Read through the 3 key discussion points.The reason the presentation is structured this way is that reducing CAPEX is always a prominent issue with PV projects and reducing it is important way of enhancing project returns.Maximising the income stream and ensuring it survives is also key to meeting performance expectations
There are many key inputs to assessing the profitability of a project Broadly we have separated the major issues into the following 4 categories with some key sub-categories that are pertinent to nearly all PV projects
In the short time I have today these are the 3 key ingredients to project returns that I am going to focus on today
Ton:
Basically 100% of the revenue of a solar project comes through electricity so ensuring technology selection yields a healthy level of electricity is important- PV modules are not a commodity as invariably in the same conditions they will generate a different amount of electricity even given the same power rating- This graph illustrates that given the same CAPEX if the PV module yielding 6% more over the time period then the IRR of the project increases in a non-linear fashion. For the case here in Australia it is 8% change in IRR
I mentioned in the previous slide the concept of nameplate power, here is how this works...1000W/m2 is somewhere to start the story but certainly not where it ends
For the situation in Bangkok Thailand the irradiance distribution is heavily weighted toward the middle of the curve, 500W/m2 This curve serves as message on buyer beware as the marketed headline power rating is not appropriate for most projects- You wouldn’t buy a car designed to speed at 300kph if you are driving around suburban streets at 60kph
This graph is interesting as it will lead me into the justification of yield back to capex valueYield is not currently the universal language in PV but is the most important for anyone at the pointy end of project finance calculationsHere is a demonstration of our superior performance in Japan as simulated by Pvsyst, the leading software for PV systems
This is how the yield benefit translate to $/W, which is the universal language for PV- You can see the benefit from yield alone is significant in the premium a developer would be willing to pay for a certain module- Note Sanyo has a benefit here in that it is a more spatially efficient module and has less mounting and land costs
Generally impacts and then how REC has positive influence: - increasing efficency, reduces land and mounting equipment needed some of minor electrical parameters can affect the BOS costs - reverse current rating as an exampleInnovative methods of installing can save material and labour cost, perhaps they increase the price of the module but need to look at the impact on the whole system
- Relating back to REC we have many benefits to our module that reduce the system install cost but we’d also like to emphasise that our module cost is reducing at an aggressive rate and is set to remain one of the cost leaders in the market through 2012
The risk of performance over a project’s lifetime is at the heart of all risk assessments of developers and financiers- With a changing and immature technology, quality needs to be assessed from the manufacturing and product development disciplineAt REC we pride ourselves on our quality and attitude to performance longevity- Range of certifications to help assist decisions here: additional loading weelbeyind IEC minimum requirments, Salt and Ammonia as extra certifications
- Which is how we can have confidence in offering an industry leading warranty- 0.7% is worst case scenario
- An insight into our claims rate as proof in the quality of our processes
Further proof in our performance is via these test cases in the Asia Pacific region