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RHDC - Item 4A - Power Purchase Agreement For A Solar Power System At Angelus and Garvey Senior HousingROSEMEAD HOUSING DEVELOPMENT CORPORATION STAFF REPORT TO: THE HONORABLE PRESIDENT AND DIRECTORS FROM: JEFF ALLRED, EXECUTIVE DIRECTOR ' DATE: SEPTEMBER 14, 2010 SUBJECT: POWER PURCHASE AGREEMENT FOR A SOLAR POWER SYSTEM AT ANGELUS AND GARVEY SENIOR HOUSING SUMMARY Levine Management Group, the management company of the two senior complexes owned by the Rosemead Housing Development Corporation (RHDC), recently contacted staff inquiring about the possibility of installing solar panels at the Angelus Senior Complex and the Garvey Senior Complex (see Attachment "A"). Their interest in investigating the possibility of installing solar electricity systems at the buildings arose as the result of the availability of significant rebates offered by Southern California Edison (SCE). SCE is a participant in the Multifamily Affordable Solar Housing (MASH) Program that provides up to 60% of the cost of solar systems. The MASH Program has been designed specifically to facilitate the acceleration of solar power in the affordable housing sector in California. The proposed project will produce an alternative source of energy for the Angelus Senior Complex and the Garvey Senior Complex. The goal is to enter into a Power Purchase Agreement (PPA) for both complexes so the RHDC will have a secure energy source alternative that will be below the cost spent for that same amount of energy purchased from SCE over the life of the PPA's (see Attachment "B" and "C"). Staff Recommendation It is recommended that Rosemead Housing Development Corporation continue this item to their September 28, 2010 meeting. ANALYSIS Over the past year, Levine Management Group has investigated opportunities to implement the use of solar panels to help generate the energy needed to operate the Angelus Senior Complex and the Garvey Senior Complex. Two main implementation options have been investigated. One is to design, build, and own our own solar panel generation facility. The second option is to negotiate a "Power Purchase Agreement (PPA)" with a qualified company for a pre-determined timeframe. The difference APPROVED FOR CITY COUNCIL AGENDA: ITEM NO. `~IA Rosemead Housing Development Corporation Report September 14, 2010 Page 2 of 3 between the two options is the first option requires the RHDC to fund, own, and operate the facility. In the second option, the RHDC negotiates a cost per kilowatt hour (kWh) for energy produced by the facility, which is designed, built, owned, maintained, and operated by the entity the PPA is entered into with. A PPA is becoming the new standard in helping corporations, municipalities, school districts, and government institutions to take advantage of incorporating clean energy through solar power. The PPA is a long-term agreement to buy power from a company that uses its own source of funds to build a solar energy generating system on a customer's site, and maintains and operates the facility for a pre-determined timeframe. Customers run their businesses as usual, without any of the headaches of owning a power plant. PPAs remove the pain of paying up-front system costs or worrying about the long-term operation and maintenance. Levine Management Group has recommended SolarCity Corporation as the entity for the RHDC to enter into a PPA with based on their knowledge and experience. The system would be owned and operated by SolarCity Corporation. They have committed to a flat electrical rate of $0.05 per kWh with a 0% annual cost escalation for the solar energy produced at both sites through the use of the solar panels. The remaining energy needed and not covered by the solar panels would be purchased through SCE. At the end of the PPA term, the solar energy equipment (facility) could be purchased at fair market value, or the PPA could be renewed on favorable terms. The PPA enables customers to benefit from the use of green energy, while still receiving some of the benefits of ownership, including lower electricity costs and a positive public image, and allows them to spend their capital budget on their core businesses. Customers typically enter into a fifteen to twenty-four year contract with a PPA provider, paying energy rates that are below existing utility prices. SolarCity Corporation is requesting a twenty (20) year contract with an option to renew for two (2) additional terms of five (5) years. Solar energy is a passive method of generating electricity and is immune from the factors that contribute to rising costs of fuel such as supply shortages, processing requirements, or labor issues. FISCAL ANALYSIS The installation, maintenance, and operation expenses will all be incurred by SolarCity Corporation. While savings could vary either up or down once a system is installed and bought on line, it is estimated that the electrical costs at Angelus Senior Complex could drop by 12% and by 20% for the Garvey Senior Complex in the first year alone. LEGAL REVIEW The attached PPA's have been reviewed and approved by RHDC's Legal Counsel. Rosemead Housing Development Corporation Report September 14, 2010 Page 3 of 3 PUBLIC NOTICE PROCESS Notice of the public hearing was published in the San Gabriel Valley Tribune on August 9, 2010, as well as through the regular agenda notification process. Prepared by: Michelle G. Ramirez Community Development Manager Submitted by: Stan Wong Community Development Director Attachment A - Solar Project Request Attachment B - Power Purchase Agreement - Angelus Senior Complex Attachment C - Power Purchase Agreement - Garvey Senior Complex Attachment D - Limited Warranty Agreement (Commercial PPA) ATTACHMENT A n9 June 1,2010 Michelle G. Ramirez Citti- of Rosemead 8838 E. Valley Boulevard Rosemead. California 91770 Dear Michelle. Enclosed please find two loose leaf books that contain significant information pertaining to solar projects at Angeles and Gan ey. The books are divided into four sections containing the follo«ing information: • Backzround information for the Multifamily Affordable Solar Housing (MASH) program. • Information relating to the purchase of a solar s). stem. • Information relating to the Power Purchase Agreement (?PA.) option. • Financial summary data for each option. Please note that the PPA option involves a third party and that no initial cash outlay is required. . For the purchase option, there is a significant cash outlay. but approximately 50% of the cost is offset by the MASH rebate. Financial summary spreadsheets are estimates of the savings and returns of each system option. Please note they were derived from information prepared by the vendors and reviewe-d by our solar consultant. These savings numbers could vary either up or down once systems are installed and brought on line. Since the Cit}, of Rosemead senior buildings are not-for-profit entities, it is my understanding that they cannot take advantage of the federal in-vestment tax credit or the tax benefit from depreciation. As you know. I spoke with Steve Brisco this morning, and he believes this information is correct. However, he is looking into the matter further, and he NAU inform me if this is not the case. If an update to any of the financial information becomes necessary, it skill be emailed to you. Sincerely yours, LEVINT MANAGEMENT GROUP, JNC. Allan Kokin Chief Financial Officer Enclosures L_%IINE Id«h..= i,4=t GRJUP, INC. 322 S. RD3c*cT4DK 3.,,... Su- 200 L A.Nu=mss, CA. 90035-1513310-353.3489 PAX 31. 358-3-~' ~MAM'.19Vbegrou PS. com Solar Project For Angeles Senior Housing Garvey Senior Housing Prepared By Levine Management Group, Inc. SOLAR PROJECT INTRODUCTION- Our interest in investigating the possibility of installing solar electricity systems at buildings in the Southern California Edison (SCE) service arose as the result of our becoming aware of the availability of significant rebates. SCE is a participant in the Multifamily Affordable Solar Housing (MASH) Program that provides approximately 60°,/0 of the cost of solar systems. The federal government provides a 30° o Investment Tax Credit (ITC) for solar systems. In addition, solar systems are eligible for accelerated five-year depreciation. Taken together, these programs provide very significant cost reductions for potential solar system installations. LMG manages eight properties in the SCE service area that are candidates for these incentives. Since LMG does not have expertise with respect to solar technology, we sought and hired a consultant to assist us in the evaluation of the system options available to us. Initially, we concentrated on the system purchase option. Three potential vendors were contacted, and our consultant, Greg Reitz, helped us narrow the selection to two. The vendors were assigned four projects each, with Absolutely Solar given the Rosemead projects. This document contains information submitted by this vendor pertaining to these projects. This information went to our consultant who reviewed it and ran it through his model. He discussed it with Absolutely Solar, and he supplied us with his analysis. That is the information that we used. We felt this made more sense since it helped guard us against the potential use of overly optimistic projections that could be offered by the vendors. We also investigated an alternative approach know as a Power Purchase Agreement (PPA). In this approach, the ow=ners do not buy the solar systems. Rather, the vendor arranges a third party agreement in which a portion of the monthly savings from each building is paid back to the PPA under an eighteen-year agreement. Our understanding is that the level of solar production is guaranteed, and that on an annual basis, the amount paid to the PPA will always be less than the energy savings. At the end of the eighteen-year time frame, the owners have the option to purchase the equipment at its fair market value. However, it is presumed that at that time, the technology would likely be out of date; so that purchase, even at a very low price, would likely not be desirable. Again, the consultant reviewed the PPA vendor information that became the basis of our analysis. The final section of this document contains a financial analysis that compares and contrasts the sayings generated under each option. Finally, please note that a Proof of Project Milestone (PPM) document must be submitted to SCE by June 24, 2010. Accordingly, a decision should be made by approximately June 21, 2010 in order to execute the necessary documents by this date. TABLE OF CONTENTS 1. Background Information • Rebate Q & A • Federal Incentive Program • MASH Program Report • MASH Program Reservation Letters and Extension Email • State Tax Information 2. Purchase Option • Absolutely Solar Information • Absolutely Solar Sample Agreement • Absolutely Solar Proposals 3. Power Purchase Agreement Option • Solar City Information. • Solar City "Hove We Estimate Savings" • Solar City Proposals • Solar City Sample Contract 4. Financial Analysis & Comparison BACKGROUND INFORMATION Rebate Q A a T Online ?..rucle -AffQi 3abie Housing Finaac~e Rebates Energize Bahr Retrofits AFFORDABLE HOUSING FINANCE • April/May 2004 By CHRISTINE SERLIN Affordable housing owners who want to retrofit their developments to go solar in California have an additional rebate incentive to help them do so. The Califomia Solar Initiative's Multifamily Affordable Solar Housing (MASH) program o, ens up-front capacity- based incentives for solar photovoltaic systems that offset common area and tenant loads for qualifying affordable housing properties that have had an occupancy permit for at least two years. The qualifying developments also nust be electric customers of Pacific Gas and Electric Co., Southern California Edison, or San Diego Gas & Electric. Applications are available for MASH's Track 1, which provides fixed rebates based on the size of the photovoltaic system installed and its expected performance. For a system that c)ffsets a common area load, owners will receive a rebate of $3.3D per watt, and for a system that offsets a tenant load, owners will receive a $4 per watt rebate. Track 2, which will offer higher incentives to applicants who provide quantifiable "direct tenant benefits," is still under review and applications have yet to be released. owners in California can now retrofit ......,-i,,.to cnlar systems with the According to Richard Raeke, director of project finance for Borrego Solar Systems, inc_, the MASH Program has $108 million in finding, which is roughly 3D megawatts of solar power. He says the program expects thekfunding ' use be ro bate or f oui y a rs, but crtive. that will depend on "how quickly developer, take to this. I have a concern it may quic beca the is Dwners couid be looking at the system paying for itself within five to seven year=-potentJBlly as little as three year depending on the cost of the installation, the _rysrem production, and the rebate level-and for roughly 45 percent to 65 percent of the cost to be paid for by the st=ate, Raeke says. He also adds that the one-time rebate should be paid out to the owner within 30 days of the soar system being turned on. Another benefit for MASH participants is virtual net metering. This allows owners to apply the credits from a single solar -system to multiple accounts on a site. The solar system will feed directly back into the grid any electricity not consumed on site, and the electric companies will allocate credits as the property owner or manager designates. For owners who are interested in utilizing solar power, Raeke recommends evaluating the potential buildings first. He says it's important to assess the roof conditions early as well as other structures in the development. Evaluating current rate schedules and consumption is also key. If an owner is already Drill a discounted rte schedule or consumption isn't that high, it might not be beneficial for the Online Re-sources owner, Raeke adds. For more information on the Multifamily Affordable Solar Housing With the MASH rebate incentive, Raeke also recommends for owners to think about the program, y;s larger scale and look at several buildings to maximize the economy of it since the rebate5 , Kww o^solra'+*it n-. ail will only be around for a few years. low ;nrnme.h:ml www ooe ~orrt~low~~^nm~DmaSDlolar Raeke says Borrego has seen an interest from owners already. He also adds that he WWW,O.com'res;d_na - wouldn't be surprised to see more states creating solar incentives for owners. SCE - I- j -,--P Incentive/Application FACs r I ~nin or ot~nr^:;him hn ein7 2Ci iir. ni ii_7i_p2CkBi rD5+5? 2. How much money is available through the J%AASH program for SCE customers? 3. How do I determine_ if my multi-flamily building meets the definition of low- income residential housing in the California Public Utilities Code (PUC) Section 2852? 4 Does the MASH Pmgran permit use of power purchase ag, cements? 5. How does California Health and Safety Code Section 5D079.5 define "lower income households"? 6. How much and what types of rebates are available? Who is eligible to recafve incentives under the MASH program? n Are tax incentives available? 9 'Which solar technologies are covered under MASH? 10. Are incentives available for solar water heating system? 11. How do I apply for MASH incentives? 12. Do I need to follow the three-step application process if I've already selected an installer? 13. How much are appiication fees? 14. How can I check on the status of my application? 15. How long will the application process take? 16. Can I apply for both Track 1A and Track 1 B? 17. Why does my PV system need to be field-verified? 18. Are there classes offered in solar PV systems? 19. Do I need to obtain a building permit? 20. How do I find a solar installer I can trust? 21. Where can I oet more information? Q1. Does installing solar on affordable housing require out-of-pocket costs? Yes, it does. The Customer must pay upfront costs for the photovoltaic equipment and installation; however, MASH incentives, federal investment tax c2dits, renewable energy credits, and net metering cradi's can significantly reduce the customer's cost of photovoltaic equipment and insaliation. Each project will have a different payback period depending on the type of financing that the customer uses to fund the Project TOP Q2. How much money is available through the MASH program for SCE customers? A: Of the S10B 34 million allocated to the MASH program, SCE's portion Of the incentive budget is summaraed below: Incentive Budget Incentive Track Incentive Budget Track 1 AIB - S34,o56.032 Track 2' $91200,D00 Total $43,856,032 `No more than 20% of the Track 2 budget can be awarded in one re%riew cycle. TOP Q3. How do I determine if my multi-family building meets the definition of low -income residential housing in the California Public Utilities Code (PUC) Section 2552? T c team more, go to the California Law homepage and search for the cogG section. TOP Q4. Does the MASH Program permit use of power purchase agreements? A: The MASH Program allows customers to enter into power purchase agreements with third parties, if the terms and conditions of the agreements comply with all existing statutes and regulations that govem the production and sale of electrici . TCP 5/14/%01 http://NkvZ,Z,,r.sce.com/solarleadership/gosolar/mashf-MASHResourc:.s,'uacen-i-~7-~-_~~1 c.a io l-_^a .rltm `CE - Lcent; ~e? ~pplication F IQs 05. How does Cal"sfornia Health and Safety Code Section 5D075.5 define "lower income households"? A: Califomia Health and Safety Coda Section 5DD79.5 defines "Iowpr hone householos' as `Dllows: r3?~2OID intone does not exc'ed the qualifying limits for lower income families as established and amended from time to time pursuant to Sew ion 8 of the United Sues Housing Act of 1937. The lirnis shall be pubfshad by the de?arunant in the California Code of Regulations as soon as possible ester adoption by the Secretary of Housing and Urban Deveiopment. In the event the federal standards are discontinued, the depa-neni shall, by reoulation, establish income limits for lower income_ households for all geographic areas of the state at 80 percent of area median income, adjusted for 3mily size_ and revised annually. (B) "Lower intone households" includes very low income households: as defined in Section 501 D5, and extremely low income households, as defined in Section 501 D6. The addition of this subdivision does not constitute a change in, but is declaratory of, existing law. (C) As used in this section, ..area median income" means the median fanily income of a geographic area of the state. To learn more. go to the Califomia Law homepage and search for the code section TOP 06. How much and what types of rebates are available? A. Multifamily Affordable Solar Housing (MASH) has two incentive tracks - Traci: 1 Ar8 and Track 2. Track 1 offers $3.301watt for a system that offsets common load and $4.001watt for a system that offsets tenant load. This rate is consistent across the three utilities. Unlike general market CSI, MASH does not have a declining rate based on volume of negawal of confirmed incentive reservations issued in SCE's service area. Track 2 is a competitive grant application process wher=e the applicant submits a proposed dollar par watt for the project Curently the only incentive type available for the MASH Program is the Expected Pe ro - anc~ Based Buydown (EPBB). TOP Q7. Who is eligible to receive incentives under the MASH program? A- Eligible electric customers of PG&E, SCE, and SDG&E may re-carve an incentrve through the MASH program. In addition, all existing multifamily affordable housinc that meet the definition of low income residential housing established in Public Utiiitias Code § 2B52.a.2 and have an occupancy permit for at least two years. Specmcally, this means multifamily housing financed with low-income housing tax credits, tax-exempt mortgage revenue bonds, general obligation bonds, or local, state or federal loans or grants. The facility must also meet the definition of low- income households in H=ealth and Safety Code § 50079.5 Planned new housing construction, including new housing development projects and new custom homes, are eligible for the New Solar Homes Partnership Program. The Single Family Low Income Incentive Program which is intended fD homeowners who quality for low-income housing programs, is expected to be rolled out in the first quarter of 2DD9. TOP QB. Are tax incentives available? A In addition to -ebates available through MASH, your project may also be eligible for federal tax credit Consult the IRS or your tax consultant for details on available tax credits. For additional information, click here. For the most current StatL.z Of these tax Credits you ShD'uid contact the Internal Revenue Ser'0Ce and"or your 'Lax preparer. TOP Q9. Which solar technologies are covered under MASH? A. MASH incentives are available for solar photovoltaic (PV) technologies (roof, mounted, ground-mounted and building-integrated PV) sized to meet actual or forecast on-site load. TOP 5/14/201 http:l/tiar~7.-%~7.sce.com/solarleadership/cosolar/mashf-kiASHResources/incenuN,--application-faq.htm ~`r - iu~,°~~'c'_~_~~i.'11C?~7.C•Il 5 _r'aVC, Of 010. Are incentives available for solar water heating system? A Currently tnere are no, in-_entlvaS for solar water 'lull, iC = 1'Si='ns I; , S'~ t S se-07-e area TOP Q11. How do I apply for MASH incentives? A In nearly all situations, the installer takes care of the application on the customer's behalf when applying for Track 1 incentives. Applications proceed through several stages before payment-from Requested to Reserved to Completed. Qualified installers understand the application process and can optimize customers' incentives by completing the application and submitting all 2quired documents TOP Q12. Go I need to follow the three-step application process if I've already selected an installer? A. Gen=rally. MASH applications oo through the three-step application process. However, applicants can opt-in to the two-step process. Keep in mind that your application is still subject to the requiremenr, detailed in the three step application process. Q13. How much are application fees? A There is no application fee for MASH. TOP Q14. How can I check on the status of my application? A. For Track 1, Your installer can provide you with regular updates regarding the status of your application. You can alsc contact your program administrator at (866) 584-7436 to get project updates. TOP Q15. How long will the application process take? A SCE strives to take less than 30 day=_ to confirm MASH Track 1 reservation requests. Application processing time depend on a number of factors. including the speed with which applicants respond to requests for more information or application corrections. To .n=_Ip ensure your application is processed quickly, please note the most frequent issues encountered with applications are: missing energy efficiancy audit listed equipment does not match EPb3 tool calculator printout, copy of executed contras for system purchase and installation, missing signature(s), and incomplete or missing documentation. TOP MASH applicants are granted a reservation period of 18 months to complete their project Q16. Can I apply for both Track 1A and Track 1B? P_ Yes, you can apply for both Track 1A to offset common load and Track 13 to offset terant load. The systan for the common area must be sized so that the svstam primarily o sets part or all of the common area's electrical needs. Tenant areas will be aggregated for sizing limits. For example. up To 5D M of a system may be allocated to 10 units in a buiiding without requiring system size justification because the average will be 5 kVV or less. TOP Q17. Why does my PV system need to be field-verified? A: installed systems must be field-verrled to ensure the installation of high- performance PV systems that are consistent with the information used to determine the estimated performance, reservations and ultimatety the final rebate. TOP Q18. Are there classes offered in solar PV systems? A. SCE hosts monthly Introduction to the California Solar Initiative classes The class is not specific to MA SH, however, it can provide you with a gener?l understanding of PV systems. Please visit wmnw.sce.com/csi for moe information. TOP Q19. Do I need to obtain a building permit? A. You will probably nead to obtain a permit from the city or county building depart rent. A solar vendortinstaller may be able to assist with this. TOP 9 htip:i;'~„T ~~.Sce.cam'solarleadership/gosolari'mashf-NtkSIaesources%ince.nti-~-e-application-faq.htm 5/14/2010 SCE - lncentivte -kpphccaaon FAQs Fage 4 oT Q20. How do I rind a solar installer I can trust? A. Qualned contraumrs a- vour key io oe ing the most productive solar system for your home or business. Choose a reputabl-e installer by interviewing at least three potential installer and ob~ining bids before making your selection. appropnately licensed Calftmia =nracto s in accordance with rules and reguiabDris adopted by the Calimmia Contractors State Licensing Board (CSLB) fall syst=ms must. ne insialied in co-ifDmancc with the manLra7Lurer's specifications and with all applicabia ei=_ctnral and building cede standards. TOP Q21. Where can I get more information? !t For additional information on `going solar,' visit www.sce.comlcsi or wnnnrv.gosolarcalifomia.ao~~.ca. 10 Ettp://•,k7~N a.scc.co=!solarleaderslip/aosolarimashJ~2~%SHResource.s!'incentiti•c-application-taq.h-an ~~L - 1IICG~Ilj'c:'.~pp11G?IlQIl t ~ Q'S 11 ( SHResoarces%ncertE e-application-iaq.h !1A/~O1( nip:m/solarieadership!cosola i:ll MASH Program Report 12 Multifamily Affordable Solar Housing J sourHELaw CALIFORNIA EDISON 1 ~ An EWSON IN7HPNAMNAL Company Semi-Annual Report January Zap 7-010 ,~i Center for sustainable Energy CALIF C,P!I, a 13 Table of Contents Table of Contents ..........1 1. Executive Summary 2 2. Background ...........3 2.1. Incentive Types: Track 1 (A and B) and Track 2 ...........4 Table 2.1: MASH Track 1 Incentive Rates in $JWatt ...........5 2.2. Virtual Net Metering ...........5 Figure 2.1: Conventional Solar Systems on Individually- Metered Multifamily Housing 6 Figure 2.2: Virtual Net Metering System on individually-Metered Multifamily Housing ...........6 2.3. Eligibility ...........7 2.4. Budget ............7 Table 2.2: MASH Budget Allocations by Utility Territory ............7 3. Program Progress ............8 3.1. Program implementation to December 31, 2DD9 8 3.2. Program Waitlist ..........10 3.3. How the Data Questions Called for in D.08-10-036 were Addressed ..........10 4. Program Progress ..........11 Table 4.1: MASH Applications by Month (2009) ..........11 Table 4.2: Summary Data: MASH Applications by Status ..........11 Table 4.2: Detailed Data: MASH Applications by Status ...........12 Table 4.3: MASH Applications by County ...........13 Table 4.4: MASH Applications by County (Capacity) ...........13 Table 4.5: MASH Applications by County ...........14 Table 4.6: MASH Applications by City ...........14 Table 4.7: MASH Applications by City (Capacity) ...........16 Table 4.8: MASH Applications by City ...........18 Table 4.9: MASH Program Expenditures by Program Administrator ............20 5. Conclusions and Program Recommendations ............21 MASH Semi-Annual Report, January 20, 2010 1 14 Multifamily Affordable Solar Housing Semi-Annual Report The Califomia Center for Sustainable Energy (GCSE), on behalf of the Califomia Solar Initiative (CSI) Program Administrators (PAs), submits this 2010 Semi-Annual Report for the Multifamily Affordable Solar Housing (MASH) Program, in compliance with the California Public Utilities Commission (CPUC or Commission) Decision (D.) 08-10-036, which requires the PAs to submit joint semi-annual reports to the Director of the Energy Division on the progress of the MASH Program.' The first MASH semi-annual report, dated January 20, 2010, captures administrative expense and program data from program inception through December 31, 2009, and includes the items appearing in the following outline, requirements identified in Appendix A of D.08-10-036, and other data that Energy Division has requested. 1. Executi,.Te Summary The MASH Program is one of the CST's two low-income programs and is administered by Pacific Gas and Electric (PG&E), Southem California Edison (SCE), and the California Center for Sustainable Energy (GCSE) in San Diego Gas and Electric territory (SDG&E) territory. The MASH Program provides incentives for the installation of solar photovoltaic (PV) generating systems on low-income multifamily housing, as defined in Califomia Public Utilities Code (PUC) Section 2852. The MASH Program has two incentive tracks both of which are paid in the Expected Performance Based Buydown (EPBB) format: 1. Track 1 provides fixed, capacity-based rebates at $3.30 per watt for solar PV generating systems that offset common area electrical load (Track 1A) or at $4.00 per watt for solar PV generating systems that offset tenant common area electrical load (Track 1 B). Track 1 applications are reviewed on a first-come first-served basis. 2. Track 2 is a competitive application process and provides variable rebates up to 100% of system and ongoing maintenance costs. To be awarded Track 2 funds, an applicant must demonstrate direct tenant benefit. Track 2 consists of two application cycles per year. The PAs began accepting applications for Track 1 in February 2009 and conducted the first round of Track 2 application evaluations between July and December 2009. PG&E, SCE, and SDG&E began to offer a Virtual Net Metering (VNM) utility tariff option in June 2009 to simplify the installation of solar PV generating systems in multifamily housing. ' D.08-10.036. Ordering Paragraph No. 9 and Appendix A. In addition, the PAs will file a more detailed reporting of MASH expenses, including VNM implementation, as part of the CSI semi-annual administrative expense report that is due on January 29, 2010. D.08-10-035, Ordering Paragraph No. 7 and Appendix. WASH Semi-Annual Report, January 20, 2010 15 The PAs received and processed the following numbers of applications in 2D09: 384 MASH applications received • 179 Track 1 applications reserved 1 Track 2 application reserved PG&E and CCSE received applications that exceeded funds available in their respe:;tive Track 1 budgets for 2D09, and both created a wait list. SCE received applications for over 90% of its Track 1 budgeF. Currently SCE has 100% of its Track 2 budget available, PG&E has 90% and CCSE has 80%. 2. Background In D.06-01-024, the Commission adopted the Staff proposal to set aside a minimum of 10% of CSI Program funds for projects installed by low-income residential customers and affordable housing projects.' In 2006, the California Legislature codified this requirement in Senate Bill (SB) 1' and Assembly Bill (AB) 2723.5 Subsequently, in D.06-12-033, the Commission directed the PAs to conform the CSI Program to SB 1 and AB 2723 requirements and directed that 10% of the total ten-year CSI budget would be reserved for the low-income residential solar incentive programs that are now referred to as MASH and the Single-Family Affordable Solar Homes (SASH) Programs. On October 16, 2008, in D.08-10-036, the Commission established the $108.34 million MASH Program as a component of the CSI Program. The MASH Program provides incentives "for solar installations on existing multifamily affordable housing that meet[s] the definition of lour income residential housing established in Pub. Util. Code § 2852.rs The Commission adopted a two-track incentive structure, "with Track 1 providing up front incentives to systems that offset either common area or tenant load, and Track 2 providing an opportunity to compete for higher incentives through a grant program ."7 PG&E, SCE, and CCSE, in SDG&E's service territory, administer incentives under the MASH Program. The Commission selected the general market CSI PAs because the target customers of the MASH Program, which are affordable housing building owners, are similar to the 2 SCE exceeded its Trade 1 budget in January 2010 and has started a wahiist 3 D.D6-01-D24, mimeo., pp. 5 and 27. Conclusion of Law 9 at p. 43 (see also Appendix A, pp. 2-3) SB 1 (Murray & Levine), Chapter 132, Statutes of 2006, sets forth specific CSI program requirements regarding program budget, conditions for solar incentives. and eligibility criteria. 5 AB 2723 (Pavley), Chapter 864, Statutes 2006, required the Commission to ensure that not less than 10% of the CSI funds are used for the installation of solar energy systems on low-income residential housing and authorized the Commission to incorporate a revolving loan or loan guarantee program for this purpose. E D.05-10-035, Appendix A, mimeo., p. 1 7 D.DB-10-D35, mimeo., p. 9. MASH Semi-Annual Report, January 20, 2010 16 commercial and non-profit customers of the general market CSI Program. The resulting synergy allowed the PAs to incorporate MASH into their existing CSI administrative structures and to implement MASH in a quick and cost-effective manner.6 The overall goals for the MASH Program are to: 1. Stimulate adoption of solar power in the affordable housing sector; 2. Improve energy utilization and overall quality of affordable housing through application of solar and energy efficiency technologies; 3. Decrease electricity use and costs without increasing monthly household expenses for affordable housing building occupants; and 4. Increase awareness and appreciation of the benefits of solar among affordable housing occupants and developers. The MASH Program will operate either until January 1, 2016, or when all funds available from the program's incentive budget have been allocated, whichever event occurs first. PUC Section 2852(c)(3) requires that any program dollars remaining unspent on January 1, 2016, are to be used for Low Income Energy Efficiency programs. 2.1. 1ncentivE Types: Track 1 (A and B) and Track 2 The MASH Program is designed to substantially subsidize solar PV generating systems in multifamily housing. Incentivizing the installation of solar PV generating systems in the MASH Program is not as straightforward as the general market CSI Program. Although affordable housing building owners are the target market, two different categories of customers may receive the benefits from an installed system: the building owners and the tenants. The Commission ensured in the design of the incentive structure and rebate levels in the MASH Program that benefits of the installed systems would accrue to both categories of customers. To accomplish this goal, MASH incentives are divided into two different tracks: Track 1 and Track 2. Track 1 is similar to the general market CSI Program in that the rebate amount is both fixed and capacity-based. As shown in Table 2.1, Track 1 offers different incentives for solar PV generating systems that cover the electric load for common and tenant areas. The rebates are based only on the EPBB method, which is a one-time lump sum payment after verification of system installation. EPBB incentive rates are fixed and do not automatically decline as the MASH Program progresses. The Administrative Law Judge assigned to the CSI proceeding, however, has the authority to reduce MASH Track 1 incentives by up to 10% each year-9 D.DB-1 D-036, p. 24-25 D.08-10-036, p. 14 MASH Semi-Annual Report, January 20, 2010 17 acentive Rates in S/Wart Track 1B. PV System Offsetting Tenant Area Load S4.DOMlatt Although different incentive rates exist for systems offsetting common or tenant area electrical load, no requirement mandates that either Track 1 A or Track 1 B solar PV generating systems provide any direct tenant benefit or decrease the monthly expenses or financial burden for the low-income tenants. On the other hand, Track 2 incorporates a direct tenant benefit requirement. Track 2 is a competitive grant-style structure that does not include a fixed rebate amount. Track 2 grants are awarded to applicants who provide quantifiable "direct tenant benefits" (i.e., any operating costs savings from solar that are shared with their tenants). Other categories of benefits that are considered in determining an award include energy efficiency improvements, green job creation or training, outreach and education for tenants on sustainability topics. Two award cycles exist each year, and the PAS can award up to 20% of the total Track 2 budget in any given cycle. Awards are not guaranteed during any cycle however. For each winning application, a PA can award up to 100% of capital costs of the project as well as ongoing operation and maintenance costs. To ensure that the PAS apply consistent criteria in evaluating Track 2 applications, the PAS developed a standardized statewide Track 2 application and review process with consultation from members of the affordable housing community. 2.2. Virtual Net Metering in December 1981, following adoption of D.93586, most utilities closed their Master Meter/Submeter Tariffs to new installations. PUC Section 780.5 required individual utility metering in multi-unit residential buildings that received building permits after July 1, 1982. While this setup encourages tenants to conserve energy, it can make it more challenging for building owners who want to install solar PV generating systems intended to serve tenants. In order to offset energy usage in tenant units, an owner would have to create a separate system with its own inverter for every meter on the property. MASH Semi-Annual Report, January 20, 2010 18 systems oa Individually- me.ered Mulrfarnily Housi_,g Figure 2.1' co nveadonal -solar, solar generator multiple SYM 1 residential unit meters utility In order to encourage solar installations on multi-unit affordable housing properties through the MASH Program, D. 08-10-036 directed SCE, PG&E and SDG&E to file tariffs for a VNM, which is a tariff that allows MASH participants to install a single solar PV generating system to cover the electricity load of the owner's common areas and the tenants' individual meters in a building. The electricity generated by the system is fed back into the grid through a Generator Output Meter, which measures the kWh produced. The participating utility then allocates bill credits resulting from the energy produced by the solar PV generating system to both the building owner's and tenants' individual utility accounts, based on a pre-arranged allocation agreement (see Figure 2.2). The VNM tariff that PG&E, SCE, and SDG&E offers is currently limited to those customers that receive incentives through either the MASH Program or the California Energy Commission's New Solar Homes Partnership Program (affordable housing only). Figure 2.2: Virtual Net Metering Systeffi on Individually-Metered Multifamily Housing solar generator solar panels utility m I M residential unit common meters area meter generator ; inverter output meter AMSH Semi-Annual Report, January 20, 2010 19 4 .3, Eligibility Eligibility for the MASH Program is based on the characteristics of the affordable housing development rather than on the characteristics of the current individual residents. If a development qualifies, then all of the residents qualify whether or not they are low-income. Individual low-income residents in multifamily housing are not eligible to apply on their own. To qualify, a building must: 1. Meet the definition of "low income residential housing" as provided in PUC Section 2852; 2. Have an occupancy permit for at least two (2) years; and 3. Be within the service territories of SCE, PG&E, or SDG&E. 2.4. Budget In an Assigned Commissioner's Ruling dated February 5, 2D07, in R.D6-03-D04, one-half of the $216 million low income CSI budget adopted by the Commission in D.D6-12-033 ($108 million) was reserved for the MASH Program. This budget, shown in Table 2.2, was adopted by the CPUC in D.D8-10-036. For information on MASH Program expenditures to date, see Table 4.9. The incentive allocation equates to 88% of each PA's budget while the remaining 12% is reserved for marketing and outreach, evaluation, and other administrative expenditures. The PAs must spend 2% on evaluation; however, the remaining 10% can be split between general administration and marketing and outreach at the PA's discretion. Territory MASH Semi-Annual Report, January 20, 2010 20 3. Program Progress The MASH PAs have made significant progress since the creation of the program. This section of the report presents program achievements and milestones to December 31, 2009. 3.1. Program Implementation to December 31, 2009 The Commission presented an implementation plan for the MASH program in D.08-10-036 and its Appendix A. The requirements of the implementation plan (shov,+n in italics) and the progress to December 31, 2009, are identified below: ■ Kriithin 60 days the Program Administrators shall jointly file an advice letter with proposed amendments to the CSl Handbook to incorporate the MASH program. The handbook should address Track 1 incentives and al/ elements of the MASH program necessary for implementation of Track 1. c On behalf of the PAs, CCSE filed CCSE Advice 2, SCE Advice 2297-E, and PG&E Advice 3378-E with the Commission on December 15, 2008, which was approved on January 22, 2009 with an effective date of January 14, 2009. This advice filing implemented the MASH section in the CSI Handbook, which describes Track 1 and associated requirements. Within 90 days of this order, the Program Administrators shall jointly file an advice letter with a standardized statewide Track 2 application and review process as well as the handbook changes necessary to implement Track 2. On behalf of the PAs, PG&E filed PG&E Advice 3402-E, SCE Advice 2310, and CCSE Advice 4 with the Commission on January 14, 2009, which proposed modifications to the CSI Handbook to incorporate Track 2 of the MASH Program. The Energy Division issued an Advice Letter Suspension Notice on February 11, 2009, because the filing did not include the Track 2 application and review process. o On behalf of the PAs, PG&E filed PG&E Advice 3402-E-A, SCE Advice 2310-E- A, and CCSE Advice 4-A on March 11, 2009, which included the Track 2 application and review process requested by Energy Division. The Commission approved the advice filing on May 27, 2009, with an effective date of May 22, 2009. PG&E, SCE, and SDG&E shall each file an advice letter, within 120 days of this order, proposing a VNM tariff applicable to individually metered multifamily affordable housing properties that install a solar energy system through the MASH program- MASH Semi-Annual Report, January 20, 2010 21 Each utilitys VNM tariff must comply with § 2827 and Appendix B of this order. On February 13, 2DD9, PG&E tiled Advice 3422-E, Establishment of Rate Schedule NEMVNM - Virtual Net Energy Metering Tariff in Compliance with Decision 08-10-036. A supplemental filing (Advice 3422-E-A), Establishment of Schedule NEMVNMA -Virtual Net Energy Metering (VNAA) Service for Individually Metered Residential Units and Owners with Housing Receiving incentives from the Multifamily Affordable Solar Housing (MASH) Program or the New Solar Homes Partnership (NSHP) Affordable Housing Program was filed on April 10, 2DD9. Energy Division approved Advice 3422-E-A on June 12, 2009, with an effective date of June 8, 2009. o SCE filed Advice 2322-E establishing a MASH Virtual Net Metering schedule (MASH-VNM) with the Energy Division on February 13, 2009, and filed supplemental Advice 2322-E-A on April 14, 2009, to incorporate revisions to the tariff sheets as advised by the Energy Division. Energy Division approved Advice 2322-E-A on June 12, 2009, with an effective date of June 8, 2009. On February 13, 2009, SDG&E filed Advice Letter 2D64-E, Establishment of Schedule VNAtI-A in compliance with D.08-10-036. Per the request of the Energy Division, a supplemental filing (2064-E-A) was submitted to the Commission on April 17, 2DD9, to provide additional clarifications to SDG&E's Virtual Net Energy Metering proposal. Advice Letter 2064-E-A was approved by the Energy Division on June 12, 2009 with an effective date of June 8, 2DD9. Within four months from the Commission order adopting the program, the DASH shall be implemented in the service territories of PG&E, SCE, and SDG&E such that applications are available to the public. On February 17, 2DD9, the PAs launched MASH Track 1 and made the Track 1 Reservation Request Form, Proof of Project Milestone Form and Incentive Claim Form, along with a list of the necessary supporting documents available on their respective web sites. By the end of 2090, the Program Administrators shall have made reasonable efforts to identify the eligible population across the state within the PG&E, SCE, and SDG&E service territories, and have attempted to contact them about the MASH program. The PAs immediately reached out to affordable housing community. In the first six months after launch of the MASH Program, the PAs held workshops, served on panels in relevant statewide and local affordable housing conferences, and met with representatives of the affordable housing community to discuss their concerns with the MASH Program as designed. The PAs also reached out to key MASH Semi-Annual Report, January 20, 2010 22 stakeholders, including the United States Department of Housing and Urban Development and non-profit developers, and leveraged upon their respective Low Income Energy Efficiency departments within each service territory. By the end of 2012, 50 affordable housing buildings should install solar energy systems through the program. While the PAs have not yet reached this milestone, 179 applications have been reserved and, assuming they meet their installation deadline as listed in their respective reservation confirmation letters, approximately 179 projects should be installed by the deadline. Currently, two projects have been successfully interconnected to the electrical grid in SCE's service territory. 3.2. Program NVaitlist As of October 26, 2009, PG&E had received more applications than sufficient to exhaust its Track 1 allotted budget of S32.9M in its service territory and created a waitlist for all new applications. Each day that PG&E receives project applications, a lottery is conducted to determine an individual application's position on the waitlist. PG&E funds waitlisted projects as funding becomes available through attrition or system size reduction for reserved projects. As of December 31, 2009, PG&E has a waitlist of 63 projects totaling $15.2 million. On December 28, 2009 CCSE began a waitlist following the same procedures as PG&E. As of December 31, 2009 CCSE has a waitlist of 1 project totaling 5137,050. As of January 1, 2010, PG&E is not accepting new applications for its MASH Track 1 Waitiist. sufficient projects drop out or if more funding is added to the PG&E budget, PG&E will again begin to accept new applications for MASH Track 1 incentives. 3.3. Howe the Data Questions Called for in D.08-10-036 were Addressed Data points noted in D.08-10-03610 were discussed in detail with the Energy Division to ensure clarity and consistency in reporting for all Program Administrators. New or revised data points are indicated in Section 4.1 and have been added at the discretion of the Energy Division. t0 D-OB-10-035. Appends A, p. o MASH Semi-Annual Report, January 20, 2010 10 23 4. Program Progress Table 4.1: MASH Table 4.2: 16 3 0 5 154 107 1 D j hR ~'1' 8 126 1 D.297 M VV 157 " Includes 1 PG&E Track 2 application 12 Includes 1 PG&E Track 2 application " Includes 22 PG&E Track 2 applications. 5 SCE Track 2 Applications & 2 GCSE includes Track 2 Applications " Includes 2B PG&E waitlisted projects 75 All PG&E projects are waitlisted 'E All PG&E projects are waitlisted All capacity measured in CEC-AC Approximately 57001k in Track 1 will go to Waitlisted projects in 2010 i5 Onty includes reserved and paid projects MASH Semi-Annual Report, January 20, 2010 mmary Data: MASH Applications by Status Summary Data (Track 1) GCSE PG&E SCE Total 5 102 1 1-9 11 24 The MASH program began accepting applications for Track 1 incentives in February 2009 and Track 2 applications in July 2D09. Program progress as illustrated from various data points is shown in Table 4.1. Table 4.2 provides a detailed breakdown of the "Reserved," "Paid," and "Under Review" capacity (in CEC-AC MW) for all MASH applications received between program inception on February 17, 2D09 and December 31, 2009. ~a le 4.2: Deta led D-- a: MASH Ap licatia::s DV Status Detailed Breakdown Track 1A GCSE PG&E SCE Total Track 1a: Total Reserved Capacity 0.263 MW 5 474 MW 0 348 MW 6 085 MW Track 1a: Total Reserved Incentives S 720,413 $ 13.289,376 S 1.130,049 $ 201140,038 Track 1a: # Projects Paid 0 0 1 1 Track I a: Total Incentives Paid $ 0 _ $0 $ 124,317 $ 1%A 31- Track 1 b: Total Reserved incentives($) Track 1 b: Total Incentives Paid Track 2: Total Awarded Track 2: # Projects Paid 0.240 MW $ D---- Track 2 Waitlist Track 1a: Total Waitiisted Incentives (S) $ 137,050 $ 9,081,553 $ 0 $9, - 218. 7 03 SMASH Semi-Annual Report, January 20; 2090 25 S 16.077,351 $ 84.022 $84,022 12 [)tnertunspecme❑ 20 Includes all counties not in thee top 10 • I I tf A CTI T2 b:e 4A. MASH 1.745 ABASH Semi-Annual Report, January 20: 2010 13 26 Vista Table 4.5: MASH San Rafael Hayward _ - • Morgan Hill West Sacramento 5 4 4 A Signal Hill Victorville 1Mest Covina Santa Monica J 3 2 2 2 2 2 Walnut Creek 3 Indian Wells 2 Bakersfield 2 Los Angeles 2 3ran-VVOOJ 2 Norco 2 Emeryville 2 Oxnard 2 Ij MASH Semi-Annual Report, January 20, 2010 14 27 Table 4.5; MASH $ 3,044,899 Table 4.6: MASH Applications by City (Cont'd) Pleasanton 1 MASH Semi-Annual Report, January 20, 2010 15 28 I Table 4.6: MASH Applications by City (Cont'd) Tabie 4,7: MASH Applications by City (Capacity) CC SE PG&E SCE 0.156 Compton 0.154 Santa Ana MASH Semi-Annual Report, January 20. 2010 29 0.127 0 115 16 1 C34,y Pleasant Hill - - - - - - Yuba City Rhonert Paris Arvin 4.7: MASH Applications by City (Capacity) (Cont'd) MASH Semi-Annual Report, January 20, 2010 30 17 Santa Barbara u.uso St Helena 0.034 Table 4.7: MASH Applications by City (Capacity) (Cont'd) CCSE PG&E SCE Fowler 0.032 } 0.030 j Pariier 0.030 Hour 6.629 - ,San Pablo 0.D25 Rodeo 0.027 Point P.eyes 0024 l Vista Ocm MASH Semi-Annual Report, January 20, 2010 31 Tiburon 0.004 Table 4.8; MASH Applications by City (Cont'd) GCSE PG&E SCE Morgan Hill $ 615,397 Moronglo Valley $ 426.590 Pleasant Hill $ 560,716 \ r,ctxvilie $ 421 891 `Yuba City San Rafael O(i d $ 513,024 Santa Ana S K4.4 11 Comp,:)-', i S494 094 i d wst ve Sa n Jose d i ng ewoo . S 491 DCA Nestmi-i5ar 581 Bt th $ 489 el Bakersf Pleasanton Brentwood y , e jo S 458.953 Los Angeies $ 460.304 Huntington Guadalupe Beach S 412,320 Simi `Jalley Manteca $ 410,531 Norco Greenfield P k $ 389,043 Fullerton 566 L V $ 382 Rhonert ar Arvin eme a . S 354 Dub Desert Hot l Springs _ rb 663 Santa B r $ 340 Hercu es San Leandro . a a a $ 337,363 Santa Konica 4 Emeryville Walnut Creek F Upland $ 300.55 S 279.3D9 Ventura V ll 264 506 A l - resno Clovis . pp a ey e S S261,950 Signal Hill Corte Madera Berkeley i Cit U $ 261.944 Whither S250.030 La Mirada 367 Riatto $ 225 n on y Tracy - S id , S216,845 Beaumont 876 Rosemaad~ $ 213 eas e Antioch d , $ 207,530 Temecula ll G $ 202 673 B d Free om Los Banos Li ar atts . , e $ 200,505 Porter✓ille $ 196 144 Bald rk i P vermore Stockton , w n a $ 196,129 Tulare - Chico Dublin - $ 191,977 Carson S 187,407 Pico Rwara 1 6 7 7 El M i Oakley Angles Camp Pin l onte S 5 . 3 $ 151,808 Woodlake 075 Olaf $ 141 - - ' - - o e Colusa - _T . $ 135,891 Torrance $ 130 907 L k d i Oakdale Sonora - a ewoo AL- , $ 127,241 Midway City 120 526 D Martinez Madera owney . $ $ 118,480 Ridge-crest MASH Semi-Annual Report, January 20, 2010 32 $ 321.068 $ 308.194 $ 304.844 $ 300,340 $ 291.350 $ 283,483 S 27; D38 $ 274.528 $ 27D?43 $ 269.669 $ 267,389 $ 248 949 $ 243.612 204 , 085 $ 179,164 S 1777 9DD $ 171.234 S 162,921 $ 143 438 $ 139.805 $ 126,291 S B4,D58 19 Table 4.8: MASH Applications by City (Cont'd) CCSE PG&E 1 SCE measurement Valuation Incentive 21 Date of DedSIDn 08-1 D-035 $0 $0 S0 $o S208.339 $o $ 248,339 MASH Semi-Annual Report, January 20, 2010 20 33 Jai ua fluDO 4 1 V,JJJ Tiburon $ 131360 Table 4.5: 14ASH Program Expenditures by Program Administrator MASH Program Expenditure Data Oct 16, 200e to December 31, 20D9 ~ 5. Conclusions and Program Recommendations • The PAs have satisfied all of the program implementation guidelines and milestones set forth in D.DB-10-036. • Participation by the affordable housing community was initially slow, but the volume of applications rapidly increased, which resulted in almost complete subscription of Track 1 funds. • As expected, applications were concentrated in larger cities. Nevertheless, the PAs received applications from locations throughout their respective territories. • Track 2 did not satisfy program goals in the first funding cycle because submitted applications generally did not provide the tenant benefits required to receive incentives above the Track 1 level. • Given the speed of MASH Track 1 subscriptions, the PAs would support a review of the Track 1 incentive amount in order to ensure that the optimal number of eligible low-income customers may participate in the MASH program. WSH Semi-Annual Report, January 20, 2010 21 34 NI-kSH Program Reservation Letters and Extension Email < Janet Dkawa(1sce.com > 4/14/2010 11:55 AM Hi Allan, Sorry I sent off the list before I was finished. Your request for an extension of 4 weeks has been granted and the new extension dates are shown below. The date you had for MASH09-00095 should have been May 3, 2010. Project Date Reservation No Extension Canyon Terrace Apartments Ponderosa Village Mountain Shadows Apartments Eucalyptus Park Apartments Barnard Park Villas Candlewood Park Apartments Angeles Senior Housing Garvey Senior Housing SCE MASH09-00095 SCE MASH 09-00096 SCE MASH09-00097 SCE MASH09-00098 SCE MASH09-00101 SCE MASH09-00102 SCE fviASH09-00103 SCE MASH09-00104 If you have any questions, give me a call. June 3, 2010 June 28, 2010 May 27, 2010 May 27, 2010 May 27, 2010 May 27, 2010 June 24, 2010 June 24, 2010 Thanks Janet Okawa Southern California Edison California Solar Initiative and Self-Generation Incentive Programs Multifamily Affordable Solar Housing (626) 302-3920 36 EDISON` A-- -vnwh js, An cnn! ftL • 3- March 25, 2010 Attn: Peter Welch Absolutely Solar Electric 2146 Lemoyne Street Los Angeles, CA 90026 RE: Multifamily Affordable Solar Housing, Resen-ation Request No. SCE MASH09- 00103 - "Levine Management (Angelus Senior Horsing)" 2417 Angelus Avenue - Resen,ation Request (RR) Confirmed Reservation Notice (Please reference this number with all correspondence) Dear Mr. W ei eh: We are pleased to inform you that your Multifamily Affordable Solar Housing (MASH) Track 1 application has been conditionally approved. The follovhring summarizes what you ;vill be installing for the MASH Program: Applicant Process: Installation T--pe: System Size: Resign Factor: Project Cost: Payment T~-pe: Incentive Rate: Incentive AIlocation: 3-Step PV 23.939 CSC-AC 0.99855 7 $150,121.00 EPBB 5330/watt 100.0% Common Load Reserved Incentive: $78,887 PPNI Due Date: May 24, 2010 The amount of your incentive may vary if the "as-built system" does not ;catch the information you have submitted. Please remember that the Proof of Project Milestone (PPM) subnuttal must be received on or before the PPM due date or the resen,ation will be canceled. Also, please keep in mind that the customer is responsible for costs associated with the metering requirements described in the CSI Handbook. 37 In accordance with Assembly B-111 171-4: sued ~y the Go\ or on June I ?OU"': California Solar ]ninative (including NAIASH) participants are not required to be on a Time-of-Use (TOU) rate at this time. If YDu are not othe-ni vise required to take servic-e on a TOlJ raze; you may choose either to be placed on a TOU rate or re;nam on your pre-sera rate. If you have any questions. please call us at (866) 584-7436: or send an entail to CSIGroup/~--` ce..com. A=Mitionallj'; the most current CSI Pro-grarn Handbook and forms are a-,1 iiable on SCE's NVtb site at ivww.sce.con.'/Mash. Aileen Lagbao Program Manager Multifami]v Affordable Solar lAousins. Proararn Cc: Jeff Levine Levine Maaappment (Angelus Senior House 522 S. Robertson Boulevard, Suite 200 Los A.rge]es, CA 90036 8 yDLfTk+S~ti paLlFt]8N1~1 EDISON' !.a rrxsoK Ifu AA.'/JhAII C-- Miarch 24. ^010 Atm: Peter Welch Absolutely Solar Electric 2146 Lemo%me Street Los Angeles, CA 90026 RE: Multifamily Affordable Solar Housing, Reservation Request No. SCE MASH09- 00104 - "Levine Management Group, Inc. (Garvey Senior Housing)" 9100 Gan,ey Avenue - Reservation Request (RR) Confirmed Resen ation Notice (Please reference this number with all correspondence) Dear Mr. Weich: We are pleased to inform you that your Multifamily Affordable Solar Housing (kLA-SH) Track 1 application has been conditionally approved- The folloc3-ing summarizes teat you will be installing for the MASH Progrwn: :A-pglicant Process: Installation Type: System Size: Design Factor: Project Cost: Payment T)?e: Incentive Rate: Incentive Allocation: Reserved Incentive: PPIN'I Due Date, 3-Step PV 39.245 CEC AC 0.99359 $246,100.00 EPBB $3.30/watt 100.0% Common Load $128.677 Mai, 24, 2010 The amount of your incentive may vary if the "as-built system" does not match the information you have submitted. Please remember that the Proof of Project Milestone (PPM) submittal must be received on or before the PPM due date or the reservation will be canceled. Also, please keep in mind that the customer is responsible for costs associated with the metering requirements described in the CSI Handbook. 39 In accord~,ce irh Assernb]~ Bill 1714, sued by the Goy emor on Jun-- , - + U , C,alifomia Solar lnitiatiN'e (i11clud"n , MASH) participants are not rewired to be on a 011 n Tune-of-Use (TOU) rate at this time. If"ou al-e not othen6°ise required to take servi e en a TOU rate. you matt choose either to be placed Oil a TOU rate or remain on yclur preset rate. If you ha-,,e any questions, please call us at (966) 584-7436, or send an ema-1 to CSIGroup Wsce.oorn. Additionally, the most current CS1 Program Handbook and forms arm available on SCI='s Veb site at ~~,nr.sce.corr_'»tash. Program Nlanaaer Multifatuily Affordable Solar Housing Prograrn Cc: Jeff Levine Le, ine Management (Game,- Senior Housing) e?? S. Robertson Boulevard. Suite 200 L.O-q.kn.9-eles, CA 90035 40 AbsoluteIN7 Solar Intornnation sSO_L!i-L ` SOI AR -'Photovoltai _wer Sz stems in Los Angeles 43 14:^010 Next Yrevious 13Pcign and development by OSKOUI+OSKOLTI. PvC. 08 Absolutely Solar. All Rights Reserved. cCII L 1 ~'SCL R -photovoltaic weir S-% stems in Las Angles Page ? of 1 Designers and Installers of Photovoltaic Systems in the greater Los Angeles Area Some Californians are turning to solar power to protect themselves from the types of blackouts that resulted from California s recent energy, disaster. Others, frustrated by the prospect of forever being at the mercy of local and state utility providers are anxious to enjoy energy autonomy and are realizing how quickly an investment in a solar system --kill pay off as energy rates rise at a meteoric pace. Of all the energy sources available, solar has perhaps the most promise. 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Inverters have a standard manufacturer's warranty of 10 years. The warranty on our labor is 5 years. 45 http://w7N~,-ev. ab solutely solar. com/sen-i ces.hm-A 5/14/2010 ABSCLUT1 ELYSCLAR - rhotovoltic 1,~~'er S``steins in Los Angeles Page 1 of 1 About Us Senjces About Photovoltaic Po ever Incentives Gallen- 1 estimonials Request Quote Contact Solar PoNver in more Detail - - • Sun Solar energy is quite simple' the energ}- produced directly by the sun and collected on Earth. The sun creates its energy through a thermonuclear process that converts hydrogen to helium. That process creates heat and electromagnetic radiation. The electromagnetic radiation (including visible light, infra-red light and ultra-violet radiation) streams out into space in all directions. A small fraction of that radiation reaches the Earth. With the help of solar panels, that radiation can be harnessed and later converted into electricity. Solar Panels Photovoltaic (or PV) systems convert light energy into electricity. The term "photo" is a stem from the Greek "phos" which means "light." "Volt" is named for Alessandro Volta, a scientist evho studied electricity in the 18th and 19th centuries. Photovoltaic systems are most commonly knoe;,-n as "solar systems." The primary component of a solar system is an array of panels that directly converts sunlight into electrical energy. Solar panels contain crystal cells made of semiconductor material. usually silicon. These cells transform light from the sun into an electrical current. 46 5/14/2010 http://~Awiv.absolutel3,solar.c.om./about_photovoltaic.ht nl Absolutely Solar Proposals 47 Cost Analysis Draft An eilus Senior Housing Size 23.939 CEC-AC (kW) Production 42,111 kWh/year CSI System Size 23.905 Electricity Cost* $0.121 per kWh Electricity, Production per year $5,116.35 Installation cost 5150,121 MASH Rebate $78,887 System Owner out of pocket expenses Federal Tax grant $21,370 Net Cost $49,864 Depreciation savings*" $24,828 Cost after 6 years $25,036 Payback time Total cost (after 6 yrs) $25,036 Electricity Production per year $5,116.35 Payback time: 4.89 years Energy production after 30 yrs*** $243,412.52 * Electricity cost calculation Total monthly bill $1,508.990 Total electricity used 12,420 Electricity cost $0.121 Depreciation calculation Project Cost (after Mash Rebate) $71,235 1/2 of Federal tax grant $10,685.18 Depreciation Basis= Pr Cost-1/2 tax gr. $60,549.33 Depreciation Basis $60,549'3 1st yr 20.00% $12,109.9 41.00% $4,965.04 2nd yr 32.00% $19,375.8 41.00% $7,944.07 r 3 d 19.2D% $11,625.5 41.00..°~ $4,766.44 r y 4th yr 11.53% $6,981.3 41.OD% $2,862.35 r 5th 11.52% $6,975.3 41.00% $2,859.87 y 6th yr 5.76% $3,487.6 41.00% $1,429.93 Total Depreciation after 6 yrs. $24,827.71 48 Angelus Senior Housing CostAnolysis Draft prodluction after 30 years Guc1 E7 Energy Price increase 3% p/year Yr 1 $5,116.35 Yr 2 $5,269.84 Yr 3 $5,427.94 Yr 4 $5,590.77 Yr 5 $5,758.50 Yr 6 $5,931.25 Yr 7 56,109.19 Yr 8 $6,292.47 Yr 9 $6,481.24 Yr 10 $6,675.68 Yr 11 $6,875.95 Yr 12 $7,082.23 Yr 13 $7,294.69 Yr 14 $7,513.53 Yr 15 $7,738.94 Yr 16 $7,971.11 Yr 17 $8,210.24 Yr 18 58,456.55 Yr 19 $8,710.24 Yr 20 $8,971.55 Yr 21 $9,240.70 Yr 22 $9,517.92 Yr 23 59,803.46 Yr 24 $10,097.56 Yr 25 $10,400.49 Yr 26 S10,712.5D Yr 27 511,033.88 Yr 28 $11,364.89 Yr 29 $11,705.84 Yr 30 512,057.D2 Total Production after 30 yrs. $243,412.52 49 Angelus Senior Housing r C `t Z6c vi C ~C W {J p~ V 0 CD O ° ° O O ° p G p O O O C O O O ° O O p ° O ° ° O O ° Ln M N t r U} 1 L o Y M L o, Y N L Cc N Y N L rj Y L V1 Y N Y N L M } N L N Y N L H T N } O I } W Y ~ L ~ i r ~ YL ~ } L e-I T ~ Q1 L T co Y L } L2 Y L } L } M L } N L } } C O C O E N O u a a m c u u Q C D u O T OD .1 L IC i m h h d 50 Cost Anaiysis Graft Cast/Benefit Analysis Solar System Production Solar Energy production Accumulated Cost amortization Yr 1 $5,116.35 $5,116.35 $44,899.11 Yr 2 55,269.84 $10,386.19 $37,755.03 Yr 3 $5,427.94 $15,814.13 $33,788.59 Yr 4 $5,590.77 $21,404.90 $31,726.24 Yr 5 $5,758.50 $27,163.40 $29,666.38 Yr 6 $5,931.25 $33,094.65 $29,036.44 Yr 7 Yr 8 Yr 9 $6,109.19 $6,292.47 $6,481.24 $39,203.85 $45,496.31 $51,977.55 5800.00 59DO.OD $800.00 Yr 10 $6,675.68 $58,653.23 $800.00 Yr 11 $6,875.95 $65,529.18 $800.DD Yr 12 $7,082.23 572,611.40 $800.00 Yr 13 Yr 14 $7,294.69 $7,513.53 $79,906.10 $87,419.63 $8DO.00 5800.00 Yr 15 $7,738.94 $95,158.57 $9DO.OD Yr 16 57,971.11 $103,129.68 $9DO.OD Yr 17 $8,210.24 $111,339.92 $800.00 Yr 18 58,456.55 $119,796.47 $9DO.OD Yr 19 $8,710.24 $128,5D6.71 $8DO.00 Yr 20 Yr 21 $8,971.55 $9,240.70 $137,478.26 $146,718.96 $800.00 $800.0D Yr 22 $9,517.92 $156,236.88 $800.OD Yr 23 $9,803.46 $166,040.34 $900.OD Yr 24 $10,097.56 $176,137.90 5800.OD Yr 25 $10,400.49 $186,538.39 $800.00 Yr 26 $10,712.50 $197,250.89 $800.OD Yr 27 $11,033.88 $208,284.77 $800.00 Yr 28 $11,364.89 $219,649.66 $800.00 Yr 29 $11,705.84 $231,355.50 $800.00 Yr 30 $12,057.02 $243,412.52 $800.00 ~l Angelus Senior Housing s G N Q e L, a~ 52 Cost Analysis r-)raji Internal, Rate of Return before Depreciation Investment -$49,864 I RR Yrl 55,116.35 Yr2 55,269.84 Yr3 55,427.94 Yr4 $5,590.77 -26.66% Yr5 $5,758.50 -17.08% Yr6 $5,931.25 -10.37% Yr7 $6,109.19 -5.53% Yr8 $6,292.47 -1.93% Yr9 $6,481.24 0.81% Yr10 $6,675.68 2.93% Yrll $6,875.95 4.60% Yr12 $7,082.23 5.94% Yr13 $7,294.69 7.03% Yr14 $7,513.53 7.92% Yr15 $7,738.94 8.66% Yr16 $7,971.11 9.28% Yr17 58,210.24 9.80io Yr18 58,456.55 10.24% Yr19 $8,710.24 10.61% Yr20 $8,971.55 10.93% Yr21 $9,240.70 11.21% Yr22 $9,517.92 11.45% Yr23 $9,803.46 11.66% Yr24 $10,097.56 11.84% Yr25 $10,400.49 12.00% Yr26 $10,712.50 12.13% Yr27 $11,033.88 12.26% Yr28 $11,364.89 12.35 io Yr29 $11,705.84 12.46% Yr30 $12,057.02 12.54'0 5-4) Angelus Senior Housing F w C r o I ~ N m r-4 1o N s.. N Y C N j > I I f'1 N > ` N N d CD n~ N u > L d L r ~ r m ti O I N Qi 0 ~ C q > } 1 T } 0 0 0 D o p o 0 0 o N r*i a v? e 0 c d d ~t G Q 54 CostAnalysis Graft Internal Rate of Return with Depreciation Investment -$25,036 IRR Yrl $5,116.35 Yr2 $5,269.84 -42.78% Yr3 $5,427.94 19.71% Yr4 55,590.77 -5.90% Yr5 $5,758.50 2.73% Yr6 $5,931-25 8.38% Y r7 $6,109.19 12.23% Yr8 $6,292.47 14.93% Yr9 $6,481.24 16.89% Yr10 $6,675.68 18.34% Yrll $6,875.95 19.42% Yr12 $7,082.23 20.25% Yr13 $7,294.69 20.89% Yr14 $7,513.53 21.39% Yr15 $7,738.94 21.78% Yr16 $7,971.11 22.099/6 Yr17 58,210.24 22.34% Yr18 $8,456.55 22.54% Yr19 58,710.24 22.70% Yr20 58,971.55 22.83% Yr21 $9,240.70 22.94% Yr22 $9,517.92 23.03% Yr23 $9,803.46 23.10% Yr24 $10,097.56 23.16% Yr25 $10,400.49 23.20% Yr26 $10,712.50 23.24% Yr27 $11,033.88 23.28% Yr28 $11,364.89 23.30% Yr29 $11,705.84 23.33% YrC $12,057.02 23.34% 5 J Alnoluce:YE Angelus Senior Housing Cost Analysis Drop Garvey Senior Housing 39.245 CEC-AC (kW) Size 591 kWh/year 69 Production , CSI System Size 38.993 Electricity Cost* $0.133 per kWh Electricity Production per year $9,252.12 Installation cost $246,100 MASH Rebate $128,677 System Owner out of pocket expenses 5117,423 Federal Tax grant $35,227 Net Cost $82,196 Depreciation savings*" $40,926 Cost after 6 years $41,270 Payback time Total cost (after 6 yrs) $41,270 Electricity Production per year $9,252.12 Payback time: 4.46 years Energy production after 30 yrs*** $440,173.62 * Electricity cost calculation Total monthly bill $1,808.12 Total electricity used 13,600 Electricity cost $0.133 Depreciation calculation Project Cost (after Mash Rebate) $117,423 1/2 of Federal tax grant $17,613.47 Depreciation Basis= Pr Cost-1/2 tax gr. $99,809.64 Depreciation Basis 20.00% $99,809.6 $19,961.9 41.00% $8,184.39 1st yr 32.00% $31,939.1 41.00% $13,095.02 2nd yr 20% 19 $19,163.4 41.00% $7,857.01 3rd yr . 11.53% $11,508.1 41.D0% $4,718.0 4th yr 52% 11 $11,498.1 41.00% $4,714.21 5th yr . 5 76% $5,749.0 41.00% $2,357.10 6th yr . $40'926.04 'Total Depreciation after 6 yrs. Garvey Senior Housing 56 Cost Analysis graft ***;r*arov Prndurtion after 30 years Energy Price increase 3% p/Year Yr 1 $9,252.12 Yr 2 $9,529.69 Yr 3 $9,815.58 Yr 4 $10,110.05 Yr 5 $10,413.3S Yr 6 $10,725.75 Yr 7 $11,047.52 Yr 8 $11,378.94 Yr 9 $11,720.31 Yr 10 $12,071.92 Yr 11 $12,434.08 Yr 12 512,807.10 Yr 13 $13,191.32 Yr 14 $13,587.06 Yr15 $13,994.67 Yr 16 $14,414.51 Yr 17 $14,846.94 Yr 18 $15,292.35 Yr 19 $15,751.12 Yr 20 $16,223.65 Yr 21 $16,710.36 Yr 22 $17,211.68 Yr 23 $17,728.03 Yr 24 518,259.87 Yr 25 $18,807.66 Yr 26 $19,371.89 Yr 27 $19,953.05 Yr 28 $20,551.64 Yr 29 $21,168.19 Yr 30 $21,803.23 Total Production after 30 yrs. $440,173.62 57 Garvey Senior Housing C Q 58 Cost Analysis Draft Cost/Benefit Analysis Solar System Production Solar Energy Production Accumulated cost amortization Yr 1 $9,252.12 $9,252.12 574,011.78 Yr 2 $9,529.69 $18,781.81 $61,716.76 Yr 3 $9,815.58 $28,597.39 $54,659.74 Yr 4 $10,110.05 $38,707.43 $50,741.44 Yr 5 $10,413.35 $49,120.78 546,827.23 Yr 6 $10,725.75 $59,846.53 545,270.13 Yr 7 $11,047.52 $70,894.05 $800.00 Yr 8 $11,378.94 $82,272.99 5800.00 Yr 9 $11,720.31 $93,993.30 $800.00 Yr 10 $12,071.92 $106,065.23 $800.00 Yr 11 $12,434.08 $118,499.31 $800.00 Yr 12 $12,807.10 $131,306.41 $800.00 Yr 13 $13,191.32 $144,497.73 $800.00 Yr 14 $13,587.06 $158,084.78 $800.00 Yr 15 $13,994.67 $172,079.45 $800.00 Yr 16 $14,414.51 $186,493.95 $800.00 Yr 17 $14,846.94 5201,340.90 5800.00 Yr 18 $15,292.35 $216,633.25 $800.00 Yr 19 $15,751.12 $232,384.37 5800.D0 Yr 20 $16,223.65 $248,608.02 $8DD.D0 Yr 21 $16,710.36 $265,318.39 $8D0.00 Yr 22 $17,211.68 $282,530.D6 $800.00 Yr 23 $17,728.03 $3D0,258.09 $800.00 Yr 24 $18,259.87 $318,517.95 $8D0.00 Yr 25 $18,807.56 $337,325.61 $800.00 Yr 26 $19,371.89 $356,697.51 5800.00 Yr 27 $19,953.05 $376,650.55 $9DD.00 Yr 28 $20,551.64 $397,202.20 $800.00 Yr 29 $21,168.19 $418,370.38 $800.00 IT 30 $21,803.23 $440,173.62 $800.D0 59 Garvey Senior Housing w c L i ! r rn N i r } C70 N N } l~ N I ~ L1 N } C N m N } N N N ~~R o~- I I } O N V L } ~ CL r a "1 ® h Q ~ r ~ r L " C I I } lima 6{- r N ® li " p _ ILI C ? L r r 7 L - ~..,r 1-1 a, c o 0 p O - O Ln O O LM Ln " e-1 N N c O O v l+ 1 01 B u 60 Cost Analysis Draft [Internal Rate of Return before Depreciation Investment -$82.,196 MR Yr1 $9,252.12 Yr2 $9,529.69 Yr3 $9,815.58 Yr4 $10,110.05 -24.28% Yr5 $10,413.35 -14.79% Yr6 $10,725.75 -8.20% YO $11,047.52 -3.47% Yr8 $11,378.94 0.02% Yr9 $11,720.31 2.66% Yr10 $12,071.92 4.70% Yrll $12,434.08 6.30% Yr12 $12,807.10 7.57% Yr13 $13,191.32 8.60% Yr14 $13,587.06 9.44% Yr15 $13,994.67 10.13% Yr16 $14,414.51 10.71% Yr17 $14,846.94 11.19% Yr18 $15,292.35 11.6D% Yr19 $15,751.12 11.94% Yr20 516,223.65 12.24% Yr2l $16,710.36 12.49% Y r22 $17,211.68 12.7090 Yr23 $17,728.03 12.89% Yr24 $18,259.87 13.0550 Yr25 518,807.66 13.19% Yr26 $19,371.89 13.31% Yr27 $19,953.05 13.42% Yr28 $20,551.54 13.52% Yr29 $21,168.19 13.60% Yr30 $21,803.23 13.67% 61 4c. 1~-::,_ III=C 3.- Garvey Senior Housing r V x y N N r r N L Y r M N I N N G ~ Y ^ _._.I N L } CL I r 0 Y ~ n = e I Ls ~ j C / } V) c r rn V N ~y Ih- ~-•1 A I H, W - - Y I I I O ; I r o~ n - LD M L r N } ri } ° Ln O u~ ° Ln M N N -4 N L C CJ Qj t Q 0 6 2 Cost Analysis Draft Internal Rate of Return with Depreciation Investment -$41,270 I RR Yrl 59,252.12 Yr2 $9,529.69 Yr3 $9,815.58 Yr4 $10,110.05 -2.48% Yr5 $10,413.35 5.97% Yr6 $10,725.75 11.45% Yr7 $11,D47.52 15.14% Yr8 $11,378.94 17.72% Yr9 $11,720.31 19.56% Yr1O $12,071.92 20.90% Yr11 $12,434.08 21.91% Yr12 $12,807.10 22.66% Yr13 513,191.32 23.24% Yr14 $13,587.06 23.69% Yr15 513,994.67 24.04% Yr16 $14,414.51 24.31% Yr17 $14,846.94 24.53°/c, Yr18 $15,292.35 24.70% Yr19 515,751.12 24.84% Yr20 $16,223.65 24.95% Yr21 516,71D.36 25.04% Yr22 517,211.68 25.11% Yr23 517,728.03 25.17.% Yr24 518,259.87 25.21% Yr25 $18,807.66 25.25% Yr26 $19,371.89 25.28.% Yr27 $19,953.05 25.3190 Yr28 520,551.64 25.33 Yr29 $21,168.19 25.3490 Yr30 $21,803.23 25.36% 63 A.b!F.CIU~- t:iU,-; Garvey Senior Housing POWER PURCHASE AGREEMENT OPTION Solar City Infonnation 65 66 T U a) ~O O_ 0 4- U cis O 0 4- O Q Q a) lao O CL co 0 c O U U m c a) E 75 a~ c O Q C: s~ co CD U ~ • ss o N N O o c~ c O c~ CO N c .U C E6 C 67 I t a r~ V a L 1 V Z a 0 'o 61 m a v a i Q~ 0 u h-l S rQ Ir= cr i ~A ~L ~i•fi K1 G c `f s ~ 0 Z Q~ X N cc 1 76 L U N O O U) co CL) E O cn o ° N a o u~ - E E c~ L U ; c6 :D O cn N a~ - ca c~ N ~ N N c 'ap cn 4-d m j N N 4- to O N N ~ ~ ~ O ~ J . ~ L) tLb L- (n C6 (J7 Q~ i _ O 68 C O C6 a~ o ~ i o V) V) C O U a) O A ~ as C O ~ U 70 C O O a) Cn C to v C m N C C N U L (n Q co Q U U L C Lf) U U in CL o Q Co 4- M C C ° ° ° a) ~ C M o - 0 C O _ U - ,rt U O O ~!1 L M L Q ~ O C N a) O ~ C Cn N C ~ O C 6 Q a~ - ~ C U ~ Q O a) x O U a) E- 1= cn cn a) +-j 69 O w E Ln O U3 O 4a co E O ~ Q O C6 Q U co ~ O U ® E C/) a) OU D Q . l ice[ j V .f: 77 Elf l in l p L- c i ~r7r ''nn 70 V/ L (6 • U C ~ ~ O L- t~p Q) O O O Q N tLo co U 70 O E f~ N m O a) co O O U N O C6 J LL U m ~ 9 N r_ o w ltwb o~ v 7 r r^.4 ~-t r~ "Co Oki w z O ~i w Con 3 S C~ C u s~ Fm) ♦y~ f~ CM, .y co la 71 L fA $4 L C C 4, U Q) O > ~T z co co C !1, O O O O O Q C E C L m p C cA a) m M C) < CD CO p - O O co Q7 F O Z u7 C b p>, 'O s C 3 C O ) m C3] a) LO O N U O E C E a o LL C + ca to M C ~ U 0 i 0 V) - CO . 0 4- 0 LO > 0 m > :3 N O O J o - LL co 0 > Lo 0 U in . c~ ~ I I ! ~ I f I . 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A r V C C 0 c m Q L7 T M N 0 T co CD n c~ LL7 v M N T CL A o M ~ ss O M M ~ as 1L) Q GF)- `m rn rn 0 y N N Cfl ~ I C7 ~ frN? tNR d w 0 N > o ~ U co N m E c C~ Q C Q ~ Q ~ a F- Z - N O N d 0 0 0 0 0 0 0 0 0 0 0 f4 0 0 0 0 0 tri o W) 0 N N T - G3 E4 Uz) 6r' c4 n N d 96 0 0 0 0 0 0 0 0 0, 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 L7 0 to C to O L7 O to ~ H +-4 H C N 4 { N ? H E9 Solar City Sample Contract 97 01a Soiar Power Purchase Agreement (Commercial CA 0108) This Solar Power PuTohase Agreement (thus "Agreement') is entered into by the patties listed below (each a '`Para" and colleanvely the "Parties") as of the date signed by Seller below, (the "Effective Date"). Purchaser: Seller: i Levine ?~4anagement Group, lnc. Name on SoiarCiry Corporat Name 822 S Robe ison Blvd and 393 Vintage Park Drive, Suite 140 and Address Los Angeles, CA 90035 Address Foster City, CA 94404 i Attention: Jeff Levine on Attention: Contract Adtninisirat Phone 310-358-3489 Phone (650) 638-1028 Fax 1310.358-34.94 Fax I (660) 638-1029 E-mail I E-mail i Contract4dministrator a, olarcity.com Contractor's license Numbers Purchaser X~ ov+as the Facilit} CA: CSLB 888104 (check one) leases the Facility OR: CCB 180498 This Agreement sets forrh the terms and conditions of the purchase and sale of solar generated electric energy from the solar panel system described in Exhibit 2 (the "System") and installed at the Purchaser's facility described in Exhibit 3 (the "FaeiW). The exhibits listed below are incorporated by reference and made part of this Agreement. Exhibit 1 Pricing Attachment Exhibit 2 System Description, Delivery Point and License Area Exhibit 3 'Memorandum of License Exhibit 4 Credit Information Exhibit 5 General Terms and Conditions (Revised December I1, 2009) Purchaser: Signature: _ Printed Name: Title: Date: SolarCity Corporation Signature: Printed Name: Lyndon Rive Title: CEO Date: Sofa; Power Purchase a dement v. 20091211 (CA/CO/OR) Term,: Eighteen (18) years, beginning on the Commercial Operation Date. 2. Additional Terms: tip to Zero (0) Additional Terns of Zero (0) years each. 3. Environmental Incentives and Environment Attributes Accrue to Seiler. 4. Contract Price: FEAR CONTRACT PRICE PER KWH 1 $0.0500 2 $0.0500 $0.0500 4 SO.0500 SO.0500 6 $0.0500 7 $0.0500 8 $0.0500 9 50.0500 10 50.0500 11 SO,O500 12 50.0500 13 $0.0500 14 50.0500 15 $0.0500 16 50.0500 17 $0.0500 18 50.0500 In--ludes ACH invoicing. If manual invoicing is required, a S25 handlin- charge Rill be added to each invoice. 5. Condition Satisfaction Date: December 31.2010 6. Anticipated Commercial Operation Date: February 28, 2011 7. Outside Commercial Operation Date: 'Nlay 31, 2011 9. Purchase Option 2-L4.R PURCHASE PRICE* 6 $64.4= 8 10 $84:744 is Fair Market Value 'Buyer shall have the right to purchase the system at the greater of the price set forth above and the :hen current fair market value. 9. Termination Value: -r-LAR TERT*ID ATION VALUE 1 5346,128 2 5304,165 $249,592 4 $206,237 5 $169,611 pow-r purctti?se A~-rae u Commercial R'o a£ l'vision (CA/C010R) 99 S1'?0.3,81- 8 $11:.690 9 5106,992 10 $100.287 11 593.574 12 $86,854 13 580,126 14 573.-' 90 15 $66,644 16 559.889 17 553.123 18 539,560 1 10. Rebate Variance. kfl prices in -his Aueement are calculated based on a rebate of mash rebate at $113,401.001System. If the actual rebate is lower than calculated, prices -Ail] be adjusted pro-rata to rvgect the actual rebate received. Power PUTchas A.Ere•,m= Commc: iai R'o i s Version (CA/CO/OR) 100 System Description. Delivery Point amd License Area 1. System Location: 4051 Candlewood St Lakewood, CA 90712 21 Svstem Size (DC kPV): 39.560 3. Expected First Year Energy Production: -54.22-1 4. Expected Module(s): 5. F L -4,N7 M r1' MAKE P~'Ii ODEL RATED PG'VtT I EFF d CIT N CY 1 I SaTCon Technology PVS-= 0 (240 V) I 0 :0.00 k1V 9:.0 6. Expected Structure: Roof Mount 7. Includes: Turn key installation: rebate processing, site audit, engineering and desim, plan check, permiuing, inspections, interconnection. SDlarcity Limited Warranty 8. Excludes: Upgrades to elec-aicaL rooflna, structural enhancements, and trenching. 9. Delivery Point amd License Area: SolarCity shall attach a schemaric that contains the: (i) array, (ii) Delivery Point: and (iii) access points needed to install and service System (bldg access, electrical room, stairs etc.) QUAN7M I MAID MODEL I STC WATTS FTC WATTS 1S4 - A SOLR I.4 OCER KD215GX-LPU 215.0'' 194.4 W Expected Inverter(s): PowL Purchase Agreement CouLnercial Working Versior. (CA/C010R) 101 M- emorandtam of License RECORDING REQUESTED BY 4.ND V►TXN RECORDED RETURN TO: SolarCity° Corporation ,93 Vintage Park Drive, Suite 140 Foster Cit,'. CA 94404 Attention: Lease License Administrator (space A. Licensor is the owner of certain real property ("Premises"), located in the County of LOS ANGELES, State of California; attached to this License as Exhibit A and incorporated herein by reference. B. Licensor and Licensee have entered into a Solar Power Purchase Agreement dated on or about the Effective Date (the "Agreement") under which Licensee is selling enern, generated by a photovoltaic elezzric generating system (`she "System") to Licensor. The Aueement is for a t.-rm of Eight.-en (18)years: beginning on the Effe:.tn,e Date and ending on the Eighteen (18) year anniversary of the Commercial Operation Date with an option to extend the Agreement for up to Zero Q extended terms of Zero (0) years each. Pursuant to the .Agreement Licensor has granted Licensee an irrevocable, non-exclusive license ("Ucense") over the Premises for the purposes and on the terms set forth in the Agreement. Licensor and Licensee a_zree as follows: 1. Licensor hereby grants to Licensee the License over the Premises on and subject to the terms and conditions set forth in the Agreement which is incorporated herein by reference. 2. The term of the License begins on the Effective Date and continues until one hundred and twenty (120) days after the termination of the .Agreement. 3. This Memorandum of License shall not be deemed to modifi alter or amend in any way the provisions of the License or the Agreement. In the event of any conflict between the terms of the License and/or the Agreement and this Memorandum, the terms of the License and or the Agreement, as applicable, shall control. The undersigned have executed this Memorandum of License as of the date first written above. MEM OR4A-DU1M OF LICENSE THIS MEMORA'N'DUM OF LICENSE is made and entered into this = day of 201J.: (the "Effective Date") by and between Levine Management Group, Inc., whose address is 822 S Robertson Blvd Los Angeles, CA 90035 ("Licensor"), and SOL.ARCITY CORPORATION, whose address is 393 Vintage Park Drive, Suite 140, Foster City, CA 94-404 ("Licensee"). LICENSOR Levine Management Group, Inc. Bv: _ Dame: Title: Dame: Lyndon Rive Title: CEO [REM43 DER OF PA GE LN TEATY70NALLY LEFT BL4T'K NOT-IRYACKNORILED GE e-WP4GEFOLLORS] this line reserved for recorder's use;) LICENSEE SOLA.RCITY CORPORATION Rv- Power Pxchase Am-eemem Commercial woriang VerslOn (CA/CO/OR) 102 STATE OF CALIFORNIA) ayuN'TY OF LOS.A-NGELES On , before me, . Notary Public, personally appeared . who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is."are subscribed to the within instrument and aclmowledtred to me that be/she/they executed the same in his'her'their authorized capacinl(iesl. and that by his'her.1their sienamre(sl on the instrument the person(s), or the entity upon behalf of which the person(s) acted: executed the instrument. I c un3-zr PENAL I" OF PER URS' under the laws of the Stat_ of Cal forma'ltat r he foregoing ,)a-az-apb is L u= and co, ~ ect. VJTTNESS my hand and ofmcial seal. Siznature of Notary Public STATE OF C.4LIFOR\Z4 I COUNTY OF SAN N4-ATEO ) ss. On . before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactoryevidence to be the per son(s) whose name(s) is'are subscribed to the within instrument and aclmow-ledged to me that htishe.,they executed the same in his,/her'their authorized capacity(ies), and that by his,lhen their signarrre(s) on the instrument the person(s): or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURE' under the laws of the State of California that the foregoing paragraph is true and correct. VvITTvESS my hand and official seal. I Signature of Notary Power Pur chess Am-mmmt Commerial VA'oridn¢ Version (CA CO/OR) 10 3 Erhibnt A Legal Des--ription of Pr=ises That retrain real property located in the County of LOS ANCTELES, State of Califomia descn-bed as follows: Pomer Purchase d gTeemcm Commercial Wor}ane Version (CVCO.!OR) 104 EWblt 4 Credtit Information Promptly following the execution of this Agreement Purchaser shall supply SclarCiw with the following credit information: Previous Corporate Addresr: p, S Robcrtson Blvd I r,;- c r- 73n T.nc Ananies. CA 900-3: Phone Number. I Fax Number Entity Type S Corp C Corp I Parmersbi P Soil Prop LLC I LLP Other Check One: Property Address for Solar Installation: State: Zap Code: Owner Occupied YES o NO Puropern Type Insurance .Agent Name Agents Phone: I Name of Landlord if Not Owner Occupied Corporate Records Cope of .4rricles of Incorporation. Partnership agreement F]ctibous Name StatemenT or Organizational formation Documents (If applicable). Financial Statements ❑ Last two (2) years of CPA audited, reviewed, compiled statements (Balance Sheet, Income Statement, Cash Flow). The above information grid any information attached is furnished to SolatCity and its afnliaaes ("Lenoer") in connection xath the Appbcanon of credit for which you may apply or credit you may guarantee. You acknowledge and understand that the Lender is 7ellwg on this information in deciding to FaM or continue credit or to accept a guarantee of credit You ,°preseM w,attanty and cordfy that the ir1f0rma6Dn provided herein is true, correct and complete The Lender is authorized to snake all inquires deemed necessary to vm,-n° the accuracy of the information contained be, cin and to date-mine your ereditworthmess. You authorize any person or consumer-reporting agency m give the Leader any information it may have about you- You authorize the L.-ndm to answer questions about its credit apenence wit you Subject w any non-disclosure agreemern be ween you and lender, this form and any other Mfo.-=Dr given to the Lender shat be the Londw's pro?-... If your application for business credit is deriitd you have the right to a wrizr= statement of the specrk reason for the denial To o1ndti the statrment, please conta.-t Sola.-City at (650) 638-1028, Foster City, CA 94-404. You must contact us within 60 days from date you are notified of ow decision We will s©d you a wrinan statemmtT of reasons for the denial within 30 d2vs of receiving your request. NOTICE: The Fed-gal Equal Oppornmity Am prohibits creditors from dism^-iminaang against creda applicants on the basis of rate, color, religion, national origin, sex, ma-ital starts or age (provided the applicant has the capacity to enter min a binding corract); because all or, part of the applicants income delves from any public assistance programs; or because the applicant has in good faith exercised am' right under the Cownner Credit Protection Act The federal agency that arim,nisms compliance with this law concerning this creditor is the Office of the Comptroller of the Currency, Customer Assistance Unit, 1301 McKinney Str° Suite 3,450, Houston, Texas 77010-9050. SolarCity is an equal opportunity lender- Signature Title Cate Power Pu chase Agreement Commercial Worong Version (CA/CO/OR) 105 1~ xhibit 5 Solar Power Pnrci;ase .F ur-=ement General Terms and Conditions _~emoer 11. 2009 1. Definitions and Interpretation: Unless otherwise defined or required by the context in which any term appears: (a) the singular includes the plural and vice versa; (b) the words `herein," "hereof' and "hereunder" refer to this Agreement as a whole and not to any particular section or subsection of this Agreement (c) references to any agreement document or instrument mean such agreement, document or instrument as amended, modified, supplemented or replaced from time to time; and (d) the words "include," "includes" and "including" mean include, includes and including "without limitation-" The captions or headings in this Agreement are strictly for convenience and shall not be considered in interpreting this Agreement 2 Purchase and Sale of Electricity. Purchaser shall purchase from Seller, and Seller shall sell to Purchaser. all of the electric energy generated by the System during the Initial Term and any Additional Term (as defined in Exhibit 1. and collectively the "Term"). Electric energy generated by the System will be delivered to Purchaser at the delivery point identified on Exhibit 3 (the "'Delivery Point"). Purchaser shall take title to the electric energy generated by the System at the Delivery Point and risk of loss will pass from Seller to Purchaser at the Delivery Point. Purchaser may purchase electric energy for the Facility from other saurces if the Purchasers electric requirements at the Facility exceed the output of the System. 3. Term and Termination, a. Initial Term. The initial term ("Initial Term") of this Agreement shall commence on the Commercial Operation Date (as defined below) and continue for the length of time specified in Exhibit 1, unless earlier terminated as pro,ided for in this Agreement The "Commercial Operation Date" is the date Seller gives Purchaser written notice that the System is mechanically complete and capable of providing electric energn to the Delivery Point. Upon Purchaser's request, Seller will give Purchaser copies of certificates of completion or similar documentation from Seller's contractor and the interconnection or similar agreement with the Utility. This Agreement is effective as of the Effective Date and Purchaser's failure to enable Seller to provide the electric energy by preventing it from instalLng the System or otherwise not performing shall not excuse Purchaser's obligations to make payments that otherwise would have been due under this Agreement b. Additional Terms. If Purchaser has not exercised its option to purchase the System by the end of the Initial Term, either Party may give the other part), written notice of its desire to extend this Agreement on the terms and conditions set forth herein for the number and length of additional periods specified in Exhibit 1 (each an Additional Term"). Such notice shall be given, if at all, not more than one hundred twenty (120) and not less than sixty (60) days before the last day of the Initial Term or the then current Additional Term, as applicable. The Party receiving the notice requesting an Additional Term shall respond positive])- Or negatively to that request in writing within thirty (30) days after receipt of the request. Failure to respond within such thirty (30) day period shall be deemed a reiection of the offer for an Additional Term. If both Parties agree to an Additional Term, the Additional Term shall begin immediately upon the conclusion of the Initial Term or the then current term on the same terms and conditions as set forth in this Agreement. If the Party- receiving the request for an Additional Term rejects or is deemed to reject the first Party's offer, this Agreement shall terminate at the end of the Initial Term (if the same has not been extended) or the then current Additional Term. 4. BiPling and Payment. a. Monthly Chames. Purchaser shall pay Seller monthly for the electric energv generated by the System and delivered to the Delivery Point at the $,'k h rate shown in Exhibit 1 (the "Contract Price"). The monthly payment for such energy will be equal to the applicable $.1:W-h rate multiplied by the number of k'Wh of energy generated during the applicable month, as measured by the System meter. b, Monthiv Invoices. Seller shall invoice Purchaser monthly, either manually or through ACR Such monthly invoices shall state (i) the amount of electric energy produced by the System and delivered to the Delivery Point. (ii) the rates applicable to, and charges incurred by, Purchaser under this Agreement and (iii) the total amount due from Purchaser. C. Taxes. Purchaser shall either pay or reimburse Seller for any and all taxes assessed on the generation, sale, delivery or consumption of electric energy produced by the System or the interconnection of the System to the Utility's electric distribution system, including property taxes on the System; provided. however. Purchaser will not be required to pay or reimburse Seller for any taxes during periods when Seller fails to deliver electric energy to Power Purchase Aereemnt Commercial Worhing Version (CA'C&OR) 1 06 Purchaser for reasons other than Force'Maieure. For purposes of this Section 4(c'~ "Taws" means any federal, stak d.UU JLn,a= a . a v, wu, Y,.,Y.., , .-t-__----- o---- other taxes, regulatory fees, surcharges or other similar charges, but shall not include any income taxes or similar taxes imposed on Sellers revenues due to the sale of energy under this Agreement, whicb shall be . Seller's responsibility. IL Payment Terms. All amounts due under this Agreement shall be due and payable net twenry, (20) days from receipt of invoice. Any undisputed portion of the invoice amount not paid vdthin the twenty (20) day period shall accrue interest at the annual rate of two and one-half percent (2.5%) over the Prime Rate (but not to exceed the ma :imum rate permitted by law). 5. Environmental -Attributes and En-Oronmental Incentives. Unless othemise specified on Exhibit 1. Seller is the owner of all Environmental Attributes and Environmental Incentives and is entitled to the benefit of all Tax Credits , and Purchaser's purchase of electricity under this Agreement does not include Environmental Attributes, Environmental Incentives or the right to Tax Credits or any other attributes of ownership and operation of the System, all of which shall be retained by Seller. Purchaser shall cooperate with Seller in obtaining, securing and transf rring all Environmental Attributes and Environmental Incentives and the benefit of all Tax Credits, including by using the electric energy generated by the System in a manner necessary to qualiffil for such available Environmental Attributes, Environmental Incentives and Tax Credits. Purchaser shall not be obligated to incur any out-of-pocket costs or expenses in connection with such actions unless reimbursed by Seller. If any Environmental Incentives are paid directly to Purchaser, Purchaser shall immediately pay such amounts over to Seller. To avoid any conflicts with fair trade rules regarding claims of solar or renewable energy use. Purchaser, if engaged in commerce and/or trade, shall submit to Seller for approval any press releases regarding Purchaser's use of solar or renewable energy and shall not submit for publication any such releases without the written approval of Seller. Approval shall not be unreasonably withheld, and Seller's review and approval shall be made in a timely manner to permit Purchaser's timely publication. "Environment2l Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the System, the production of electrical energy from the System and its displacement of conventional energy generation, including (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOX), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (C02), methane (CH4), nitrous oxide, hydrofluorocarbons, petfluorocarbons, sulfur heXa7uoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth's climate by trapping heat in the atmosphere; and (3) the reporting rights related to these avoided emissions, such as Green Tag Reporting Rights and Renewable Energy Credits. Green Tag Reporting Rigbts are the right of a party to report the ownership of accumulated Gram Taos in compliance with federal or state law, if applicable, and to a federal or state agency or any other parry, and include Green Tag Repordne Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Environmental attributes do not include Environmental Incentives and Tax Credits. Purchaser and Seller shall file all tax returns in a manner consistent with this Section 5. Without limiting the generality of the foregoing, Environmental Attributes include carbon trading credits, renewable energy credits or certificates, emissions reduction credits, investment credits, emissions allowances, green tags, tradeable renewable credits and Green-eZ products. "Environmental Incentives" means any and credits, rebates, subsidies, payments or other incentives that relate to self- generation of electricity, the use of technology incorporated into the System, environmental benefits of using the System, or other similar programs available from the Utility, any other regulated entity, the manufacturer of any part of the System or any Governmental Authority. "Governmental Authority" means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau or entity (including the Federal Energy Regulatory Commission or the California Public Utilities Commission), or any arbitrator with authority to bind a party at law. "Tax Credits" means any and all (i) investment tax credits, (ii) production tax credits and (iii) similar tax credits or grants under federal, state or local law relating to the construction, ownership or production of energy from the System. Conditions to Obileations. a. - ; ~ezs to Seller's Obliaabons. Prnuer Purchase Agreement Commtrcial w'ork3ng Version (C.AJCO!OR) 107 Seller's obligarions under this Agreement are conditioned on the completion of the fDik-,ving -andi~Das -,D Seller's i. Completion of a physical inspection of the Facility and the properr upon which the Facility is located (the "Premises including, if applicable, geotechnical work, and real estate due dligence to confirm the suitability, of the Facility and the Premises for the System; ii. Approval of (A) this Agreement and (B) the Construction Ageement (if any) for the System by Seller's Financing Parties. "Construction Agreement" as used in this subsection means an agreement between SolarCiiy and a subcontractor to install the System: iii. Connrmation that Seller -AU obtain all applicable Environmental Incentives and Tax Credits; iv. Receipt of all necessary zoning, land use and building permits; V. Execution of all necessarT agreements with the Utility for interconnection of the System to the Utility's eiectric distribution system; and ,0. Prior to Seller commencing construction and installation of the System, Purchaser shall give Seller proof of insurance for all insurance required to be maintained by Purchaser under this Agreement. b. Conditions to Purchaser's Obligations. Purchaser's obligations under this Agreement are conditioned on the cccw-rence of the Commercial Operation Date for the System on or before the Outside Commercial Operation Date (See Exhibit 1 . C. Failure of Conditions. If any of the conditions listed in subsections a or b above are not satisfied by the applicable dates specified in those subsections, the Parties -AU attempt in good faith to negotiate new dates for the satisfa-^tion of the failed conditions. If the parties are unable to negotiate new dates then the Pam that has not failed to meet an obligation may urinate this Agreement upon ten (10) days -aTitten notice to the other Pam m ithmn liability for costs or damages or triggering a default under this Agreement. Seller's Rights and Obligations. a Permits and .Approvals. Seller, with Purchaser's reasonable cooperation, shall use commercially reasonable efforts to obtain, at its sole cost and expense: i. any zoning, land use and building permits required to construct, install and operate the System; and ii. any agreements and approvals from the Utility necessary in order to interconnect the System to the Utility's electric distribution system. Purchaser shall cooperate with Seller's reasonable requests to assist Seller in obtaining such agreements, permits and approvals. b. Standard S` Mm Repair and Maintenance. Seller shall construct and install the System at the Facility. During the Term, Seller will operate and perform all routine and emergency repairs to, and maintenance of, the System at its sole cost and expense, except for any repairs or maintenance resulting from Purchaser's negligence, vvillful misconduct or breach of this Agreement or the Site Lease (if applicable). Seller shall not be responsible for any work done by others on any part of the System unless Seller authorizes that work in advance in writing. Seller shall not be responsible for any loss, damage, cost or expense arising out of or resulting from improper environmental controls or improper operation or maintenance of the System by anyone other than Seller or Seller's contractors. If the System requires repairs for which Seller is not responsible, Purchaser shall pay Seller for diagnosing and correcting the problem at Seller or Seller's contractors' then current standard rates. Seller shall provide Purchaser with reasonable notice prior to accessing the Facility to make standard repair=_. C. ]Von-Standard System Repair and Malntenaiam If Seller incur incremental costs to maintain the System due to conditions at the Facility or due to the inaccuracy of any information provided by Purchaser and relied upon by Powe' Pxvhese A urzMent Commercial WOrU-19 Version (C- /MOR) 108 Seller, the pricing, schedule and other terms of this Agreement will be equitably adjusted to compensate for any L r n t t . n 'n negotiate such equitable adjustment in good faith. d. Breakdown Notice. Seller shall notify Purchaser pithin twenty-four (24) hours following Seller's discovery of (i) anv material malfunction in the operation of the System or (ii) an interruption in the supply of electrical energy from the Svstem. Purchaser and Seller shall each designate personnel and establish procedures such that each Party, may provide notice of such conditions requiring Seller's repair or alteration at all times, Twamy-four (24) hours per day, including weekends and holidays. Purchaser shall notify Seller immediately upon the discovery of an emergency condition affecting the Systc-m. e. Suspension. Notwithstanding anything to the contrary b--rein, Seller shall be entitled to suspend delivery of elecliicity from the System to the Delivery Point for the purpose of maintaining and repairing the System and such suspension of service shall not constitute a breach of this Agreement provided. that Seller shall use commercially reasonable efforts to minimize any interruption in se; \ice to the Purchaser. f. Use of Contractors and Subcontractors. Seller shall be petmiued to use contractors and subcontractors to perform its obligations under this Agreement However, Seller shall continue to be responsible for the quality of the work performed by its contractors and subcontractors. If a list of pre-approved contactors and subcontractors is desired, such list shall be scheduled on an appendix to this Exhibit. All contractors and subcontractors, other than those that may be scheduled on an appendix to this Exhibit, shall be subject to Purchaser's prior written consent, not to be unreasonably withheld. g. Liens and Pa`-ment of Contractors and Suonbers. Seller shall pay when due all valid charges from all contractors, subcontractors and suppliers supplying goods or services to Seller under this Agreement and shall keep the Facility free and clear of any liens related to such charges, except for those liens which Seller is permitted by law to place on the Facility following non-payment by Purchaser of amounts due under this Agreement- Seller shall indemnify Purchaser for all claims, losses, damages, liabilities and expenses resulting from any liens filed against the Facility or the Premises in connection pith such charges; DroNide however, that Seller shall have the right to contest any such lien, so long as it pro-6des a statutory bond or other reasonable assurances of payanent that either remove such lien from title to the Facility and the Premises or that assure that any adverse judgment with respect to such lien will be paid pithout affecting title to the Facility and the Premises. h. loo Warranty, NO WARRANTY OR REMEDY, WITHER STATUTORY, WRITTEN, ORAL., EXTRESS OR DSPLIED, 1NCLUDD;G WITHOUT LU ffTATION W ARRA.=S OF MERCHANTABILITY AND FITTTESS FOR A PARTICLZAR PURPOSE, OR WARR-A-\ TES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE SHALL APPLY. The remedies set forth in this Agreement shall be Purchaser's sole and exclusive remedies for any claim or liability arising out of or in connection pith this Agreement, whether arising in contract tort (including negligence), strict liability or othervvise. The Limited Warranny SolarCity will provide Purchaser with is a separate contract from this Agreement No rights provided to Purchaser by the Limited Warranty may be asserted under this Agreement No warranty is made in this Agreement. Therefore, any warranty claim must be made independently of this Agreement and will not affect Purchaser's obligations under this Agreement 8. Purchaser's Rights and Obligations. a. Facility Access Rights. Purchaser grants to Seller and to Seller's agents, employees and contractors an irrevocable non-exclusive license running with the Premises (the "License") for access to, on, over, under and across the Premises as more particularly described in Exhibit A to ExMbit 3 (the "License Area") for the purposes of (a) installing, constructing, operating, owning, maintaining, accessing, removing and replacing the System; (b) performing all of Seller's obligations and enforcing all of Seller's rights set forth in this Agreement; and (c) installing, using and maintaining electric lines and equipment, including inverters and meters, necessary to interconnect the System to Purchaser's electric system at the Facility and/or to the Utility's elecuc distribution system or that otherwise may from time to time be useful or necessary in connection pith the construction, installation, operation, maintenance or repair of the System. Seller shall notify Purchaser prior to entering the Facility except in situations where there is imminent risk of damage to persons or property. The term of the License shall continue until the date that is one hundred and twenty (120) days following the date of expiration or termination of this Agreement (the "License Term"). During the License Term, Purchaser shall ensure that Seller's rights under the License and Seller's access to the License .Area are preserved and protected and shall not interfere pith or permit any third parties to interfere with such rights or access. The giant of the License shall sun•ive termination of this agreement by either Party. Purchaser agrees that Seller may record a memorandum of license in substantially the same form attached hereto as Exhibit 3 in the land records respecting the License. Power Pw-,aase Afire-went Co nmercial R'ortdng version (C4)CO/OR) 1 U9 b. OSHLA Compliance, Both parries shall ensure that all Occupational Safety and Health Azt (OSHA) requirements c. Maintenance of Facility. Purchaser shall, at its sole cost and expense, maintain the Facility in good condition and repair. Purchaser will ensure that the Facility remains interoonnected to the local utility grid at all times and will not permit cessation of elecsic see ice w the Facilhy from the local utility. Purchaser is fully responsible for the maintenance and repair of the Facility's electrical system and of all of Purchaser's equipment that utilizes the System's outputs. Purchaser shall properly maintain in full working order all of Purchaser's electric supply or generation equipment that Purchaser may shut down while utilizing the System. Purchaser shall prompt]), notif} Seller of any matters of which it is aware per-mining, to any damage to or loss of use Of the System or that could reasonably be expected to adversely affect the System. d. No Alteration of Facility. Purchaser shall not make any alterations or repairs to the Facility which may adversely affect the operation and maintenance of the System without Seller's prior written consent. If Purchaser w=ishes to make such alterations or repairs, Purchaser shall give prior written notice to Seller; sating forth the work to be under taken (except for emergency repairs, for which notice may be given by telephone), and give Seller the opportunity to advise Purchaser in making such alterations or repairs in a manner that avoids damage to the System, but notvA-ithstanding any such advice, Purchaser shall be responsible for all damage to the System caused by Purchaser or its contractors. To the extent that temporary disconnection or removal of the System is necessary to perform such alterations or repairs, such work and any replacement of the System after completion of Purchaser's alterations and repairs, shall be done by Seller or its contractors at Purchaser's cost All of Purchasers alterations and repairs will be done in a good and workmanlike manner and in compliance with all applicable laws, codes and permits. e. Outages, Purchaser shall be permitted to be off line for rwo (2) full tu=enl3--f6ur (24) hour days (each, a "Scheduled Outage") per calendar year during the Term, during which days Purchaser shall not be obligated to accept or pay for electricity from the System; orovided, however, that Purchaser must notify Seller in writing of each such Scheduled Outage at least forty-eight (48) hours in advance of the commencement of a Scheduled Outage. In the event that Scheduled Outages exceed two (2) days per calendar year or there are unscheduled outages, in each case for a reason other than a Force *Majeure event, Seller shall reasonably estimate the amount of electricity that would have been delivered to Purchaser during such excess Scbeduled Outages or unscheduled outages and shall invoice Purchaser for such amount in accordance with Section 4. f. Liens. Purchaser shall not directly or indirectly cause, create, incur, assume or allow to exist any mortgage, pledge, lien, charge, security interest, encumbrance or other claim of any, nature on or with respect to the System or any interest therein. Purchaser shall immediately notify Seller in writing of the existence of any such mortgage, pledge, lien, charge, security interest, encumbrance or other claim, shall promptly cause the same to be discharged and released of record without cost to Seller, and shall indemnify Seller against all costs and expenses (including reasonable attomeys' fees) incurred in discharging and releasing any such mortgage, pledge, lien, charge, security interest encumbrance or other claim. Security. Purchaser shall be responsible for maintaining the physical security of the Facility and the System. . Purchaser will not conduct activities on, in or about the License Area or the Facility that have a reasonable likelihood of causing damage, impairment or otherwise adversely affecting the System. . h. Insolation. Purchaser understands that unobstructed access to sunlight ("Insolation") is essential to Seller's performance of its obligations and a material term of this Azrr=ment. Purchaser shall not in any way cause and, where possible, shall not in any way permit any interference with the System's Insolation. If Purchaser becomes aware of any activity or condition that could diminish the Insolation of the System, Purchaser shall notify Seller immediately and shall cooperate with Seller in preserving the System's existing Insolation levels. The Parties agree that reducing Insolation would irreparably injure Seller, that such injury may not be adequately compensated by an award of money damages, and that Seller is entitled to seek specific enforcement of this Section 8(h) against Purchaser. i. Data Line. Purchaser shall provide Seller a high speed internet data line during the Term to enable Seller to record the electric energy generated by the System. If Purchaser fails to provide such high speed internet data line, or if such line ceases to function and is not repaired, Seller may reasonably estimate the amount of electric energy that was eenerated and invoice Purchaser for such amount in accordance with Section 4. j. Breakdown Notice. Purchaser shall notify Seller within tw=enty-four (24) bours following the discovery by it of (A) any material malfunction in the operation of the System; or (B) any occurrences that could reasonably be expected Power?'Xchase Agreement Commercial woiang Version (C.A/CO/OR) 110 to adversely affect the System. Purchaser shall notify Seller immediat>l. upon ,.a. an inw-upnon in she _ and Seller shall each designate personnel and establish procedures such that each Party may provide notice o such conditions requiring Seller's repair or aheration at all times, twenry-four (24) hours per day, including weekends and holidays. 9. Chance in Law. `Change in Law'' means (i) the enactment, adoption, promulgation, modification or rape.] after the Effective Date of any applicable law or reeulation; (ii) the imposition of any material conditions on the issuance or renew-al of any applicable permit after the Effective Date of this Agreement (norMThstanding the general requirements contained in any applicable Permit at the time of application or issue to comply with future laws, ordinances, codes, rules. regulations or similar legislation), or (iii) a change in any utility rate schedule or tarit'fapproved by any Governmental Authority which in the case of any of (i), (ii) or (iii), establishes requirements affecting owning supplying, , conszructing, insralling operating or maintaining the System. or other performance of the Seller's obligations hereunder and which has a material adverse effect on the cost to Seller of performing sucb obligations; Rrotdded that a change in federal, state., county or any other tax law after the Effective Date of this .Agreement shall not be a Change in Law pursuant to this Agreement. If any Change in Law occurs that has a material adverse effect on the cost to Seller of performing its obligations under this Agreement, then the Parties shall, within thirty (30) days following receipt by Purchaser from Seller of notice of such Change in Law, meet and attempt in good faith to negotiate amendments to this Agreement as are reasonably necessary to preserve the economic value of this Agreement to both Parties. If the Parties are unable to agree upon such amendments within such thirty (30) day period, then Seller shall have the right to terminate this .Agreement without further liability to either Party except with respect to payment of amounts accrued prior to termination. 10. Relocation of System. If Purchaser ceases to conduct business operations at andJor vacates the Facility or is pre<,ented from operating the System at the Facility prior to the expiration of the Term, Purchaser shall have the option to provide Seller with a mutually agreeable substitute premises located within the same Utility district as the terminated System or in a location with similar Utilmv rates and Imolation. Purchaser shall pro-,ide vi,ritten notice at ]east sixty (60) days but not more Than one hundred eighty (ISO) days prior to the date that it wants to make this substitution. In connection with such substitution. Purchaser shall execute an amended agreement that shall have all of the same terms as this Agreement except for the (i) Effective Date; (ii) License, which will be amended to grant rights in the real property where the System relocated to; and (iii) Term, which will be the ent shall be deemed to be a continuation of this remainder of the Term of this Agreement and such amended azr al-M Agreement without termination. Purchaser shall also provide any new Purchaser, owner, lessor or mortgagee consents or releases required by Seller or Seller's Financing Parties in connection with the substitute facility. Purchaser shall pay all costs associated with relocation of the System, including all costs and expenses incurred by or on behalf of Seller in connection with removal of the System from the Facility and installation and testing of the System at the substitute facility and all applicable interconnection fees and expenses at the substitute facility, as well as costs of new title search and other out-of-pocket expenses connected to preserving and refiling the security interests of Seller's Financing Parties in the System. Seller shall remove the System from the vacated Facility prior to the termination of Purchaser's ownership, lease or other rights to use such Facility. Seller will not be required to restore the Facility to its prior condition but shall promptly pay Purchaser for any damage caused by Seller during removal of the System, but not for normal wear and tear. If the substitute facility has inferior Insolation as compared to the original Facility, Seller shall have the right to make an adjustment to EiMbit 1 such that Purchaser's payments to Seller are the same as if the System were located at The original Facility. If Purchaser is unable to provide such substitute facility and to relocate the System as provided, an), early termination will be treated as a default by Purchaser. 11. Removal of Svst.em at Expiration. Upon the expiration or earlier termination of this Agreement (provided Purchaser does not exercise its purchase option), Seller shall, at its expense, remove all of its tangible property comprising the System from the Facility on a mutually, convenient date, but in no event later than ninety (90) days after the expiration of the Term. Excluding ordinary wear and tear, the Facility shall be returned to its original condition including the removal of System mounting pads or other support structures. In no case shall Seller's removal of the System affect the integrity of Purchaser's roof, which shall be as leak proof as it was prior to removal of the System and shall be flashed and/or patched to existing roof specifications. Seller shall leave the Facility in neat and clean order. if Seller fails to remove or commence substantial efforts to remove the System by such agreed upon date, Purchaser shall have the right, at its option, to remove the System to a public warehouse and restore the Facility to its original condition (other than ordinary wear and tear) at Seller's cost- Purchaser shall provide sufficient Power P=hase Ap*L__m= Co=erciaa worlang Version (C.AJCO/OR) I I space for the Tzmporaa- ° storage and staging of tools, materials and equipment and for the parking of consvuction crew ;P 2 12. Messurement. Electricity delivered to the Facility shall be measured by the SolarGuard monitoring system installed and maintained by Seller as pan of the System. 13. Default Remedies and Damages. a. Default Arty Party that fails to perform its responsibilities as listed below or experiences any of the circumstances listed below shall be deemed a "Defaulting Pam" and each event of default shall be a "Default Event": (1) failure of a Part), to pay any amount due and payable under this Agreement other than an amount that is subject to a good faith dispute, within ten (10) days following receipt of written notice from the other Parry (the "Non-Defaulting Party") of such failure to pay ("Payment Default"); (2) failure of a Parry to substantially perform any other material obligation under this Agreement within thin (30) days fo1)o«-ing receipt of written notice from the Non-Defaulting Party demanding such cure; pro,,ided. that such thirty (30) day cure period shall be extended (but not beyond ninety (90) days) if and to the extent reasonably necessary to cur the Default Event, if (i) The Defaulting Party initiates such cure with the thirty (30) day period and continues such cure to completion and (ii) there is no material adverse affect on the Non-Defaulting Party resulting from the failure to cure the Default Event; (3) if any representation or warrant), of a Party proves at any time to have been incorr= in any material respect when made and is material to The transactions cont-emplaced hereby, if the effect of such incorrectness is not cured within thirty (30) days following receipt of written notice from the Non-Defaulting Parry demanding such cure. (4) Purchaser loses its rights to occupy and enjoy the Premises; (5) a Party. or its guarantor, becomes insolvent or is a party to a banlcrupwy, reorganization, insoh,ency. liquidation, receivership, dissolution, winding-up or relief of debtors, or any general assignment for the benefit of creditors or other similar arrangement or any event occurs or proceedings are taken in any jurisdiction Mth respect to the Parry which has a similar effect; or (6) Purchaser prevents Seller from installing the System or otherwise failing to perform in a way that prevents the delivery of electric energy from the System. Such Default Event shall not excuse Purchaser's obligations to make payments that other Arise would have been due under this Agreement. b. Remedies. (1) Remedies for Pavment Default. If a Pa)-ment Default occurs, the Non-Defaulting Party may suspend performance of its obligations under this Agreement. Further, the Non-Defaulting Party may pursue any remedy under this Agreement, at law or in equity, including an action for damages and termination of this Agreement, upon five (3) days prior written notice to the Defaulting Party following the Payment Default. (2) Remedies for Other Defaults. On the occurrence of a Default Event other than a Payment Default the Non-Defaulting Parry may pursue any remedy under this Agreement, at law or in equity, including an action for damages and terminatiion of this Agreement or suspension of performance of its obligations under this Agreement, upon five (6) days prior %ATitten notice to the Defaulting Party following the occurrence of the Default Event. Nothing herein shall limit either Party's right to collect damages upon the occurrence of a breach or a default by the other Party that does not become a Default Event If Purchaser terminates this contract without cause prior to System Installation a 55,000 design cancellation fee shall also apply in addition to any other remedy available to Seller. Power Purchzse Am-mment Co=ercia! Working Version (CA'CO/OR) Damages Uaon Termination by Default -Upon a pay a TerminatiDn Payment to the Non-Defaulting Parry determined as follows (the "Termination Payment"): A. Purchaser. If Purchaser is the Defaulting Parry and Seller terminates This Agreement the Termination Pav rent to Seller shall be equal to the sum of (i) the termination value set forth in ErMbit 1 (the "Termination Value") for such Contract Year, (ii) removal costs as provided in Stobon 13fb)(31(0 and (iii) any and all other amounts previously ac--M--d under this Agreement and then owed by Purchaser to Seller. The Parties agree that actual damages to Seller in the event this Agreement terminates prior to the expiration of the Term as the result of an Default Event by Purchaser would be difficult to ascertain, and the applicable Termination Value set fords in Exhibit 1 is a reasonable approximation of the damages suffered by Seller as a result of early termination of this Agreement The Termination Payment shall not be less than zero. B. Seller. If Seller is the Defaulting Parry and Purchaser terminates this Agreement, the Termination Payment to Purchaser shall be equal to the sum of (i) the present value (using a discount rate of 9.5%) of the excess, if any, of the reasonably expected cost of electric energy from the Utility over the Contract Price for the reasonably expected production of the System for the remainder of the Initial Term or the then current Additional Term, as applicable; (ii) all costs reasonably incurred by Purchaser in re- converting its electric supply to service from the Utility; (iii) any removal costs incurred by Purchaser, and (iv) any and all other amounts previously accrued under this Agreement and then owed by Seller to Purchaser. The Termination Payment shall not be less than zero. C. Obliganons Following Termination. If a Non-Defaulting Parry terminates this Agreement pursuant to this Section 13(bl. then following such termination, Seller shall, at the sole cost and expense of the Defaulting Pasty, remove the equipment (except for mounting pads and support st*uctttres) constituting the System. The Non-Defaulting Pam shall take all commercially reasonable efforts to mitigate its damages as the result of a Default Event. 14. Representations and Warranties. a. General Representations and R'arranties. Each Parry represents and warrants to the other the following: (1) Such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; the execution, deliver), and performance by such Party of this Agreement have been duly authorized by all necessary corporate, partnership or limited liability company action, as applicable, and do not and shall not violate any law; and this Agreement is valid obligation of such Party, enforceable against such Part} in accordance with its terms (except as may be limited by applicable bank-uptcy, insolvency, reorganization moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally). (2) Such Party has obtained all licenses, authorizations, consents and approvals required by any Governmental Authority or other third party and necessary for such Pam to own its assets, carry on its business and to execute and deliver this Agreement and such Party is in compliance with all laws that relate to this Agreement in all material respects. b. Purchaser's Representations and Warranties. Purchaser represents and warrants to Seller the following: License. Purchaser has the full right, power and authority to grant the License contained in Section 8(a). Such grant of the License does not violate any law, ordinance, rule or other eovernmenial restriction applicable to Purchaser or the Facility and is not inconsistent with and will not result in a breach or default under any agreement by which Purchaser is bound or that affects the Facility. (2) Other Agreements. Neither the execution and delivery of this Agreement by Purchaser nor the performance by Purchaser of any of its obligations under this Agreement conflicts with or will Power P rcaase Pgeem--rt Commercial Work-ins Version (CACUOR) 1 1 J result in a breath or default under any agreement or obligation to which Purchaser is a party or by (3) Accuracv of Informabon All information pro»dtd by Purchaser to Seller: as it pertains to the Faeil r is physical configuration, Purchasers planned use of the FacUit•, and Purchaser's estimated elatrimn requirements, is accurate in all material respects. (4) Purchaser Status. Purchaser is not a public utility or a public utility holding company and is not subject to regulation as a public utility or a public utility holding company. No Pool Use. No elemicity eener-dmd by the System will be used to heat a s-Mmming pool. (6) Oregon Only: The elecn-iciny gentrated by the System will be used solely for commercial and business purposes. No portion of the electricity generated will be used for personal, family, household or agricultural purposes. 15. Qvs m and Facility Dpr-nage and Insurance. IL System and Facility Damage. (1) Seller's Obligations. If the System is damaged or destroyed other than by Purchaser's gross negligence or willful misconduct, Seller shall promptly repair and restore the System to its pre- existing condition; provided, however, that if more than fifty percent (50%) of the System is destroyed during the last five (5) years of the Initial Term or during any Additional Term, Seller shall not be required to restore the System, but may instead terminate this Agreement, unless Purchaser agrees (i) to pay for the cost of such restoration of the System or (ii) to purchase the System "AS-IS" at the greater of (A) then current fair market value of the System and (B) the sum of the amounts described in Section 13.b(3)A)(i) (using the date of purchase to determine the appropriate Contract Year) and Sermon 13.b(3)A)(iii). (2) Purchaser's Obligations. If the Facility is damaged or destroyed by casualty of any kind or any other occurrence other than Seller's gross negligence or willful misconduct, such that the operation of the System and or Purchaser's ability to accept the ele.ct'iic energy produced by the System are materially impaired or prevented, Purchaser shall promptly repair and restore the Facility to its pre-existing condition; rovide however. that if more than _50% of the Facility IS destroyed during the last five years of the Initial Term or during any Additional Term, Purchaser may elect either (i) to restore the Facility or (ii) to pay the Termination Value set forth in Exhibit 1 and all other costs previously accrued but unpaid under this Agreement and thereupon terminate this Am- eemetlt. b. insurance Covera6e At all times during the Term, Seller and Purchaser shall maintain the following insurance: Seller's Insurance. Seller shall maintain (i) property insurance on the System for the replacement cost thereof, (ii) comprehensive general liability insurance with coverage of at least $1,000,000 per occurrence and $2,000,000 annual aggregate, (iii) employer's liability insurance with coverage of at least $1,000,000 and (iv) worker's compensation insurance as required by law. ii. Purchaser's Insurance. Purchaser shall maintain (i) comprehensive general liability insurance with coverage of at least 51,000,000 per occurrence and $2,000,000 annual aggregate, (ii) employer's liability insurance with coverage of at least 51,000,000 and (iii) worker's compensation insurance as required by law. Policy Provisions. All insurance policies provided hereunder shall (i) contain a provision whereby the insurer agrees to give the party not providing the insurance thirty (30) days (ten (10) days in the event of non-payment of premiums) written notice before the insurance is cancelled, terminated or materially altered, (ii) be written on an occurrence basis, (iii) with respect to the liability insurance policies, include the other Party as an additional insured as its interest may appear, (iv) include waivers of subrogation, (v) provide for priman, coverage without right of contribution from any insurance of the other Party, and (vi) be maintained with companies either razed no less than A- as to Policy Holder's Rating in the current edition of Best's Insurance Guide or otherwise reasonably acceptable to the other p211 1y. Pow-r Pircrase P.z-a_-ment Co=er cial R'onnne Version (CA IMOR) 114 d. Certificates. Within thim- (30) days after execution of this Agreement and upon the other Pam's request and coverage. A Pam's receipt review, or acceptance of such certincate shall in no Away limit or reline the other Party of the duties and responsibilities to maintain ins rmce as set forth in this Agreement. Deductibles. Unless and to the extent that a claim is covered by an indemnity set forth in this Agreement, each Pam° shall be responsible for the payment of its own deductibles. 16. Dwn,ership: Option tri Purchase. E. Ownership of System. Throughout the Term, Seller shall be the legal and beneficial owner of the System at all times, includine all Environmental Attributes, and the System shall remain the personal property of Seller and shall not attach to or be deemed a part of; or fixture to, the Facility or the Premises. Each of the Seller and Purchaser agree that the Seller is the tax owner of the System and all tax filings and reports will be filed in a manner consistent with this Agreement The System shall at all times retain the legal status of personal property as defined under Article 9 of the Uniform Commercial Code. Purchaser covenants that it will use commercially reasonable efforts to place all parties having an interest in or a mortgage, pledge, Lien, charge, security interest, encumbrance or other claim of anv nature on the Facility or the Premises on notice of the ownership of the System and the legal status or classification of the System as personal property. If there is any mortgage or azure filing against the Premises which could reasonably be construed as prospectively attaching to the System as a fixture of the Premises, Purchaser shall provide a disclaimer or release from such lienholder. If Purchaser is the fee owner of the Premises, Purchaser consents to the filing of a disclaimer of the System as a fixture of the Premises in the office where real estate records are customarily filed in the jurisdiction where the Facility is located. If Purchaser is not :he fee owner, Purchaser will obtain such consent from such owner. Purchaser agrees to deliver to Seller a non-disturbance agreement in a form reasonably acceptable to Seller from the owner of the Facility (if the Facility is leased by Purchaser), any mor=zce with a lien on the Premises, and other Persons holding a similar interest in the Premises. b. Option to Purchase. At the end of the sixth (6th) and tenth (101h) Contract Years and at the end of the Initial Term and each Additional Term, so long as Purchaser is not in default under this Agreement, Purchaser may purchase the System from Seller on any such date for a purchase price equal to (i) with respect to an option exercised at the end of the sixth (6th) or tenth (10th) Contract Years the greater of (A) the amount set forth at such time in the Purchase Option Price schedule in Pahibit 1. and (B) the Fair Market Value of the System; and (ii) with respect to an option exercised at the end of the Term or an Additional Term, the Fair Market Value of the System. The `'Fair Market Value" of the System shall be determined by mutual agreement of Purchaser and Seller; rovide however. if Purchaser and Seller cannot agree to a Fair Market Value within thirty (30) dzys after Purchaser has exercised its option, the Parties shall select a nationally recognized independent appraiser with experience and expertise in the solar photovoltaic industry to determine the Fair Market Value of the System. Such appraiser shall act reasonably and in good faith to determine the Fair Market Value of the System on an installed basis and shall set forth such determination in a written opinion delivered to the Parties. The valuation trade by the appraiser shall be binding upon the Parties in the absence of fraud or manifest error. The costs of the appraisal shall be borne by the Patties equally. Purchaser must provide a notification to Seller of its intent to purchase at least ninety (90) days and not more than one hundred eighty (180) days prior to the end of the applicable Contract Year or the Initial Term or Additional Term. as applicable, and the purchase shall be complete prior to the end of the applicable Contract Year or the Initial Term or Additional Term. as applicable. Upon purchase of the System, Purchaser will assume complete responsibility for the operation and maintenance of the System and liability for the performance of the System, and Seller shall have no further liabilities or obligations hereunder. 17. Indemnification and Limitations of Liability. R. General. Each Party (the "Indemnifyipg Party") shall defend, indemnify and hold harmless the other Party and the directors, officers, shareholders, partners, members, agents and employees of such other Party, and the respective affiliates of each thereof (collectively, the "Indemnified Parties"), from and against all loss, damage, expense, liabilirv and other claims, including court costs and reasonable attorneys' fees (collectively, "Liabilities") resulting from any third party actions relating to the breach of any representation or warranty set forth in Section 14 and from injury to or death of persons, and damage to or loss of property to the extent caused by or arising out of the negligent acts or omissions of. or the willfil misconduct of, the Indemnifying Party (or its contractors. agents or employees) in connection with this Agreement-, rovid~ however, that nothing herein shall require the Indemnifying Party to indemnify the Indemnified Party for any Liabilities to the extent caused by or arising out of the negligent acts or omissions of, or the willful misconduct of. the Indemnified Party. This Section 17(a) however, shall not apply to liability arising from any form of hazardous substances or other environmental contamination, such matters being addressed exclusively by Section 17(c). Power PL=hz AE*veme-r Commercial WxbnE Vnnrsion (aVCUOR) 115 b. Notice and Particilp&tion to Third )Partrr Ciahms. The Indemnified Pam- shall give the Indemni:--zng Par, uTuten informarion of any possible Claim or of the commencement of such Claim. The Indemnifying Pam may assume the defense of any Claim, at its sole cost and expense, with counsel designated by the Indemnifying Party and reasonably satisfactory to the Indemnified Pam. The Indemni~ed Pam may, however, select separate counsel if both Parties are defendants in the Claim and such defense or other form of participation is not reasonably available to the Indemnifying Party. The Indemnifying Parry shall pay the reasonable anorneys' fees incurred by such separate counsel until such time as the need for separate counsel expires. The Indemnified Pam' may also, at the sole cost and expense of the Indemnifying Party, assume the defense of any Claim if the Indemnifying Party fails to assume the defense of the Claim within a reasonable time. Neithe7 Party shall settle any Claim covered by this Section 17(_) unless it has obtained the prior written cons= of the other Pam°, which consent shall not be unreasonably withheld or delayed. The Indemnifying Pam' shall have no liabilin! under this Section 17(b) for any Claim for whicb such notice is not provided if that the failure to give notice prejudices the Indemnifying Party. C. Environmental Indemnification. Seller shall indemnify, defend and hold harmless all of Purchaser's Indemnified Parties from and against all Liabilities arising out of or relating to the existence at on, above, below or near the License Area of any Hazardous Substance (as defined in Section 17(c)(M to the extent deposited, spilled or otherwise caused by Seller or any of its contractors or agents. Purchaser shall indemnify, defend and hold harmless all of Seller's Indemnified Parties from and against all Liabilities arising out of or relating to the existence at, on, above, below or near the Premises of any Hazardous Substance, except to the extent deposited, spilled or otherwise caused by Seller or any of its contractors or agents. Each Parry shall promptly notify the other Party- if it becomes aware of anv Hazardous Substance on or about the License Area or the Premises generally or any deposit, spill or release of any Hazardous Substance. "Hazardous Substance" means any chemical, waste or other substance (a) which now or hereafter becomes defined as or included in the definition of "hazardous substances:" "hazardous wastes," "hazardous materials," "extremeh+ hazardous wastes," "restricted haze dous wastes," `toxic substances," "toxic pollutants," "pollution," "pollutants," "regulated substances.." or words of similar import under any laws pertaining to the environment, health, safety or welfare, (b) which is declared to be hazardous, toxic, or polluting by an} Governmental Authority, (c) exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Authority. (d) the storage, use, handling, disposal or release of which is restricted or regulated by any Govenmental Authority, or (e) for which remediation or cleanup is required by any Governmental Authority. d. Limitations on URbRin-. i. No Conseouential Damages. Neither Parry nor its directors, officers; shareholders, partners, members, agents and employees subcontractors or suppliers shall be liable for any indirect, special, incidental, exemplary, or consequential loss or damage of any nature arising out of their performance or non- performance hereunder even if advised of such. ii. Actual Damages. Seller's aggregate liability under this Agreement arising out of or in connection with the performance or non-performance of this Agreement shall not exceed the lesser of (A) the total payments made by Purchaser under this Agreement as of the date that the events that first cave rise to such liability occurred; and (B) the total of the prior twelve (12) monthly payments preceding the date that the events that first gave rise to such liability occurred. The provisions of this Section (1 NdYii) shall apply whether such liability arises in contract, tort (including negligence), strict liability or otherwise. Any action against Seller must be brought within one (1) year after the cause of action accrues. 18. Force Maieure. EL "Force hlajeare" means any event or circumstances beyond the reasonable control of and without the fault or negligence of the Parry claiming Force Ivlajeure. It shall include, without limitation, failure or interruption of the production, delivery or acceptance of electricity due to: an act of god; war (declared or undeclared); sabotage; riot; insurrection; civil unrest or disturbance; military or guerilla action; terrorism; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out; explosion; fire; earthquake; abnormal weather condition or acti ons of the elements; burricane; flood; lightning; wind; drought; the binding order of any Governmental Authority (pro-Oded that such order has been resisted in good faith by all reasonable legal means); the failure to act on the part of any Governmental Authority (provided that such action has been timely requested and diligently pursued); unavailability of electricity from the utility grid, equipment, supplies or products (but not to the extent that any such availability of Power Pu cazsr. Aereement Commercial Wmidng Version (CAICO/OR) any of the foregoing results from the failure of the Party claiming Force M~.ajeure to have exercised reasonable - b. Except as otheruise expressly provided to the contrary in this Agreement, if either Pam' is rendered wboll° or partly unable to timely perform its obligations under this Agreement because of a Force Majeure event, that Parry shall be excused from the performance aff°...-ted by the Force h4ajeure event (but only to the extent so affected) and the time for performing such excused obligations shall be extended as reasonably necessary: provided that: (i) the Party affected by such Force Majeure event- as soon as reasonably practicable after obtaining knowledge of the occurrence of the claimed Force Majowe event, gives the other Part), prompt oral notice, followed by a written notice reasonably describing the event; (ii) the suspension of or extension of time for performance is of no greater scope and of no longer duration than is required by the Force '-N4ajeure event; and (iii) the Party affected by such Fore lvlajeure evem uses all reasonable efforts to mitigate or remedy its inability to perform as soon as reasonabl possible. Seller shall not be liable for any damage to the System or the Facility resulting from a Fore ' ajeure event. The Term shall be extended day for day, for each day performance is suspended due to a Force Majeure event. C. Nom ithstandine anything herein to the contrary, the obligation to make any payment due under this Agreement shall not be excused by a Force Majeure event. d. If a Force Majeure event continues for a period of one hundred (180) days or more within a twelve (12) month period and prevents a material part of the performance by a Parry hereunder, the Party not claiming the Force Majeure shall have the right to terminate this Agreement without fault or further liability to either Parry (except for amounts accrued but unpaid). 19. Assig-Ement and Financing. a. kssignment This Agreement may not be assigned in whole or in part by either Parry without the prior wrinen consent of the other Party, which consent shall not be unreasonably withbeld or delayed. Notes=ithstanding the foregoing Seller may, without the prior uTitten consent of Purchaser, (i) assign mortgage, pledge or otherAise collaterally assign its interests in this Agreement w any Financing Pam'. (ii) directly or indirectly assign this Agreement to an affiliate of Seller, (iii) assign this Agreement w any entity through which Seller is obtaining financing or capital for the System and (iv) assign this Agreement to any person succeeding to all or substantially all of the assets of Seller (provided that Seller shall be released from liability hereunder as a result of any of the foregoing permitted assignments only upon assumption of Seller's obligations hereunder by the assignee). Purchaser's consent to any other assignment shall not be unreasonably withheld if Purchaser has been provided with reasonable proof that the proposed assignee (x) has comparable experience in operating and maintaining photovoltaic solar systems comparable to the System and providing services comparable to those contemplated by this Agreement and (v) has the financial capability to maintain the System and provide the services contemplated by this Agreement in the manner required by this Agreement. This Agreement shall be binding on and inure to the benefit ofthe successors and permitted assignees. b. Financing. The Parties acknowledge that Seller may obtain construction and long-term financing or other credit support from lenders or third parties ("Financing Parties") in connection with the installation, construction, ownership, operation and maintenance of the System. Both Parties agree in good faith to consider and to negotiate changes or additions to this Agreement that may be reasonably requested by the Financing Parties; rovid that such changes do not alter the fundamental economic terms of this Agreement. The Parties also agree that Seller may assign this Agreement to the Financing Parties as collateral, and in connection with any such assignment, Purchaser agrees to execute a consent to assignment in customary form and reasonably acceptable to the Financing Parties. Poww Purchase m-=rnem Commercial Worlang Version (CA/CO/OR) 117 20. CorLdentialh-v and Pmbbcity- a. Confidentiality. If either Party provides confidential information, including business plans, strategies, financial information, proprietary, patented, licensed, copyrighted or trademarked information. and%or technical information regarding the design, operation and maintenance of the System or of Purchaser's business ("Confidential )information") to the other or, if in the course of performing under this Agreement or negotiating this Agreement a Parry learns Confidential Information regarding the facilities or plans of the other, the receiving Party shall (a) protect the Confidential Information from disclosure to third parties -Pith the same degree of care accorded its ow=n confidential and proprietary information, and (b) refrain from using such Confidential Information, except in the negotiation and performance of this Agreement. Notwithstanding the above, a Party, may provide such Confidential Information to its, officers, directors, members, managers, employers, agents, contractors and consultants (collectively, Representatives"), and affiliates, lenders, and potential assignees of this Agreement (provided and on condition that such potential assignees be bound by a written agreement or legal obligation restricting use and disclosure of Confidential Information), in each case whose access is reasonably necessary to the negotiation and performance of this Agreement. Each such recipient of Confidential Information shall be informed by the Parry disclosing Confidential Information of its confidential nature and shall be directed to treat such information confidentially and shall agree to abide by these provisions. In any event, each Pam shall be liable (with respect to the other Pam') for any breach of this provision by any entity to Whom that Party improperly discloses Confidential Information. The terms of this Agreement (but not its execution or existence) shall be considered Confidential Information for purposes of this Section 20(a), except as set forth in Section 20(b). All Confidential Information shall remain the property of the disclosing Party and shall be returned to the disclosing Parry, or destroyed after the receiving Parry's need for it has expired or upon the request of the disclosing Party. Each Parry agrees that the disclosine Party would be irreparably injured by a breach of this Section 20(a) by the receiving Party or its Representatives or other person to whom the receiving Party discloses Confidential Information of the disclosing Parry and that the disclosing Pam may be entitled to equitable relief; including injunctive relief and specific performance, in the went of a breach of the provision of this Section 20(a). To the fullest extent permitted by applicable law, such remedies shall not be deemed to be the exclusive remedies for a breach of this Section 20(a). but shall be in addition to all other remedies available at law or in equity. b. Permitted Disclosures. Notwithstanding any other provision in this Agreement, neither Pam shall be required to hold confidential any information that (i) becomes publicly available other than through the receiving Party, (ii) is required U be disclosed to a Governmental Authority under applicable law or pursuant to a validly issued subpoena (but a receiving Party subject to any such requirement shall promptly notify the disclosing Part}, of such requirement to the extent permitted by applicable law), (iii) is independently developed by the receiving Parry or (iv) becomes available to the receiving Parry without restriction from a third party under no obligation of confidentiality. If disclosure of information is required by a Governmental Authority, the disclosing Party shall, to the extent permitted by applicable law, notify the other Party of such required disclosure promptly upon becoming aware of such required disclosure and shall cooperate with the other Patty in efforts to limit the disclosure to the maximum extent permitted by law. 21. Goodwill and Publicity. Neither Party shall use any name, trade name, service mark or trademark of the other Party in any promotional or advertising material without the prior written consent of such other Party. The Parties shall coordinate and cooperate with each other when making public announcements related to the execution and existence of this Agreement, and each Parry shall have the right to promptly review, comment upon and approve any publicity materials, press releases or other public statements by the other Party that refer to, or that describe any aspect of, this Agreement. Neither Party= shall make any= press release or public announcement of the specific terms of this Agreement (except for filings or other statements or releases as may be required by applicable law) without the specific prior written consent of the other Party. Without limiting the generality= of the foregoing, all public statements must accurately reflect the rights and obligations of the Fames under this Agreement, including the ownership of Environmental Attributes and Environmental Incentives and any related reporting rights. 22. General Provisions a. Choice of Law. The law of the state where the System is located shall govern this Agreement without giving effect to conflict of laws principles. b. Arbitration and Attorneys' Fees. Any dispute arising from or relating to this Agreement shall be arbitrated in San Francisco, California The arbitration shall be administered by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, and judgment on any award may be entered in any court of competent jurisdiction. If the Parties agree, a mediator may be consulted prior to arbitration. The prevailing party in any dispute arising out of this Agreement shall be entitled to reasonable attorneys' fees and costs. Power P=has-- AM--m-ml Commercial Worlmg Vwsion (C.4/COIOR) 118 C. Notices. All notices under this Agreement shall be in -writing and shall be by personal delivery, facsimile deemed received upon personal delivery, acknowledgment of receipt of electt'omc transmission, the promised delivery date after deposit -with overnight courier, or five (5) days after deposit in the mail. Notices shall be sent to the person identified in this Agreement at the addresses set forth in this Agreement or such other address as either part), may specify in writing. Each parry shall deem a document faxel emailed or ele=onicaDy sent in PDF form to it as an original document d. SunivaL Provisions of this Agreement that should reasonably be considered t- survive termination of this Agreement shall sm-vive. For the avoidance of doubt, surviving provisions shall include, without limitation, Section 4 (Representations and Warranties), Section 7(h) (No Warranty), Section 15(b) (Insurance Coverage), Section 17 (Indemnification and Limits of Liability), Section 20 (Confidentiality and Publicity), Section 22(a) (Choice of Law), Section 22 (b) (Arbitration and Attorneys' Fees), Section 22(c) (Notices), Section 22 (gl (Comparative Negligence), Section 22(h) (Non-Dedication of Facilities), Section 22(i) (Service Contract), Section 22(k) (No Partnership) Section 22(l) (Full Agreement, Modification, Invalidity, Counterparts, Captions) and Section 22(n) (No Third Party Beneficiaries). e. Further Assurances. Each of the Parries hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of This Agreement Riebt of Waiver. Each Pam, in its sole discretion, shall have the right to waive, defer or reduce any of the requirements to which the other Parry is subjec'-t under this Agreement at any time; provided. however that neither Party shall be deemed to have waived, deferred or reduced any such requirements unless such action is in writing and signed by the waiving Party. No waiver will be implied by any usage of trade, course of dealing or course of performance. A Party's exercise of any rights hereunder shall apply only to such requirements and on such occasions as such Party may specify and shall in no event relieve the other Party of any requirements or other obligations not so specified. No failure of either Party to enforce any term of this Agreement will be deemed to be a waiver. No exercise of any right or remedy under this Agreement by Purchaser or Seller shall constitute a waiver of any other right or remedy contained or provided by law. Any delay or failure of a Party to exercise, or any partial exercise of; its rights and remedies under this Agreement shall not operate to limit or offie-wise affect such rights or remedies. Any waiver of performance under this Agreement shall be limited to the specific performance waived and shat] not, unless otherwise expressly stated in writing, constitute a continuous -waiver or a waiver of future performance. g. Comparative NeuReence. It is the intent of the Parties that where negligence is determined to have been joint, contributor), or concurrent, each Party shall bear the proportionate cost of any Liability. h. Non-Dedication of Facilities. ?Nothing herein shall be construed as the dedication by either Pam of its facilities or equipment to the public or any part thereof. Neither Party shall knowingly take any action that would subject the other Party, or other Party's facilities or equipment, to the jurisdiction of any Governmental Authority as a public utility or similar entity. Neither Party shall assert in any proceeding before a court or regulatory body that the other Party is a public utility by virtue of such other Party's performance under this agreement. If Seller is reasonably likely to become subject to regulation as a public utility, then the Parries shall use all reasonable efforts to restructure their relationship under this Agreement in a manner that preserves their relative economic interestswhile ensuring that Seller does not become subject to any such regulation. If the Parties are unable to agree upon such restructurine. Seller shall have the right to terminate this Agreement without further liability, and Seller shall remove the System in accordance with Section 11 ofthis Agreement. Estoppel. Either Parry hereto, without charge, at any time and from time to time, within five (5) business days after receipt of a written request by the other party hereto, shall deliver a -written instrument, duly executed, certifi'ing to such requesting party, or any other person specified by such requesting Party: (i) that this Agreement is unmodified and in full force and effect, or if there has been any modification, that the same is in full force and effect as so modified, and identifj-ing any such modification; (ii) whether or not to the knowledge of any such pary there are then existing any offsets or defenses in favor of such party against enforcement of any of the terms, covenants and conditions of this Agreement and, if so, specifying the same and also whether or not to the knowledge of such parry the other party has observed and performed all of the terms, covenants and conditions on its part to be observed and performed, and if not, specifying the same; and (iii) such other information as may be reasonably requested by the Power Purchase AEreement Commercial Wxking Version (GA/CO/OR) Pam'. A.nv written instrument given hereunder may be relied upon by we recipient of such nsL ent, j. Service Contract The Parties intend this Agreement to be a "service contract" within the meaning of Section 7701(eX3) of the Interval Revenue Code of 1986. Purchaser will not take the position on any tax return or in any other filings suggesting that it is anything other than a purchase of electricity from the System. L No Partnership. No provision of this Agreement shall be construed or represented as creating a partnership, trust, joint venture, fiduciary or any similar relationship between the Parties. No Pam is authorized to act on behalf of the other Party. and neither shall be considered the agent of the other. Full Agreement Modification Invalidity. Counterparts. Captions. This Agreement, together with any Exhibits, completely and exclusively states the agreement of the parties regarding its subject matter and supersedes all prior proposals; agreements, or other communications between the parties, oral or written, regarding its subject matE,°r. This Agreement may be modified only by a vk iting signed by both Parties. If any provision of this Agreement is found unenforceable or invalid, such unenforceability or invaliding shall not render this Agreement unenforceable or invalid as a whole. In such event such provision shall be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision within the limits of applicable law. This Agreement may be executed in any number of separate counterparts and each counterpart shall be considered an original and together shall comprise the same Agreement. The captions or headings in this Agreement are strictly for convenience and shall not be considered in interpreting this Agreement. M. Forward Contract. The transaction contemplated under this Agreement constitutes a "forward contract within the meanine of the united States Bankruptcy Code, and the Patties further azkno)A7]edQe and agree that each Party is a "for yard contract merchant"vitnin the meaning of the United States Banlottptcy Code. n. No "Third PaM Beneficiaries. Except as otherwise expressly provided herein, this Agreement and all rights hereunder are intended for the so].- benefit of the Parties hereto and shall not imply or create any rights on the part of, or obligations to, any other Person. End ®f Exhibir 5 Power Ptrchase Az•eetnent Commercial Working Version (CAICO/OB) 120 FINANCIAL ANALYSIS AND COMPARISON The financial analyses compares and contrasts the savings obtainable from the Purchase Option and the PPA option for each of the four Levine properties. Originally. the Purchase Option was analyzed under a nventy-five year term. Since the PPA Option was based on an eighteen-year agreement, the Purchase Option was also analyzed under the same time period. To further the analyses, the internal rate of return for the Purchase Option was computed for several time periods. After reviewing the data received from the vendors and the consultant. it was determined that the amount of savings differed for each option. This «-as likely due to the alternative methodologies that each of the vendors and the consultant used to compute the savings, as well as the degree to which each was aggressive or conservative. As a result of discussions with the consultant, he revie,,ved both options and made appropriate modifications so that the savings are the same for each. The purpose of this was to get to the same starting place for each option in making the comparison bet-\ een the two alternatives. Included in the cost of the systems is a maintenance contract so that the owners `rill not have to worry about future repairs with one exception. That exception involves a part called an inverter. It is estimated that this part will require repair between the fifteenth and twentieth year of operation. Originally, it was anticipated that this item would require replacement at considerable cost. It is now understood that only a motor ~a i11 need to be chanced at a cost of between $d000 and $10.000 for each system. The only other knovtn costs that the owners will have to bare include periodic cleaning of the panels (two to four times per year), and maintaining responsibility for the roof. This involves ensuring that the roof is in good repair prior to construction, and keeping the roof in good condition throughout the term of the agreement. Therefore, it is recommended to have a complete inspection done prior to the installation of the system. If the roof has not had major renovations in a while, significant repairs could be needed. However, such repairs would likely be required in due time in any case. 122 N W V) J a z a z O r - L) ~N {.L z O a J 0 f: O z w 0 W -j W 0 z a z W m w uj Q uj Q UNN 1.1. D CL 7 w O CL z w D W LL O W J a Z w W F- Z z O CL O LU N Q U IL H L) C Q Q O L7 O - L7 M O Q C1 C9 O O 'U!, O N O CA O h h h C Cb O N Q h O C C; Q O, C O7 O; r Co L T (11 m C L,~ C Ln T r N N M C L7 C h p C r N M r r r Nl C ~ u c 4 _ [A O p T T _ CD ? ~ ~ U O Q L7 N P 01 m tl- M cc m a D in C C cr O Q Q O N Cn C r L7 CA C CI) L7 C O C M M C CD C T O C C O N Q [n C W C- D D1 -O O -V JI r_ Q t:_ C:. 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Ci, 1A.M.1 638 1028 (P88) SOLCn`r ri660) n39 j02 # SOLARCITY.COA Please sign and mail the business reply card on the last page of this warranty or scan and email it to SolarCity at ContractAdministrator@SolarCity.com LIMITED WARRANTY AGREEMENT (Commercial PPA) This Limited Warranty Agreement (this "Agreement") is SolarCity Corporation's C'SolarCity") agreement to provide installation and other services for the solar panel system(s) (the "System") it will use to sell electric energy to you (the "Purchaser") and to provide a warranty for the System. A description of the System that will be used to sell you electricity is set forth in the PPA agreement (the "PPA") that you executed with SolarCity. The System will be professionally installed by SolarCity at the address you listed in the PPA. We will refer to the installation location as the "Premises" or your "Facility." When you choose SolarCity, you can be assured that we will stand behind our System and installation with industry- leading warranties. We will professionally install your solar system in a good and workman-like manner and honor our commitment to you to keep your System in good working order. Read below for full details on SolarCity's Installation Warranty, Use Warranty, Roof Warranty and Repair Promise. SOLARCITY'S STANDARDS For the purpose of this Agreement the standards for SolarCity's performance will be (i) normal professional standards of performance within the solar photovoltaic power generation industry in the relevant market; and (ii) Prudent Electrical Practices. "Prudent Electrical Practices" means those practices, as changed from time to time, that are engaged in or approved by a significant portion of the solar energy electrical generation industry operating in the United States to operate electric equipment lawfully and with reasonable safety, dependability, efficiency and economy. For purposes of this Agreement, SolarCity's performance shall include necessary roof preparation for the installation of the System. 2. LIMITED WARRANTIES (A) LIMITED WARRANTIES SolarCity warrants the System as follows: L Installation Warranty SolarCity will professionally install the System in a good and workman-like manner according to our commitments to you in Section 1. This installation warranty will run for one (1) year following the completion of Commissioning; ii. Use Warranty Under normal use and service conditions, the System will be free from defects in workmanship or defects in, or a breakdown of, materials or components during the Warranty Period (as defined below); iii. Roof Warranty If SolarCity penetrates the Facility roof in performing the Installation Services SolarCity will warrant roof damage it causes as a direct result of these roof penetrations. This roof warranty will run the longer of (A) one (1) year following the completion of the System installation; and (B) the length of any existing installer warranty on the Facility's roof; and iv. Repair Promise During the Warranty Period, SolarCity will repair or replace any defective part, material or component or correct any defective workmanship, at no cost or expense to Purchaser (including all labor costs), when Purchaser submits a valid claim to SolarCity under this Agreement. If we damage your Facility, Property or belongings we will repair the damage we cause or pay you for the damage we cause. SolarCity may use new or reconditioned parts when making repairs or replacements. SolarCity may also, at no additional cost to Purchaser, upgrade or add to any part of the System to ensure that it performs according to the guarantees set forth in this Agreement. This Agreement will continue from the date SolarCity starts installing the System at its Facility through the longer of (i) the PPA Term (as that term is defined in the PPA); and (ii) ten (10) years (the "Warranty Period") except for the warranties specified in Sections (a)(i) and (iii) above, which may have shorter periods. If Purchaser has assumed an existing PPA, then this Agreement will cover Purchaser for the remaining balance of the original Warranty Period. (13) MAINTENANCE AND OPERATION I. General During the Warranty Period, SolarCity will operate and perform all routine and emergency repairs to and maintenance of the System. SolarCity will provide Purchaser with a copy of SolarCity's Solar Operation and Maintenance Guide. This guide provides Purchaser with System operation and maintenance instructions, answers to frequently asked questions, troubleshooting tips and service information. ii. SolarGuard During the Warranty Period, SolarCity will provide Purchaser, at no additional cost, the SolarGuard Monitoring Service ("SolarGuard"). SolarGuard is a proprietary monitoring system designed and installed by SolarCity that captures and displays historical energy generation data over an Internet connection and consists of hardware located on site and software hosted by SolarCity. The SolarGuard service requires a high speed Internet line to operate. Therefore, during the Warranty Period, Purchaser agrees to maintain the communication link between SolarGuard, the System and the Internet. Purchaser agrees to maintain and make available, at Purchaser's cost, a functioning indoor Internet connection with one available wired Ethernet port and standard AC power outlet within eighty (80) feet of the System's AC/DC inverter(s). This communication link must be a 10/100 Mbps Ethernet connection that supports common internet protocols (TCP/IP and DHCP). (C) MAKING A CLAIM; TRANSFERRING THIS WARRANTY i. Claims Process Purchaser can make a claim by: a. Emailing SolarCity at the email address below; b. Writing us a letter and sending it overnight mail with a well-known service; or c. Sending us a fax at the number in below. ii. Transferable Limited Warranty SolarCity will accept and honor any valid and properly submitted Warranty claim made during the Warranty Period by any person to whom Purchaser properly transfers the PPA. (D) EXCLUSIONS AND DISCLAIMER The Warranty does not apply to any repair, replacement or correction required due to the following: i. someone other than SolarCity or its approved service providers installed, removed, re-installed or repaired the System; ii. destruction or damage to the System or its ability to safely produce energy not caused by SolarCity or its approved service providers while servicing the System (e.g., a tree falls on the System); iii. Purchaser's failure to perform, or breach of, Purchaser's obligations under the PPA. (such as if Purchaser modifies or alters the System); iv. Purchaser's breach of this Agreement including being unavailable to provide access or assistance to us in diagnosing or repairing a problem or failing to maintain the System as stated in the Solar Operation and Maintenance Guide; v. any Force Majeure Event (as defined below); vi. a power or voltage surge caused by someone other than SolarCity including a grid supply voltage outside of the standard range specified by the Utility; vii.any System Failure not caused by a System defect (e.g., such as making roof repairs); or viii.theft of the System. This Agreement gives you specific rights, and Purchaser may also have other rights which vary from state to state. This Agreement does not warrant any specific electrical performance of the System, other than that described above. The promises in this warranty are the only express warranties made by SolarCity with respect to the system. SolarCity hereby disclaims, and any beneficiary of this agreement hereby waives any warranty with respect to any cost savings from using the system. 3. ADDITIONAL SERVICES (A) SCOPE OF ADDITIONAL SERVICES Purchaser agrees that if (i) the System needs any repairs that are not the responsibility of SolarCity under this Agreement, (ii) the System needs to be removed and reinstalled to facilitate remodeling of the Facility or (iii) the System is being relocated to another Facility pursuant to the PPA (collectively, items (i) - (iii) are "Additional Services"), Purchaser will have SolarCity, or another similarly qualified service provider, at Purchaser's expense, perform such repairs, removal and reinstallation, or relocation on a time and materials basis. (B) APPROVED SERVICE PROVIDERS Purchaser's retention of a third party to perform Additional Services that is not qualified to perform such Additional Services will void the Warranty. To prevent voiding the Warranty, Purchaser should obtain the written consent of SolarCity prior to engaging a third party to perform Additional Services. If Purchaser engages a third party service provider to perform Services without the prior consent of SolarCity, Purchaser does so at the risk that SolarCity will subsequently determine such service provider was not qualified to perform the Additional Services. (C) PRICING ON ADDITIONAL SERVICES Performance of Additional Services by SolarCity will be on a time and materials basis at SolarCity's then current standard rates. 4. FORCE MAJEURE If SolarCity is unable to perform all or some of its obligations under this Agreement because of a Force Majeure Event, SolarCity will be excused from whatever performance is affected by the Force Majeure Event, provided that: 1. SolarCity, as soon as is reasonably practical, gives Purchaser notice describing the Force Majeure Event; 2. SolarCity's suspension of its obligations is of no greater scope and of no longer duration than is required by the Force Majeure Event; and 3. No SolarCity obligation that arose before the Force Majeure Event that could and should have been fully performed before such Force Majeure Event is excused as a result of such Force Majeure Event. "Force Majeure Event" means any event, condition or circumstance beyond the control of and not caused by SolarCity's fault or negligence. It shall include, without limitation, failure or interruption of the production, delivery or acceptance of electricity due to: an act of god; war (declared or undeclared); sabotage; riot; insurrection; civil unrest or disturbance; military or guerilla action; terrorism; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out; explosion; fire; earthquake; abnormal weather condition or actions of the elements; hurricane; flood; lightning; wind; drought; the binding order of any governmental authority (provided that such order has been resisted in good faith by all reasonable legal means); the failure to act on the part of any governmental authority (provided that such action has been timely requested and diligently pursued); unavailability of electricity from the utility grid, equipment, supplies or products; and failure of equipment not utilized by SolarCity or under its control. 5. LIMITATIONS ON LIABILITY (A) NO CONSEQUENTIAL DAMAGES In no event shall either parry or its agents or subcontractors be liable to the other for special, indirect, punitive, exemplary, incidental or consequential damages of any nature. Some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation may not apply in such states. (B) LIMITATION OF DURATION OF IMPLIED WARRANTIES Any implied warranties, including the implied warranties of fitness for particular purpose and merchantability arising under state law, shall in no event extend past the agreement. Some states do not allow limitations on how long an implied warranty lasts, so the above limitation may not apply in such states. (C) LIMIT OF LIABILITY Notwithstanding any other provision of this Agreement to the contrary, SolarCity's total liability arising out of or relating to this Agreement shall in no event: i. For System Failure or Replacement: exceed the total of the Purchaser's payments during the previous twelve (12) month period; and ii. For damages to your Facility, Property or belongings: exceed three million dollars ($3,000,000) provided that for any damages to be recovered under this section they must be caused solely by SolarCity or the System. 6. NOTICES TO SOLARCITY: TO PURCHASER: SolarCity Corporation At the billing address in 393 Vintage Park Drive, Suite 140 the PPA or any subsequent Foster City, CA 94404 billing address Purchaser Attention: Warranty Claims gives SolarCity. Telephone: 650-638-1028 Facsimile: 650-638-1029 Email: contractadministrator@solarcity.com All notices under this Agreement shall be in writing and shall be by personal delivery, facsimile transmission, electronic mail, overnight courier, or regular, certified, or registered mail, return receipt requested, and deemed received upon personal delivery, acknowledgment of receipt of electronic transmission, the promised delivery date after deposit with overnight courier, or five (5) days after deposit in the mail. Notices shall be sent to the party identified in this Agreement at the address set forth above or such other address as either party may specify in writing. Each party shall deem a document faxed to it as an original document. shall be proper in the State of California. County of San Mateo. Each party shall bear its own costs and expenses, including attorneys' fees, with respect to any arbitration. The arbitrator shall have the authority to award any legal or equitable remedy or relief that a court could order or grant. The arbitrator, however, is not authorized to change or alter the terms of this Agreement or to make any award that would extend to any transaction other than this Agreement. 8. ASSIGNMENT AND TRANSFER OF THIS AGREEMENT SolarCity may assign its rights or obligations under this Agreement to a third party without your consent, provided that any assignment of SolarCity's obligations under this Agreement shall be to a party qualified to perform such obligation. This Agreement protects only the party that hosts the System. Purchaser's rights and obligations under this Agreement will be automatically transferred to any party to whom Purchaser properly transfers the PPA. 9. ENTIRE AGREEMENT; CHANGES This Agreement contains the Parties' entire agreement regarding the matters set forth herein. SolarCity's obligations under this Agreement are separate and distinct from the obligations of the Seller or its assigns under the PPA. No breach of this Agreement shall affect Purchaser's obligations under the PPA. The PPA may be assigned to a third party without assignment of SolarCity's obligations under this Agreement. Any change to this Agreement must be in writing and signed by both Parties. If any portion of this Agreement is determined to be unenforceable, the remaining provisions shall be enforced in accordance with their terms or shall be interpreted or re-written so as to make them enforceable. Provisions that should reasonably be considered to survive termination of this Agreement shall survive. 7. APPLICABLE LAW / - - - - - - ARBITRATION The laws of the state where the Facility is located shall govern this Agreement without giving effect to conflict of laws principles. All claims, disputes and other matters in question, arising out of, or relating to, this Agreement or the breach there of shall be decided by binding BUSINESS REPLY MAIL arbitration. Each arbitration, i including the selecting of the I FIRST-CLASS MAIL PERMIT NO. 78100 SAN MATEO CA arbitrator, will be administered I POSTAGE WILL BE PAID BY ADDRESSEE by JAMS under its Commercial Arbitration Rules. Arbitration will be governed by the Federal SolarCity. Arbitration Act (Title 9 of the U.S. SOLARCITY CORPORATION Code). Either Party can initiate an arbitration proceeding by 393 VINTAGE PARK DR STE 140 filing the necessary forms with FOSTER CITY CA 94404-9981 JAMS. Venue for any arbitration brought under this Agreement NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES I SolarCity. CUSTOMER COPY Please sign and mail the business reply on the last page of this warranty or scan and email to SolarCity at ContractAdministrator@SolarCity.com PURCHASER: Signature: Printed Name: SOLARCITY CORPORATION: Company Name: Date: I - - - - - - - - - - BUSINESS REPLY -SOLARCITY COPY I Consider the environment -Please sign then scan and email to SolarCity at ContractAdministrator@SolarCity.com I PURCHASER: I Signature: Printed Name: I Title: Company Name: I Date: i J Lyndon Rive, CEO