CleanView Capital Financing a clean energy future Clean Energy - - PowerPoint PPT Presentation

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CleanView Capital Financing a clean energy future Clean Energy - - PowerPoint PPT Presentation

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CleanView Capital Financing a clean energy future Clean Energy Ownership Program Energy Cost Reduction + Value Creation www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017 CleanView

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SLIDE 1

Clean Energy Ownership Program

Energy Cost Reduction + Value Creation

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 2

Making Clean Energy Ownership Affordable

Solar, batteries, wind, CHP energy systems and microgrids!

  • No upfront capital outlay.
  • 100% tax-deductible, fixed payments, no escalation.
  • No interest paid.
  • Ownership at discounted price after years 6 and 7.

A low-cost path to ownership at an affordable price!

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 3

Energy Cost Reduction + Value Creation

Companies keep:

  • Full utility savings:
  • Greater than 20% cost reduction.
  • Low levelized cost of energy (LCOE).
  • RECs & all environmental benefits.
  • All incentive payments: grants, PBI.
  • Companies obtain value from tax benefits.

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 4

Program Features

  • 9-year investment strategy: “Lease & Loan to Own”
  • 7-year ”traditional” lease: a low-cost path to ownership.
  • 2-year loan: purchase financing maintains low payments.
  • Progress payments without construction loan: no interest.

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 5

Leasing as a Method

  • f Financing
  • Savvy business owners and CFOs prefer to own solar and

clean energy systems when they can obtain long-term value and the purchase is affordable (fits within budget).

  • A lease is used to eliminate upfront capital investment and

provide a low-cost path to ownership at an affordable price.

  • In this way, a “traditional” lease with attractive purchase
  • ptions serves as a “de facto” method of financing a

company’s acquisition of a clean energy system.

www.CleanView Capital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 6

What is a Lease?

  • A lease is a usage agreement (aka rental agreement).
  • Owner of property (Lessor) conveys to another (Lessee)

the right to use the property for a period of time (term) in return for a consideration (payments).

  • Purchase option exercised or property returned.
  • Typically triple net (Lessee responsible for insurance,

maintenance, and property taxes).

  • Not borrowing money.
  • Payments 100% tax-deductible.

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 7

Leasing: Tax Credit Monetization Solution

  • Solar projects are not undertaken when a company

cannot derive value from the federal ITC.

  • LLCs and S Corps cannot use a tax credit.
  • ITC passed through to company owners does not

conserve cash where needed, in the business.

  • An operating lease (aka tax lease) solves this

problem when Lessor monetizes the ITC and shares the value with the company (Lessee).

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 8

Cost Comparison: Operating Lease vs Loan

Solar Lease Amount: $ 1,000,000

Operating Lease

(No Interest)

Loan

(6% Interest)

Monthly Payment 8,100 Monthly Payment 14,538 # Months X 84 # Months X 84 Total Payments 680,400 Total Payments 1,221,192 Purchase (FMV = 15%) + 150,000 Purchase (included above) Total Paymts & Purchase 830,400 Total Paymts & Purchase 1,221,192 Tax Savings (35% tax rate): Tax Savings (35% tax rate): ITC

  • ITC (30%)
  • 300,000

Monthly Payments

  • 238,140

Interest

  • 77,417

MACRS Depreciation

  • 52,500

MACRS Depreciation

  • 297,500

After-Tax Cost 539,760 After-Tax Cost 546,275

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 9

“Traditional” Lease

  • vs. Bank Loan
  • 100% project cost vs. possible loan to value limit.
  • No compensating balances.
  • No restrictive financial covenants.
  • Preserves existing bank lines.
  • Banks may require additional collateral (liens).
  • Lease Conserves Cash. More cash in Lessee’s

hands improves balance sheet ratios, and profitability when invested in the business. Leasing: A powerful cash management tool !

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 10

7-Year “Traditional” Lease

  • vs. 20-Year PPA or

Solar Industry Lease

  • Fixed payments with no escalation.
  • All utility/government incentive payments to customer.
  • Full displaced cost of electricity is savings to customer.
  • No lien on real estate.
  • 4-page lease vs. 20 pages or more.
  • Quick, low-cost path to ownership.
  • Greater overall value for customer.

Leasing as a low-cost method of financing!

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 11

“Traditional” Lease vs. PACE Program

  • Lease solves the ITC monetization problem- Not PACE.
  • No lien on real estate.
  • No interest paid.
  • Credit-based vs equity-based approval.
  • Simple, familiar 4-page lease documentation.
  • Quick, low-cost path to ownership.
  • Lease provides greater overall value for customer.

Leasing as a low-cost method of financing!

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

CleanView Capital

Financing a clean energy future™

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SLIDE 12

Sample Cash Flow CleanView Capital

Financing a clean energy future™

Prepared for: Contractor: Y

  • ur Name Here

Date:

6/12/2017

Tax Rate 35% 0.150 Loan = Purchase Price (C) 236,550 2.00% Interest Rate: 5.00% Solar 1,577,000 0.50% # Months 84 # Months 24 # Months 108 Battery 788.50 Payment 12,773.70 Payment 10,377.78 Wind 1,577,000 1,072,991 249,067 Total Mo. Pymts 1,322,057 Generator 8,635 Lease Costs 8,635 1,577,000 1,577,000 1,081,626 249,067 Grand Total 1,330,692

BEFORE-TAX CASH

Am't Invested Electric (kWh) Utility Incentive O&M Net less Net less Loan MACRS (F) as percent of Year Production Savings Income (D) Expense Net Lease Loan all Pymts Lease Pymts Interest Depreciation Annual Cumulative Project Cost (G) 1 867,350 130,103 140,920 271,023 (161,919) 109,103 (38,186) 70,917 70,917 0.0% 2 863,013 132,041 132,844 264,885 (153,284) 111,601 (39,060) 72,541 143,458 0.0% 3 858,698 134,008 125,468 259,477 (153,284) 106,192 (37,167) 69,025 212,483 0.0% 4 854,405 136,005 118,265 254,271 (153,284) 100,986 (35,345) 65,641 278,124 0.0% 5 850,133 138,032 111,469 249,501 (153,284) 96,216 (33,676) 62,541 340,664 0.0% 6 845,882 140,088 105,267 245,355 (153,284) 92,071 (32,225) 59,846 400,510 0.0% 7 841,653 142,176 99,207 241,382 (153,284) 88,098 (30,834) 57,264 457,774 0.0% 8 837,444 144,294 93,489 237,783 (124,533) 113,250 (83,224) 3,223 16,559 49,807 507,581 0.0% 9 833,257 146,444 88,275 234,719 (124,533) 110,186 (82,152) 1,158 26,494 55,686 563,267 0.0% 10 829,091 148,626 83,178 231,804 231,804 (81,132) 15,896 166,569 729,836 0.0% 11 824,945 150,841 150,841 150,841 (52,794) 9,538 107,584 837,420 0.0% 12 820,821 153,088 153,088 153,088 (53,581) 9,538 109,045 946,465 0.0% 13 816,717 155,369 155,369 155,369 (54,379) 4,769 105,759 1,052,224 0.0% 14 812,633 157,684 157,684 157,684 (55,189) 102,495 1,154,718 0.0% 15 808,570 160,034 160,034 160,034 (56,012) 104,022 1,258,740 0.0% 16 804,527 162,418 162,418 162,418 (56,846) 105,572 1,364,312 0.0% 17 800,504 164,838 164,838 164,838 (57,693) 107,145 1,471,457 0.0% 18 796,502 167,294 167,294 167,294 (58,553) 108,741 1,580,198 0.0% 19 792,519 169,787 169,787 169,787 (59,425) 110,361 1,690,559 0.0% 20 788,557 172,317 172,317 172,317 (60,311) 112,006 1,802,565 0.0% 21 784,614 174,884 174,884 174,884 (61,209) 113,675 1,916,240 0.0% 22 780,691 177,490 177,490 177,490 (62,122) 115,369 2,031,609 0.0% 23 776,787 180,135 180,135 180,135 (63,047) 117,088 2,148,696 0.0% 24 772,903 182,819 182,819 182,819 (63,987) 118,832 2,267,528 0.0% 25 769,039 185,543 185,543 185,543 (64,940) 120,603 2,388,131 0.0% Totals: 20,431,254 3,906,357 1,098,383 5,004,740 (1,081,626) (249,067) 3,674,048 (1,373,090) 4,381 82,793 2,388,131 Levelized Cost of Energy (H): 0.011 $ 1,192,099 92% 0.150 $ TAX SVGS (EXPENSE) based upon : AFTER-TAX CASH

(A) Contractor provided electric rate and output, PV degradation, inflation percentage, tax rate and incentive assumptions.

Electric Inflation Rate

This projection is for discussion purposes only. Customers should consult their own accountant, tax advisor and energy consultant.

SYSTEM

(B) Projection assumes Lessee finances its purchase of the energy system at the end of the lease term with a LOAN FROM A LENDER OF LESSEE'S CHOOSING. (C) Loan Amount equal to Lessee's purchase at fair market value (assumed to be 15% of Lease Amount). See "Path to Ownership" in Program Guide. (G) Amount Invested is the Lessee's After-Tax Cumulative Cash Flow expressed as a percent of Project Cost.

savings from current rate:

(H) Levelized Cost of Energy equals Total Payments less Incentive Income divided by Total Electric Production. (D) Incentive Income from RECs, grants, PBI, FIT, etc.

PAYMENTS (E) Total Monthly Pymts A Massachusetts Company PROJECT SUMMARY (A) Components Electric Rate ($/kWh) Project Cost System Size (kWdc) Lease Amount Incentive applied to Cost Project Cost Annual PV Degradation After-Tax LEASE & LOAN TOTALS

(E) Year 1 also includes a 0.5% Lease Commitment Fee plus $750 for documentation.

Net Present Value of After-Tax Cash Flow at 5%:

(F) Tax savings from MACRS depreciation on Purchase Price.

Before-Tax 7-YEAR LEASE Total Total Monthly Pymts Lease Costs Total LOAN (B)

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SLIDE 13

www.CleanViewCapital.com * IBESA U.S. Storage Day * September 10, 2017

Stanley S. Fishbein, JD, LLM (Tax)

Managing Partner 777 Westchester Ave, Suite 101 White Plains, NY 10604 Tel: 914.613.8454 ext. 1 Email: Stan@CleanViewCapital.com

Albert W. Golembeski, Jr.

Managing Partner 5250 Old Orchard Road, Suite 300 Skokie, IL 60077 Tel: 914.613.8454 ext. 2 Email: Al@CleanViewCapital.com

CleanView Capital’s Clean Energy Ownership Program uses a traditional lease with attractive purchase options to provide companies nationwide with a low-cost way to obtain ownership of solar and other clean energy systems, including

  • microgrids. Our bank partners, each with more than $35 billion of assets, provide

the program with tax equity and funding capacity greater than most clean energy

  • funds. Transactions range from $100,000 to $10 million.

_________

CleanView Capital

Financing a clean energy future™