Whiteside Solar DevelopmentSee’s Candies Production Facility1760 Rollins Rd., Burlingame, CA
Feasibility Study
Michael Whiteside September 23, 2009
"Great societies are made when old men plant trees under whose shade they know they will never sit." ~Greek proverb
Agenda
The Green “Movement” – a wave of social awareness Solar PV – Motivations & Interests Electricity Cost in California – Historical & Projected See’s Burlingame Electricity Demand & Proposed
Solar System Program Management (Phase Gates) Summary
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The Green “Movement”The Green“Movement”
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September 16, 2009 Sacramento, CA, USACalifornia Raises Renewable Energy Portfolio
Standard (RPS) to 33% by 2020
GREEN MOUNTAIN COFFEE ROASTERS, INC.
makes FORTUNE'S List of 100 fastest-growing companies in the
world.Company Chief Nominated as Responsible CEO of the Year
City Council Approves Climate Action Plan Date: 7/23/2009
BURLINGAME, Calif. – June 16, 2009 – The Burlingame City Council unanimously approved the city’s first Climate Action Plan on June 15 … requires a 15 percent
reduction in GHG emissions … by the year 2020.Burlingame has adopted numerous programs to encourage "green" practices, in 2007, the City formed a Green Ribbon Taskforce to recommend sustainable
policies and programs. September 11, 2009 Fremont, CA, USA$1/2B US Energy Dept. Loan Guarantee to
Solyndra has a $2B backlog
City of San Francisco – 10,000 Solar Rooftops initiative; Clean Energy Loan Program; Solar Mapping web portal ( www.sf.solarmap.org )
Barack Obama to United Nations – September 22, 2009"We understand the gravity of the climate threat. We are determined to act, and we will
meet our responsibility to future generations."
November 5, 2008 Berkeley, CA, USABerkeley First Program - eligible homeowners finance Solar PV system
installs via 20yr Property Tax Assessment – fully subscribed in 9 minutes!
Solar PV Installations
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Google Campus Mtn.Vw., CA8 Rooftops; 2 Carports9212 Modules @ 210W1.9MW Fixed Tilt Systems2.64MWh & $390k Generated AnnuallyCommissioned Mar.’07
9’0” Clearance
Alameda County Building1320 Modules @ 190W251kW Tracker System437,000kWh Generated Annually40% of Electricity DemandInstalled March’05-PowerLight
EAH - Richmond, CA4323 Modules @ 210W908kW Fixed Tilt SystemkWh Generated Annually% of Electricity DemandCompletion scheduled - Oct’07
Green Mountain Coffee“Brewing a better world”600 Modules @ 210W120kW Fixed Tilt System174,000kWh Generated Annually
Placer Co.High School District2304 Modules @ 210W483kW Fixed Tilt System660,000kWh Generated Annually50% of Electricity DemandInstalled Sep’09- PPA Financed
Green Mountain Coffee“Brewing a better world”600 Modules @ 210W120kW Fixed Tilt System174,000kWh Generated Annually
Motivations & Interests
Marketing– Good Corporate Citizenship, in support of Burlingame’s Green Ribbon
Taskforce: 29.9% (26M lbs) reduction in GHG emissions by 2020– See’s Solar System, as proposed will reduce over 176k lbs CO2 annually– Parallel’s Charles See’s belief in building a business based on Quality &
Integrity and See’s corporate vision “Quality without compromise” Operations
– Overhead cost decrease – almost 1c per lollipop– Equivalent Production Equipment purchase
Purchase price: <$200k with <7 year simple breakeven 25 year life & contribute $660k after purchase and maintenance costs
– Term of current lease – almost 20yrs Finance
– Investment return 10% annual over term of building lease– Inflation hedge
Greenbranding - Standing up for, and making a commitment to, the next generation
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Source – DoE (Energy Information Administration)
Commercial Rate Increases1999-2009
9.44 to 13.51 c/kWh (43%)
California Electricity Rates
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•3.7% 10yr. Avg. Annual increase•8.8% Increase from ‘08 to ‘09
Max. Demand
PG&E Electric Rates Peak Part-Peak Off-PeakEff. Mar 1, 2009 Summer 10.27$ 0.16507$ 0.14066$ 0.12613$
Winter 5.76$ 0 0.11104$ 0.09938$
Eff Mar 1, 2008 Summer 8.86$ 0.14365$ 0.12361$ 0.11168$ Winter 5.00$ 0 0.09854$ 0.08898$
Energy Rates
See's Burlingame - E10 TOU Rate Changes
15.9% 14.9% 13.8% 12.9%15.2% 12.7% 11.7%
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See’s Candy Production FacilityBurlingame, CAPG&E Rate schedule: A10 TOU
176’
88.5’
80’
77.5’
~6,200 sq.ft.
~15,600 sq.ft.
N
S
W E
Solar PV Feasibility Study - Existing Conditions
194deg
212deg
180deg
Occupied space 21,800 Sq.Ft.Building peak demand 261 kWPeak demand/sq.ft. 12 WElectric Demand Monthly 61,800 kWhElectric Demand Annually 741,600 kWhElectric Cost Annual 106,484$ 2008
114,242$ 2009PGE actualPGE actual + forecast
36mo. Maximum
36mo. Average historical36mo. Average historical
Tenant Power Demand
Solar PV Feasibility Study - Proposed
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N
S
W E
Modules 500 Tilt 15 deg.Azimuth (orientation) 212 deg.MPPT 210 WArray size 105 kWAvg.Daily output (DC) 578 kWhAnnual output (DC) 210,788 kWhAnnual output (AC) 150,696 kWh
Proposed Solar Array Configuration
Structure orientationSunPower SPR 315E
5.5 sun-hours (No.Cal)
CSI-PBI
AnnualYear 1 20 Years 25 Years 40 Years
Summer 16,866$ 476,969$ 656,933$ 1,426,036$ Winter 5,806$ 164,184$ 226,131$ 490,874$
Savings 22,672$ 641,152$ 883,065$ 1,916,910$
System Generated Power Savings
Gross Cost 761,250$ CA Rebate (113,006)$ CSI applic.fee 1,130$ Fed.Tax Credit (228,375)$ 30.0% of Gross Cost
420,999$ 5yr deprec.impact (238,877)$ Net system cost 182,122$
System Cost Installed - estimated
(1% of PBI)Calculated
Simple Breakeven6yrs 11mo
Cumulative Rate of Return = >10%
annually
Concept to Commission – C2CProgram Management
Ph I: Investigation & Feasibility– Concept– Site Feasibility– Draft System Design– Pro-Forma Financial analysis
Ph II: Optimization & Planning– Requirements defined– System Design– RFQ & Supplier T&Cs– Contracts negotiated & Signed
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Ph III: Pre-Installation– Project Scheduling– Supplier Staging
Ph IV: Installation– Supplier/Sub-contractor Performance
Management– Contract Administration
Ph V: System Commissioning– Inspections & Maintenance Program established– System Performance baselined
Each Phase Exit is formalized with signed approval from all stakeholders
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Investigation & Feasibility
Optimization & Planning Pre-Installation Installation
System Commissioning
Energy demand analysisBuilding & Site SurveyIdentify Harvestable/Unshaded AreaLease termPreliminary System DesignPro-Forma Financial ModelingIdentify StakeholdersReview Building Dept.requirementsReview Fire Dept.requirementsProposal Presented
Energy Effic.Audit (required for CSI)Apply & Obtain CSI Rebate ReservationIdentify Short-list suppliersFinalize System design & rev. controlReview contract terms - See's stakeholdersIssue RFQ to Short-list suppliersDesign review with S-L suppliersOn-site meetings with S-LProject/Production Schedules co-ordinatedProject Schedule review with S-LBuilding/Fire Dept. on-site meetingsReview and summarize S-L bidsProposal & Recommendations Presented
Contract negotiated with finalistProject Schedule finalized & committedBusiness award communicatedSupplier/See's Stakeholders meetingMaterial staging off-siteFinal Project/Production Schedule review
Materials stagedRoof layout and mounting hardwareRacking and Modules installedCombiner boxes; Disconnects & LockoutsInverters & CabinetsWire & CableSystems tested
Building inspectionGrid tie-inCommission & TestWalk-thru' & hand-off
Investigation & Feasibility
Optimization & Planning Pre-Installation Installation
System Commissioning
Approve designApprove Supplier
& ScheduleApprove
Installation start NotificationsCertificate of Completion
Janu
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Phase Exit Review & Stakeholder Approval
Sept
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Nov
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Janu
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Project Phases
Sept
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Nov
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Summary
Proposed Solar System ROI: 6.9yrs; 10% IRR at 20yrs – Manufacturers warranty 25yrs; Anticipated/demonstrated life 40yrs– Maintenance included in Proposed System Financial data
SRECs (Solar Renewable Energy Credits)– 150 SRECs earned by Proposed System (1,000kWh/yr = 1 SREC)– Market value determined by RPS (Renewable Portfolio Standards) & pending Cap & Trade
legislation. System Monitoring
– Real-time power production – System performance management– Greenhouse Gases avoided – Environmental Responsibility
Additional Energy savings opportunities:– Energy survey & demand scheduling– LEED Certification
Next Steps– Feasibility Phase Exit Meeting – All stakeholders– Obtain LOI– Budget Approval for CSI filing & design work
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Quality without Compromise
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176,011 lbs CO2 Saved176,012
176,013
176,014
176,015
176,016
176,017
176,018
176,019
176,020
176,021
176,022
176,023
Quality without compromising values
Thank You
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Backup
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See’s Notes
Web-based system performance tracking Investment in predictable production costs Lowered production costs Founded 1921 10M lbs candy produced from Sep1-Dec15 80% of product produced from Dec 15-25 Using the freshest finest grade raw materials Margaret Moos Pick’s book:
– Charles See’s belief in building a business based on Quality & Integrity– Chuck Huggins
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General Notes
Local codes– Fire– Building
Energy Efficiency Audit – PG&E Qualified Contractor on staff – CSI application Current Incentive levels
– EPBB: $1.10/W– PBI: $0.15/kWh
Reservation Confirmation letter http://www.ssfscavenger.com/Documents/ScavNL-Summer-08.pdf 210 El Camino Real, So.San Francisco, CA 94080 (Spruce & ECR) System FinancingOptions:
– Buy & rollover to landlord at year5– Power Purchase Agreement (PPA)– Tax Lease; Structured Lease
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CA Energy Use per Capitavs. States with >5M People
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Green “Pressure” Mounting
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Source: North American Supply Chain Carbon & Sustainability Report.http://events.eyefortransport.com/SSC/report.shtml
Natural Gas Price TrendUS & California
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System Financials – Tenant Buy & Hold Option
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Investment Breakeven 6.9yrs
Years 1 2 3 4 5 6 7 10 15 20 25 40
Gross Cost (756,000) CA Rebate 22,604 24,413 26,366 28,475 30,753 Fed Tax Credit 226,800
Net Initial Cash Investment (506,596) After tax benefit of deprec. 112,366 46,821 29,342 18,855 18,855 10,990 3,124 0 0 0Energy Revenues * 22,672 23,465 24,287 25,137 26,016 26,927 27,869 30,899 36,699 43,587 51,767 86,728 Reserve - Inverter/Maintenance (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (30,000) (2,000) (2,000) (2,000)
Cash Flow: (485,924) 158,244 95,473 80,954 73,625 43,782 36,859 32,024 6,699 41,587 49,767 84,728 Cumulative Cash Flows (485,924) (327,679) (232,206) (151,252) (77,628) (33,845) 3,014 95,985 238,854 432,538 664,450 1,640,296 Internal Rate of Return -18.37% -7.53% -2.88% 0.23% 5.43% 9.23% 11.18% 12.14% 13.09%
Solar Investment Cash Flows
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Years 1 2 3 4 5 6
Gross Cost (756,000) CA Rebate ($1.10/W & 81% effic.) 22,604 24,413 26,366 28,475 30,753 Fed Tax Credit (Cash Grant) 226,800
Net Cash Invested (506,596) After tax benefit of deprec. 112,366 46,821 29,342 18,855 18,855 Energy Revenues 22,672 23,465 24,287 25,137 26,016 Maintenance/Inverter Reserve (2,000) (2,000) (2,000) (2,000) (2,000) System Sale 250,000 After tax impact of Capital Gain -
Cash Flow: Annual (485,924) 158,244 95,473 80,954 323,625 18,855 Cumulative (485,924) (327,679) (232,206) (151,252) 172,372 191,228
Internal Rate of Return -36.50% -18.37% 11.55% 12.46%
Initial Investment and Resale Cash Flows
Years 6 7 8 9 10 11 15 20 25Net Cash Invested (250,000) -
After tax benefit of deprec. 44,965 18,715 11,715 7,515 7,515 1,215 0 0Energy Revenues 26,927 27,869 28,845 29,854 30,899 31,981 36,699 43,587 51,767 Maintenance/Inverter Reserve (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (30,000) (2,000) (2,000) Cash Flow: Annual (225,073) 70,835 45,560 39,570 36,415 37,496 7,914 41,587 49,767
Internal Rate of Return -17.84% -6.71% 0.80% 11.58% 16.68% 18.34%
Subsequent Investment Cash Flows
System Financials – Tenant Buy & Rollover to Landlord Option
The numbers …..
US Annual Energy Demand = 100 Exajoules = 27,800B kWh LEED Platinum Standard BofA Building – Cost of LEED 2.3%; Rent premium for LEED 9% China brings a new coal-fired power plant on-line every week 1000W/sq.m. is the solar energy hitting the earth 1 hr of solar energy hitting the earth is equivalent to the world’s annual energy demand The US is 5% of the world’s population, consumes 27% of the world’s energy US average energy consumption per person is double that of the average European California energy usage per capita has not increased since 1973 and is 70% that of the average non-
Californian . 100yrs is the time it takes for CO2 to dissipate through the earth’s atmosphere
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M.Whiteside bio
Certified Solar PV Professional Supplier and Sub-contractor Performance
Management Expertise Multi-million dollar complex projects completed Whiteside name established in Bay Area since 1978
– High-end Residential Construction– Project Management
Public Company Controller background
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Needs work
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