Solar Photovoltaic Project Simple Financial Model

RPS Solar Carve-Out Program v1.0

DATA ENTRY AND FINANCIAL SUMMARY
Key Scenario Definitions
Entry Cells Scenario A: Non-Taxable Rebate - Assumes that the state rebate is non-taxable, but is subtracted from the cost basis for purposes of determining tax credits and accelerated depreciation.
Calculation Cells (Not for Entry) Scenario B: Taxable Rebate - Assumes that the state rebate is taxable, but is not subtracted from the cost basis for purposes of determining tax credits and accelerated depreciation.
Both Scenarios assume that the project owner can use both federal and state tax benefits
Select Taxable or Non-Taxable Entity Taxable Taxable 1 2 3 4 5 6 7 8
Non-Taxable Tax Assumptions
Project and Customer Cost Assumptions Federal Tax Rate 35%
Solar Photovoltaic System Size 200000 Watts (DC STC) State Tax Rate 10%
Total System Cost/Watt $ 5.500 $/Watt (DC STC) Effective Tax Rate 42%
Total System Cost $ 1,100,000.00 Federal Tax Credit 30%
State Tax Deduction 100%
CEC Rebate Assumptions 5 Year Accelerated Depreciation Schedule (MACRS) 20.00% 32.00% 19.20% 11.52% 11.52% 5.76%
Rebate$ per/Watt $ - $/Watt (DC STC) Depreciation 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 0.00% 0.00%
Total Rebate Asset Basis
Gross Cost $ 1,100,000
Rebate $ -
Less 50% of Federal Tax Credit $ (165,000)
Project Performance and Savings/ Cost Assumptions
Annual Net Capacity Factor 13.0% kW (DC STC) to kWh AC Asset Basis $ 935,000
Annual Production Degradation 0.50% % Financing Assumptions
Project Life 25 Years % Financed w/ Cash 100% Cash
Depreciation Life 20 Years % Financed w/ Loan 0%
Electricity Revenue (Avoided Costs) $ 0.16 $/kWh Loan Interest Rate 9.00% Loan
Electricity Revenue (Avoided Costs) Annual Adjustor 3.0% % Loan Period 20 Years (must be equal to or less than project life)
Solar Renewable Energy Certificate (SREC) Auction Price $ 0.285 $/kWh Net Cost $ 1,100,000
SREC Auction Opt-In Term 10 Years (must be equal to or less than project life) Customer Discount Rate 8.00%
SREC Revenue Annual Adjustor 0.0% % Loan $ -
SREC Contract Price $/kWh
SREC Contract Term Years (must be equal to or less than project life)
Annual Operations and Maintenance Cost Factor $ 17.59 $/kW/Year
Annual Operations and Maintenance Cost $ 3,518 $/Year
Annual Operations and Maintenance Adjustor 3.0% % Solar Project Financial Analysis Summary
Future Inverter Replacement Cost $ 0.30 $/Watt (DC STC) Net Present Value $ 52,425
Inverter Life, Replace Every X Years 10 Year (must be equal to or less than project life) Simple Payback (100% Cash only) Year 7
Estimated Return on Equity 9.4%
Scenario A: Guess Return on Equity 10%

Disclaimer: This Unofficial Cash Flow Model is intended to provide non-residential entities that are considering the purchase and installation of solar energy equipment with a general understanding of possible financial implications
of such purchase and installation. Those entities interested in learning more about the financial implications of the purchase and installation of solar energy equipment are urged to consult their own tax and financial experts. The
information contained in the Unofficial Cash Flow Model may not be relied on by anyone for any purposes. Furthermore, the information contained in this model does not necessarily reflect the views of the Department of Energy
Resources or the Commonwealth of Massachusetts, and reference to any specific method does not constitute an implied or expressed recommendation or endorsement of it. Neither the Department of Energy Resources nor the
Commonwealth of Massachusetts make any warranties or representations, expressed or implied, as to the usefulness, completeness, or accuracy of any processes, methods or other information contained, described, disclosed, or
referred to in this model. Finally, neither the Department of Energy Resources nor the Commonwealth of Massachusetts makes any representation that the use of any product, apparatus, process, method, or other information will
not infringe privately owned property rights and assumes no liability of any kind or nature for any loss, injury, or damage directly or indirectly resulting from, or occurring in connection with, the use of information contained,
described, disclosed, or referred to in this Unofficial Cash Flow Model.

452418585.xls 1
Solar Photovoltaic Project Simple Financial Model
PRO FORMA AND PRODUCTION
Start-Up Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year
Project Output 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Annual Generation (kWh) 227,760 226,621 225,488 224,361 223,239 222,123 221,012 219,907 218,807 217,713 216,625 215,542 214,464 213,392 212,325

FINANCIAL SCHEDULES
INCOME STATEMENT
Electricity Revenue (Avoided Cost) $ 36,442 $ 37,347 $ 38,275 $ 39,226 $ 40,201 $ 41,200 $ 42,224 $ 43,273 $ 44,349 $ 45,451 $ 46,580 $ 47,738 $ 48,924 $ 50,140 $ 51,386
CEC Rebate $ -
SREC Auction Revenue $ 64,912 $ 64,587 $ 64,264 $ 63,943 $ 63,623 $ 63,305 $ 62,988 $ 62,673 $ 62,360 $ 62,048 $ - $ - $ - $ - $ -
SREC Contract Revenue $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total Revenue (Avoided Costs) $ - $ 101,353 $ 101,934 $ 102,539 $ 103,169 $ 103,824 $ 104,505 $ 105,212 $ 105,947 $ 106,709 $ 107,499 $ 46,580 $ 47,738 $ 48,924 $ 50,140 $ 51,386
Replace Inverter? No No No No No No No No No No Yes No No No No No
Operations & Maintenance Costs $ (3,518) $ (3,624) $ (3,732) $ (3,844) $ (3,960) $ (4,078) $ (4,201) $ (4,327) $ (4,456) $ (4,590) $ (4,728) $ (4,870) $ (5,016) $ (5,166) $ (5,321)
Inverter Replacement Cost $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (60,000) $ - $ - $ - $ - $ -
Total Operating Expenses $ - $ (3,518) $ (3,624) $ (3,732) $ (3,844) $ (3,960) $ (4,078) $ (4,201) $ (4,327) $ (4,456) $ (64,590) $ (4,728) $ (4,870) $ (5,016) $ (5,166) $ (5,321)
EBITDA $ - $ 97,835 $ 98,311 $ 98,807 $ 99,325 $ 99,865 $ 100,427 $ 101,012 $ 101,620 $ 102,252 $ 42,909 $ 41,852 $ 42,868 $ 43,908 $ 44,973 $ 46,064
Federal Depreciation Expense $ (187,000) $ (299,200) $ (179,520) $ (107,712) $ (107,712) $ (53,856) $ - $ - $ - $ - $ - $ - $ - $ - $ -
EBIT $ - $ (89,165) $ (200,889) $ (80,713) $ (8,387) $ (7,847) $ 46,571 $ 101,012 $ 101,620 $ 102,252 $ 42,909 $ 41,852 $ 42,868 $ 43,908 $ 44,973 $ 46,064
Interest Expense $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
EBT $ - $ (89,165) $ (200,889) $ (80,713) $ (8,387) $ (7,847) $ 46,571 $ 101,012 $ 101,620 $ 102,252 $ 42,909 $ 41,852 $ 42,868 $ 43,908 $ 44,973 $ 46,064
Federal taxes saved/(paid) $ - $ 34,632 $ 73,752 $ 31,708 $ 6,412 $ 6,242 $ (12,785) $ (31,819) $ (32,010) $ (32,209) $ (13,516) $ (13,183) $ (13,503) $ (13,831) $ (14,167) $ (14,510)
State taxes saved/(paid) [can not deduct federal depreciation expense] $ - $ (9,784) $ (9,831) $ (9,881) $ (9,932) $ (9,986) $ (10,043) $ (10,101) $ (10,162) $ (10,225) $ (4,291) $ (4,185) $ (4,287) $ (4,391) $ (4,497) $ (4,606)
Net Income $ - $ (64,316) $ (136,968) $ (58,886) $ (11,908) $ (11,592) $ 23,743 $ 59,092 $ 59,448 $ 59,818 $ 25,102 $ 24,484 $ 25,078 $ 25,686 $ 26,309 $ 26,948

CASH FLOW STATEMENT

Cash From Operations
Net Income $ - $ (64,316) $ (136,968) $ (58,886) $ (11,908) $ (11,592) $ 23,743 $ 59,092 $ 59,448 $ 59,818 $ 25,102 $ 24,484 $ 25,078 $ 25,686 $ 26,309 $ 26,948
Federal Depreciation Expense $ - $ 187,000 $ 299,200 $ 179,520 $ 107,712 $ 107,712 $ 53,856 $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Flow From Operations $ - $ 122,684 $ 162,232 $ 120,634 $ 95,804 $ 96,120 $ 77,599 $ 59,092 $ 59,448 $ 59,818 $ 25,102 $ 24,484 $ 25,078 $ 25,686 $ 26,309 $ 26,948

Cash From Investing

Installed PV Cost $ (1,100,000)
One Time State Solar Investment Tax Deduction (Actual Cash Value) $ 77,000
One Time Federal Solar Investment Tax Credit $ 330,000
Cash Flow From Investing $ (693,000) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Cash From Financing

Loan Disbursement $ -
Loan Repayment (Principle) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Flow From Financing $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Annual Cash Flow $ (693,000) $ 122,684 $ 162,232 $ 120,634 $ 95,804 $ 96,120 $ 77,599 $ 59,092 $ 59,448 $ 59,818 $ 25,102 $ 24,484 $ 25,078 $ 25,686 $ 26,309 $ 26,948
Cumulative Cash Flow $ (693,000) $ (570,316) $ (408,085) $ (287,451) $ (191,646) $ (95,526) $ (17,927) $ 41,165 $ 100,613 $ 160,430 $ 185,532 $ 210,015 $ 235,093 $ 260,779 $ 287,089 $ 314,036

Simple Payback $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ 8 $ 9 $ 10 $ 11 $ 12 $ 13 $ 14 $ 15
Net Investment $ (693,000) $ (570,316) $ (408,085) $ (287,451) $ (191,646) $ (95,526) $ (17,927) $ 41,165 $ 100,613 $ 160,430 $ 185,532 $ 210,015 $ 235,093 $ 260,779 $ 287,089 $ 314,036
Simple Payback Year 7 7

DEBT SCHEDULES
Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year
Scenario A Loan: Debt Schedule 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Beginning Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Debt Service $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Principle $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Interest $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Ending Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year
Disclaimer: This Unofficial Cash Flow Model is intended to provide non-residential entities that are considering the purchase and installation of solar energy equipment with a general understanding of possible financial implications of such purchase and installation. Those entities interested in learning
purchase and installation of solar energy equipment are urged to consult their own tax and financial experts. The information contained in the Unofficial Cash Flow Model may not be relied on by anyone for any purposes. Furthermore, the information contained in this model does not necessarily refle
Resources or the Commonwealth of Massachusetts, and reference to any specific method does not constitute an implied or expressed recommendation or endorsement of it. Neither the Department of Energy Resources nor the Commonwealth of Massachusetts make any warranties or representations
completeness, or accuracy of any processes, methods or other information contained, described, disclosed, or referred to in this model.

Finally, neither the Department of Energy Resources nor the Commonwealth of Massachusetts makes any representation that the use of any product, apparatus, process, method, or other information will not infringe privately owned property rights and assumes no liability of any kind or nature for any
resulting from, or occurring in connection with, the use of information contained, described, disclosed, or referred to in this Unofficial Cash Flow Model.

452418585.xls 2
 9 10 11 12 13

0.00% 0.00% 0.00% 0.00% 0.00%

452418585.xls 3
 Year Year Year Year Year
16 17 18 19 20
211,263 210,207 209,156 208,110 207,069

$ 52,663 $ 53,971 $ 55,312 $ 56,687 $ 58,096

$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ 52,663 $ 53,971 $ 55,312 $ 56,687 $ 58,096
No No No No Yes
$ (5,481) $ (5,645) $ (5,815) $ (5,989) $ (6,169)
$ - $ - $ - $ - $ (60,000)
$ (5,481) $ (5,645) $ (5,815) $ (5,989) $ (66,169)
$ 47,182 $ 48,326 $ 49,498 $ 50,698 $ (8,073)
$ - $ - $ - $ - $ -
$ 47,182 $ 48,326 $ 49,498 $ 50,698 $ (8,073)
$ - $ - $ - $ - $ -
$ 47,182 $ 48,326 $ 49,498 $ 50,698 $ (8,073)
$ (14,862) $ (15,223) $ (15,592) $ (15,970) $ 2,826
$ (4,718) $ (4,833) $ (4,950) $ (5,070) $ 807
$ 27,601 $ 28,271 $ 28,956 $ 29,658 $ (4,440)

$ 27,601 $ 28,271 $ 28,956 $ 29,658 $ (4,440)

$ - $ - $ - $ - $ -
$ 27,601 $ 28,271 $ 28,956 $ 29,658 $ (4,440)

$ - $ - $ - $ - $ -

$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -

$ 27,601 $ 28,271 $ 28,956 $ 29,658 $ (4,440)

$ 341,638 $ 369,908 $ 398,865 $ 428,523 $ 424,082

$ 16 $ 17 $ 18 $ 19 $ 20
$ 341,638 $ 369,908 $ 398,865 $ 428,523 $ 424,082

Year Year Year Year Year

16 17 18 19 20
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -

Year Year Year Year Year

ose entities interested in learning more about the financial implications of the
model does not necessarily reflect the views of the Department of Energy
any warranties or representations, expressed or implied, as to the usefulness,

lity of any kind or nature for any loss, injury, or damage directly or indirectly

452418585.xls 4
Definitions
Unit of energy. This is a measure of how much energy is consumed by a home o
Back Kilowatt-hours (kWh) much electricity is produced by a solar PV system. The amount of energy cons
electric meter.

Solar System The solar photovoltaic (PV) system. This includes your panels (modules), inverte
Back
utility.

The best case scenario for how much electricity a solar PV system will produce.
Estimated Optimal Annual
electricity depending on several factors. For example, a system will produce les
Generation (kWh)
roof) than if they are on an axis that tracks the sun throughout the day. Another
Back
optimal fixed south facing system is able to face due south, the more it should produce. Tilt angle also imp
free from shading location tilt is to its latitude the more it will produce. An optimal system in Massachusetts
degrees) and has a tilt of 42 degrees.

System Size Kilowatts are a measure of power. A kilowatt is 1,000 watts. In this case, it desc
Back single solar PV panel might be rated at 180 watts. If a system uses 10 panels ra
kilowatts (kW) will be 1800 watts, or 1.8 kW.

This is a ratio between the amount of energy produced by your solar PV system
production capability. A 12.8% net capacity factor is average for solar PV system
Back Annual Net Capacity Factor by the angle of the system, its orientation, and the amount of shading. If a solar
every day, 24 hours per day at the optimal tilt and orientation with no shade then
capacity factor, in other words, it would produce its rated output.

Annual Production Over the course of the life of the PV system, its production capability will decreas
Back Degradation time. Our default assumption is that this degradation will be 0.5% per year.

Depreciation is the reduction in the value of an asset due to usage, passage of

Back Depreciation Life obsolescence or other factors. Depreciation life is the "useful life" of the system,
the system will provide an economic benefit.
Electricity Revenue (Avoided This is the price per kWh that you will save on your electricity bill using this solar
Back Costs) this is a state average price for electricity.

Electricity Revenue (Avoided This model assumes that the cost of electricity will increase at 5% per year, there
Back Costs) Annual Adjustor electricity costs will also increase at 5% a year.

Solar Renewable Energy Certificates (SRECs), also known as green tags, Solar
environmental commodities in Massachusetts which represent proof that 1 mega
Solar Renewable Energy
Certificate (SREC) Auction generated from an eligible renewable energy resource. These certificates may h
Back
Price traded so that the owner of the SREC can claim to have purchased renewable e
$.285/kWh, which is the price owners will receive for their SRECs if sold through
Account.

The model uses a default term of 10 years. This term is based upon the length o
projects qualified in 2010 will receive. All projects with an Opt-In Term of 10 year
Back SREC Auction Opt-In Term generated during their Opt-In Term by depositing them in the end of year Solar C
The Auction is expected to be a measure of last resort for projects that have not
compliance entities that are required to purchase SRECs by the end of the comp

SREC Revenue Annual

Back Adjustor This models allows the value of RECs to change by this percentage each year
Back SREC Contract Price The price of SRECs as agreed upon in a bilateral contract with a compliance ent
Back SREC Contract Term The term of the bilateral contract with a compliance entity or other entity purchas
A solar inverter is a component of a PV system that changes the direct current (D
Future Inverter Replacement alternating current (AC) for use with home appliances or any AC load. The life o
Back Cost the life of the PV panels and will likely need to be replaced during the lifetime of
more. This model assumes the default cost to replace the inverter will be $0.75/

Back Annual Generation (kWh) This is the estimated amount of energy that your solar PV system will produce in

Total System Cost includes all elements of the installation including design, equi
Back Total System Cost etc. In the case of taxable commercial entities, the Total System Cost should inc
equipment
gy is consumed by a home or facility. It is also a measure of how
The amount of energy consumption or production is measured by an

ur panels (modules), inverter, and meter which connects you to the

ar PV system will produce. PV systems will produce more or less

e, a system will produce less energy if the panels are fixed (e.g. to a
roughout the day. Another factor is orientation. The more the
produce. Tilt angle also impacts production. The closer a system's
al system in Massachusetts that is fixed, faces due south (180

0 watts. In this case, it describes the size of the solar PV system. A

a system uses 10 panels rated at 180 watts each, the system size

ed by your solar PV system and its optimimum nameplate (labeled)

average for solar PV systems in Massachusetts. This value varies
mount of shading. If a solar PV system had the sun shining on it
entation with no shade then that system would have a 100%
ted output.

uction capability will decrease as it deteriorates to a degree over

will be 0.5% per year.

due to usage, passage of time, wear and tear, technological

e "useful life" of the system, meaning the estimated length of time

lectricity bill using this solar PV system. The default is $0.18/kWh as

crease at 5% per year, therefore your savings from avoided

known as green tags, Solar Renewable Energy Credits, are tradable

represent proof that 1 megawatt-hour (MWh) of electricity was
e. These certificates may have a value and they can be sold and
ave purchased renewable energy. Their default value is set at
their SRECs if sold through the Solar Credit Clearinghouse Auction

m is based upon the length of the Auction Opt-In Term that all
h an Opt-In Term of 10 years will be eligible to sell SRECs
m in the end of year Solar Credit Clearinghouse Auction Account.
rt for projects that have not signed bilateral contracts with
ECs by the end of the compliance year.

his percentage each year

ntract with a compliance entity or other entity purchasing SRECs.
ntity or other entity purchasing SRECs.
hanges the direct current (DC) electricity from the PV array into
s or any AC load. The life of a solar PV system's inverter is less than
laced during the lifetime of the system which can be 25 years or
e the inverter will be $0.75/watt.

r PV system will produce in kilowatt hours (kWh) each year.

ation including design, equipment, labor, permitting, interconnection,

otal System Cost should include Massachusetts sales tax on the