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Solar Power @ Closed Landfills: Project Economics in Massachusetts June 2009 Agenda Key Issues Impacting Project Economics Screen 1: Cost and Performance Screen 2: Incentives Case Study: 220 kW Solar Project Taxable Entity Owner Non Taxable Entity Owner Host w/ 3 rd Party Owner

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Solar Power @ Closed Landfills:Project Economics in Massachusetts

June 2009


Introduction l.jpg

Agenda

Key Issues Impacting Project Economics

Screen 1: Cost and Performance

Screen 2: Incentives

Case Study: 220 kW Solar Project

Taxable Entity Owner

Non Taxable Entity Owner

Host w/ 3rd Party Owner

Looking Forward

Policy

Tracking?

Nexamp, Inc.

Turnkey Clean Energy Solutions Provider.

Leading Solar Installer Headquartered in Massachusetts.

32 Employees: engineers, designers, construction managers, installers, electricians, HVAC technicians, etc.

Recipient: Association of Energy Engineers Best Energy Reduction Project in New England 2008.

Introduction


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Landfill Solar Project Development

  • Nexamp Turnkey Installations Capabilities

    • Advisory Services

    • Technical and Financial Feasibility

    • Design and Engineering

    • Rebates and Incentives

    • Permitting and Interconnection

    • PPA and Other Financing Support Options

    • Installation

    • Operations and Maintenance


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Ground Mounted Experience

  • Nexamp ground mounted solar projects:

    • Attached

    • Ballasted (ideal for Landfills)


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Ground Mounted Experience

As a sub contractor to BlueWave, Nexamp provided preliminary technical and financial assessment to Western Massachusetts Electric Company to support DTE Solar Program Filing.


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Today’s Assumptions

  • This presentation applies to the MA Solar Market as of last Monday.

    • Market is subject to rapid change (equipment cost and policy).

  • Solar is still very reliant on incentives and incentives remain the primary financial driver.

    • Only projects that qualify for Commonwealth Solar or a similar incentive make financial sense.

  • Land in MA is relatively valuable and finite. Even brownfields may have a competing use (e.g., park, parking lot, etc.).

    • kWh/sqft (power density) may be a more important consideration than it is in other portions of the U.S.



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Key Issues: Focus on Power Density

  • February/March 2009 edition of SolarPro Magazine about the Tilt Angle and Power Density (kWh/sqft):


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Key Issues: Maximize Incentives

  • Incentives: Order of Importance on Project Economics

    • Commonwealth Solar Rebate or equivalent (~50% of project cost)

    • Federal 30% Tax Credit/ Grant for Taxable Entities

    • Federal Depreciation

    • MA State Tax Deduction

    • $/kWh energy savings and REC revenue

  • ~95% of initial investment recovered by first 4 incentives if you can use them!


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Key Issues: Maximize Incentives

  • Today’s MA market is rebate driven and rebates ($/watt) decrease faster than economies of scale improve as project size increases:

Note: No Public Building Adder


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220 kW Ground Mounted

Fixed Tilt @ 20°

Polycrystalline Modules

Commonwealth Solar Rebate Eligible

Scenarios

Taxable Owner

No Public Adder

Non-Taxable Owner

w/ Public Adder

3rd Party PPA

Both

Assumptions

Installed cost: $6/watt

Capacity Factor:13.2%

Degradation: .5%/yr

Avoided Electricity: $.14/kWh

RECs: $.35/kWh for 7 years

Inverter replacement in Yr. 20

25 year project life

Previously discussed incentives as applicable

Case Study: 220 kW Ground Mounted


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Case Study: 220 kW Ground Mounted

  • Taxable Owner: No Public Building Adder


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Case Study: 220 kW Ground Mounted

  • Non-Taxable Owner: w/ Public Building Adder


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Case Study: 220 kW Ground Mounted

  • Power Purchase Agreement: No Public Building Adder

  • $.11/kWh w/ a 3% annual escalator for 20 years w/ a 5 year extension option (savings is pre-tax)


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Case Study: 220 kW Ground Mounted

  • Power Purchase Agreement: Public Building Adder

  • $.07/kWh w/ a 3% annual escalator for 20 years w/ a 5 year extension option


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MA Conclusions and Outlook

  • Financial

    • Sweet spot is in 110 kW to 220 kW range

    • PPA make most sense for Public Entities

    • Tremendous value today, but expect changes

  • Outlook

    • Equipment Costs

    • Stimulus

    • Net Metering

    • CS Solar to S-REC Transition (better for larger projects?)

    • Increased use of Tracking Systems


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Contact Information

  • Dan Leary, Nexamp, Inc.

  • President and COO

  • phone: 978.688.2700 x706

  • email: [email protected]

  • Jon Abe, Nexamp, Inc.

  • V.P. Business Development

  • phone: 978.688.2700 x707

  • email: [email protected]


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