The Proposition
Clean energy, from your own roof,
that’s more affordable than the
grid – a no brainer!
Solar Adoption is on a High Tech Trajectory:
Source: CTIA – The Wireless Asscoiation
MONTHLY SAVINGS
Before Solar SolarLease
Utility Bill $287 $106
SolarLease Payment $146 Total Monthly Cost $287 $252
Net Monthly Savings $35
$300 $200 $0 $100 OLD UTILITY BILL SOLARLEASE PAYMENT NEW UTILITY BILL
Pay-as-you-go solar
• Lease finance with performance guarantee: you pay a fixed amount every month, with annual adjustments to match performance
• PPA: The solar company owns the solar panels. You pay for the electricity.
• In both cases, no large upfront payment means more people can go solar
• How it works in the US:
• 15-20 year lease
• Sungevity owns and maintains system
• Customer gets clean solar power
• A typical homeowner saves about 15% net with $0 down in their first year
Idea of $0 down cash-flow positive is very attractive
Why Solar Leasing works in US
30% federal government tax incentive
=
interested investors
Copyright 2013 Sungevity Australia
What has worked in Australia
Solar loan is perceived as debt
Solar loan is not cash flow positive
Friction in the credit approval process
Market share growth in California from
March 2011 to February 2012
The US industry
Third-party-owned solar pumped more than $938 million
into California’s economy in 2012.
Source: Sunrun & PV Solar Report
Third-party finance is set to propel the growth of the solar
residential market in the US from $1.3 billion in 2012 to
$5.7 billion in 2016.
Source: GTM Research report
This model was rare five years ago!
Major Financial Players Are Going Big on Solar
Berkshire Hathaway US Bank & East West Bank Capital Dynamics Dupont GE Google Kohlberg Kravis Roberts MetLife US Bancorp Credit Suisse
Dollars Invested ($millions) Recent Investments
$5.7B
Recently announced investments$109B
Saudi Arabia’s 20-year solar investment planHurdles in Australia
High cost of funds
Lack of debt finance
Currently requires straight equity (industry participants or private investors)
Lack of simple customer credit check processing
Copyright 2013 Sungevity Australia
Sungevity’s Experience
In the US 97% go for financed solar
Trialing 7 year solar payment plan here - struggle to be cash-flow positive
To be attractive offer has to be cash-flow positive from Day 1
Need a smooth transition into and out of the finance process
People are wary of debt
What’s required for success
You need to have in place:
Rigorous credit control & assessment of end customer
Simple, online, “instant” credit assessment of customer
Billing systems
Accurate monitoring systems
Longer term agreement with customer
Longer term finance to enable cash flow positive proposition
(Currently at 5-7 year money)
Bankable product - recognised manufacturers with reliable
warranties
The good news is…
Pay-as-you-go solar is off the ground here in Australia
Today there are many people working on financed solar
products
We’re educating about solar as an asset class
Banks, investors and the market are starting to understand this new asset class
No longer an un-trodden path
To make it work in the future we need $0 down cash-flow
positive
iQuote includes:
• Pay-as-you-go cost • Savings • PAYG vs. Buying • Environmental impactsSungevity can then
install, manage,
and maintain
through life of
agreement
Sungevity’s “ONLINE SUNSHINE”
Sungevity Monitoring
To buy or not to buy – that is the question!
We’re giving consumers options
• Do consumers want to own generation assets?
• Ownership isn’t necessarily for everyone
Solar as a service can bring solar to more Australians,
not only because it eliminates the upfront cost, but
Benefits to the industry Benefits to the consumer
Ongoing relationship with the customer
$0 upfront cost = accessibility Greater control over the solar
performance
Solar power is cheaper than grid power
Creates a greater market reach Immediate Savings
Steady return on investment Warranty & maintenance handled by Sungevity
Benefits of pay-as-you-go
Get ready for the Rooftop Revolution
• Solar has barely scratched surface of $2.2 trillion market!• A game changer for solar industry and retail electricity industry • New investment opportunities for investors
• Great return profile for superannuation funds • Innovating renewable energy financing
• Creating an investment vehicle for direct investment into 1000’s of solar generators