Silicon Solution Joint Venture, LLC - Energy Highway
Silicon Solution Joint Venture, LLC - Energy Highway
Silicon Solution Joint Venture, LLC - Energy Highway
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US SOLAR – WHITE PAPER 24 May 2012<br />
Table 1: Solar business model participants<br />
Participant Role Examples<br />
Lender<br />
Tax equity<br />
investor<br />
Developer<br />
Third-party<br />
financier<br />
• Provides debt to a project<br />
• Repaid via interest payments over the loan’s tenor<br />
• Provides tax equity to finance a project under various<br />
structures<br />
• Repaid via tax benefits and cash<br />
• Originates and develops project through commissioning<br />
• Sources financing from investors<br />
• Can provide sponsor equity<br />
• Most relevant in the utility-scale model<br />
• Originates solar customers and provides small-scale<br />
financing services via a lease or PPA<br />
• Sources financing for project portfolios from large<br />
investors<br />
• Provides monitoring and customer services<br />
• Can also act as an installer<br />
JPMorgan<br />
Banco Santander<br />
US Bank<br />
Wells Fargo<br />
NRG<br />
Borrego Solar<br />
SolarCity<br />
Sunrun<br />
Third-party<br />
intermediary<br />
• Offers a platform to connect financiers with installers Clean Power Finance<br />
Special<br />
purpose<br />
vehicle<br />
Installer<br />
Project<br />
Utility<br />
Host<br />
• Created by developers and third-party financiers to hold<br />
ownership of assets<br />
• Installs projects on its own or via a partnership with a<br />
third-party financier<br />
• Can provide financing to a customer via a third-party<br />
intermediary<br />
• The physical solar asset<br />
• A ‘project portfolio’ is a bundled group of usually smallscale<br />
solar assets<br />
• Distributes energy from producers to consumers<br />
• Purchases solar energy via PPAs with large projects<br />
• Under net metering, credits hosts for project generation<br />
in excess of use<br />
• Provides rooftop or land for solar projects<br />
• Consumes electricity produced by hosted project<br />
Blue Chip <strong>Energy</strong> <strong>LLC</strong><br />
Sun City Project <strong>LLC</strong><br />
Galkos Construction<br />
REC Solar<br />
Webberville Solar Plant<br />
SunEdison Kohl<br />
Department Store Solar<br />
Portfolio<br />
Southern California<br />
Edison<br />
Duke <strong>Energy</strong><br />
Homeowners<br />
Commercial building<br />
owners<br />
Source: Bloomberg New <strong>Energy</strong> Finance<br />
Host-owned model<br />
Host-owned projects differ from utility-scale projects under PPAs in several notable ways:<br />
• They tend to be small-scale.<br />
• Rather than primarily serving the utility's grid, these projects produce electricity primarily for<br />
the host – that is, the owner of the property on which the project sits (eg, rooftop or adjoining<br />
land). Assuming ‘net metering’ is in place, the system owner receives credit for any excess<br />
generation the solar system sends into the grid. Depending on state and utility regulations<br />
governing net metering policy, system owners may roll the excess generation over months or<br />
years, with the value of excess electricity paid to the homeowner at year end at prevailing<br />
wholesale or retail rates.<br />
• These projects are too small to attract tax equity investors such as banks or insurance<br />
companies, which tend to want to deploy at least $15-30m at a time. One alternative is for the<br />
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