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Solar Power @ Closed Landfills: Project Economics in Massachusetts

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

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  1. Solar Power @ Closed Landfills:Project Economics in Massachusetts June 2009

  2. 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

  3. 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

  4. Ground Mounted Experience • Nexamp ground mounted solar projects: • Attached • Ballasted (ideal for Landfills)

  5. 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.

  6. 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.

  7. Key Issues: Cost and Performance

  8. Key Issues: Focus on Power Density • February/March 2009 edition of SolarPro Magazine about the Tilt Angle and Power Density (kWh/sqft):

  9. 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!

  10. 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

  11. 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

  12. Case Study: 220 kW Ground Mounted • Taxable Owner: No Public Building Adder

  13. Case Study: 220 kW Ground Mounted • Non-Taxable Owner: w/ Public Building Adder

  14. 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)

  15. 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

  16. 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

  17. Contact Information • Dan Leary, Nexamp, Inc. • President and COO • phone: 978.688.2700 x706 • email: dleary@nexamp.com • Jon Abe, Nexamp, Inc. • V.P. Business Development • phone: 978.688.2700 x707 • email: jabe@nexamp.com

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