PV O&M USA

Achieving the highest Long Term

PV Project Values

Laura Stern
President and Co-Founder
Nautilus Solar Energy

November 2017
Optimizing PV Project Value

5
 PV Project Value

o “Value” has different meanings for different parties at various stages of a project’s life cycle

o At what stage is each party capturing value?

o Original developer
o COD Owner, if different *
o O&M/Asset Manager
o “Exit” Owner *

• Budget vs. Actual – Assumptions, as much as performance, drive returns during each period
of ownership

• A project’s value, in terms of operational assumptions, are only as good as its worst year of
performance

• Asset Manager/O&M Provider may have the longest-term involvement with a project

o * Project Reset Opportunity

3
Stuff Happens

4
Project Challenges – Know what to expect and expect unknowns

• With increasingly lower PPA and SREC revenues, operating costs impact
returns more directly than ever before
• Separate fixed from variable costs
• Know which variable costs will be incurred annually, but whose scope is
Add chartoutside
of service provider’s control
• Considerations that drive up operating costs/watt – size, distance to nearest
city/availability of local technicians, financing structure, # of project entities,
# of offtakers
• Focus on driving costs down over the operating life of a project

Strictly Private and Confidential

Integrated Approach

AP/AR
Financial KPI Management
calculation Tax & Audit
(DSCR, IRR)

“Solar
Warranty Regulatory
Management monitoring, maintenance management
and financial/compliance
management from multiple
Operating providers increases
Contract
Budget management time and cost. compliance
Management
Add the market variability,
regional policy and
incentive parameters and
Insurance
claims disparate asset stakeholder Incident
handling
management groups and what emerges is
the gross inefficiency of
Loan & Tax
most solar asset services Owner’s
Equity offerings to meet the activities
management management
demands of today’s solar
Cash flow
investor needs.” PPA & Site
Lease
management
Warranty management
management
 Asset Management - Rent or Buy?

One of the biggest questions facing owners:

In-house vs. outsourcing
• Just because you don’t see an invoice, does not mean there is no cost
• Institutional Knowledge vs. Industry Knowledge
• Size matters
• Location, location, location- can you be everywhere at the same time?
• Specializations – SREC Management, Community Solar Management,
Storage
• Timing

Strictly Private and Confidential 6

 Industry Challenges

• Lack of available public data on failure rates and systemic issues inhibits
the development of best practices across the industry
• Industry is too fragmented and protective of information to develop a body of
knowledge
• Leads to too much ”starting from scratch”

• Inconsistency in and lack of understanding of service expectations

• Making costs more effective, particularly when it comes to monitoring

• Work validation – how to verify that the work has been done
Where is the market going in 2018 & beyond?
 Total Installed Capacity triples by 2022, reaches 16 GW annually

Source: SEIA/GTM
Research U.S. Solar Market
Insight
 Solar Growing Coast to Coast

Top 10 States Cumulative Solar Capacity by State, through Q2 2017

1. CA: 19,665
MW
2. NC: 3,540 MW
3. AZ: 3,254 MW
4. NV: 2,350 MW
5. NJ: 2,164 MW
6. MA: 1,743 MW
7. TX: 1,620 MW
8. UT: 1,551 MW
9. GA: 1,500 MW
10. NY: 1,066 MW

Source: SEIA/GTM Research U.S.

Solar Market Insight Report 2017
Q2
 Market Trends

Top market trends

• Aging fleet demands more efficient services, post-warranty strategies, better

performance and contractual solutions for underperforming assets
• Increased investment in operations and analytics capabilities
• Expanding service capabilities (AM, Commissioning, CM, etc.)
• Driving down cost through automation and increased reliance on remote
diagnoses and automation
• Continued growth in community solar –and asset management requirements
• Energy Storage

DELIVER MORE EFFECTIVE SERVICE AT LOWER COST TO A WIDER RANGE

OF PROJECT GEOGRAPHIES, TECHNOLOGIES AND REGULATORY
ENVIRONMENTS
 Services Trends

Top Services and Pricing trends

• Bifurcation of Operations and Maintenance to different parties

• Investment in automation to reduce cost and take on more scope
• Aligning service requirements to project economics
• Investing in equipment to insource additional scope (vegetation, module
washing, drones, etc.)
Q&A

Thank you!