Presenting a live 90-minute webinar with interactive Q&A - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Structuring Solar Development Financing, Leasing and Operating Agreements for Commercial Properties Reducing Legal Risk and Maximizing Client Income Opportunities Through Strategic Use of Financing, Tax Incentives and Documentation THURSDAY, SEPTEMBER 19, 2013 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Jack Fersko, Partner, Greenbaum Rowe Smith & Davis , Woodbridge, N.J. Jamie F . Hahn, Managing Director, Solis Partners , Manasquan, N.J. Mark S. Hennigh, Founding Partner, Greene Radovsky Maloney Share & Hennigh , San Francisco The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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Strafford CLE Webinar/Teleconference • September 19, 2013 • Jack Fersko Jamie F. Hahn Mark S. Hennigh Greenbaum, Rowe, Smith & Davis Solis Partners Greene, Radovsky, Maloney, Share & Hennigh

• Why Solar? • Solar Generation Systems • Incentives • Transaction Structure • Project Documents • The Relationship Piece Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 6

• Energy Savings • Incentives • Environmental Benefits • Marketing Value  Greening your building • Competitive advantage Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 7

• Primary components of a solar PV energy system are as follows:  Solar photovoltaic modules (panels)  Mounting hardware  Inverter(s)  Disconnects  Meter  Data monitoring system Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 8

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• Roof mounted (steep and low slope roofs) • Ground mounted (fixed, single, dual axis trackers) • Parking lot canopy mounted Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 13

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VS.  Solar electricity produced  Solar electricity is delivered is delivered directly to the directly to a business or electrical distribution system residence or grid  If power is not needed at the  Utility / electricity supplier time of production, electricity enters into PPA to off-take goes back to grid via net (purchase) the power metering (customer receives  Renewable energy credits kWh credit on next billing cycle) (RECs) are usually bundled with the electricity (kWh)  Renewable energy credits sold (RECs) are un-bundled Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 18

• Federal Tax Incentives  IRC § 48 - 30% Investment Tax Credit (ITC)  Depreciation - 50% Bonus Depreciation Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 19

• State Incentives  Tax Credits 24 States  Sales Tax Incentives 28 States & Puerto Rico  Renewable Portfolio Standards 16 States & Washington D.C. Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 20

• California Solar Initiative • Property Tax Exclusion for Solar Energy Systems • Feed-In Tariff • PACE (Property Assessed Clean Energy) Financing • AB 32 Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 21

• The following apply to all qualifying solar electric generation facilities in New Jersey  SRECs – 15 Yr. Production-Based Incentive  Net Metering • Additional benefits:  Offset NJ’s higher than average electricity costs for 25+ years  Property tax exempt  Sales tax exempt Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 22

• First Party Ownership  Property owner/operator owns system, usually through affiliate  Engineering, Procurement and Construction (EPC) Agreement • Third Party Ownership  Power Purchase Agreement (PPA) and Site Lease  Independent third party owns system; sells power to building owner/operator via PPA  Independent third party owns and leases system to building owner/operator via equipment lease Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 23

• What will the system cost? • Financing • Energy savings • Incentives • Type of system • Terms of existing lease agreements • Land use issues Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 24

• System design and engineering • Permits • Utility interconnect approvals • Federal and state incentive approval administration • Procurement of all materials • Construction and project management • Metering • Testing and commissioning • Price  Building structure  Roof system  Electrical switch gear within the facility  Upstream utility distribution system infrastructure • Risk of Loss • Insurance • Warranties Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 25

• Typical Equipment Warranties  Panels – 10 Yr. Workmanship / 25 Yr. Limited Power Production  Inverter – 10 Yrs. w/ option for 20 Yrs.  Racking – 10 Yr. Materials and Workmanship  Data Monitoring – 5 Yr. Hardware / 5 Yr. Hosting Services Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 26

• Term • Price • Take or Pay • Insurance • Removal / Relocation • Environmental Attributes  Green Tags, Renewable Energy Credits, etc. Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 27

• Premises  Roof  Ground  Inverter location  Access  Storage/lay-down areas • Term  Tie to PPA  Cross-default Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 28

• Obligation to Build • Rent • Use Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 29

• Insolation issues • Building/roof issues  Building structure  Roof  Age  Condition  Warranty  Continuation of warranty Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 30

• Free O&M for specific period • What is included? • Comport with requirements for warranty continuation Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 31

• Between Property Owner, System Owner and Lenders  Property Owner Lender  Consent to system installation  SNDA  Comply with PPA in event of foreclosure  Provider Lender  Confirm personal property  Property Owner and Mortgagee Waiver Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 32

• Performance coverage • Business Interruption coverage  Lost energy sales  SRECs or other state incentives  Tax value of accelerated depreciation  Treasury Grant/Investment Tax Credit Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 33

• Legislative outlook • Panelists’ predictions Strafford CLE Webinar/Teleconference • SEPTEMBER 2013 34