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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/ 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
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
Ground Mounted Experience • Nexamp ground mounted solar projects: • Attached • Ballasted (ideal for Landfills)
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.
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.
Key Issues: Focus on Power Density • February/March 2009 edition of SolarPro Magazine about the Tilt Angle and Power Density (kWh/sqft):
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 • $/kWh energy savings and REC revenue • ~95% of initial investment recovered by first 4 incentives if you can use them!
Key Issues: Maximize Incentives • Today’s MA market is rebate driven and rebates ($/watt) decrease faster than economies of scale improve as project size increases: Note: No Public Building Adder
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
Case Study: 220 kW Ground Mounted • Taxable Owner: No Public Building Adder
Case Study: 220 kW Ground Mounted • Non-Taxable Owner: w/ Public Building Adder
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)
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
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
Contact Information • Dan Leary, Nexamp, Inc. • President and COO • phone: 978.688.2700 x706 • email: email@example.com • Jon Abe, Nexamp, Inc. • V.P. Business Development • phone: 978.688.2700 x707 • email: firstname.lastname@example.org