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Financing Shams Dubai
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KEY TAKE AWAYS
! Distributed Solar is a big business, not necessarily a
profitable business
! Shams Dubai is an opportunity and challenge
! Equipment leasing is the best financing model for Dubai
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Why distributed Generation?
3 Source: shirnkthatfootprint.com – average electricity
prices
US$/kWh (2011)
Dubai = $0.12/kWh
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Solar costs are stabilizing
4
0.0
1.0
2.0
3.0
Multi-crystalline cell price index
2011 2015 2013
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USA rooftop solar raised $7B
5 Note: Represents total funds raised in US$m as of 2014 Source:
BNEF – Sustainable Energy in America 2015 Factbook
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Top companies are all losing money
Solar City 4.68B -0.30
SunRun 1.12B -0.80
Vivant 1.40B -0.27
Note: Values as of close of markets on 2015-09-14
Market Cap EPS
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Shams Dubai Opportunity
7
20
40
60
80
100%
Industrial Commerical Residential Government
2 GW estimated market
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Shams Dubai Financing Challenge
! Low rate of return ! 8-10% IRR
! Little security on payment ! Customer default risk
! Redevelopment risk
! No history of execution ! Security with experience
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Sources of financing
1. Project Finance Expensive
2. Corporate Loan Restrictive on business
3. 3rd Party Investment Scale and flexibility
Method Outcome
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Structure of financing
Payment $/kWh $/kWh or Fixed Fixed
Ownership Financer Financer User
Financier Risk High High Low
PPA Lease Loan
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Leasing vs. Buying in practice
11
No up-front cost High up-front cost
No operational risk Ongoing maintenance requirements
Pay for only what your system generates
Pay regardless of system performance
Leasing a System Buying a System
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Conclusion
! Distributed Solar is a big business, not necessarily a
profitable business
! Shams Dubai is an opportunity and a challenge
! Equipment leasing is the best financing model for Dubai
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Thank you
For further information, please contact:
[email protected]: +
971 4 385 7997Fax: + 971 4 385 7996
