www.capsolar.org CAP SOLAR ROOFTOP SOLAR THE VALUE CAP SOLAR - - PowerPoint PPT Presentation

SOLAR ENERGY AS A SOCIAL ENTERPRISE

392 Main Street, Hackensack, NJ 07601 (e) steven.leitner@capsolar.org (p)201.968.0200 x 7057

www.capsolar.org

CAP SOLAR – ROOFTOP SOLAR – THE VALUE

Ford / EPA / Ringwood Remediation Cap Solar Community Solar Farm

CAP SOLAR – COMMUNITY SOLAR – THE VALUE

• 1. Why CAA solar?
• 2. Available Financing
• 3. Opportunity Zones
• 4. Other Funding Methods
• 5. Project Flow
• 6. Leadership Time and Resources Needed
• 7. Where to get projects
• 8. How Cap Solar attracted Funding for the Network.

SOLAR ENERGY AS A SOCIAL ENTERPRISE

392 Main Street, Hackensack, NJ 07601 (e) steven.leitner@capsolar.org (p)201.968.0200 x 7057

The discussion

• 8. Understanding the options available
• 1. Risk Quadrant
• 9. Snapshot of the Solar Market
• 10. The importance of the Value Statement to attract funders to

non-profit solar.

• 1. Cap Solar Rooftop Project
• 2. Cap Solar Community Solar Project.
• 11. The Cap Solar Value Statement to the Network

SOLAR ENERGY AS A SOCIAL ENTERPRISE

Why Community Action Solar?

• Cap Solar is inside our network and has better insights into the mission of our Network than an outside developer.
• As the solar developer, the CAA is in control of the aspects of the project that serves our communities.
• Price of Power
• Choice of off-taker
• Avoidance of credit-worthiness of off-takers.
• New clients to widen CAA reach into community for other services.
• More unrestricted development and other fees paid directly into local CAA.
• Renewables are evolution of services in our network
• LIHEAP
• Weatherization
• Database mining for off-takers.
• Local / State / Federal Innovation

392 Main Street, Hackensack, NJ 07601 (e) steven.leitner@capsolar.org (p)201.968.0200 x 7057

CAP SOLAR – INVESTORS AND THE NETWORK

• Cap Solar has proven to investors that non-profit solar can be a market rate investment.
• Cap Solar has access to different types of capital that is not always available to for-profit

companies.

• As the developer, your CAA can set the price of power at a deep discount. Cap Solar will

model lowest price possible with the funders to see if a project is viable.

• Cap Solar has presented the value of the CAA network to our funders to drive more value

and economies of scale to our existing clients.

• Together, we have an immediate opportunity to create a nation-wide program.

… AND WE HAVE ACCESS TO THE CAPITAL TO DO IT WITH YOU.

$1 BILLION $350 MILLION

• Opportunity Zone Funds
• Aggregate minimum of 400kW
• Larger individual projects will

garner larger fees to CAA.

• Must be invested by 2025
• Solar only
• Large European Renewable

Company looking for specific market share in the US.

• Aggregate minimum of 1-3mW
• Larger individual projects will

garner larger fees to CAA.

• No restrictions on location of

building site.

• All renewables considered

Who can participate?

Any non-profit or for-profit that will return value to the community.

When can this happen?

AVAILABLE FUNDING THROUGH CAP SOLAR FOR NON-PROFIT SOLAR

Now

www.capsolar.org

WHAT IS AN OPPORTUNITY ZONE? www.capsolar.org

OPPORTUNITY ZONE REGULATION

What are they?

OPPORTUNITY ZONES

• An Opportunity Zone is a tax incentive to invest in economically-

distressed communities.

• Opportunity Zones are special entity corporations with

shareholders who can invest and divest in each corporation for as long they want the Zone tax incentive.

• The Zones were chosen by the Governor of each state.
• An investor can reduce certain capital gains taxes if the investment

is in the Zone for 10 years.

• The incentive expires in 2026, so projects must be under

construction in 2025.

• The Zones represent 8,700 Census Tracts and cover 18,565 Zip

Codes.

31 Square Miles 10GW

OPPORTUNITY ZONES

1/7th of all US solar

For-Profit Corporate

• Traditional Loans and Equity Investments

Non-Profit Corporate

• Traditional Loans and Equity Investments
• Community Reinvestment Act (CRA)
• Tax Investors – ITC, MACRS, NMTC, Opportunity Zones
• Impact Investing
• Social Impact Bonds
• Corporate Social Responsibility (CSR)

Government

• Office of Community Services (OCS)
• Department of Community Affairs (DCA)
• Department of Energy
• CSBG
• LIHEAP Re-Allocations - Statute 2605 subsection (k)(1), (k)(2A), (b)(16)
• Societal Benefit Charge Incentives
• Regional Green House Gas Initiative
• Cap and Trade Grants

Other

• Foundation Grants
• Foundation Loans
• Foundation Guarantee
• Donations

Funding Sources

OTHER FUNDING

As a non-profit, as long as we are providing off-taker support services, we can raise funds AFTER the project is

• perational.

• Origination Fee – Finding the project
• Developer Fee – Participation in the development of the project
• Off-taker Fee – Finding the off-taker(s)
• On-Going Services Fee – Guaranteeing the power payment to the funder.
• “Pre-Development Fee” – Delivering a ready to build project.

HOW DO THE FEES WORK?

Types of Fees Size of Fees

• Size of the overall project will receive higher fees.
• Larger, single projects will receive larger fees.
• Fees to be paid after project completion
• Assumed predevelopment costs ie: Engineering can be reimbursed.
• Delivering a ”Ready to build” project will maximize all fees.

1. I am interested 2. I have identified opportunities 3. I am not sure how to identify opportunities 4. Contact Cap Solar 1. Advisory session 2. What needs to be done to analyze the market? 3. What outcomes would you like to see? 1. Cap Solar performs a market analysis to determine if another advisory session is needed 2. Cap Solar performs a fiscal analysis based on desired outcomes 3. Cap Solar makes a formal presentation to its funders 4. If accepted by funders, Cap Solar presents the terms of the outcomes with CAA 5. Cap Solar builds the project 1. Fee Distribution

Interest Advisory Implementation Completion

PROCESS CHART FOR CAP SOLAR PROJECTS

Project Construction Cap Solar Funds CAA Y N End

FISCAL WORKFLOW FOR CAP SOLAR PROJECTS

Development Origination Project $ Market, Engineering and Fiscal Analysis Project Completion Fees Fee Distribution End

Sales and Marketing

• Outreach to CAA’s local network
• Explain solar and financial impact
• Review Site Lease and PPA

Back Office

• Coordinate draw down and EPC payments
• Monitor power produced
• Monetize state incentives
• Bill site host under PPA
• Aggregate cash-remit to equity investor
• File State and Federal Taxes
• Produce financial statement
• On-going O&M responsibility

Construction

• Engineering/ Procurement /

Construction (EPC)

• Monitor Construction
• Complete interconnection

Legal

• Prepare entity
• Prepare documents
• Review/change all final contracts
• Specialty Advisory Services

CAA

Financing

• Available types of Financing
• Comprehensive Business Plan
• Solar Fiscal Modeling
• Contract negotiations
• Fiscal Pitch / Road Show

LEADERSHIP TIME AND RESOURCES – DO IT YOURSELF

Sales and Marketing

• Outreach to CAA’s local network
• Explain solar and financial impact

CAA Community Engagement

LEADERSHIP TIME AND RESOURCES – WITH CAP SOLAR

COMMUNITY ACTION’S REACH – WHERE CAN I FIND PROJECTS?

Municipality Community Hospitals, Health Centers For Profit Non-Profit

Municipal Property Housing Authority Superfunds Capped Landfills Parking Structures Penitentiaries Police Department Fire Department EMS Libraries Many Others…

Schools

Private Religious Head Start Day Care Public Schools Many Others… YMCA Salvation Army Good Will United Way Boy/Girl Scouts Red Cross Religious Charities Many Others… Boys and Girls Club Local Union Affiliate Rotary/Kiwanis, etc CHiP Veterans Homes VFW Senior Centers Community Centers Recreation Centers Gymnasiums Religious Organizations Many Others… Corporate Private Religious Low Income Community Many Others… For-Profit Solar Developers Lands for lease Shopping Centers Mausoleums Banks Condo Complexes Real Estate Developers Many Others…

COMMUNITY ACTION SERVICES FOR LOW-AND-MODERATE COMMUNITY

• LIHEAP
• Head Start/Early Head Start
• ESL
• HSE
• New Americans
• ServSafe
• Weatherization Training
• WAP
• Home-Safe Lead Remediation
• Financial Counseling
• Housing Counseling
• Economic Security Initiative
• Landlord Tenant Guidance
• Homelessness Prevention
• Youth Transition Housing
• Family Shelter Program
• Community Housing in Partnership
• Food Bank
• WIC
• SNAP
• Healthy Families
• Family Self Sufficiency – FSS
• CAP Credit Union
• Health Services
• Solar
• More…

The Cap Solar Website

http://www.capsolar.org Use the Opportunity Zone Fund Map to search by address (desktop only) Submit a project opportunity (individual, or upload multiple files) Submit addresses and descriptions of addresses and we will do the analysis. Learn more about Cap Solar. Contact Cap Solar / Online Chat. Email: projects@capsolar.org

THE CAP SOLAR MARKET ANALYSIS

What does the market look like?

• Energy Services Company (ESCO)
• For-profit solar
• Non-profit solar
• What GBCA discovered

Approaching the fiscal markets:

• Loans
• Tax Equity
• Straight Equity
• Social Impact Investors
• The reality of the Return on Investment and the non-profit sector.

Conclusions: The impact of the value statement as it pertains to getting partners. There is a sizeable void in the market that understood non-profit mechanics.

ELECTRICITY IS A COMMODITY

• Index Funds
• Exchange-Traded Funds (ETF)
• Mutual Funds
• Stocks
• Bonds
• Options
• Private markets
• ESCO

BUY LOW – SELL HIGH

• Direct to consumer pricing
• Services to clients
• Independence from predatory

practices.

• Maximum fiscal impact

Non-profit solar projects promote

ELECTRICITY IS A COMMODITY, BUT CAA CLIENTS ARE NOT

CAA CLIENTS ARE NOT

ENERGY SERVICE COMPANIES (ESCO)

Abest Power ABN Energy LLC Affordable Power Agera Energy Agway Energy Services Alpha Gas and Electric Ambit LLC American Power & Gas Ameristar Energy Amplified Power & Gas, LLC Associated Renewable Atlantic Energy LLC Atlantic Power & Gas LLC BluCo Energy BlueRock Energy Inc. Brown's Fuel Service, LLC Buy Energy Direct Buy Energy Direct (F) Champion Energy Services Chief Energy Power LLC Citizens Choice Energy, LLC City Power & Gas, LLC Clearview Energy Columbia Utilities Constellation Energy Power Choice Direct Energy Dynamic PL East Coast Power Energetix Energy Technology Savings Inc. Entrust Energy Ethical Electric Family Energy Inc. Gateway Energy Services Global Energy, LLC Great Eastern Energy, RE GreatEnergyRebate.com Green Mountain Energy Company Greenlight Energy, Inc. Gulf Electricity Hiko Energy LLC Hudson Energy IDT Energy IGS Energy Inspire Energy Holdings, LLC Josco Energy Just Energy Kiwi Energy Lexington Power & Light LLC Liberty Power Major Energy Mpower Energy New York Gas & Electric Nordic Energy Services LLC North American Power & Gas LLC Oasis Energy Choice Energy Phoenix Energy Group, LLC Public Power LLC Pure Energy USA, LLC Robison Energy SBR Energy LLC SJ Energy Partners South Bay Energy Corp. Starion Energy NY, Inc. Trident Power Utility Expense Reduction Verde Energy USA Viridian Energy NY, LLC XOOM Energy LLC Zone One Energy, LLC

$28.71 distribution, transmission, other charges $33.21 actual energy used. This is the ONLY charge an ESCO can change. 46.3% of this bill are avoidable costs if this customer used rooftop or community solar

• Rooftop solar will lower on-bill consumption.
• Community Solar will produce on bill-credit

for consumption.

THE REALITY OF GETTING A “LOWER” POWER CHARGE

If an ESCO offered a reduction in power of 10%, the bill would only go down 4.7% or $3.33. If the energy was discounted 100%, the savings would only be 47%. Reality:

RISK RETURN

Nothing ESCO CAA Solar Loan, 100% Equity Single off taker CAA Loan, 100% Equity, Multiple

• ff takers

30% Partner Tax sale for Equity, 70% Loan Outsource 100% $/off-taker or Developer Fee Outsource 100% - Developer fee for Maintenance, O&M Responsibility 100% equity partner – Development, Origination Fees, Maintain off-takers Sale/Leaseback NMTC/ ITC/ MACRS/ Incentives

Visionaries Leaders Standard Niche

NON-PROFIT SOLAR QUADRANT

100% equity partner – Development, Origination, Ongoing Service Fees, PPA Guarantee $$FREE Solar$$ 100% equity partner – Development, Origination Fees

Cap Solar Goldman Sachs Cap Solar New Funding

70+GW

TOTAL SOLAR CAPACITY INSTALLED NATIONWIDE

242,000

AMERICANS WORKING IN SOLAR

2,073,346

SOLAR ENERGY SYSTEMS INSTALLED NATIONWIDE

A SNAPSHOT OF THE MARKET 2019

75,000+

SOLAR DEVELOPERS

1-5

TRUE NON-PROFIT SOLAR DEVELOPERS IN THE COUNTRY

$17B

TOTAL SIZE OF SOLAR INDUSTRY

CAP SOLAR - ROOFTOP

What we did and why we did it:

• Spiraling utility costs
• The servicing of our community
• The underserved solar market opportunity
• Environmental responsibility
• This is the evolution of other core businesses

like LIHEAP and Weatherization

• Ability to wrap CAP services around clients

who are unable to pay their bill. How it changed our CAP agency:

• Indirect costs affect everyone’s mission.
• Approaching capital from a different

perspective creates opportunities to enable

• ther worthwhile social undertakings.
• It substantiated the successful role that CAPs

can play in the private sector.

• It helped us begin to look at our current

businesses differently.

• Provides much needed unrestricted capital

The Value Statement

A 2MW solar installation over a 15 year lifetime will produce 21,508 MWh of electricity, at a 50% discount, this will avoid approximately $1,720,000 of expense on utility bills.*

*Based on average New Jersey electricity rates

Cap Solar has generated 10,031,250 kWh to date. This has had the following environmental impact:

7,217,729 lbs 6,764 trees 5,908 barrels 9,899 lbs 19,318 lbs 303 lbs 133,934,000 hrs 298,138 gallons 7,257,155 lbs 2,981,378 lbs 6,289,221 miles 7,428,332 hours

ENVIRONMENTAL

GOLDMAN SACHS URBAN INVESTMENT GROUP CAP Solar New Jersey’s $10 million investment is financed by Goldman Sachs Urban Investment Group (UIG). This investment takes advantage of the New Market Tax Credit which incentivizes UIG to invest in economically distressed communities as defined by the Community Development Financial Institutions Fund at the US Department of Treasury. It is paid back, in part, by other tax-driven incentives: Solar Investment Tax Credits, Federal 1603 Grants, and accelerated depreciation in order to realize a return on capital. The remainder of the investment is paid back through revenues earned from participant consumption of solar energy and sales of solar renewable energy credits (SRECs). The project receives no government grants. After a 10-year period, when Goldman Sachs exits the project, CAP Solar will own all of the solar assets outright. CAP Solar is self-sustaining due to the revenue earned through power payments from nonprofit program participants.

NMTC = 40% ITC = 30% MACRS = 30% SRECs = $400-$700K/yr Tax Incentive = 100%

+

In English Please…

Social Impact Investment: Value from Investor to Cap Solar Power Payments = $170K/yr

CAP SOLAR – THE FISCAL VALUE STATEMENT

AND JUST LIKE THAT CAP SOLAR WAS BORN… WELL…NOT YET…

NEW COMPANIES REQUIRED

• 1. Tax Credit Investor
• 2. NMTC Investment Fund
• 3. Managing Member
• 4. Sub-CDE
• 5. Master Tenant
• 6. QALICB/Lessor
• 7. For-Profit Blocker
• 8. Non-Member Manager

COMPLEX CORPORATE STRUCTURING – NMTC – SALE LEASE BACK

• 62 Different Contracts
• 3000 Pages
• Corporate Attorneys
• Tax Attorneys
• Shared Accounting Firm
• Advisory Committee
• 1. Fund Distribution
• 2. Sale of SRECs
• Shared NMTC Firm

This does NOT include:

• EPC Contracts
• Interconnection
• Permitting
• Implementation
• Project Management
• Customer Acquisition
• Customer Management
• O&M Contracts
• Monitoring Contracts

Starting a “Utility”

COMMUNITY SOLAR

• Install in one location and sell in another
• Consumer has no infrastructure costs
• Ideal for low-income solar
• Rooftop vs Community Solar funding
• For- Profit Developer discount targets
• Non-Profit Developer discount targets

COMMUNITY SOLAR

CAP SOLAR - COMMUNITY SOLAR – RINGWOOD, NJ

CAP SOLAR – COMMUNITY SOLAR – RINGWOOD, NJ - SUPERFUND

CAP SOLAR – COMMUNITY SOLAR – RINGWOOD SUPERFUND

• Iron mines from the Revolutionary War
• Ford Motor Company bought the land and was

given permission to discard used car parts

• Ford landfill was used to dump car parts and toxic

paint sludge.

• The first site that was re-listed in EPA history.
• 500 Acres of Northern Ringwood
• 40 Indigenous Families live inside the Superfund
• Life expectancy has decreased to an average of 62

Subject of Documentary (HBO)

Mann v Ford

CAP SOLAR – COMMUNITY SOLAR - RINGWOOD SUPERFUND – VALUE STATEMENT

Cap Solar will build a 2MW Community Solar Farm on the same Lot and Block as the active EPA/Ringwood/Ford remediation. Positive use for the land that has been controversial for 40 years. Cap Solar will sell power at approximately 60% off local retail rates:

• 1. Indigenous population inside Superfund
• 2. Extremely Low-Income persons 0-100% of Federal Poverty Level
• 3. Low-Income persons 101-200% of Federal Poverty Level
• 4. Seniors who are 70% of Average Median Income
• 5. Remaining power will be used by the Borough Library.

The majority of the off-takers will come from LIHEAP, Weatherization and Head Start The reduction of electricity rates will lessen the demand for LIHEAP which will expand the reach of the program.

Ford / EPA / Ringwood Remediation Cap Solar Community Solar Farm

CAP SOLAR – COMMUNITY SOLAR RINGWOOD SUPERFUND – FUNDING AND SUPPORT

• Using State Land Use Regulations the Borough has leased the land needed to Cap Solar for $1/yr. for 20 years.
• Ford, who will be in an active remediation process on the same Block/Lot while we are constructing the solar

farm has been monitoring the project and may participate financially or otherwise.

• Due to the value and awareness the Solar Project will bring, the entire project has been pre-funded $4+ Million

by one of our investors.

• The Borough Council voted unanimously for the project and the lease.
• Local politicians have been using the positive impact of the project as a platform for re-election.

Letters of support:

• The Ramapo Mountain Indian community who live on the Superfund.
• The Borough of Ringwood Council and Mayor
• Religious leaders who support the low-income community
• Ringwood Economic Development Committee
• Ringwood Environmental Committee

THE CAP SOLAR VALUE STATEMENT TO THE NETWORK

• The fiscal and corporate infrastructure are proven and ready.
• Cap Solar has access to outside capital for the entire network.
• Cap Solar can provide an inside network resource to greatly facilitate the spread of non-profit solar.
• Other CAA’s do not have to convince other capital markets of the value of non-profit solar, our

partners already understand the value.

• Cap Solar will minimize the fiscal risk to the CAA.
• Leadership time and resources will not have to be invested in starting another line of business from

scratch.

• CAA’s will be able to spread more value to our communities.
• A unique source of unrestricted money.

www.capsolar.org

392 Main Street, Hackensack, NJ 07601 (e) steven.leitner@capsolar.org (p)201.968.0200 x 7057

www.capsolar.org

QUESTIONS?

info@capsolar.org projects@.capsolar.org

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