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Solar Energy

Distributed Generation (DG) Business Models: Third Party Ownership

Monday, November 19th, 2012, 9:30am- 12:30pm ET/ Streamed Panel Discussion: 7:00am - 9:00am PT / 10:00am - 12:00pm ET / 16:00 - 18:00 (Paris-Frankfurt)

 

 

 

Location: 10 Rockefeller Plaza, 16th Floor, New York, NY 10020

 

Between the California Solar Initiative (CSI) launch in 2007 and 2011, solar installations in the state grew at an average annual rate of 38.2%1. Its incentives spawned a shift toward third party financing, revolutionizing and galvanizing the residential rooftop market. This can be seen in figures reported by GTM Research that show third party ownership of residential PV systems growing from a 13% share in 2009 to 41% in 2011, making it the fastest growing segment in the residential market. This shift toward third party ownership also correlates heavily with an uptick in the number of median income households installing solar, another testament to its growing appeal.

 

Many, such as Jonathan Bass from SolarCity and Nat Kreamer from Clean Power Finance, respectively tout the versatility of the ownership model as well as the sizeable benefits to both the installer and home-owners. Third party financing provides month to month energy savings to the homeowner while removing the upfront costs and maintenance risks. Meanwhile, third party owners see, as a result of the Investment Tax Credit (ITC), up to “45% of their capital outlay come back as tax benefit in the first year of the loan” and returns ranging from “the high single digits to the mid-teens” according to Kraemer of Clean Power Finance.

 

This increasingly popular model, however, can be hampered by legislative uncertainty and high soft costs. The third party ownership PPA model is active in the following states: California, Colorado, Michigan, Nevada, New Jersey, New Mexico, Oregon and Virginia according to NREL. Fortunately, there is legislation that supports third party financing through solar leases in many of the remaining states. Still, according to a report by NREL2 “third-party electricity sales face regulatory and legislative challenges pertain[ing] to whether third-party owners are deemed to act as monopoly utilities, competitive service suppliers (competitive suppliers), or both depending on the degree of retail electricity market deregulation.” In terms of soft costs, the complexity of “roof owner/system financier contract legalities represents one of the biggest market barriers to third party ownership of residential rooftop systems.

 

Major developers and institutional lenders are still bullish however. Lynn Jurich, president of SunRun said recently that residential solar was “at the tip of the iceberg in terms of growth…as costs continue to drop and more homeowners realize they can go solar without high upfront payments, adoption will scale exponentially”.

 

In this meeting, experts will weigh in on innovation in the third party financing space, its applications in non-residential sectors, and ways of eliminating uncertainties and barriers to entry.

 

  • How will the plummeting module prices affect the balance between cash-owned and third party owned installations?
  • What are the biggest risks associated with third party ownership of PV?
  • How effective has third party ownership been in C&I markets?
  • What is the optimal size for a third party owned system (residential vs. commercial)?
  • How can securitization enhance third party ownership models?

 

 

1Calculated using data from Figure 1 of California Solar Initiative Annual Program Assessment, June 2012

2 Katharine Kollins, Bethany Speer, Karlynn Cory, ‘Solar PV Project Financing: Regulatory and Legislative Challenges for Third-Party PPA System Owners’, February 2010

 

Speakers:

Ram Akella, Centrosolar, President

 

Madeleine M.L. Tan, Kaye Scholer, LLP, Partner, Structured Finance and Co-Head of Energy Group

 

Alison Kling, Sustainable CUNY | NYC Solar America City Initiative, Solar Coordinator

Eli Katz, Chadbourne & Parke, LLP, Partner

David Angel, KeyBanc Capital Markets, Managing Director

Event Announcement 

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Agenda
18 SEP 2014
13 MAY 2014
27 FEB 2014
14 JAN 2014
29 OCT 2013
26 SEP 2013
18 SEP 2013
27 AUG 2013
24 JUN 2013
17 JUN 2013
30 MAY 2013
07 MAY 2013
25 APR 2013
19 APR 2013
04 APR 2013
03 APR 2013
12 FEB 2013
06 FEB 2013
31 JAN 2013
30 JAN 2013
24 JAN 2013
17 JAN 2013
04 DEC 2012
28 NOV 2012
19 NOV 2012
08 NOV 2012
01 NOV 2012
25 OCT 2012
24 OCT 2012
18 OCT 2012
10 OCT 2012
27 SEP 2012
26 SEP 2012
23 AUG 2012
01 AUG 2012
25 JUL 2012
24 JUL 2012
11 JUL 2012
28 JUN 2012
21 JUN 2012
12 JUN 2012
06 JUN 2012
24 MAY 2012
17 MAY 2012
16 MAY 2012
03 MAY 2012
24 APR 2012
19 APR 2012
12 APR 2012
12 APR 2012
06 MAR 2012
29 FEB 2012
31 JAN 2012
11 JAN 2012
08 DEC 2011
29 NOV 2011
22 NOV 2011
16 NOV 2011
19 OCT 2011
11 OCT 2011
04 OCT 2011
29 SEP 2011
15 SEP 2011
08 SEP 2011
07 JUL 2011
03 JUN 2011
14 APR 2011
24 MAR 2011
16 MAR 2011
10 MAR 2011
07 FEB 2011
03 FEB 2011
18 NOV 2010
21 JUL 2010
24 FEB 2010