Driving Growth
$-
$2
$4
$6
$8
$10
$12
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Inst
alle
d C
apac
ity
(MW
)
Inst
alle
d C
apac
ity
(MW
)
Installations Projected Average System Price
Solar System Economics Today
0
10
20
30
40
50
60
Leve
lized
Co
st o
f En
erg
y (L
CO
E -
¢/kW
h)
Installed Cost ($/Watt)
Average Installed Cost Today: $3.75/Watt
CT Commercial Retail Rate (14.37¢/kWh)
Solar PV LCOE 250 kW System, Fixed Mount
Hartford
Source: EIA, SunEdison Analysis
Gap to grid parity = ZRECs
7
Value Proposition of Solar PPA
• Electricity savings
Generally offered at Day 1 discount off fully bundled retail rates
Typically result in significant savings over the life of the contract
No upfront costs
Customer just pays for energy; not equipment
No assets on balance sheet
Predictable long-term pricing
Prices fixed over life of PPA
Hedge against volatile retail electricity prices
No technology risk
Developer responsible for all monitoring, maintenance
Pay for performance
Efficient leveraging of state and federal incentives
30% federal ITC
CT ZREC revenues
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
0.2
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Ce
nts
/kW
h
Contract Year
Solar PPA vs. Bundled Retail Rate
*Not actual forecasted savings.
For illustrative purposes only.
Case Study: Kohl’s Department Stores
Kohl’s awarded 6 ZREC contracts in
2012
– Typical project size: ~300 kW
– Capital outlay: $0
Produces ~20-50% of stores’ total
annual energy requirements
– At or below retail electric rates from the
grid
Part of overall company plan to expand
operations while minimizing
environmental footprint
- Fleet of over 100 solarized facilities
across N. America
“The SunEdison solution is a great partnership between retail businesses
and green power. They enable the implementation of solar through their
Solar Power Services Agreement that otherwise would be very capital
intensive. Everyone wins.”
June Fischer, Senior Manager of Environmental Strategies, Kohl’s
Connecticut ZREC Program Basics
Budget based incentive program for no/low emissions distributed
generation
Over $1B in incentives allocated over life of program through six annual
solicitations
Technology agnostic
Any non-emitting Class I resource (solar, wind, hydro) may qualify
for Zero Emission Renewable Energy Credit Program though reality
is that lion’s share of funding will go to solar
Any low emitting Class I resource (including solar) will qualify for
Low Emission Renewable Energy Credit Program
Annual solicitations resulting in long-term REC contracts with
distribution utility
Reverse auction mechanism
Winning bidders receive 15-year REC offtake agreement
Supports net metered systems up to 1 MW (ZREC) or 2 MW (LREC)
Separate standard offer programs for smaller systems
ZREC Program – State of the Art Incentive Design
Promotes self-sustaining local solar industry
6 year runway for solar to achieve retail grid parity before incentives end
Sufficient scale to attract national players – est. 350 -500 MW market
over life of program
Market-based program design drives competition
Imposes competitive discipline on solar market participants
Competition minimizes ratepayer subsidy
Long-term contracts facilitates low cost project finance
Winning bidders receive 15-year REC offtake agreement with
creditworthy entity (i.e., distribution utility)
Focus on net metered systems up to 1 MW (ZREC)
Protects other ratepayers
Budget based program – as costs come down, more installed capacity
possible
Mid-course review after Year 4 – program continuation contingent on
declining costs
