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HOU - Item 7A - 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 28, 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 approve a twenty (20) year Power Purchase Agreement (PPA) with SolarCity Corporation authorizing the installation, maintenance, and operation of solar panels at Angelus Senior Complex and Garvey Senior Complex with an option to renew for two (2) additional terms of five (5) years, and authorize the President to sign all documents. 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 ITEM NO. APPROVED FOR CITY COUNCIL AGENDA: Rosemead Housing Development Corporation Report September 28, 2010 Page 2 of 3 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 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, withotat 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. Rosemead Housing Development Corporation Report September 28, 2010 Page 3 of 3 LEGAL REVIEW The attached PPA's have been reviewed and approved by RHDC's Legal Counsel. 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: cm" d • 4^A~ Michelle G. Ramirez Community Development Manager Submitted by: ngV 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 n v June 1, 2010 Michelle G. Ramirez City of Rosemead 8838 E. Vall ey Boulevard Rosemead. California 91770 Dear Michelle, Enclosed please find two loose leaf books that contain significant information pertaining to solar projects at Angeles and Gamey. The books are divided into four sections containing the following information: • Background information for the Multifamily Affordable Solar Housing (MASH) program. • Information relating to the purchase of a solar system. • Information relating to the Power Purchase Agreement (PPA) 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.N ASH 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 revie`ved by our solar consultant. These savings numbers could vary either up or down once systems are installed and brought on line. Since the City of Rosemead senior buildings are not-for-profit entities, it is my understanding that they cannot take advantage of the federal investment 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 will inform me if this is not the case. If an update to any of the financial information becomes necessary, it will be emailed to you. Sincerely yours, LENTNE MANAGEMENT GROUP, INC. ;i J 1 Q -ti Allan Kokin Chief Financial Officer Enclosures LEVINE Id ~N~rl a=t T C-POUP, INC. • 622 3!dD.. Sias 200 • Los ANG=_ =s. CP. 30035-1013 - 310-353-8489 ~ FAX 31 J 358 34 4 Ark M'Aevinegroups.corn Solar Project For Angeles Senior Housing Garvey Senior Housing Prepared By Levine Management Group, Inc. SOUR PROJECT Ir~ODUC T i0N Our interest in investigating the possibilit 7 of installing solar electricity systems at buildinas in the Southern California Edison (SCE) sen-ice 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 appro}amately 60% of the cost of solar systems. The federal government provides a 30% 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 w-e 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 owners 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 savings 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 Jane 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 "How We Estimate Savings" • Solar City Proposals • Solar City Sample Contract 4. Financial Analysis & Comparison BACKGROUND INFORMATION Rebate Q & A -ndT 0r-11 ne -Ar`dC1t xftordable Housing Finance ,Jr EE SCE-N L Rebates Energize Solar Retrofits AFFORDABLE HOUSING FINANCE • .April/May 2DD9 BY C;~RIST1NE SERLIN AffDrdable hpusin3 owners who want to retro it their developments to go solar in CalifDrriia have an additional rebate incentive to help them do so. The California Solar Initiative's Ivlultifamily Affordahl_ Solar Housing (MASH) program offers 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 occupan_ry permit for at least two years. 7h; a oualifying developments also must b electric customers of Pacific Gas and Electric Co., Southern Califomia 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 offsets a common area load, owners will receive a rebate of $3.30 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. has $10 miliD71 i According to Richard Raeke, dire~or of project finance for 5o 7ego Solar Say 2r-aPInc. , the MASH DrDg ' j~ d or f8 our years nb r funding, which is roughly 3o megawatts of solar power. He says the program that will depend Dn "how quickly develDpers take to this. I have a concern it may go quicker because the rebate is sD lucra lve." Dwner, could be looking at the svs em paying for itself within five to seven years-potentially as little as three years depending on the cyst of the installation, the system production, and the rebate level-and for roughly 45 percent to 65 percent of the cost to be paid for by the state, Raek=_ says. He also adds that the one-time rebate should be paid out to the owner within 3D days of the solar system being turned on. Another benefit for MASH participants is virtual net metering. This allows owners to apply thce credits om a Singl solar and the electric multiple accounts on a site. The solar -system will feed dire =iy back into the grid any e ty . companies will allocate credis as the property owner or manager designates. For owner who are interested in utilizing solar power, Raeke recommends evaluating the potential buildings first. He Says Its important to assess the roof conditions early as well as other structures in the devaiopment. Evaluating current rate schedules and consumption is also key. If an owner is already on a discounted rate schedule or consumption isn't that high, it might not be beneficial for the owner, Raeke adds. With the MASH rebate incentlvn, Raeke also recommends for owners to think about the larger scale and look at several buildings to maximize the economy of it since the rebates will only be around for a few years. Raeke says Sorrego has seen an interast from Owners already. He also adds that he wDuldn't be surprised to see more states creating solar incentives for owner s. Online Res!2qrceis For more information on the Multifamily Affordable Solar housing program, visit: www o solarca_lifomia onilcsi/ ipw incone.htrnl www oo- ronllowincomesolar www. 5-- comlr~siden'iallrebates- savinas/mash • www enermN&a r on SCE - L~cen e'_^-gplic_rio F--kQS Incentivie/,application 1FAQs i~~ - e i~r nn a$~~hl- nn, rcinn rar> ,ir- ~u1-nf-PDCkei nDSt~~ 2. How much money is available tnrough the WiASH program for SC- customers? 3. How do I deiennine if my multi-amily building meets the dennition of low income residential housing in the Caiifomia Public UtiG5as Cade (PUC) Section 2B52? 4 Does the IJLASH Program permit use of power purchase agreements? 5. How does California Health and Safety Code Section 5DD79.5 define 'lower income households'? 6. How much and what types of rebates are available? 7. Who is eligible to receive incentives under the MASH program? 5 Are tax incentives available? 9 Which solar technologies are covered under MLASH? 10. Are incentives available fn-, 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 application faes? 14. How can I check on the status of my application? 15. How Long will th=_ application process take? 15 Can I apply for both Track 1A and Track I B? 17, Why do=_s my PV system need to be field-verified? 18. Are there classes offered in soiar PV systems? 19. Do I need to obtain a building permit? 2D. How do I find a solar installer I can trust? 21. Where can I get more information? Q1. Does insulting solar on affordable housing require out-of-pocket costs? ,4 Yes, it does. The customer must pay up font costs for the photovoltaic equipment and installation, however, MASH incentives, fade ai investment tax credits, renewable energy credits, any net metering credits can significantly reduce the customer's cost of photovoltaic equipment and installation. 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 5108 34 million allocated to tie MASH program„ SCEs portion of the incentive budget is summar ized below. IncentNe Budget Incentive Track Incentive Budget Track 1 A/B 534,656.032 Track 2' S9,200,DOD Tota I $43.856.032 -No more than 20% of the Track 2 budget can be awarded in one review cycle. TOP 03. How do I determine if my mufti-family building meets the definition of low -income residential housing in the California Public Utilities Code (PUC) Section 2852? To learn more, go to the California Law homepage and search for the Code section. TOP Q4. Does the (MASH Program permit use of power purchase agreements? A: The MASH Program allows customers to enter into pDwer p'urahase agreements with third parties, if the terms and conditions of the agreements comply with all existing statutes and regulations that govern the production and sale of electricity. TOP 51 /_O1 http://Nv"r\7,r.sce.corn/sOlarleadership/goSolar/'ma~,li,'N2a Sl,'-~~~-_ c- ces/incentive-application-:a :-h-L SCE - _FAQ-; raze_olc Qs. How dog California HsaSth and Safety Code Section 53079.8 deTme "lower income households"? 4 Califomia Heaft-i and Safety Cods =ec:rr. dp::'= = defir°es "tower mcome households' as follows: ri Dw.. ins e _,a , ~ Whese income does not ex,-,ed the qualitying limi=a for IDwer income iamille5 as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. The limits shall be published by the department in the California Code of Regulations as soon as possible after adoption by the Secratarv of Housing and Urban Development In the event the federal stanoards are discontinued. the department shall, by reouiation, establish incon limits for lower Income h:iusehoids for all geopraphic areas of the state at SD.erc=_nt of area median income. adjusted for family size and revised annually. ,B) "Lower income households" irnoluoes ve-y low income households.. as defined in Section 501 D5, and extremely low income households, as defined in Section 50106. The addition of this subdivision does not constitute a change in, but is declaratory of, a-yisting law. (C) As used in this section, "area median income" means the median family income of a geographic area of the state. To learn more go to the California Law homepage and search for the code section TOP 06. How much and what types of rebates are available? A. Multifamily Affordabi Solar Housing (hhASH) has two incentive tracks - Track 1 AIB and Track 2. Track 1 offers 53.301watt for a system that offsets common load and S4.0D/watt for a system that offseis tenant: load. This rte is consistent across the three utilities. Unlike general market CSI. MASH does not have a declining rate based on volume of mecawatts of confirmed incentive reservations issued in SCE's service area. Track 2 is a competitive grant application process where the applicant submits a proposed dollar per watt for the project. Currently. the only incentive type available for the MASH Program is the Expected Performance-Based Buyd.wn ,EPBB). TOP Q7. Who is eligible to recehfe incentives under the MASH program? A Eligible eiectic customers of PG&E, SCE, and SDG&E may receive ar._ incentnve through the MASH program. In addition. all existing muttifarniiy affordable housing that meet the definition of low income residential housing established in Public Utilities Code § 28S2.a.2 and have an occupancy permit for at least two years. Specifically, 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 iow- incom= households in Health and Safety Code § 50D79.5 Planned new housing grstruction, 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 for homeowners who qualify for low-income housing programs, is expected to be rolled out in the first quarter of 2DD9. TOP Q8. Are tax incentives available? A. In addition to rebates available through MASH, your project may also be eligible for a 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 Status of these tax credits you should contact the Internal Revenue Service and/:). your tax preparer. TOP 09. Which solar technologies are covered under MASH? A MASH incentives are available for solar photovoltaic (PV) technologies (oof- mounted, oround-mounted and building-Integrated PV) sized to meal actual or forc3ast Dn-site !Cad. h t ://~~,~A-\;,r.sce.comJsolarleadership/gosolar;'mash[AkSHResources/incenu-,,e-application-iagI= 5/14/201 ~SCr - Incerti -ve/ApplicaLion -F-.Qs rage 3 of 5 Q1 Q. Are incentives available for solar water Freeting system? 5 A CJ7e'7tiV there are no incentives for solar wafer heating systems in SCE: servicE 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 i incentives Applications proceed through several stages before payment-from Requested to Reserved to Completed. Qualified installers unde-stand the appiiDation process and can optimize customers' incentives by oomoi=_ting the application and submitfina all requi-ed documents. TOP 012. Do I need to follow the three-stap application process if I've already selected an installer? A. Generally. MIASH applications go through the three-step application process However, applicants can opt-in to the two-ster process. Keep in mind that you, application is still subject to the requiremenn detailed ir 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- Por Track 1, Your installer can provide you wire regular updates regarding the status of your application. You can also contact your progran administrator at (666) 564-7436 to get project updates. TOP Q15. How long will the application process take? .k SCE strives to take less than 30 days to confirm MASH Trade 1 reservation r?au=_s+s. Application processing time depends on a number of factors, including me spjed with which applicants respond to reqiests for -none information or application corrections. To help ensure your application is processed quickly, please note the most equent issues encountered with applications are: missing ensroy =efficiency audit listed equipment does not match EPBB tool calculator printout copy of aX=_cuted contract for system purchase and installation, missing signature(s); and incomplete or missing documentation TOP MASH applicants are granted a reservation period of 18 montns to comoleia their protect Q16. Can I apply for both Track 1A and Track 1 B? A. Yes, you can apply for both Track 1A to offset common load and Track 1 B to offset tenant load. The system for the common area must be sized so that the system primarily offsets part or all of the common area's electrical needs. Tenant arras will be aggregated for sizing limits. For example. up to 5D kW of a system may be allocated to 10 units in a building without requiring system size justificatior because the average will b 5 kW or less TOP Q17. Why does my PV system need to be field-verified? A: Installed systems must be field-verified to ensure the installation of high- performance PV systems that are consistent with the information used to determine the estimated performance, reservations and ultimately the final rebate. TOP Q16. Are there classes offamd in solar PV systems? A. SCE hosts monthly Introduction to the California Solar Initiative cl=asses. The class is not specific to MASH. however, it can provide you with a general understanding of PV systems. Please visit www.sce.comlcsi for mo- information. TOP Q19. Do I need to obtain a building permit? A- You will probat ly need to obtain a permit from the city or county building depam-rient A solar vendorrnstaller may be able to assist with this. TOP 9 htTP://Vrv'rNv.sce.com/solarleadership/gosolar/mash/ IA.SHResources/incenti ve-application-faq.htn 5/14/2010 SCE - 17GZn 1 e!-~pFliGa oLi FAQ-25 Page 4 of Q20. How do I and a solar installer I car, :rLsi? Quaiified co-ii actors are youi key t-, geFing the most produ:aive solar st'=-:8'- for your hom=_ or business. Cnoosa a repulabi= ins-311ar by inie;Vlewing a. leas: tir=e potential installers and Db inm: bas bafD7= ma~ing your SaleytiDn appropriately licensed CBlif0mia '„J' "tractors in accordance with, rules and egulations adopted by the Calrfomia Convactors State Licensing Board (CSLc) ,',I! svstarns must be installed in confo7 anca with the manufacturers so=cification and with all applicable el=_cirical and building code standards. TOP Q21. Where can I oet more information? A. For additional information on'gong solar," visitwnaw.sce.comlcsi or ~,srovw. gosol arca I iforn ia.gov.ca. 10 5/14/201C hi :/lu~~-~a.sce.cornlsolarleadershiplgosolar/mashl?N4,SHResources/incentiti,e-application-faq.hm SCE l.~GLL~11'_^_Qs rRt D GI ~ 11 http://NNT"r,.".sce.corn/solarleadership/,osolar/mash'N-LkSHResources/inr-enti-\'e-application-faq.htm 5/14/201C MASH Program Report 1 Multifamily Affordable Solar Housing Semi-Annual Report January 20, 2010 SOLIMERN CAU;Oamu J E D I S ©N r Sustainable Energy An EDISDN 1hTERNAMNAL Company 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 $/Watt 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, 2D09 8 3.2. Program Waitlist 10 3.3. How the Data Questions Called for in D.D8-10-036 were Addressed .........................................1D 4. Program Progress .........................11 Table 4.1: MASH Applications by Month (2D09) .........................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 Califomia 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.D8-10-036, and other data that Energy Division has requested. 1. Executive Summary The MASH Program is one of the CSI's two low-income programs and is administered by Pacific Gas and Electric (PG&E), Southem California Edison (SCE), and the Califomia Center for Sustainable Energy (CCSE) 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: 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 $4.00 per watt for solar PV generating systems that offset tenant common area electrical load (Track 1 B). Track 1 applications are reviewed on a first-come first-served basis. 2. Track 2 is a competitive application process and provides variable rebates up to 100% of system and ongoing maintenance costs. To be awarded Track 2 funds, an applicant must demonstrate direct tenant benefit. Track 2 consists of two application cycles per year- The PAs began accepting applications for Track 1 in February 2009 and conducted the first round of Track 2 application evaluations between July and December 2009. PG&E, SCE, and SDG&E began to offer a Virtual Net Metering (VNM) utility tariff option in June 2009 to simplify the installation of solar PV generating systems in multifamily housing. D.08-10-036, Ordering Paragraph No. 9 and Appendix A. In addition, the PAs will file a more detailed reporting of MASH expenses, including VNM implementation, as part of the CSI semi-annual administrative expense report that is due on January 29, 2010. D.DB-1 D-036, Ordering Paragraph No. 7 and ,Appendix. MASH Semi-Annual Report, January 20, 2090 1~ The PAs received and processed the following numbers of applications in 2009: • 384 MASH applications received 179 Track 1 applications reserved 1 Track 2 application reserved PG&E and CCSE received applications that exceeded funds available in their respective Track 1 budgets for 2009, and both created a wait list. SCE received applications for over 90% of its Track 1 budgef. Currently SCE has 100% of its Track 2 budget available, PG&E has 90% and CCSE has 80%. 2. Background In D.06-01-024, the Commission adopted the Staff proposal to set aside a minimum of 10% of GSI Program funds for projects installed by love-income residential customers and affordable housing projects. In 2006, the California Legislature codified this requirement in Senate Bill (SB) 1" and Assembly Bill (AB) 2723.$ 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 CommlSSlon 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 low income residential housing established in Pub. Util. Code § 2852."' 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 Track 1 budget in January 2010 and has started a wattlist 3 D.D6-01-024, 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 2005, sets forth specific CSI program requirements regarding program budget, conditions for solar incentives, and eligibility criteria. AB 2723 (Pavley), Chapter 864. Statutes 20D6, 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. 6 D.08-1 D-035, Appendix A, mimeo., p. 1 D.08-10-035, 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." 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. PLIC 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. Incentive 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.08-10-036, p. 24-25 ° D.08-10-036, p. 14 MASH Semi-Annual Report, January 20, 2010 17 Table 2.1: MA. S ii Rates Track IA: PV System Offsetting Traci: 1B: PV System Offsetung Common Area Load Tenant Area Load S330NVatt S4.00/1Natt 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 1881, 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, 2090 18 =ig re 2.1: Conven-eanai Solar Svsteras on Iadf0duaily- Arietered Mulr_famiIy y-riov- sing solar generator multiple s}~ste T F _P r I' common area - meter solar residential unit inverters 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 System on Individually-Metered MultiFamily housing solar generator solar panels utility [E utility residential unit power common meters area iA M i' M "A V meter olar generator inverter output meter WSH Semi-Annual Report, January 20, 2010 19 .3. El11 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, 2007, in R.06-03-004, one-half of the $216 million low income CSI budget adopted by the Commission in D.06-12-033 ($108 million) was reserved for the MASH Program. This budget, shown in Table 2.2, was adopted by the CPUC in D.08-10-036. For information on MASH Program expenditures to date, see Table 4.9. The incentive allocation equates to 889/D 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. 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. Drogram 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 (shown in italics) and the progress to December 31, 2009, are identified below: ■ Within 60 days the Program Administrators shall jointly file an advice letter with proposed amendments to the CSI Handbook to incorporate the MASH program. The handbook should address Track 1 incentives and all 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 statevnlide Track 2 application and review process as in/eU as the handbook changes necessary to implement Track 2. c 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 utility's VNI0 tariff must comply with § 2527 and Appendix B of this order. On February 13, 2009, PG&E riled 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 (VNM) 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, 2DD9. a 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, 20D9, to incorporate revisions to the tariff sheets as advised by the Energy Division. Energy Division approved Advice 2322-E-A on June 12, 2DD9, with an effective date of June 8, 2009. On February 13, 2009, SDG&E filed Advice Letter 2064-E, Establishment of Schedule VNIA-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, 2009, 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, 2009. 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, 2009, 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. t By the end of 2010, 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 Lour 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 "Taidist As of October 26, 2009, PG&E had received more applications than sufficient to exhaust its Track 1 allotted budget of $32.9M 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, 2D09, PG&E has a waitlist of 53 projects totaling $15.2 million. On December 28, 2009 GCSE began a waitlist following the same procedures as PG&E. As of December 31, 2009 CCSE has a waitlist of 1 project totaling $137,050. As of January 1, 201 D, PG&E is not accepting new applications for its MASH Track 1 Waitlist. If 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. How the Data Questions Called for in D.08-10-036 were Addressed Data points noted in D.08-10-036i0 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. 10 D-08-10-036, Appendix A, p. 6 MASH Semi-Annual Report, January 20, 2010 10 23 4. Program Progress The MASH program began accepting applications for Track i incentives in February 2009 and Track 2 applications in July 2009. Program progress as illustrated from various data points is shown in Table 4.1. Table 4.1: MASH 0091 Table 4.2: Summary Data: MASH Applications by Staras I Summary Data (Track 1) Projects reserva-J SCE Total -,2 179 $ 1137,050 $ 14,206,027 $ 0 $ 14,343,077 " Includes 1 PG&E Track 2 application 'Z Includes 1 PG&E Track 2 application Includes 22 PG&E Track 2 applications, 5 SCE Track 2 Applications & 2 CCSE includes Track 2 Applications " Includes 28 PG&E waitlisted projects s5 All PG&E projects are waitlisted All PG&E projects are waithsted 'All capacity measured in CEC-AC ° Approximately S700k in Track 1 will go to Waidisted projects in 2010 ° Only includes reserved and paid projects MASH Semi-Annual Report, January 20, 2010 11 24 Average Project Costs (S/►►Vatt) S 8 671Wan $ 8 7SWatt S 8 04,Watt N1A Total Master-Metered (Reserved) 0 8 4 12 Total IndNidualty Metered (Reserved) 5 154 8 167 Table 4.2 provides a detailed breakdown of the "Reserved,' "Paid,' and "Under Review" capacity (in CEC-AC MM for all MASH applications received between program inception on February 17, 2)09 and December 31, 2009. Table 4.2; detailed Data: MASH Status Track 1.A CCSE PG&E Track 1 a: Total Reserved Capacity 0 263 MW 5.474 MW Track 1a: Total Reserved Incentives $ 720,413 $ 18.289,576 Track fa: # Projects Paid 0 0 Track 1a: Total Incentives Paid $ 0 $ 0 - - - - Track 1 B Track 1 b: Total Reserved Incentives(5) Track 1 b: Total Incentives Paid Track 2 Track 2: # Projects Paid Waitlist Track 1a: Total WaitJisted Incentives (5) Track 1 b: Total WaNsted Incentives $ 137,050 S9,081.653 $ D $ 5,124,374 MASH Semi-Annual Report, January 20, 2010 Track 2: Total Awarded Capacity 12 25 $ 124.317 $ 124,317 C1 I~ Table 4.3: MASH uppiic I PG&E Table 4.4: MASH 2D Includes all counties not in the top 10 MASH Semi-Annual Report, January 20; 2010 26 29 0 534 0 330 1.745 SCE 13 Vista Table 4.5: VASE by City $ 3,D44,899 MASH Semi-Annual Report, January 20, 2010 14 27 'Fable 4.5: MASH Table 4.6: MASH Applications by C'y (Cont'di CCSE PG&E SCE Freedom 2 7~omcma 2 ! Guadalupe % Porterville 2 Livermore 2 Rosamond 2 Marina 2 Rosemead AML 2 Santa Ana 1 2 IV~l7ntefey Oakdale 2 Simi Valley 2 ?r~ r)~4i- 7 Tulare 2 - Point Reyes 2 Long Beach 1 Station San Leandro 2 Huntington 7 Beads Santa Mana 2 Corona 1 MASH Semi-Annual Report, January 20, 2010 15 28 rn wlc Pleasanton I Table 4.6: MASH Applications by City (Cont'd) San f-- Yuba City 0.219 0.184 0.179 0173 .4 0 136 0.129 0.127 0.115 MASH Semi-Annual Report, January 20, 2010 16 29 St Helena 0.034 D. 012 MASH Semi-Annual Report, January 20, 2090 17 30 Table 4.7: MASH Applications by City (Capacity) (Cont'd) Table 4.7: MASH Applications by City (Capacity) (Cont'd) _ CCSE PG&E SCE T:rwkAw D 1132 GCSE City t San Diego F-vista T-LI- A O. Lk A C:-: 1,498,274 Corona $ 713,366 Duarte $ 566.693 $ 700.157 West Covina $ 558,733 $ 639,862 La Palma $ 440,355 MASH Semi-Annual Report, January 20, 2010 18 31 Salinas Fremont I Table 4.8: MASH Applications by City (Cont'd) CCSE PG&E Moroan Hill $ riea,anton Martinez Madera S 468 956 Los ?.noeies $ 450.304 Huntington Beach $ 118,480 SCE $ 426.590 S42 1,691 $ :',51,2D1 $ 345,794 $ :.36.560 $ 327,944 S 321 068 2~ ioi,VvI $84,058 MASH Semi-Annual Report, January 20, 2010 19 32 Table 4.8: MASH Applications by City (Cont'd) GCSE PG&E SCE Pa}aro $ 112,174 Lindsey $ 79.223 - - i-- ~ R r In inn Table 4.5: MASH Program irkrezditures by Program Administrator MASH Program Expenditure Data Oct 16, 2008" to December 31, 2009 CCSE PG&E SCE ; Total 109.100 $ 2D9,940 $ 259,093 $578,133 Measurement & $ D $ 0 $ 0 $ 0 Valuation incentive $ 0 $ 0 $ 208.339 $ 208.339 21 Date of Decision D8-1 0-036 MASH Semi-Annual Report, January 20, 2010 20 3 3 5. Conclusions and Program Recommendations • The PAs have satisfied all of the program implementation guidelines and milestones set forth in D.08-10-036. • 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. WASH Semi-Annual Report, January 20, 2010 21 34 1\,Z~SH Proaram Resennation Letters and Extension Email < Janet.Okavvra~-:,sce.ccm > 4/14/201-0 11;55 Afvl 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. T he 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 MASHD9-00095 SCE MASH09-00096 SCE MASH09-00097 SCE MASH09-00098 SCE MASH09-00101 SCE MASH09-00102 SIZE MASHD9-00103 SCE MASHD9-00104 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 3une 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.R LIlJs~4. IhTRlvi.ZCn-LL 6 Cm=m j* March 25, 2010 Attu- Peter Weich Absolutely Solar Electric 2146 L emo,,me Street Los Angeles, GA 90026 RE: Multifamily Affordable Solar Housing, Resenation Request No. SCE MASH09- 00103 - "Levine Management (Angelus Senior Housing)" 2417 Angelus Avenue - Resen,ation Request (RR) Confirmed Reservation Notice (Please reference this number wirh all correspondence) Dear Mr. Vv eich: We are pleased to inform you that your Multifamily Affordable Solar Housing (MASH) Track I application has been conditionally approved. The following summarizes what you rill be installing for the 1,ti4SH Prom-am: Applicant Process: 3-Step Installation Type: PV System Size: 23.939 CFC-AC Design Factor: 0.99857 Project Cost: $150,121.00 Payment Type: EPBB Incentive Rate: S330hvatt Incentive Allocation: Reserved Incentive: PP114 Due Date: 100.0% Common Load S^8,887 May 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) subli-dttal must be received on or before the PPM due date or the reservation ivill be canceled- Also, please keep in mind that the customer is responsible for costs associated with the rzetering requirements described in the GSI Handbook 37 In accordance w ith Assembly Bill 1714, signed by le Go ~ or on June -1. VU 1. California Solar Initiative (including 1,~ASH) participants are not required to be on a Time-of Use (TOU) rate at this time. If you are not othe_vise rzLu.ired to take se-vice on a TOU rate, you may choose either to be placed on a T OU -ate or main on your present rate. If you have any questions, please call us at (866) 584-7436. or send an email to CSIGroup c smcom. Additionally; the most current CSI Program Handbook and forms are aA ila<ble on SCE's 1>,%eb site at Aileen Lagbao Proaam N- da Lager A4J-6fami1y Affordable Solar Housing Program Cc: ?erT Levine Levine Managetnnent (Angelus Senior Housing) 822 S. Robertson Boulevard, Suite 200 Los Angeles, CA 900;5) 38 EDISON A. F7r:ON !•'u::k.w_-~oX.it I Caw it March 24. 2010 Atm: Peter',Veich Absolutely Solar Electric 2146 L&-n?ovme Stream Los Anae4es, CA 90026 RE: Multif ELly Affordable Solar Housing, Reservation Request No. SCE 'NLkSH09- 00104 -"Levine Management Group, Inc. (Garvey Senior Housing')" 9100 Gamey Avenue - Reservation Request (RR) Confirmed Reservation Notice (Please reference this number witri all correspondence) D ear Mr. IN ei 01 We are pleased to inform you that your Multifamily Affordable Solar Housing (h'LkSH) Track 1 application has been conditionally approved- T he follo;A-ing summarizes vi-hat you will be installing for the NtkSH Program: Applicant Process: Installation Type: System Size: Design Factor: Project Cast- Payment Type: Incentive Rate: Incentive .allocation: 3-Step PV 39.245 CEG .AC 0.99359 $246,100.00 EPBB S3.30/watt 100.0% Cor=on Load Reserved Incentive: $128,677 PPM Due I3-ate. M2,,, 24, ? 010 The amount of your incentive may vary if the "as-built system" does not match the information you have submitted. Please remember tliat the Proof of Project Milestone (PPM) submittal must be received on or before the PPM due date or the reservation ,,N ill be canceled. Also, please keep in mind that the customer is responsible" for costs associated with the 3neterna requirements described in the CSI Handbook. 39 5 ~ by j]~e. Go; eMCI on.,une 7, in accoraance "-'th Assembly Bill i 71 s, -n--6 California Solar Initiative (including MASH) participants are not required to be on a Tinge-of-Use (TOU) rate at this Mime. If you are not othenwise required to take sen--ice on a TOU rate. you May choose eitiierr to be placed on a TOU rate or remain on your present rate. If you have any questions, please call us at (966) 584-74316; or send an email to CSIGroupousce.com. ?.dditionally; tl,e frost currerj CSI Prouam Handbook and forms arq available on SC'✓'s \Veb site at 1 Ai een Lag Program Manager Multifamily Affordable Solar Housing Program Cc: Jeff Levine Levine IA4anasement (Garvey Senior Housing) 822 S. RobertsDn Boulevard, Suite ?00 Los Anseles, CA 90035 40 Absolutely Solar Information 4, A-75SOILL-IELY SOLAR - ?hotovoitai Dwer Systems in Los Angeles page 1 of 1 att}Le Iy6aia' 43 ....1-117+o1Von1ar rnmlvallPrv/inde-Y.html 5/14/2010 '3PQign and development by OSKOUI+U5xUU1. iNL . C 08 Absolutely Solar. All Rights Reserved. ~ 1 A3SGLUiE~ SCLA R - P'hotoN7oltaic a~Ier S'I°stems in Los Angeles rage 1 or Designers and Lns--Lahers of Photovoltaic Systems in the greater Los Angeles Aiea 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 ,will pay off as energy rates rise at a meteoric pace. Of all the energy sources available, solar has perhaps the most promise. Technically, the sun is capable of producing the raw power required to satisfy the energy needs of every human being on earth. Environmentally, it is the least destructive of all possible sources of energy. Practically, it can be adjusted to pourer nearly e1-er)- ing. For these reasons, solar power is clearly the energy resource of the future. 44 5/14/2010 in today's climate of gro«zng energy needs and increasing environmental concerns, millions of homeo-Anvers and businesses are seeking alternatives to the use of non-renewable and polluting fossil fuels. One such alternative is Solar Energy - Solar Power. 3S0L1_TELYS0'LAR - Photovoltaic Systems in Los Angeles Providing Los Angeles t,ith premiere photovoltaic services since 2001. Page 1 of 1 Phone Consultation 'ase call us at 323.665.3t92 ` Z system for your energy needs. Site Evaluation and Estimate After the initial phone consultation. our owner. Peter Reich, J dll'\zsit your site to assess the exact requirements of your project and to determine the cost and benefits of your system. A detailed estimate «Zll then be prepared for you. Building and Electrical Permits After the proposal is accepted, AbsolutelvSolar will obtain the necessary building permits and assist you in filing for rebates and incentives from your utility company. Installation The supplier Aill deliver the system directly to your site. Our qualified electricians, with the supenision of our engineer will then expertly install your system and test h thoroughly. Inspection by Local Building and Safety Office en completed. the install ation -will be inspected and approved by your local Building and Safety Department. Ralkthrough and Training Our engineer, Ulrich Buelhoff, will t~ a1k you through all the aspects of the system from start-up to monitoring and emergency shut-downs. Warranty All solar panels have a 20 to 25 year manufacturer warranty. Inverters have a standard manufacturer's 'warranty of 10 years. The -warranty on our labor is 5 years. 45 htLp:/hk-~v«,.absolutelysolar.com/ser-,-ic.--s.htnl ,;1TI2U10 of 1 ',3SCLUi1=L~-50L_~R - Photos olt c 7WCT Sv;1ems .3 Los Anc2eles - - About Us Sen•ices About Photovoltaic Po-wer Incentives Gallen Testimonials Request Quote Contact Solar Po,%ver in more Detail Sun Isolar energy is quite simply the energy produced directly by the sun and collected on Earth. The sun creates its energti through a thermonuclear process that converts hydrogen to helium. That process creates heat and electromagnetic radiation. The electroma rie-tic radiation (including -visible light, infra-relight 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", «-hich means light. Volt is named for Alessandro Volta, a scientist who studied electricity in the 18th and 19th centuries. Photovoltaic systems are most commonly known 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 cn°stal cells made of semiconductor material, usually silicon. These cells transform light from the sun into an electrical current. 46 http : //-.A-«w. abso lutely solar.com/about_photo,%,,oltaic.hunl 5/14!201 C Absolutely Solar Proposals 47 Cost Anol ysis Draft ~,ngelus Senior Housing Size 23.939 CEC-AC (kW) Production 42,111 kWh/year CSI System Size 713 905 Electricity Cost- $0.121 per kWh Electricity Production per year $5,116.35 Installation cost $150,121 MASH Rebate $78,887 System Owner out of pocket expenses _71,23 { Federal Tax grant $21,370 Net Cost $49,864 Depreciation savings** $24,828 Cost after 6 years 525,036 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 50.121 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.OD% $12,109.9 41.00% $4,965.04 2nd yr 32.D0% $19,375.8 41.00% $7,944.07 3rd yr 19.20% $11,625.5 41.OD% $4,766.44 4th yr 11.53% $6,981.3 41.00% $2,862.35 5th r 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 CostAna(ysis Draft ***Energy Production after 30 years Energy Price increase 3% p/year Yr 1 $5,116.35 Yr 2 $5,269.84 Yr 3 $5,427.94 Yr 4 S5,590.77 Yr 5 $5,758.50 Yr 6 55,931.25 Yr 7 $6,109.19 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 57,738.94 Yr 16 $7,971.11 Yr 17 $8,210.24 Yr 18 $8,456.55 Yr 19 $8,710.24 Yr 20 $8,971.55 Yr 21 $9,240.70 Yr 22 $9,517.92 Yr 23 $9,803.46 Yr 24 $10,097.56 Yr 25 $10,400.49 Yr 26 $10,712.50 Yr 27 S11,033.88 Yr 28 $11,364.89 Yr 29 $11,705.84 Yr 30 $12,057.02 Total Production after 30 yrs. $243,412.52 49 Angelus Senior Housing 0 } m ~ I T i - i } r-4 ~ ~ L p Y N N } N N } M } ry I N } N > N O f6 N } N ` 0 ~ m } N ~p 0 r I 75 ~I c E _ Li u m Q } r" c i } rl ~ 0 m ~ O ~ V } d 1 W ~ ~ } fG I' p O ' u ( r I I } ~ o Y sf1 } c } N r } j e4 r o ° . 0 0 ° ° n C) L ~ arr L tr> ~Q Cost Anofysis Drcrjt Cost/Beneft Analysis Solar System Production Solar Energy Production Accumulated cost amortization Yr 1 $5,116.35 $5,116.35 $44,899.11 Yr 2 $5,269.84 $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 $6,109.19 $39,203.85 $800.DD Yr 8 $6,292.47 $45,496.31 $900.0D Yr 9 $6,481.24 $51,977.55 $800.OD Yr 10 $6,675.68 $58,653.23 $800.00 Yr 11 $6,875.95 $65,529.18 $800.00 Yr 12 $7,D82.23 $72,611.40 $800.00 Yr 13 $7,294.69 $79,906.10 $8DO.OD Yr 14 $7,513.53 $87,419.63 $8DO.00 Yr 15 $7,738.94 $95,158.57 $800.OD Yr 16 $7,971.11 $103,129.68 $800.00 Yr 17 $8,210.24 $111,339.92 $800.00 Yr 18 $8,455.55 $119,796.47 $8DO.DD Yr 19 $8,710.24 $128,506.71 $800.00 Yr 20 $8,971.55 $137,478.26 $800.00 Yr 21 $9,240.70 $146,718.96 $800.00 Yr 22 $9,517.92 $156,236.88 $800.00 Yr 23 $9,803.46 $166,040.34 $800.00 Yr 24 $10,097.56 $176,137.90 $800.00 Yr 25 $10,400.49 $186,538.39 $800.00 Yr 26 $10,712.50 $197,250.89 $SDO.00 Yr 27 $11,033.88 $208,284.77 $&00.00 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 51 Angelus Senior Housing r G a Q ~ i ~ of I ~ I I I Ln L ~ I a ~ t N } q } r ~ N I I h 1 ~ N Ln N L } N Y N L } ~ N N } I v'1 N I I F o } ~ ► I F L ~ } Q~ I r I r` L. L 1 L> r Ln C I f c r-1 r ~ m N } ~ r ro ~ q c r L L } i t } I } } L } ° Ln D L"1 o Ln o Ill ° Ln 1 ~-I r-f N N K L 0 C 61 h Oi Q7 Q 52 Cost Analysis Draft Internal Rate of return before Depreciation Investment -$49,864 IRR Yrl $5,116.35 Yr2 $5,269.84 Yr3 55,427.94 Yr4 $5,590.77 -26.66% Yr5 $5,758.50 -17.08% Yr6 55,931.25 -10.37% Yr7 56,109.19 -5.53% Yr8 $6,292.47 -1.93% Yr9 $6,481.24 D.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 $8,210.24 9.8D% Yr18 $8,456.55 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.DD% Yr26 $10,712.5D 12.13% Yr27 $11,033.88 12.26% Yr28 $11,364.89 12.36% Yr29 $11,705.84 1 12.46% Yr30 $12,057.02 12.54% AZ!-; Di.:teIJ,= _ 53 Angelus Senior Housing D 0 c ~ o nn rv ~ 1 r v~ N I } I ~ b Y N N N } N i I I I } N i r N v N • r O L I ~ ~ CL ry ~ I I I ~ L ~ r ~ r I r Q I I I i N ~ r 76 } O ~ C ~ I } ~ r n } ~D ~ r Ln ~ ~ ~ O O O O O' O O O O N M ~ ~ c _o C d a a~ 54 ~:ost Anaiysis Graft internal Rate of Return with Depreciation Investment -$7-5,036 I RR Yrl $5,116.35 Yr2 $5,269.84 -42.78% Yr3 55,427.94 -19.71% Yr4 $5,590.77 -5.90% Yr5 55,758.50 2.73% Yr6 $5,931.25 8.38% Yr7 $6,109.19 12.23% Yr8 $6,292.47 14.93% Yr9 $6,481.24 16.89% Yr10 $6,675.68 18.34% YrI1 $5,875.95 19.42% Yr12 $7,D82.23 20.25% Yr13 $7,294.69 20.89% Yr14 $7,513.53 21.39% Yr15 57,738.94 21.78% Yr16 $7,971.11 22.09% Yr17 $8,210.24 22.34% Yr18 $8,456.55 22.54% Yr19 $8,710.24 22.70% Yr20 $8,971.55 22.83% Yr21 59,24D.7D 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% Yr30 $12,057.02 23.34% Angelus Senior Housing 55 Cost Analysis Drofi GarwaY SEnlori Housing Size 39.245 CEC-AC (kW) Production 69,591 kWh/year 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 $45,270 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 $99,809.6 1st yr 20.00% 519,961.9 41.009/, $8,184.39 2nd yr 32.00% 531,939.1 41.00% $13,095.02 3rd yr 19.20% $19,163.4 41.00% $7,857.01 4th yr 11.53% $11,508.1 41.00% $4,718.30 5th yr 11.52% $11,498.1 41.00% $4,714.21 6th yr 5.76% $5,749.0 41.D0% $2,357.10 Total Depreciation after 6 yrs. $40,926.04 56 Garvey Senior Housing Cost Analysis Draft ***r normr Drntitirtinn after 30 vealrs •v~ 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 $10,413.35 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 $12,807.10 Yr 13 $13,191.32 Yr 14 513,587.06 Yr 15 $13,994.67 Yr 16 $14,414.51 Yr 17 $14,846.94 Yr 18 515,292.35 Yr 19 $15,751.12 Yr 20 $16,223.65 Yr 21 $16,710.35 Yr 22 $17,211.68 Yr 23 $17,728.03 Yr 24 $18,259.87 Yr 25 $18,807.66 Yr 26 $19,371.89 Yr 27 $19,953.05 Yr 28 520,551.64 Yr 29 $21,168.19 Yr 30 $21,803.23 Total Production after 30 yrs. $440,173.62 57 Garvey Senior Housing C m ` O m Y m h ~ _ C D Y N Q A 4/` q L } l7 } N Y N L•1 Y r,4 L. r r N m T N \ r N T N O N } N D } ~ rn N } CO D U ~ E * Y ~ l } ti C Q i L1 Y N ~ ~ } v u m Q o G~1 r ~ v ° r LLJ M co 0 t Ln i n r ~ L. r Ln ` L. 1 Y Q l } ~ m r - , r \i, N } e-1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 n n m O O t~ Y Q CD CD O p O O ~ O 00 0 00 0 00 0 Ln C C m m N -✓s an vs n tin +n O O O O 0 0 C C CD Ln o Ln 58 Cost Analysis Draft Cast/Benefit Analyses Solar System Production Solar Energy Production Accumulated Cost amortization Yr 1 $9,252.12 $9,252.12 $74,011.78 Yr 2 $9,529.69 518,781.81 561,716.76 Yr 3 $9,815.58 $28,597.39 $54,659.74 Yr 4 $10,110.D5 $38,707.43 $50,741.44 Yr 5 $10,413.35 $49,120.78 $46,827.23 Yr 6 $1D,725.75 559,846.53 $45,270.13 Yr 7 511,047.52 $70,894.05 $800.00 Yr 8 $11,378.94 582,272.99 $800.00 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.OD 'Yr 13 $13,191.32 $144,497.73 $800.00 Yr 14 $13,587.06 $158,084.78 5800.00 Yr 15 $13,994.67 $172,079.45 $8DD.00 Yr 16 514,414.51 $186,493.95 $800.00 Yr 17 $14,846.94 5201,340.90 5800.00 Yr 18 515,292.35 $216,633.25 $800.00 Yr 19 $15,751.12 $232,384.37 $800.00 Yr 20 516,223.65 $248,608.02 $80D.OD Yr 21 $16,710.36 $265,318.39 $800.00 Yr 22 517,211.68 $282,530.06 $800.DO Yr 23 517,728.03 $300,258.09 $800.00 Yr 24 $18,259.87 $318,517.95 $800.00 Yr 25 $18,807.66 $337,325.61 $500.00 Yr 26 $19,371.89 $356,697.51 1 $800.00 Yr 27 $19,953.05 $376,650.55 $800.DO Yr 28 $20,551.64 $397,202.20 $800.00 Yr 29 $21,168.19 $418,370.38 $800.OD Yr 30 $21,803.23 $440,173.62 $800.00 59 Garvey Senior Housing r d C c}i min T a ~ T N n N Y N N L Y T N T N i N ~ Y N A, } ~ 01 Y YY~' n T ~ W } c ~ I C I I L m i ~ o N r1 L } O } L } co Y r` } N L Y H L } D D O D D D D O o o Ln CD Ln o o LM o N .y ~-i r-I N N M a c 0 0 UY d t O u 60 most Analysis Draft Internal Rate of Return before Depredation Investment -$52,196: I RR 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 -8.2D% Yr7 $11,047.52 -3.47% Yr8 $11,378.94 0.02% Yr9 $11,720.31 2.66% Yr10 $12,071.92 4.70% Yr11 $12,434.08 6.30% Yr12 $12,807.10 7.57% Yr13 $13,191.32 8.60% Yr14 $13,587.D6 9.44% Yr15 $13,994.67 10.13% Yr16 $14,414.51 10.71% Yr17 $14,846.94 11.19% Yr18 $15,292.35 11.60% Yr19 $15,751.12 11.94% Yr20 516,223.65 12.24% Yr21 516,710.36 12.49% Yr22 $17,211.68 12.70% Yr23 517,728.03 12.89% Yr24 $18,259.87 13.05% Yr25 $18,8D7.66 13.19% Yr26 $19,371.89 13.31% Yr27 $19,953.05 13.42% Yr28 $20,551.64 13.52% Yr29 $21,168.19 13.60% Yr30 $21,803.23 13.67% Gon ey Sonior Housing 61 ry1 L~ C N L } N } N i } C ~ N ~ Ir N N 0 -T N W cn L i A } Q } I ~ n Am F- ° i r y } Ln Q Q r r. W } ~ w .e } Y It M N } e-i L } L V O O O u1 O N N Ln V) Q V C O.i i Q 62 Cost Analysts Draft Internal Rate of Return with Depreciation Investment -$41,270 I RR Yrl $9,252.12 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 $11,047.52 15.14% Yr8 $11,378.94 17.72% Yr9 $11,720.31 19.56% Yr10 $12,071.92 20.90% Yrll $12,434.08 21.91% Yr12 $12,807.10 22.66% Yr13 $13,191.32 23.24% Yr14 513,587.06 23.69% Yr15 513,994.67 24.04% Yr16 514,414.51 24.31% Yr17 $14,846.94 24.53% Yr18 $15,292.35 24.70% Yr19 $15,751.12 24.84% Yr20 516,223.65 24.95% Yr21 $16,710.36 25.04% Yr22 $17,211.68 25.11% Yr23 $17,728.03 25.17% Yr24 $18,259.87 25.21% Yr25 $18,807.66 25.25% Yr26 $19,371.89 25.2896 Yr27 $19,953.05 25.31% Yr28 520,551.64 25.33% Yr29 $21,168.19 25.34% Yr30 $21,803.23 25.36% 63 Gamey Senior Housing POWER PURCHASE AGREEMENT OPTION Solar CAN, Information h-5 66 U O .Q L Q. O L- 4- C) RS O U 4- O C: O Cl O bo cn O l_ Q. >1 U co O (n co O O U U m O O O E 75 Ci? C a) O w C: C O .Q A• W' V D O C . O O c O co C C .U C m C U- 67 2 W O Z O U • ~j ~ m = 7 IO N ".T C a V A 2 T a D a a m v iI C d y U Yil C/) t~ - ~ L 7E) E 0 E E p cn C CD m M L' E C 4 C: Co > Cn row W ~ Q a .asa .rw •Vi D 2 T r .Q 6 D Z X N 0 C) c~ 0 LO N o C: tY • co Q 70 °J U co > U CO N Q N c U) o o Q Ca cn a_ m co o 68 :ON c S O 0 ~ U O N c~ Cn -O c0~ ~ b00 C C U') U 1 3 C i U ~ O U) bA O O U N ~ ~ ~ C6 o c CO O U O o E U O C11 b~J C U N O t ~ O O E5 . C) o C + cn Ln :3 O a o o L Lf) A LL a U ~ O O c6 Q Cl _ c ~ C CZ U O v ~p Q Q) E a) Q a.> E an o o c 69 - i 1 t w 70 N c L E 'O w LO c a, U U) En cn U7 O ~ ~ U N CO ~ O N ~ O O - O O O Q N O Q N U C6 b~ O - _ • N n~.o o o v m o V) . 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IFI l 74 O Z m CZ co C O GO 0 O L C Q C ' Q) co O U O O (D O N D7 ~ O N C O o C E C U m O I- tF) d a U o C ~ m v E ' Q L N O } C Q ' O E ~ C O ~ O - O ~ N C U a"' L L Q L O W m ~ C O U 00 v O V) cn 6. C L O O U) • • • r 0= E F E -r I' 1 tr i l I I i t 0 C O O fJ U 70 O L E 4-1 L U ~ C6 ~ F N y ^L W O 4-0 1..L 1 E 0 0 L o E O ~ LU o co O -C OU O 75 U .E cc ~yW K`LLB y.~.~^ o C O r"1 b~ 0 O a o L E U ~ O U? ~ 11 .41 e ' ~I `sIl v ~I ~I +j °I ° ~I W L U a~ L U Ca 0- y_ CZ U • L~ s~ W D Z ~ N D I _ ~ I y T l 1 62 4 - 1 L L 1 ~ i ~ T ~ U) n ' }J 1J / A p a a U? ~ Q - 0- ~ a Q Qa p a 3 C Cn U) C> 4-1 76 L O o ? _ p Q/j O? 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Purchaser: I Seller: Name Levine Management Group, Inc. Name Sola.rCity Corporation and 822 S Robertson Blvd and 393 Vintage Park Drive; Suite 140 Address Los Aneeles; CA 90035 Address Foster City, CA 94404 Attention: Jeff Levine Attention: Contract Administration Phone 310-358-3489 Phone (650) 638-1028 Fax 310358-3494 Fax (650) 638-]029 E-mail ContractAdministratorosolarcity.com E-mail Contractor's License Numbers Purchaser XD owns the Facility CA: CSLB 888164 (check one) leases the Facility OR: CCB 190498 This Agreement sets fords the terms and conditions of the purchase and sale of solar generated elecmc enereN trom me sour pauc, system described in Exhibit 2 (the "System") and installed at the Purchaser's facility described in Exhibit 3 (the "Facility"). The exhibits listed below are incorporated by reference and made part of this Agreement. Exhibit I Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 5 Purchaser: Signature: Printed Name: Title: Date: Pricing Attachment System Description. DeliveryPoint and License Area 'Memorandum of License Credit Information General Terms and Conditions (Revised December 11, 2009) SolarCity Corporation Signature: Printed Name: Lyndon Rive Title: CEO Date: Solar Power Ptuahzse Aereemmt v. 20091211 (C.A/C&OR) I. Term: Eighteen (18) years, beginning on the Commercial Operation Date. 2. Additional Terms: tip to Zero (0) Additional Terms of Zero (0) years each. 3. Environmental Incentives and Environment Attributes Accrue to Seiler. 4. Contract Price: IT-411 CONTRACT PRICE PER K-A'H 1 50.0500 2 $0.0500 3 $0.0500 4 $0.0500 5 SO-0500 6 $0.0500 7 50.0500 8 50.0500 9 50.0500 10 50.0500 11 50.0500 12 $0.0500 13 50.0500 14 $0.0500 15 50.0500 16 50.0500 17 50.0500 18 50.0500 be added to each invoice. Includes ACH invoicing. If manual invoicing is required, a S35 handling charge `ill 5. Condition Satisfaction Date: December 31, 2010 6. Anticipated Commercial Operation Date: February 28, 2011 7. Outside Commercial Operation Date: May 31, 2011 S. Purchase Option YTAR PURCHASE PRICE- 6 S84.4:8 10 $84,744 18 Fair Market Value "Buyer shall have the right to purchase the System at the greater of the price set forth above and the then current fair market value. 9. Termination Value: Y'L.+LR TERMNATION VALUE 1 5346,128 2 5304,165 3 $249,592 4 $206,? ; 7 5 5169,611 Power Purchase Agreement Commercial vjorlang version (CACO/OR) 99 S120-18-1 8 $113,690 9 $106,992 10 $100,287 17 $93,574 12 $86,854 13 $80,126 14 $7;..390 15 $66,644 16 $59.889 17 $=3,123 18 53 4.560 10. Rebate Variance. All prices in this Agreement are calculated based on a rebate of mash rebate at $113,401.00/System If the actual rebate is lower than calculated, prices mill be adjusted pro-rata w reflect the actual rebate received. Power Ptucnase.Agr-..-mem Commercial WorLang Version (CA/CC/OR) 100 System Description, Delivery Point and License Area 1. System Location: 4051 Candlewood St Lakewood, CA 90712 2. System Size (DC k-Vf): 39.560 3. Expected First Year Energy Production: 541"" 4. Expected Module(s): 5. QUANTPTY MARE MODEL RATED POPPER EFnC1ENCY 1 SarCon Techno]og' PVS .0 (240 0. 00 kVJ 95.0% 6. Expected Structure: Roof Mount 7. Includes: Turn key installation: rebate processing, site audit, engineering and design, plan check, permitting, inspections, interconnection. SolarCity Limited Wamanty 8. Excludes: Upgrades to electrical, roofing, structural enhancements, and trenching. 9. Delivery Point and License Area: SolarCity shall attach a schematic that contains the: QL'Alr'TTT1' lyL ja I MODEL I STC WATTS FTC WATTS 194 KYOCERA SOLAR 1;DD215GX-LY-U 215.0'W 194.4R' Expected )inverter(s): (i) array; (ii) Delivery Point; and (iii) access points needed to install and service System (bldg access, electrical room, stairs etc.) Power Pwchase Agreement Commercial ti'or)dne Version (C4/C0.!0R) 101 Memommdum of License RECORD»G REQUESTED BY 4-N-D RHEN RECORDED RETURN TO: SolarCity Corporation 393 Vintage Park Drive, Suite 140 Foster City, CA 94404 Attention: Lease2.icense 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 energy- generated by a photovoltaic electric generating system (the "System") to Licensor. The Agreement is for a term of Eighteen (18) years, beginning on the Effective 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 emended terms of Zero (0) , ears each. Pursuant to the Agreement, Licensor has granted Licensee an irrevocable, non-exclusive license ("License") over the Premises for the purposes and on the terms set forth in the Agreement. Licensor and Licensee agree 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 modify, 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. ~ THIS AgMORAN-DL~4 OF LICENSE is made and entered into this ! day of ~ =01t. the "Effective Date") by and between Levine Management Group, Inc., -hose address is 822 S Robertson Blvd Los .Angeles, CA 90035 ("Licensor"), and SO-ARCM CORPORATION, whose address is 393 Vintage Park Drive, Suite 140, Foster City, CA 94404 ("Licensee"). LICENSOR Levine Management Group, Inc, By. - Name: Title: Name: Lyndon Rive Title: CEO IREM4D0ER OF PAGE LkTENTIONALLY LEFT BL:4NX A7OT.4RY.4CKhOTi EDGEA ENTP_4GEFOLLOWS] this line reserved for recorder's use) IvIUMORAh"DL`TM OF LICENSE LICENSEE SOLARCITY CORPORATION 12 - Power Purchase Agreement Commercial R'orlan¢ Version (C.AL/CO/OR) 102 STATE OF CALIF OK\-L'k) :~OLw Y OF LOS ANGELES On , before me, , Notary Public, personally appeared who proved tome on the basis of satisfactory evidence to be the person(s) whose name(s) is'are subscribed to the within instrument and acimowledzed to me that he%shelthey executed the same in his'her/their authorized capacity(ies). and that by his-'hertheir signature(s) on the inctmiment the person(s), or the entity upon behalf of which the person(s) acted: executed the instrument. I certify under PD~ALTY OF PERJURY under the laws of the State of Califorruathat the foregoing paragraph is true and correct. RTTNESS my hand and omcial seal. Signature of Notary Public STATE OF CALIFORNL-k COL~?NTTY OF SAIN MATEO ) ss. On , before me, ,'rotary Public, personally appeared Who proved to me on the basis of satisfactory evidence to be the person(s) wbose name(s) is/are subscribed to the within instrument and aclmowledged to me that he/she/tbev executed the same in his'hevtbeir authorized capacity(ies), and that by his./her/tbcL* signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I cerdfV under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of''otarv Public Pnw . Piirchpce Aer=MtM Comme vial aorliv N t-mon (CA)CO/OR) 103 F Ylibit 4 Leeal Description of Premises Thai certain real property located in the Counn' of LOS ANGELES, State of California described as follows: Ei unit 4 Credit Information Promptly following the execution of this Agreement Purchaser shall supply SolarCity with the following credit information: RII~LATION APPLI Tax IIT: !lame: t Gaup: Inc. Previou E - R'ebsite: CorporRaberson B)vd 82 1 City, Steles, CA 90035 Phone Number. Fax ?cumber Entity Type 5-Corp C-Corp Pattnersh' tP Sole Prop I LLC LLP other Check One: Property Address for Solar Installation: State: Lip Cade: Owner occupied c `!"ES NO Insurance Agent same Agents Phone: ?dame of Landlord if Not Owner Occupied Property Type Information Requested Corporate Records n Copy of Articles of Incorporation, PaTmership Agreement, Fictitious 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 and any information attached is furnished to Sola,,City and its amiiates ("Lender") in connection with the Appiica on of credit for which you may apply or credit you may guarantee. You aclztowledge and understand that the L--nder is rel}ring on this information in deciding to pant or continue credit or to =zept a guarantee of credit You represent, wa2nry and certify that the information provided herein is true; correct and complete. The Lender is authorized w make all inquires deemed necessary to verify the accuracy of the information contained herein and to determine your creditworthiness. You withorize Env person or consumer-reporting agency to give the Lender am, information it may have about you You authorize the Lsndw to answer tp --stions about is credit expwlencc A-th you Subject to an), non-disclosure agreement between you and Lender, this form and any other information given to the Lender shall be the Lender's property. If your application for business credit is denied you have the right tD a written statement of the specific reason for the denial. To obtain the statement, please contact Solar-ry at (650) 639-1028, Foster City, CA 44404. You must contact us within 60 days from date you are notified of our decision. We will send you a written statement of reasons for the denial within 30 days of receiving yotu request. NOTICE: The Federal Equal Opportututy Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national ongin. sex, marital status hr age (pro-6de6 the applicant has the capacity to enter into a binding contract); because all or part of the applicarr's income derives from am+ public assistance programs; or because the applicant has in good fail exercised any right tinder the Consumer Credit Protection ACS. The federal agency that administers compliance with this law concerning this creditor is the 05ce of the Comptroller of the Currency, Customer Assistance Unit, 13^v1 McKinney Street, Suite 3450, Houston, Texas 77010-9050. Sola-Ciry is an equal opportunity lender. Signature Title Date Pnwer Purchase Azreement Commercial Worl:inp Version (CA-'CO/OR) 105 Exhibit 5 Solar Power Purchase Agreement General Terms and Conditions Revised December 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 "bereunder" refer to this Agreement as a whole and not to any parTimlar 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 `mithout 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 sources if the Purchasers electric requirements at the Facility exceed the output of the System. 3. Term and Termination. IL 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 terminates as provided 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 prodding electric energy 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 interconne lion or similar agreement with the Utility. This Agreement is eff5mve as of the Effective Date and Purchaser's failure to enable Seller to provide the electric enerev by preventing it from installine the System or othemise not performine 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 Party written notice of its desire to extend this Aartemerlt 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 giz en, 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 positively or negatively to that request in writing within thirty (30) days after receipt of the request. Failure to respond MThin 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. Billing and)?avment. a. ]Monthly Char-es. Purchaser shall pay Seller monthly for the electric energy generated by the System and delivered to the Delivery Point at the S,/kW1t rate shown in Exhibit 1 (the "Contract Price"). The monthly payment for such energy will be equal to the applicable VkWh rate multiplied by the number of kWh of energy generated during the applicable month, as measured by the System meter. b. 1Vlonthly Invoices. Seller shall invoice Purchaser monthly, either manually or through ACH. 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 Purcftase Agreement Commercial working Version (C.4/C0/OR) 106 Purchaser for reasons other than Force Majeure. For purposes of this Section 4(c) . "Tames" means any federal, state other taxes, regulatory fees. surcharges or other similar charges, but shall not include any income taxes or similar taxes imposed on Seller's revenues due to the sale of mere. under this Agreement, which shall be Seller's responsibility. CL Pavrneut Terms. All amounts due under this Agreement shall be due and payable net twenty (20) days from receipt of invoice. Any undisputed portion of the invoice amount not paid within 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 maximum rate permitted by law). 5. Environmental Attributes and Environmental Incentives. Unless otherwise specified on Erbibit SeDeT 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 transferring 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 qualify 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 Purchasers 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. "Environmental Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the System, the production of electrical enerev 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 oaide, de and other greenhouse gases hydrofluorocarbons, pert'luorocarbons, sulfur bexafluori (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contn'bute 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 Rights are the right of "a party to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party, and include Green Tag Reporting Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, r t~ulation 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-et 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 Oblieations. a. Conditions to Seller's Obligations. I PowerPirc`ase Agreevin*n Csasarrcia Work= Version (CAICOlOR) 107 Seller's obligations under this Agreement are conditioned on the completion of the following conditions to Seller's i. Completion of a physical inspection of the Facility and the properry upon which the Facility is located (the "Premises") including, if applicable, geotechnical work, and real estate due diligence to confirm the suitability of the Facil , and the Premises for the System; ii. Approval of (A) this Agreement and (B) the Construction Agreement (if any) for the System by Seller's Financing Parties. "Construction Agreement" as used in this subsection means an agreement between SolarCity and a subcontractor to install the System; iii. Confirmation that Seller will obtain all applicable Environmental Incentives and Tax Credits iv. Receipt of all necessary zoning, land use and building permits; v. Execution of all necessary agreements with the Utility for interconnection of the System to the Utility's electric disabution system; and Ni. Prior to Seller commencing construction and installation of the System, Purchaser shall give Seller proof of insurance for sII insurance required to be maintained by Purchaser under this Agreement. b. Conditions to Purchaser's Obligations. i. Purchaser's obligations under this Agreement are conditioned on the occurrence of the Commercial Operation Date for the System on or before the Outside Commercial Operation Date (See xhibit I . 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 will attempt in good faith to negotiate new dates for the satisfaction of the failed conditions. If the parties are unable to negotiate new dates then the Partrn that has not failed to meet an obligation may terminate this Agreement upon ten (10) days written notice to the other Par.\ -i*hDm liability for cos s c, damages or triggering a default under this Agreement. Seller's Rights and Obligations. IL Permits and Awromis. 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, pettniu and approvals. b. Standard System 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, willful 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 repairs. Non Standard System Repair and Maintenance. If Seller incurs 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 Power Purchase Agreement Commercial workine version (C.k CO/OR) 108