There is Nothing Special About Clean Energy

Avi JacobsonSenior Sustainable Energy CoordinatorWashington State Housing Finance Commissionavi.jacobson@wshfc.org206-254-5359@Avi_Jacobson

Introducing… Me

• Run the WSHFC Energy Program

• Help finance renewable energy & energy efficiency

projects

• Policy Advice

• Matchmaking

• Consulting

• All around nice guy

Growing the WA Clean Technology sector

Introducing… You

• Backgrounds?

• Why BGI?

• Goals?

• Knowledge of energy sector?

If I am talking too fast, above/beneath you then stop me.

Lessons of the

Sustainable Energy Program• What sustainability issue is being addressed

• What business problem does addressing it solve

• Whose problem is it?

• Business model to meet it

• Finance structure to implement it

• Debt

• Equity

• Public Private Partnerships

• Etc.

Sustainability Problem?

• Long list of options

• You are BGI students.

• I don’t have to waste slides on this

• But I did anyway

What business problem does addressing it solve?

• Spending too much on energy?

• Compliance Costs?

• Resource efficiency?

• You tell me…

Whose Problem Is It?

• This is your market… does it really exist?

• Question your assumptions

• Do not be sloppy with language

• “Energy” is not the same as electricity

• Electricity is a convenient example…

• Quick & Dirty Look at Macro & Micro Trends

• Develop Hypotheses

http://www.wshfc.org/index.htm

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http://www.eia.gov/forecasts/aeo/images/figure_75-lg.jpg

Data: http://www.eia.gov/forecasts/aeo/excel/fig75_data.xls

http://www.eia.gov/forecasts/ieo/images/figure_82.jpg

http://www.eia.gov/forecasts/ieo/images/figure_81.jpg

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Figure 2.2 GTM/SEIA USMI 3Q2013 Executive Summary

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Figure 2.1 GTM/SEIA USMI 3Q2013 Executive Summary

Figure 2.4 GTM/SEIA USMI 3Q2013 Executive Summary

Figure 2.5 GTM/SEIA USMI 3Q2013 Executive Summary

Lessons of the

Sustainable Energy Program• What sustainability issue is being addressed

• What business problem does addressing it solve

• Whose problem is it?

• Business model to meet it• Finance structure to implement it

• Debt

• Equity

• Public Private Partnerships

• Etc.

Lessons of the

Sustainable Energy Program• What sustainability issue is being addressed

• What business problem does addressing it solve

• Whose problem is it?

• Business model to meet it• How do you make money?

• One off projects? Selling widgets? Selling service?

• Distribution channel?

• Customers?

• Let’s tinker with some ideas we put on the whiteboard earlier…

Lessons of the

Sustainable Energy Program• What sustainability issue is being addressed

• What business problem does addressing it solve

• Whose problem is it?

• Business model to meet it

• Finance structure to implement it

• Debt

• Equity

• Public Private Partnerships

• Etc.

Lessons of the

Sustainable Energy Program• Finance structure to implement it*

• Debt

• Equity

• Public Private Partnerships

• Etc.

* Disclaimer:

Following slides are for demonstration purposes only

The Impact of Financial Structure on the Cost of Solar Energy Michael Mendelsohn, Claire Kreycik, Lori Bird, Paul Schwabe, and Karlynn Cory Prepared under Task No. SM10.2444

http://www.wshfc.org/index.htm

Project Owner• Debt financing from lenders (i.e., Green Bank and

Commercial Lenders)• Receives incentives from Federal Government, as well as

state and local incentives where available• Sells Renewable Energy Credits where available• Purchases solar equipment from Manufacturers, who

provide equipment warranties• Pays Installation Partners to install the solar equipment

and provide installation warranty • Enters into PPAs/Leases with Behind-the-Meter-Hosts

Federal Government

Local Utility

Installation Partners

Solar Equipment

Manufacturers

Commercial Lenders

State and Local Governments

ROOFTOP SOLAR PV FINANCING STRUCTURE

LegendDebt FinancingEquity InvestorsProject OwnerSuppliers and CustomersIncentives Ownership RelationshipContractual Relationship

Loan Repayment

Loan Proceeds

Repayment

Financing Support

Tax Equity Investor

Property Owner

Holding Company

Green Bank

Benefits from Investment Tax Credit and Accelerated Depreciation

Renewable Energy Credits

Payment for Renewable Energy Credits and

State and Local Incentives

Incentives to be Administered

Solar Equipment and Warranties

Payment Payment Installation and Warranties

Bill Credits throughNet Metering

Excess Electricity

PV System (Lease) or Electricity Generated from

PV System (PPA)

Provides Capital and Owns [x]% of Project Owner

Provides Capital andOwns [y]% of Project Owner

Monthly Payments

http://www.wshfc.org/index.htm

Lessons of the

Sustainable Energy Program• What sustainability issue is being addressed

• What business problem does addressing it solve

• Whose problem is it?

• Business model to meet it

• Finance structure to implement it

• Debt

• Equity

• Public Private Partnerships

• Etc.

Avi JacobsonSenior Sustainable Energy Coordinator

Washington State Housing Finance Commission

avi.jacobson@wshfc.org206-254-5359

@Avi_Jacobson