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Today’s Speakers Brandon Deno Bruce Chandler Vice President, Solar Business Development, Solar § 9 years solar experience § 7 years solar experience § Former country manager for § Formerly with Zep Solar, AUO/BenQ Solar SolarBridge, and Sunlink § Over 100 MW in solar system and component sales | 9/25/18 2 Private & Confidential
Commercial Solar... Challenges to Growth | 9/25/18 3 Private & Confidential
Commercial Solar Market Growth has been flat compared to Residential and Utility segments Utility Residential Commercial Source: SEIA/GTM | 9/25/18 9 Private & Confidential
Existing Commercial Solar Financing Options Existing options are not enabling market growth, the problems: Leases Cash Purchase § Moderate credit standards § Require cash § System size restrictions § Negative cash flows or balloon PPA’s payments § High credit standards and system size restrictions Bank Loans § Complex contracts, long term § Short terms, interest rate risk commitment required, difficult to transfer § Negative cash flows or balloon payments § Overall economics are just barely compelling Plus, a high percentage of commercial properties are leased… | Private & Confidential
Now… the good news | 9/25/18 6 Private & Confidential
CleanFund’s has Created Solar PACE ! TM Key Commercial Solar Financing Needs + PACE Financing Framework Solar PACE TM | 9/25/18 7 Private & Confidential
About CleanFund and PACE Financing… | 9/25/18 8 Private & Confidential
About CleanFund Commercial PACE Capital, Inc. § Founded in 2009 by PACE financing pioneers § 100% focus on Commercial PACE Solar Commercial Energy Real Estate § Team of experienced structured finance, real estate, banking, construction, and solar Construction Energy and Efficiency professionals Engineering § Track record of originating, underwriting, and Structured PACE Finance Programs financing PACE transactions across the country Municipal Lender § Direct capital provider (not a broker) Finance Relationships § National coverage with headquarters in the San Francisco Bay Area | 9/25/18 9 Private & Confidential
What is PACE Financing? § P roperty A ssessed C lean E nergy § Legal framework for financing energy efficiency and renewable energy projects through property tax assessments – repayment via property tax bill § Used on private projects that qualify as being for the Public Good § Private capital is typically used with negligible fiscal impact to municipalities § PACE has achieved strong growth nationwide § Legislation passed in 33 states & D.C. § 44 PACE programs created or being developed | 9/25/18 10 Private & Confidential
Solar PACE™ for Commercial Solar Project Financing… | 9/25/18 11 Private & Confidential
CleanFund’s Solution: Solar PACE ™ Financing § Created specifically to finance solar on commercial properties § Solves most commercial credit issues § Available for projects down to $100K (approximately 30kW) § Flexible options to utilize tax credits § Terms that maximize cash flow § Product supported by team of solar and PACE financing experts | 9/25/18 12 Private & Confidential
How Solar PACE™ Works for Property Owners 3 4 5 1 2 | 9/25/18 13 Private & Confidential
Solar PACE ™ Key Features Financing up to 30 years To match the productive life of the solar system and unlock steadily increasing positive cash flows. Credit decision based on property value Not on the credit of the property owner, significantly opening up addressable market. Financing stays with the building Just like the PV system, and delivers positive cash flows to a new owner if the property is sold. Roofing and Storage are financeable Energy efficiency measures that are ancillary to a solar project like roofing and storage can be financed. | 9/25/18 14 Private & Confidential
Solar PACE ™ Key Features (cont.) Delivers positive cash flows The long term of SolarPACE™ typically immediately cash flow positive even before factoring in solar tax benefits. Option to partially pay down principal by ITC To improve cash flows if needed or desired. Option to provide tax equity via a PPA For customers without tax appetite. The PPA is prepaid with the SolarPACE™ financing proceeds and repaid via the annual PACE payment. Solves split incentive problem By giving property owner tax incentives to put solar on property while tenant gets electricity savings. | 9/25/18 15 Private & Confidential
SolarPACE Advantages vs Traditional Solar Financing Cash Capital Operating Solar PACE PPA Purchase Lease Lease Financing matches system life Immediate positive cash flows Cash flow positive every year Tenant pass through Automatic transfer Easy credit approval, no personal guarantees Tax benefits directly received by property owner Flexibility to reduce annual payments No balloon payments Preserve internal capital Can finance non-solar property improvements 6 – 18 months of savings before first payment Yes Maybe | 9/25/18 12 Private & Confidential
Project Example: Accelerating Cash Flow with Solar PACE ™ Income Property Utility Tax Bill $ Tax Bill $ Bill $ 200 kW system ________ ________ ________ ________ ________ ________ NET Bill: INCREASE DECREASE DECREASE SAVINGS Over next 5 years: $200,000 $220,000 $320,000 $340,000 + Ongoing, increasing annual savings every year over remainder of term! (starting at 14% in year 6) * Equal to a fixed rate 30 year PPA at $0.112/kWh Assumptions: 200 kW system, installed cost of $2.60/W, current $0.15/kWh utility electricity rate, 30 year financing term | 9/25/18 17 Private & Confidential
Next Steps… | 9/25/18 18 Private & Confidential
Working with CleanFund Consultative Partnership Approach § CleanFund works closely with partners to help close deals § Customized modeling and for best economics on every project § Fast turnaround on proposal generation Complete Management of Financing § CleanFund handles all aspects of the financing, Detailed economic modeling including property appraisals, existing lender acknowledgement, and documentation Cons truction Financing § Milestone payments made after close of financing § Distributor partnership that reduces credit line concerns | 9/25/18 9 Private & Confidential
Working with CleanFund - Let’s Get Started! 1) Request proposal: Basic solar project information needed for analysis 2) Customer submits financing application when ready to proceed 3) Full underwriting, from application to closing, can be 1-2 months Project Approvals Funding and Assessment and Construction and Scope Underwriting | 9/25/18 20 Private & Confidential
Now, even better news... | 9/25/18 21 Private & Confidential
Commercial Solar is Poised for Growth Source: SEIA/GTM | 9/25/18 22 Private & Confidential
Solar PACE ™ is the Perfect Solution for: Customers Customers Non- who want that don’t Any project investment solar tax want to pay over 30 kW grade credits incentives cash Foreign Properties Leased owned that may be Non-profits properties properties or sold in the businesses next 5+ years | 9/25/18 23 Private & Confidential
Q&A and Thank You! Contact us: HEADQUARTERS Zero up front Immediate costs savings, tax 2330 Marinship Way benefits and Suite 100 positive cash Sausalito, CA 94965 flow www.cleanfund.com (415) 256-8000 info@cleanfund.com Long term Simple billing CleanFund.com/SolarPACE financing that on property tax matches the life bill of the solar installation Benefits for both property owners and tenants | 9/25/18 24 Private & Confidential
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