Solar Case Studies for Tax Exempt Entities

Solar Case Studies for Tax Exempt Entities Presented By: Richard Raeke Director of Project Finance Borrego Solar Systems, Inc. www.borregosolar.com

Financing Options for Tax Exempt Entities • Solar is expensive at roughly $7,000/kilowatt (or $0.45/kWh) • On a typical solar project, the federal tax incentives pay for more than 1/3, local or state incentive programs pay for 1/3 and the last 1/3 comes from debt or owner equity. • As tax-exempt entities, universities cannot receive the federal Investment Tax Credit/Grant and bonus depreciation on a purchase. • Tax Exempt Entities have to look to more creative structures, such as PPAs, in order to monetize the tax credits. • Without monetizing the tax credit, a customer would have to look to another funding source, such as grants or donations to make the system economically viable.

A Power Purchase Agreement (PPA) • Long term agreement to purchase electricity from a third party financier (PPA Provider) – 20 year terms, predictable cost increases • No equipment to purchase, no capital investment • No annual maintenance expense, no asset to manage • Customers purchase only the power produced by the system

State Solar Programs • Solar PV works in states with viable incentive programs • Massachusetts – Commonwealth Solar Initiative • California – Production Based Incentive (PBI) • New Jersey – SREC program • Others include Connecticut, New York, Pennsylvania, Arizona, Colorado, New Mexico, Oregon and Hawaii • The ARRA • Stay tuned – incentive programs are evolving.

Case Study: Boston Community Capital • Boston Community Capital received $10 million from Massachusetts through the Green Affordable Housing Initiative • BCC had mission of creating the most economical solution for putting on solar on affordable housing statewide • BCC issued an RFP for an installation/financing partner • Chose Borrego to help identify best sites and install systems • Letters sent to dozens of affordable housing owners across state • Based on responses, Borrego began evaluating sites • BCC created a PPA provider – Solar Energy Advantage Program • Five initial sites – Cambridge, Charlestown, Webster and Pittsfield • Second round of installations to follow this year Generate Change. Choose Solar.

Case Study: Cambridge Housing Authority Washington Elms: PPA Solution • Boston Community Capital PPA • 100 KW • Sharp 175 modules • SMA inverters • Uni Rac ULA racking • 15 degree tilt – SSW • Solar on 6 buildings • Reduce common load kWh by 60% • 20 year $.165 / kWh PPA • Annual 1.25% escalator Generate Change. Choose Solar.

Case Study: Cambridge Housing Authority Washington Elms • 100 KW • Sharp 175 modules • SMA inverters • Uni Rac ULA racking • 15 degree tilt - SSW Generate Change. Choose Solar.

Case Study: Cambridge Housing Authority Washington Elms: Roof Mounts and Racking Generate Change. Choose Solar.

Case Study: Cambridge Housing Authority Washington Elms: Electrical Conduit Installation Generate Change. Choose Solar.

Case Study: Cambridge Housing Authority Washington Elms Generate Change. Choose Solar.

Case Study: Cambridge Housing Authority Washington Elms: Module Installation Generate Change. Choose Solar.

Case Study: Cambridge Housing Authority Washington Elms: Inverter Installation Generate Change. Choose Solar.

Case Study: Cambridge Housing Authority Washington Elms: Completed Arrays Generate Change. Choose Solar.

Case Study: UCSD • Borrego won RFP issued by UCSD • Partnered with Solar Power Partners to provide financing • Borrego signs EPC contract with SPP • SPP signs PPA with UCSD • Roughly $0.15/kWh • 20 year contract • UCSD keeps RECs • UCSD provides insurance

Case Study: UCSD • Site Evaluation • Customer preferences • Electricity consumption • Cost per kWh • Available space • Meter location • Trenching • Conduit runs Generate Change. Choose Solar.

Case Study: UCSD Prefabrication of arrays Generate Change. Choose Solar.

Case Study: UCSD Carport Construction Crane day Generate Change. Choose Solar.

Case Study: UCSD Carport construction Generate Change. Choose Solar.

Case Study: UCSD Generate Change. Choose Solar.

Case Study: Padre Dam Municipal Water District • 862 kW of thin film over three sites and on 15-foot tall carports • 546 day sales process • Borrego awarded RFP • Expensive installation due to carports • Borrego signed PPA and Site-Lease Agreement with Padre Dam • Section 48 ITC faced expiration system needed completion by Dec. 31 • Borrego assigned PPA to a third-party at quoted price • EPC negotiations finished mid-September 2008 • Construction finished and system interconnected mid-December • Bonus depreciation preserved Generate Change. Choose Solar.

Case Study: Padre Dam www.borregosolar.com

Solar Case Studies for Tax-Exempt Entities Richard Raeke Director of Project Finance Borrego Solar Systems, Inc. rraeke@borregosolar.com (510) 849-5414 www.borregosolar.com www.borregosolar.com

Solar Case Studies for Tax Exempt Entities