Power Purchase Agreements

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• Power Purchase Agreements

Ned Chaney Business Director American Capital
Energy
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ACE Background

• Commercial Integrator
• Principals of the company have 60 years
  experience in solar
• Consultative Sales Process

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Definition of a PPA

• Power Purchase Agreement (PPA) is a mechanism for
  financing a renewable energy project for
  companies and non-profit organizations where a
  long-term contract is signed to purchase power
  from the system owner.

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Benefits of a PPA

• No out of pocket expense to the organization
• Take advantage of tax credits and depreciation
• Known budgetary numbers for length of PPA
• Fair market buy-out at the end of contract

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Structure

• Company similar to ACE would sell the system and
  bring in a financing company to work out the PPA
• Contract between System Owner and
  Installer/Integrator for installation
• Contract between Host Site and System Owner for
  purchase of power

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Structure (continued)

• Purchase power that the system produces for 15-20
  years
• Power is sold to Host Site at a negotiated price
  per kWh with a pre-determined energy escalation
  percentage year-over-year
• System Owner is in charge of insurance and
  maintenance of the system

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Structure (continued)

• Maintenance typically done by installing company
• End of contract options
• Buy-out gives great value for approximately 20
  additional years of free power.
• PPA Extension
• Removal of panels

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PPA Trends

• Growing interest for non-profit and profitable
  business
• More financial institutions interested in getting
  into GREEN financing

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Conclusion

• In an economy where groups are feeling a
  financial pinch PPAs are a great way to hedge
  electric cost
• A way to show dedication to sustainability with
  no up-front capital cost
• Great marketing tool being able to say you are
  purchasing renewable energy

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Questions?Ned ChaneyAmerican Capital
EnergyBusiness Directornchaney_at_americancapitalen
ergy.com