ICF International explores how the combination of rapid declines in capital costs, a proliferation of financing options, and growing interest in sustainability make renewable energy an attractive investment for many firms. Whether the customer is deploying its own capital or pursuing projects through power purchase agreements, these projects often carry underappreciated financial risks that impact this win. Additional discussion topics include examples of on-site solar and off-site wind and solar projects to demonstrate how ICF evaluates project value and helps clients mitigate risks and navigate renewable energy investment strategies.

1. 1icfi.com |
Welcome to Today’s Webinar:
Winning Renewable Energy Investment
Strategies for Fortune 1000 Firms
Tuesday, April 8, 2014
11:30 a.m. EST
Craig Schultz, Principal

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Why Now?: Drivers of Increasing Viability for Renewables
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
• Renewable energy cost & performance improvements
• Ongoing high levels of Federal incentives for many renewable energy
technologies
– Investment Tax Credit (ITC) & accelerated depreciation (MACRS)
• State, local, and utility incentives in many markets
• Wide range of financing options
• Volatility in market electricity prices (desire to hedge costs)
0
50,000
100,000
150,000
200,000
250,000
300,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
MW
U.S. Renewable Generation Capacity
(excluding traditional hydro)
Source: EIA, U.S. Dept. of Energy

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Renewable Energy Transaction Types: A Spectrum
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES

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Financing Types: Self-Purchase vs. PPA/Lease
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
Self-Purchase Power Purchase Agreement (PPA) or
Lease
Customer provides capital (with or without external
debt) and needs to monetize investment tax credit
and accelerated depreciation
Renewable developer provides capital; no upfront
capital cost to end-use customer
Most money is paid upfront, with typically modest
O&M costs thereafter
Monthly payments based upon asset’s electricity
output or fixed schedule
Customer is responsible for all asset decisions,
though often enters into long-term O&M contract
Often a turnkey service; developer finances,
permits/interconnects, owns, operates, and
decommissions asset
Key contract is < 2-year engineering, procurement,
& construction (EPC)
Key contract is 15- to 25-year PPA or lease (with
site easement if on-site);
However, PPAs are not allowable in certain states
Counterparty risks relevant, but not long-term Counterparty risks central and long-term
No fixed duration for investment Expensive buyout options intra-term; extension,
purchase, or removal options at contract
conclusion

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Growing Popularity of PPA Financing for On-Site Solar PV
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 YTD
Self-Finance Third-Party Finance (PPA)
Source: California Solar Initiative (CSI) for “Large Commercial” Systems

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Typical 2 MW+ Renewable Project Locations
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
Renewable Energy Technology On-Site Off-Site
Rooftop or Parking Canopy Solar PV 
Ground-Mount Solar PV  
Biomass and Biogas

(if local feedstock
exists)

Wind 
Geothermal 

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Common Renewable Energy Transaction Experience
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
• Do not expect that thoughtfully
reviewing, selecting, and executing a
$2MM - $50MM renewable energy
transaction will be easy
• Short-term rollercoaster to secure
smooth and sustainable electricity
supply for 15-25 years

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Inside the Rollercoaster Ride
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
1. Internal Support Obtained/
This Might Work
2. Realize the # of
Pieces Involved
3. Strong Interest from
Qualified Vendors
4. Complications: Contract Length,
Counterparty Risks,
REC Sales, Etc.
5. Initial Complications
Resolved
6. Board or Sr. Mgmt.
Produce
Unexpected Questions
7. Close Deal Internally
8. Negotiation of Contracts
& Wait for Commissioning
9. Operating Project/
Fin’l & Environmental Gains

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Catalog of Information Needed from PPA or Lease Bidders
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
1. Price & payment schedule
2. Inclusions and exclusions in bid
3. Equipment to be used
4. System layout/design and
engineering (including total capacity)
5. System performance and degradation
6. Warranties (equipment as well as any
on workmanship and performance)
7. Construction, installation, and
commissioning process and schedule
8. Interconnection and permitting
process
9. Integration of system with facility
warranties
10. Insurance, safety, and vandalism
protection
11. Monitoring
12. O&M
13. Assistance with RECs and other
incentives
14. Financial standing of vendor
15. Designation of specific people who
would likely manage project
16. List of planned subcontractors and
how they have worked with prime
contractor
17. Statements of whether contractors
have been in bankruptcy or had
lawsuits against them
18. Summary of local renewable energy
experience
19. References
20. Copy of supplier’s standard legal
contract

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Weighing Bid Information According to Customer Priorities
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
Meeting bid specs
Price
Output
Experience (industry &
local)
Financial strength
Design & technology
Equipment & labor source
of origin
Other procurement
preferences
Adapted from national webinar presented by ICF staff for U.S. Department of Energy

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Summary: Do’s and Don’ts for Renewable Energy Transactions
WINNING RENEWABLE ENERGY STRATEGIES FOR FORTUNE 1000 COMPANIES
Do’s Don’ts
Analyze hourly (8,760 hours/year)
renewable electricity production vs. your rate
structure
Be in a hurry as these are 20-year+
investments (but try to implement by Dec.
2016 when investment tax credit declines)
Select the technology type & capacity that
matches your electricity consumption
Expect a perfectly smooth process
Decide how communications (environmental
claims) about project will be managed
Sole source the transaction (there are many
qualified renewable developers and EPCs)
Involve senior management early in the
process
Assume exorbitant increases in conventional
utility power prices (doing so would inflate
the renewable project returns)
Review counterparty/credit risk carefully
(especially for PPAs/leases)
Open new facilities without first considering
their energy supply
Determine whether you will need outside
assistance (legal, financial, engineering) to
complete the transaction
Neglect on-site clean fossil fuel generation
(e.g., combined heat-and-power) as a
possible solution

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Craig Schultz manages renewable energy projects ranging from
market assessments and feasibility analyses to project selection, policy
formulation, negotiation, and implementation. Mr. Schultz has spent 18
years in the energy industry, working with solar, wind, and other
renewable electricity projects as well as conventional energy supply,
pricing, and risk management.
His professional focus has been on helping energy market participants
manage the costs and volatility of their energy transactions and helping
them optimize their conventional and renewable energy assets. He has
been the lead advisor for many successful renewable energy projects.
Mr. Schultz received his MBA from The University of Chicago Booth
School of Business with beta gamma sigma honors and his Bachelor’s
in Economics from Wesleyan University with phi beta kappa honors.
Today’s Featured ICF Speaker
Craig.Schultz@icfi.com
+1.202.669.6200
http://www.icfi.com/about/our-people/icf/s/schultz-craig