1. INNOVATIVE FINANCIAL INSTRUMENTS TO SUPPORT ENERGY EFFICIENCY:
LED STREETLIGHT PROJECTS
LIMA, PERU
NOVEMBER 15, 2016
Kerry Wilson, MBA
Managing Director,
Business Solutions

2. TOPICS Government & Private sector roles EXAMPLE OF SUCCESSFUL MODEL
RealTerm Energy EXPERIENCE
PUBLIC PRIVATE PARTNERSHIPS IN LED Conversion
ESCO FINANCING ALTERNATIVE

3. EXPERIENCE WITH LED TURNKEY CONVERSION PROJECTS
165 LED Conversion Projects in 3 Canadian provinces and 6 US states
190,000+ fixtures to date
Projects from 14 to >12,000 fixtures
71,722 fixtures installed in 2015,
including 31,000 in Q4 2015
40 full and part-time
LED streetlight professionals
Pioneered 10 Year Energy Performance Contracts
in 15 Cities in Ontario, Canada

4. BENEFITS: SUSTAINABLE LIGHTING SOLUTION
Increased Light Quality/Quantity
Reduced Energy Consumption
Economical Solution for all Parties
Reduced GHG Emissions
Reduced GHG emissions
Simple and affordable way to go ‘green’
Mercury and lead-free
GHG reductions Targets
Contributes to internal, Federal or National GHG reduction targets
Reduced light pollution (minimal light trespass)
Dark sky friendly
Low-Carbon positioning
positive PR, gives utility a competitive advantage; more and more utilities initiating/developing sustainability initiatives/programs

5. TURNKEY PUBLIC PRIVATE PARTNERSHIP MODEL
Define Project Scope ( >$25MM US)
Procure Product & Operating Partners
Establish Baseline Savings Potential
Evaluate Project & Operational Risk
Project Cash Flow Distributions
Creation of SPV to Operate Assets
Finance with or without Securitization
Project Implementation

6. ASSESSING PROJECT RISK
Implementation of an LED
Streetlight conversion
Project scope, grid hardening, operating costs defined
Long term Measurement & Verification
Repurchase of lights,
Establish Baseline to identify savings
Documentation, Financing, Transfer of Operating and Maintenance costs / risk

7. STEPS TO MAXIMIZE SAVINGS AND MINIMIZE RISK
GIS Data Collection
Photometric
Design
Investment Grade Audit
Installation &
Project Management
Identify Billing Changes
Contract & Operations

8. GOVERNMENT PROGRAMS & INCENTIVES
Electric Utility
Buyback Legislation & Assistance
State-level, low interest capital pool for infrastructure programs
Incentives for upgrades, smart city controls that optimizing design
M&V Standards for Billing & Reporting
Municipal Customer

9. ELEMENTS OF A WORKING ESCO MODEL
Define pool of Savings,
Project Failure Rates &
Maintenance Costs,
Warranty Coverage
Hell or High Water, securitizable income stream
regardless of energy rate fluctuations
Minimal Term
to amortize
project costs,
warranty exposure
Establish split of energy/maintenance savings
3rd Party Insurance to protect owner for non-performance

10. SELF FUNDED PROJECT vs. PRIVATE ESCO FINANCING
No. of LEDs:
43,000
Project Cost
$21.6 MM
kWh Savings: 66%
E. Cost Savings: %
Maint. Savings: 80%
Savings Pool: $4.75MM
Per Annum
Approx. $7.45M Annual Streetlight Expenditure
(Energy/Maintenance)
2.0% Interest
5 Year Term
3.5 Year Payback
9% IRR to ESCO
65% - 35% Split
10 Year Term w/ Maint.

11. THANK YOU