1. 1 Tempe Community Christian Church (CCC) Church is a non-profit—can’t use tax incentives SunWest (third party) --Places solar plant on Church property --Sells all of production to Church at lower than APS rate Net Metered—Excess solar production goes through Church meter to grid Church takes and gives power to grid as needed At end of year, --Net grid power used by Church—Church Pays APS --Net grid power to APS—APS Pays Church

2. Tempe CCC Solar System Net Metering 2 Solar System Sun SunWest Meter APS Meter Chuch Panel Church Electric Power Loads Grid

3. Timeline 3 SunWest promises 25% decrease in electrical costs for the church SunWest prepares contract and church board agrees Trimble has not seen contract and puts together his best guess of the situation—Best case, CCC uses all of electricity generated and will have NPV savings of $32K over 20 years. Trimble reviews contract and realizes that demand charge has not been considered. Church is paying SunWest 75% of 21.2 cents/kWh instead of the assumed APS rate of 12 cents/kWh

4. Timeline 4 SunWest determined rate by taking total APS Bill/total kWh used Trimble issues analysis stating that church will loose about $5.3k the first year. This is based on analyzing the APS bill structure and realizing about 45% of bill is based on demand charges. Solar will not reduce peak demand. Church loses over $6k the first year Trimble gathers data from APS and confirms that peak occurs in the evening when solar is not available. Church is attempting to recover losses and re-negotiate contract

5. 5 Equations for CCC Savings Spreadsheet IOC Yearly Solar Production, kWhe Production Degradation, %/Yr SunWest Rate, % of APS Sell Rate APS Sell Rate, $/kWhe APS Buy Rate, $/kWhe APS Rate Escalator, %/Yr CCC Usage, % of IOC Solar Production Production Degradation Factor = (1 + degradation per year) * number of years Yearly Solar Production = IOC Yearly Solar Production * Prod Degradation Factor Total CCC Usage = % of IOC Yearly Solar Production * IOC Yearly Solar Production Energy Purchased from APS = Total CCC Usage – Yearly Solar Production Energy Sold to APS = Yearly Solar Production – Total CCC Usage APS Rates Escalation Factor = (1 + APS Rate Escalation) * number of years Given:

6. Initial Analysis of Church Savings 6

7. 7 Equations for CCC Savings Spreadsheet Money Paid to SunWest = % of APS Sell Rate * APS Sell Rate * Yearly Solar Prod Money Paid to APS = APS Sell Rate * Energy Purchased from APS Money Received from APS = APS Buy Rate * Energy Sold to APS Total Cost of Energy = Money Paid to SunWest + Money Paid to APS -Money Received from APS Avoided Cost from APS = APS Sell Rate * Rate Escal Factor * Total CCC Usage Yearly Savings = Avoided Cost of Electricity from APS – Total Cost of Electricity Cumulative Savings = Prior Years Savings + This Year’s Savings Present Value of Yearly Savings = Yearly Savings / ((1.04) Number of Years )

8. 8 Equations for CCC Savings Spreadsheet Cumulative Present Value Savings = PV of Prior Years Savings + PV of This Year’s Savings Savings Net Present Value = Cumulative Present Value Savings in Year 20

9. 9 CCC Savings Spreadsheet

10. 10 CCC Savings vs. Usage Savings Decrease as Usage Decreases Below 100% Usage Must be Greater than 80% of IOC Solar Output

11. 11 CCC Case: Third Party Spreadsheet Can take advantage of tax subsidies Easier access to low-cost financing Often production based incentive is used by utility to make solar financially attractive Third party owns the equipment and sells power to the user Third party takes the risk of supplying a reliable flow of energy

12. 12 Example: Church Third Party Financing

13. 13 Example: Church Third Party Financing

14. 14 Example: Church Third Party Financing

15. Analysis of APS Billing Rates 15 See MS Word document provided to church

17. 17