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A Major Solar PV Installation for the Town of Poolesville, MD

A Major Solar PV Installation for the Town of Poolesville, MD . May 6, 2013. Agenda. Status Update – Timeline Review Original System D esign Revised System D esign Developing a PPA Rate Poolesville’s Concerns Benefits to Poolesville Long Term Solar Partnership

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A Major Solar PV Installation for the Town of Poolesville, MD

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  1. A Major Solar PV Installationfor the Town of Poolesville, MD May 6, 2013

  2. Agenda • Status Update – Timeline Review • Original System Design • Revised System Design • Developing a PPA Rate • Poolesville’s Concerns • Benefits to Poolesville • Long Term Solar Partnership • Creating Long-term Energy Independence • Questions

  3. Original Poolesville Array Layout

  4. Timeline – How We Started • 5-10-12 Poolesville RFP Submitted • RFP – PPA rate of 9.36 cents 20yrs w/2.5% escalator 1.1MW system • 7-16-12 Standard Solar (SSI) Presents to Poolesville Town Council • BAFO - PPA rate of 8.60 cents for 20 years w/2.5% escalator • 8-23-12 Introduced Urban Grid (UG) to Poolesville Leadership • Introduce PPA concept and document. • Discussed easement & removal of trees to maintain 1.1MW project as presented. • Changes would either reduce system size or require us to split system both increasing cost to construct • Construction schedule (NTP needed by 10-15-12 to achieve Bonus Depreciation (12-31-12)) • 9-10-12 UG/SSI Presented to Town Council in Public Meeting

  5. Timeline – Where We Ended Last Fall • 10-17-12 UG & SSI Meeting with Poolesville Leadership • With anticipated NTP parties engaged in further PPA discussions before engaging UG lawyer • Discuss 10-22-12 Site Plan approval meeting • Issues Impacting PPA Pricing: • The challenge with removing neighboring trees removed from the Casey Foundation property as well as negotiate and enter into a right of way agreement to allow maintenance of that property for the benefit of the solar array, resulted in the need to either reduce system size or split the solar array into 2 separate systems both impact cost of construction • Further declines in MD Solar Renewable Energy Certificate (SREC) values from July – Dec 2012 • SSI/UG were informed that there would be a delay in decision until after elections. Resulting delays impacted UG’s ability to realize bonus depreciation in 2012. • Revised PPA rate at 8.80 cents with 2.5% escalator for 25 years was presented enabling system to be completed in 2013 (without bonus depreciation)

  6. Revised Poolesville Array Layout

  7. Where We Stand Today • 5-6-13 Current Offer • Revised PPA rate at 8.9 cents with 2.5% escalator for 20 years • Positive Factor -- Bonus depreciation extended to 12/31/2013 • Negative Factor – SREC values continue to slide • July 2012 - 3 year SREC Contract Price: $150/SREC • Oct 2012 - 3 year SREC Contract Price: $120/SREC • May 2013 - 3 year SREC Contract Price: $ 95/SREC • Other Factor – Term reduced from 25 to 20 years • System to be completed in 2013 according to timeline

  8. Timeline – Next Steps • Given the access to bonus depreciation for 2013, UG is once again able to pass along that benefit to Poolesville • Proposed PPA rate of 8.9 cents with a 2.5% escalator for 20 years • Ample time to negotiate PPA, mobilize and complete project in 2013, provided we can meet the timeline

  9. Concerns of Poolesville • Fair Market Value/removal costs and Conditions Precedent: • UG had stated this was open to negotiation as part of counsel-to-counsel discussions • Standard Solar’s involvement: • Agreed that SSI would be contractually involved as SSI was the responsive bidder • Important to note that SSI was executing an Engineering, Procurement and Construction (“EPC”) contract with UG to build and maintain the system • Floating rate: • This was discussed at the initial SSI presentation to the Council members on 7/16 when the Council asked if it could get a floating PPA rate.  It was stated at the time that, while it was a possibility, we would need to know if that was the direction the Council wanted to move as it is a very different price structure (compared to the originally quoted $0.086/kWh rate) and required a specific Finance Partner for us to be able to offer it as an option. SSI only had one partner at the time that would have been available to offer such a product. The Council’s response at that time was that it accepted the notion of budget certainty and would proceed with the fixed price/escalator. • Capping electric costs – This, too, has been a topic of discussion, and both SSI and UG have said that capping prices is not an option that is available in the solar marketplace.  Solar is about buying electricity from a provider under a long-term contractual arrangement with pricing certainty, thereby managing your facilities’ risk over time and providing budget certainty over the life of the PPA.

  10. Benefits to Poolesville • Power Purchase Agreement requires no upfront costs • 1.1 MW array will produce nearly 100% of usage of 6 largest bills • Creates budget certainty • Helps manage volatile energy risk in the future • Large potential energy savings: • $1.7 million over 20 years offsetting electricity at 10.4 cents • $2.1 million over 20 years offsetting electricity at 11.4 cents • $1.2 million over 20 years offsetting electricity at 9.4 cents • Positive publicity as first town to produce 100% renewable energy • Environmental Benefit: lowers carbon footprint by 1,500 tons of • CO2 annually • Support the local economy, employment of MBE contractors

  11. Long-term Solar Partnership • Standard Solar, Inc. + Urban Grid Development Partnership • Construction Experience: 30+MW, 7 Installations over 1 MW • Currently installing 5 MW at WSSC in Montgomery and Prince Georges • Engineering Capability: 13 NABCEP PV installers, 4 Master electricians • Operations + Maintenance Expertise • Forty plus commercial systems currently under O&M contract • 3rd Party O&M Contracts: Washington Redskins, Philadelphia Eagles, New York Giants/Jets, and New England Patriots stadiums • Utility Experience: Experience with aggregate net metering projects • First installation in Maryland and Delaware plus three others • Educational Benefits • SMART program, 21 educational installations • Local Economic Benefits • Headquartered in Rockville, 8 commercial and 150+ residential in MC • SSI’s first installation was in Poolesville in 2003 PAGE 11

  12. Future Projected Energy Costs Assumes: 2.5% growth Solar 4.0% growth Utility * Forecast data from EIA Annual Energy Outlook

  13. MD Retail Electricity Prices (1990-2012) Data from EIA form 861

  14. Creating Energy Independence

  15. Jun 2013 NYMEX Futures Price

  16. Dec 2013 NYMEX Futures Price

  17. Developing a PPA Rate

  18. Lee Bristol • Commercial Channel Manager • 240-479-1510, leebristol@standardsolar.com • Mike Hartley • Director of Structured Finance • 301-944-5186, mike.hartley@standardsolar.com • Tony Clifford • Chief Executive Officer • 301-944-5146, tony.clifford@standardsolar.com Questions and Discussion

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