Making high-quality, high-power solar cells
and modules using U.S.-based technology at
affordable costs to address the world’s energy needs
THE GPASI: GOOD NEWS FOR THE COMMERCIAL PV MARKET FEB. 8 2013
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SUNIVA IN GEORGIA: OVER 90 SITES & 7+MW INSTALLED
Suniva Executives at HQ with First Lady & Georgia Governor Nathan Deal
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TODAY’S SPEAKERS
• Anthony Coker – Suniva, Sr. Director, Business Development
• Ervan Hancock -- Georgia Power, Manager of Renewable & Green Strategies
• Doug Beebe – Key Equipment Finance, Vice President, Energy Finance
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AGENDA
• GPASI Overview & Benefits for Commercial Customers, Anthony Coker
• In-depth review of Medium-Scale Solar Agreement & Process - Ervan Hancock
• Highlights of lease financing plan for GPASI commercial clients - Doug Beebe
SUNIVA OVERVIEW
Manufacturer of high-efficiency, crystalline silicon PV cells & modules
– High-Efficiency Cells: 19.2+% in production; over 20% in laboratory; roadmap to 22+% by 2014
– High-Power Modules: Up to 16+% in production; 60-cell modules up to 270W, 72-cell modules up to 315W
– Buy American Compliant Modules: one of the highest U.S.-content modules on the market
– Manufacturing Capacity: 170 MW in the U.S. and expanding in 2013; 500 MW in Asia
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SUNIVA INVESTOR BACKING
Suniva is led by a highly-successful leadership team and backed by quality investors
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SUNIVA & GEORGIA TECH DEEP ROOTS
1985: PV Program
Established at Georgia Tech
1992: Dept. of Energy provided funding
1992: GA Tech
University Center of Excellence
(UCEP) Established
2007: Suniva Founded
Deep Roots with GA Tech, Continued Collaboration
Suniva has access to over $50M worth of advanced research equipment at UCEP/Georgia Tech
Suniva benefits from a budget of over $43M of PV-related research programs funded partly by the U.S. DOE
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SUNIVA & GEORGIA TECH DEEP ROOTS
90 kW rooftop installation on Georgia Tech’s Clough Center
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SUNIVA INNOVATION IN THE VALUE CHAIN
Silicon Ingot Wafer Systems Integrators
Cells Modules
Balance of System Solutions
Unique Partnerships
The solar cell is the “DNA” of
any PV system, and hence the
key driver of value
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CELL TECHNOLOGY ROADMAP
2008 We are here 2014
Eff
icie
ncy
< 6months Startup
Industry leading performance
2-bus bar cell design
Proprietary recipes
Process optimization
Material and equipment improvements
3-bus bar design
Advanced Metallization
Finer Gridlines
Higher efficiency at Lower Cost
Full Al BSF
N-type Select Plus
N-type substrate
Back contact eliminates all shading
Integrated front & back side enhancements
Simplified 12-step process
Proprietary >20% cell structure
Back side improvements
NREL certified over 20%
Proprietary Cell and Process
World’s First adopter of Implant
Front side emitter improvement
Process Simplification
ARTisun 18.0%
ARTisun 17%
ARTisun Select 19.0%
ARTisun Star 20% ARTisun
Select + 19.5%
ARTisun IBC
> 22%
Execution Optimization Innovation Simplification Collaboration
2008 We are here 2014
Listed with all leading international agencies Certification
In-house and third party validation Reliability
• UCL Extended Stress Test – Passed at Fraunhofer ISE
• Bankability Audit by Beck/SAIC – Passed
• IEC Salt Spray Extended Severity Level 6 – Passed
• PID free as tested at PV Evolution Labs
• PAN File verification at PV Evolution Labs
Verified by independent labs & field sites Energy Yield
• Long Term Field Performance Analysis at TUV – 100%
• Hundreds of installs, documented field performance and yields – out perform
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QUALITY & RELIABILITY TESTING MODULES ARE FIELD TESTED, CERTIFIED & HAVE PASSED THE HIGHEST LEVELS OF QA TESTING
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ORIGINALLY PROPOSED TO THE PSC
2013 2013 2015 2014
60MW
10MW
180 Utility + 30 Distributed = 210 MW Total
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THE FINAL ALLOTMENT
The Balance of Any Unused DG
120 Utility + 90 Distributed = 210 MW Total
A 3x Increase for Commercial Applications
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GPASI DETAILS
Georgia Power recently announced its new solar program called the Georgia Power Advanced Solar Initiative (ASI). As approved by the PSC, Georgia Power will purchase 210
MW of solar power via a Power Purchase Agreement (PPA) with:
• 45 MW of Distributed Generation (5MW expected to be provided to SP1)
• 60 MW of Utility Scale to be deployed in 2013 and 2014 The Initiative is divided into 3 categories: 1) Small Scale Solar (25% reserved of Distributed Generation)
A. Less than or equal to 100 kW B. FIT of $0.13/kWh, 100% sold to Georgia Power for 20 years C. Must be installed within 6 months of acceptance date
2) Medium Scale Solar (Distributed Generation) A. Greater than 100 kW and less than or equal to 1 MW B. $0.13/kWh or an escalating price schedule both over 20 years C. Collateral security required plus system design/layout
3) Utility Scale Solar A. Competitive RFP process B. Must not exceed $0.12/kWh
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THE ASI APPLICATION PROCESS:
Evaluation
• Deadline for application: March 1, 2013
• GP to train and register all applicants
• Applicants trained on software
Submission
• GP to review application package consisting of one-line diagram, textual description, and proof of fee payment
Awarding
• If more than 45 MW of applications received then GP to subject whole batch to a lottery
• Applications not picked in first 45 MW, to be listed in the order they were received
• Remaining sites that do not advance stay in the queue for 2014; no refunds given for sites unless the 90 MW is oversubscribed and applicant did not make the queue
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GPASI PROCESS TIMELINE
Participants’ Conference at Georgia Power
On-line Application Process Open
Notification of Completeness of Application
After Acceptance, Project Completion
Feb. 22
Mar. 1-14
15 Days
190 Days
Georgia Power's Renewable Strategy with Solar Power
Presented by Ervan Hancock
Renewable Development and Green Strategy Manager
Georgia Power Company
GEORGIA POWER COMPANY’S CIRCLE OF LIFE
CUSTOMERS
Constructive
Regulation
Healthy Capital
Spending
High Reliability
Low Prices
High Customer
Satisfaction
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GEORGIA POWER ADVANCED SOLAR INITIATIVE (210MW)
1. Distributed Solar Purchase Programs (45MW per year)
– Small Scale Purchase Program (<100kW)- Customer & Developer
– Medium Scale Purchase Program (100kW-1000kW)- Customer & Developer
2. Utility Scale Solar RFP Program (60MW per year)
– Projects selected through RFP with Independent Monitor (IM)
– Project sizes will range from 1MW-20MW
– No single project will exceed 20MW
3. Excess Capacity Rolled to 3rd Year
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DISTRIBUTED SOLAR PURCHASE PROGRAMS
Distributed Solar Purchase Programs
Small Scale Purchase Program (<100kW)
Program will begin 1st quarter 2013
Targeting up to 11MW annually to be allocated to projects <100kW
Must me developed at a GPC customer site
No single customer will exceed more than 20% of annual program capacity
Program will initially be offered to the SP-1(Green Energy Program) waiting list
Simplified interconnection agreement & metering costs
Purchase price will include solar avoided costs, capacity benefits along with
T&D savings 13cents/kwh
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Medium Scale Purchase (100kW-1000kW)
Program will begin 1st quarter 2013
Targeting up to 34MW annually to be allocated to medium sized projects
Pricing terms similar to Small Scale Program with two exceptions
– Fixed escalating and levelized pricing will be offered
– Additional security may be required
More detailed interconnection agreement & potential for additional metering costs
No single customer can have more than 20% of annual program capacity
Purchase price will include solar avoided costs, capacity benefits along with T&D savings
13cents/kwh 21
Distributed Solar Purchase Programs
TIMELINE 1. Filed Program with PSC September 26th
2. Received PSC Approval on November 20th
– Ongoing meetings with solar industry and PSC staff
3. Distributed Generation (DG) program to launch by March 2013
– Approach current customers on SP-1 waiting list
– Begin to receive and process project applications
– Notify applications no later than April 5th
4. Utility Scale RFP process to begin January 2013
– Expect power purchase agreements (PPA)s to be signed by September 2013
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RESULTS
Places Georgia as a national leader in solar development
– Develops the largest voluntary portfolio of solar photovoltaic in the country
Meets the needs of customers wishing to develop solar at their homes and businesses
Diversifies Georgia Power’s generation portfolio by adding cost-effective solar resources
Expands the Georgia solar industry by creating additional opportunities to develop projects in a responsible manner
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• Investing in Diversified Fuel Mix – Large Scale Solar – Biomass Potential
• Investing in Cost
Effective Energy Efficiency
• Adding Two Zero-Emission Nuclear Power Units – Vogtle Units 3 & 4
All Arrows in the Quiver
Classification - 25
How to finance your solar project
in Georgia
Doug Beebe Vice President, Energy
Finance
Key Equipment Finance (KEF)
• 100% owned by KeyCorp (NYSE: KEY)
• Among nation’s largest, well-capitalized banks
• Headquartered in Cleveland, OH
• Organized in Ohio in 1858
• Strong balance sheet; $89 Billion in assets
• Over 1,000 KeyBank branches in 14 states
• Corporate banking, finance and leasing across U.S.
• Over 15,000 employees
KEF leasing capabilities
• Customer receives the income from the Georgia Power
buyback program with a KEF lease
• Direct, full-recourse leases and loans
– Capital lease / Non-tax lease
Customer takes the tax benefits of 30% ITC and depreciation
Similar to a loan
– Operating lease / Tax lease
KEF takes the tax benefits of 30% ITC and depreciation
KEF uses the tax benefits to reduce the lease payment
– Loans
• 7 – 10-year terms
• Deal size: $250,000+, no maximum
• Construction financing available
Classification - 27
Capital/Non-tax Lease
• Similar cash flows to a loan
• Tax benefits
– Lessee (customer) takes ITC and Depreciation
– Customer tax appetite necessary
– Interest component of lease payments is considered an expense
• Georgia Power buyback income belongs to customer
• 100% financing of the equipment and installation
• Asset and liability recorded on customer’s balance sheet
• Customer owns the solar array at end of lease
Classification - 28
Operating/Tax Lease
• Tax implications
– Lessor (KEF) takes ITC and depreciation benefits
– KEF uses tax benefits to reduce lease payment
• Georgia Power buyback income belongs to customer
• 100% financing of equipment and installation
• Lease payments are considered an expense for tax purposes
• Asset and liability are recorded on Key’s balance sheet
• Three options for lessee at end of lease: 1. Renew/extend the lease
2. Purchase the equipment at fair market value
3. Remove the system and return to lessor (at lessee’s expense)
Classification - 29
Lease comparison
Classification - 30
Capital/ Non-tax Operating/Tax
Tax benefits Lessee KEF
Similar to Loan Long-term rental
GP buyback
income
Lessee Lessee
100% financing Yes Yes
Tax deduction Interest portion Lease payment
Balance sheet Lessee KEF
At lease
termination
Lessee owns,
clear title
3 options: 1. Renew
2. Return
3. FMV purchase
Benefits of lease vs. cash purchase
• KEF offers additional capital source, allowing company
to reserve cash for business operations
– Reinvestment into the company’s core business
– Higher rate of return
• Lower lease payments improve cash flow
• Accommodates specific tax and accounting needs
• Flexible end-of-term options
• Master Lease agreement expedites internal approval process
Classification - 31
Additional considerations
• Proven track record: KEF deals range from 70kW to 8MW
• Georgia Power buyback income flows directly to customer
• Fees for legal, appraisal, CPA certification, etc.
can be included in the amount financed
• Lease documentation simplified; primarily facilitated
by KEF in-house specialists
• Relationships developed for all external professional services
• Funded from KeyCorp balance sheet
Classification - 32
How to finance your solar project
• Solar installer contacts KEF with project details
• Customer provides 3 years financial statements to KEF
• KEF prepares solar lease proposal and cash flow analysis
• Customer accepts lease proposal
• KEF credit team reviews transaction
• If approved, KEF sends lease documents
• Sign lease documents and return to KEF
• KEF provides finance during project construction
• Solar project completed, KEF funds the solar integrator
• KEF starts the lease
Classification - 33