Clean Technology Industry Report 2014

Brendan Lin

Silicon Valley U.S. Export Assistance Center | U.S. Department of Commerce | Submitted 07/24/2014
1
Outline of Report
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1. Description of Solar Financing Models
a. Solar Power Purchase Agreements (PPA) The Solar Services Model
b. The Solar Lease Model
c. The Solar Loan Model
2. List of Specific Solar Financing Firms
a. Solar Leasing/PPA
b. Solar Loan Providers
3. Recipients of Clean Technology Funding
a. Statoil Wind Farm in UK
b. World Bank Bangladesh Home Solar Systems
c. Apple Solar Farm
d. AT Capital India-based Orange Group Renewable Energy Products
e. City of Sunnyvale, CA Solar Systems for Public Facilities
4. Economically Sensible Clean Technology Deployment Locations
a. Bangladesh - Solar
b. Brazil Wind
c. Australia Solar
d. Nigeria Solar

Description of Solar Financing Models
Solar Power Purchase Agreements (PPA) The Solar Services Model
What Is It?
A third-party developer (the Solar Services Provider) owns, operates, and maintains the
solar energy system, and a host customer purchases the electric output and provides a
physical site for the system. This means that the host customer purchases the services of the
system rather than the system itself.
Who is Involved?
Leasing companies (the Solar Services Providers, i.e. the third-party developers) are
organized into several categories:
o Vertically Integrated Financiers
Provide financing and installation of the systems themselves (like SolarCity
and Vivint). They would be in charge of everything, including the capital,
sales, after-sales service, and maintenance.
o Partner Model Financiers + Preferred Installers
Clean Technology Industry Report 2014
Brendan Lin

Silicon Valley U.S. Export Assistance Center | U.S. Department of Commerce | Submitted 07/24/2014
2
Companies like SunPower or Sungage Financial provide financing for
systems installed by companies in a preferred network. The type of
financing can include leases, loans, or both.
o Semi-Integrated Financiers + Preferred Installers
Provide financing for systems installed by companies in a preferred
network AND internal resources. The type of financing can include leases,
loans, or both.
o Semi-Integrated Installers + Preferred Financiers
Provide all installation services themselves but source financing from both
internal AND external entities.
What Are The Benefits?
Benefits include the following:
o Third-party developer benefits financially, through tax credits and revenue from the
sale of electricity.
o Host customer can receive more stable, lower cost electricity.
o Host customer can avoid high up-front capital costs; system performance risk; and
complex design and permitting processes.
o All maintenance will be done by a third party.
The Solar Lease Model
What Is It?
Similar to a Solar Power Purchase Agreement (PPA, see above), a third-party developer
owns, operates, and maintains the solar energy system. Rather than charging host
customers for electrical output (like a PPA), the developer instead charges them a flat lease
rate for the physical system. This charge increases incrementally each year. This means that
the host customer pays for the system itself, rather than the services of the system.
Who is Involved?
Leasing companies (the Solar Services Providers, i.e. the third-party developers) are
organized into several categories. These are identical to those of PPA firms:
o Vertically Integrated Financiers
Provide financing and installation of the systems themselves (like SolarCity
and Vivint). They would be in charge of everything, including the capital,
sales, after-sales service, and maintenance.
o Partner Model Financiers + Preferred Installers
Companies like SunPower or Sungage Financial provide financing for
systems installed by companies in a preferred network. The type of
financing can include leases, loans, or both.
o Semi-Integrated Financiers + Preferred Installers
Provide financing for systems installed by companies in a preferred
network AND internal resources. The type of financing can include leases,
loans, or both.
Clean Technology Industry Report 2014
Brendan Lin

Silicon Valley U.S. Export Assistance Center | U.S. Department of Commerce | Submitted 07/24/2014
3
o Semi-Integrated Installers + Preferred Financiers
Provide all installation services themselves but source financing from both
internal AND external entities.
What Are The Benefits?
Benefits include the following:
o Host customer can receive more stable, lower cost electricity.
o Host customer can avoid high up-front capital costs; system performance risk; and
complex design and permitting processes.
o All maintenance will be done by a third party.
The Solar Loan Model
What Is It?
Solar loans have the same basic structure as home improvement loans. The principal a host
customer borrows from a lender would be paid off in monthly increments. These loans can
come in two forms: secured (customers must offer an asset as collateral) or unsecured (the
only collateral may be the solar system itself).
Who is Involved?
A large variety of institutions offer solar loans, including:
o Local and national banks
o Solar panel manufacturers
o Credit unions
o National lending institutions
o Certain public-private partnerships
o Utility companies
o Municipal governments
o For a full list of loan providing companies, click here.
What Are The Benefits?
Benefits include the following:
o Financial returns will most likely be higher with a solar loan than with a solar lease
or PPA.
o Loan payments are generally fixed and do not increase each year.

List of Specific Solar Financing Firms
Click here for a full list of solar leasing/PPA companies.
Click here for a full list of solar loan providers.


Clean Technology Industry Report 2014
Brendan Lin

Silicon Valley U.S. Export Assistance Center | U.S. Department of Commerce | Submitted 07/24/2014
4
Recipients of Clean Technology Funding
Statoil will spend $2.5 billion on offshore wind farm in the United Kingdom
The money will go towards the Dudgeon Offshore Wind Farm off Norwich, England.
Statoil canceled a planned project in Maine (USA) due to the governors political
maneuvering.
World Bank offers loan of $78.4 million to government of Bangladesh for 480,000 home solar
systems
Planned install of 7,000 home solar systems per month, which would make it one of the
largest projects of its kind in the world.
World Bank: Together, the government of Bangladesh and the World Bank is scaling up a
program that delivered development results for millions of rural Bangladeshis. This is a
proven model that works. Investing in electricity in rural areas empowers both men and
women, leading to increased income and growth opportunities, and reducing poverty.
Apple to spend $55 million on 100 acre, 17.5 MW solar farm for its North Carolina data center
Would be the third solar farm powering its Conover, NC data canter. The farm itself will be
in nearby Claremont, NC.
Apple is contracting with SunPower for its solar needs; wants to have 100% of its data
centers run on renewable energy in the next few years.
AT Capital, a Singapore-based $2.5 billion private investment fund, to invest $40 million in
India-based Orange Groups renewable energy projects
The Orange Group focuses on hydro, biomass, wind and solar energy and has an operating
portfolio of 60 MW of wind power projects in Rajasthan and is currently developing a
further 150 MW of wind power projects in Madhya Pradesh. The company is also
developing two biomass-based power projects of 10 MW capacity each in Karnataka. The
Orange Group plans to become one of the leading renewable energy companies in India and
is targeting 1,000 MW of power generation by 2017 through further investment.
City of Sunnyvale, California to spend $1.3-$1.5 million on installation of solar panels for city-
owned facilities
Sunnyvale City Council voted to explore PPA and direct purchase of solar panels for the
SMaRT Station, Ortega Park, Baylands Park and the Sunnyvale Corporation Yard
Vote was split 4-3.


Clean Technology Industry Report 2014
Brendan Lin

Silicon Valley U.S. Export Assistance Center | U.S. Department of Commerce | Submitted 07/24/2014
5
Economically Sensible Clean Technology Deployment Locations
Bangladesh - Solar
The World Bank is offering a loan of $78.4 million to the government of Bangladesh for
480,000 home solar systems. Dubbed the Rural Electrification and Renewable Energy
Development II (RERED II) Project.
Brazil Wind
Renewable energy participation in Brazil increased 2.5% from 2012 to 2013; wind energy
capacity in particular increased 73% from 2011 to 2012. Half of that growth is attributed to
the Brazilian Governments Programme of Incentives for Alternative Electricity Sources
(PROINFA, also known as Law 10438 - Programa de Incentivo a Fontes Alternativas de
Energia Eltrica).
Australia- Solar
Bloombergs New Energy Finance Market 2030 Outlook forecasts almost $37 billion
invested by Australia in solar technologies in the coming years. This is based on the
conditions of the electricity market; the cost of retail electricity is high, while the cost of
technologies is continuously decreasing.
Nigeria- Solar
Nigeria has a 10% target for renewable energy mix for all new connections by 2020, set by
the National Electric Power Policy of 2001. It recently received a $5 billion solar energy
investment from SkyPower FAS Energy, a global clean energy development venture.