In January, the Solar Endowment began creating a web-based Solar Project Financial Simulator for tax-exempt entities to model and compare financial performance of solar photovoltaic (PV) investments. Using institution-specific values, users can view simulations for four different PV investment types including direct purchase, power purchase agreement, operating lease, and debt financing. Each of the four investment options will be accompanied by an introductory page outlining the financial structure, key terms, and links to external resources for additional assistance. Simulation results will be represented in tables and graphs outlining key financial values and timelines including return on investment, internal rate of return, net present value, cash flow nature, and levelized cost of energy where applicable.
The goal of the Solar Project Financial Simulator is to facilitate greater understanding of the financial structuring, transaction costs, and return profile of PV investments for tax-exempt entities. Developing the capacity of university and foundation leaders to analyze, compare, and define investment strategies that meet their needs will help advance PV investments on and off campus. The MREA has selected Sustainable Capital Advisors to develop the financial tool and Future Web Studio to develop the web-based platform with anticipated completion late March 2017.
The Solar Endowment team has also been energized by the recent hire of new MREA Solar Finance Manager Eric Rehm. Working out of the St. Paul office, Eric has administered numerous clean energy financing programs for residential, commercial businesses, nonprofits, and municipal sectors for the MN Dept. of Commerce and in the private sector while at Eutectics. Eric’s background will help further develop and apply financial modeling tools to project returns from PV investments and provide resources and recommendations for entities to procure outside services to advance solar projects.
“The process of installing a solar PV system is often complicated, particularly for a non-tax paying entity with a complex energy footprint. With his breadth and depth of experience, Eric will lead our team to help organizations procure highest value, lowest cost solar and make good on the unprecedented investment opportunity in local, clean energy” says Nick Hylla, MREA Executive Director.
This month, Solar Project Financial Simulator partners Sustainable Capital Advisors will be presenting the tool at the 2017 Presidential Climate Leadership Summit during the Monday, February 13, Networking Lunch and on Wednesday, February 15, during the “Expanding the Pie: Leveraging Innovating Capital Sources to Increase On-Campus Sustainability Investments” session with Agnes Scott College and Sustainable Endowments Institute. The Solar Endowment is also supporting campuses to attend the Smart and Sustainable Campuses Conference in College Park, MD, March 26-28, 2017, where they will be highlighting the Solar Project Financial Simulator and Applied Campus PV Course during their “Engaging Students and Campus Leadership to Advance Solar Energy Investments” session. The work of this project will also be presented at both MREA Energy Fairs this year in Custer, WI, and St. Paul, MN, in June and September 2017 as well as at the October 15-18 Association for the Advancement of Sustainability in Higher Education Conference in San Antonio, TX.
To date, products developed as a result of primary and secondary research into university investment in renewable energy include an interactive map showing 200 higher education solar projects, a blog post describing the Clean Power Plan impacts on the higher education community, and the four Solar University Network: Innovation in Solar Energy Finance & Development case studies focused on higher education investment in renewable energy projects. More information on the Solar Endowment at www.solarendowment.org.