1. Energize NY MARK THIELKING , ENERGIZE NY, EXECUTIVE DIREC TOR ROBERT FISCHMAN, ENERGIZE NY, DIREC TOR COMMERCIAL PROGRAMS Energize NY Finance Qualification Training July 22, 2014 energizeny.org 1

2. EIC Energy Improvement Corporation Not-for-profit, Local Development Corporation Mission to increase Clean Energy adoption Utilizes a shared service model Funded by NYSERDA, DOE, revenue from financings Serve property owners with four programs: Energize NY Commercial Energize NY Finance Energize NY Residential Westchester Solar Initiative energizeny.org 2 3. Energize NY (ENY) Finance is NY States PACE program Energize NY is ready to finance your project Repayments collected by municipality via property tax bill charge Senior lien status PACE Finance Property Assessed Clean Energy energizeny.org 3 4. Investments in energy efficiency and clean energy are on the rise. Considering that buildings consume 49% of all energy used in the US and account for 75% of electricity usage, energy efficiency retrofits show a huge chance for positive change. PACE or Property Assessed Clean Energy is an innovative mechanism used to fund energy efficiency and clean energy improvements. To date, 31 states and the District of Columbia have PACE enabling legislation. PACE Universe is expanding and new programs are being started. Check out a list of all PACE programs. IsPACEavailableinyour state? PACEprogramsand legislation at a glance XX PACElegislation enacted XX no PACElegislation haslegislation or programs doesnot have legislation or programs legislation or programsin development MA RI CT NJ DE MD DC share share share share Across the USA, 31 States and the District of Columbia have enacted PACE Legislation PACE is Nationwide energizeny.org 4 5. Energize NY A Brief Video energizeny.org 5 6. Energize NY Finance New way to pay for clean energy projects in commercially owned buildings. Not-for-profit Office Retail Agricultural Institutional Healthcare Hospitality Industrial Multifamily Warehouse Private colleges energizeny.org 6 7. Financeable Measures Solar PV, solar thermal, geothermal, wind, etc. Lighting, insulation, air sealing, HVAC, chillers, controls, windows, pumps, etc. energizeny.org 7 8. Financing Criteria Estimated annual energy savings from improvements must be greater than annual finance payments Improvements have savings-to-investment ratio > 1 Propertys existing loan-to-value is no greater than 80% Financing up to 10% of value of benefitted property No bankruptcy within last 7 years At least 3 year history of timely property tax payments Existing lender consent required Up to 20 year financing terms energizeny.org 8 9. CAPITAL FLOW MunicipalTax Receiver Special Tax Charge payments Bond payments __________ Energize NY Finance offered to property owner BankTrustee For Energy Improvement Corp Energy Improvement Corporation $ Building within municipal boundaries Pledged Municipal Payments $ Allows for lower cost of capital $ $ $ 10. Bedford Croton-On-Hudson Greenburgh Lewisboro New Rochelle North Salem Ossining Peekskill Pound Ridge Somers White Plains Yorktown Orange County energizeny.org EIC Membership Current Members 10 11. EIC Membership Prospective Members energizeny.org 11 Albany (County) Broome (County) Buffalo (City) Dutchess (County) Erie (County) Orange County Cities - Newburgh-Middletown-Port Jervis Onondaga (County) Poughkeepsie (City) Putnam (County) Rockland (County) Rensselaer (County) Syracuse (City) Suffolk (County) Sullivan (County) Troy (City) Ulster (County) Westchester (remaining munis) NYPA Five Cities Program 12. Another Product from Energize NY Finance: The Westchester Project Federal Qualified Energy Conservation Bonds (QECBs) Westchester government allocated QECB bonding authority to ENY Affordable multifamily housing & not-for- profits Federally subsidized interest rates (3-4%) 38 QECB eligible projects in the pipeline $8.6 million 14 affordable housing, 24 not-for-profit energizeny.org 12 13. EIC Members Launch & event planning Website communications for municipality Training services for local contractors/solar developers Outreach & marketing support for municipality Property Owners Provide guidance Application support Finance analysis tools Contractor qualification Property owner summits energizeny.org Energize NY Member & Property Owners Services 13 14. ENY Commercial Overview MISSION - Drive energy improvements in the commercial and non-profit sectors STRATEGY - Help property owners leverage: skilled developers, energy service providers, NYSERDA and Utility program resources energizeny.org 14 15. Energize NY Commercial Project Pipeline 60 projects in process $31.4M in Energize NY Financing 47 - Efficiency 13 - Renewable ============================ 50% - Commercial & Industrial 45% - Multifamily 5% - Retail energizeny.org 15 16. Energize NY Qualification Training energizeny.org 10 minute break One hour training session to follow Focused on commercial project finance Attendees will be eligible for qualification to offer ENY Finance 10-15 minute Q&A session at the end Energize NY staff will be available to answer questions after the training session WE ENCOURAGE YOU TO STAY FOR BOBS PRESENTATION 16 17. ENERGIZE NY (PACE) FINANCE QUALIFICATION WORKSHOP energizeny.org 17 18. Energize NY Post-Training Qualification energizeny.org Complete the attendance confirmation form (today) Complete the online Energize NY Partner Profile (watch for follow-up email in the coming days with a link to the form) Schedule a follow up meeting (call) with Bob Fischman or Elyssa Rothe at 914-302-7300 Follow up meeting (call) to review the Energize NY Partner Profile and confirm level of participation 18 19. Would another financing option be useful to help you sell commercial solar deals? Energize NY Survey Question (17 responses) energizeny.org 19 20. Energize NY Commercial Systems (Westchester) energizeny.org Projects kW Installed 92 4,330 In Queue 44 4,237 20 21. Energize NY MID-HUDSON REGION POTENTIAL* energizeny.org 2016 2020 2025 2035 2050 New Generation Capacity All Renewables(MW) 500 1,000 2,000 5,000 10,000 *Mid-Hudson Regional Sustainability Plan, 2013. The 2016 targets are attainable based on existing federal tax credits and other fiscal drivers that would spur large scale private sector investment. 21 22. ENERGIZE NY FINANCE DETAILS energizeny.org 22 23. Energize NY Finance Product Benefits Finance up to 100% of project cost Long term amortization of costs up to 20 years Deeper upgrades Renewables Positive cash flow 3.75% - 6.75% interest rate Automatically transfers to next property owner Community aligned goals Jobs creation Keeping dollars local Better buildings Reduced emissions energizeny.org 23 24. Estimated annual energy savings from improvements must be greater than annual finance payments Improvements have savings-to-investment ratio > 1 Propertys existing loan-to-value is no greater than 80% Financing up to 10% of value of benefitted property No bankruptcy within last 7 years At least 3 year history of timely property tax payments Existing lender consent required Recent market value appraisal energizeny.org Energize NY Finance Underwriting Criteria 24 25. Do you have potential opportunities with customers who are not able (e.g. non-profits) to directly take advantage of tax credits (e.g. ITC, MACRS)? Energize NY Survey Question (17 responses) energizeny.org 25 26. Energize NY Finance allows a 3rd party to own the system to fully capture all economics (Federal Tax incentives/depreciation) related to a Solar project energizeny.org 1. Solar installations available to all including not-for-profits 2. Allows for power purchase and lease agreements with no upfront costs Energize NY Finance 3rd Party Ownership 26 27. Energize NY Finance 3rd Party Ownership Energize NY Requires: - Contract confirming improvement remains operational - Generates required SIR and cash flows - Transferability to new owners energizeny.org 27 28. Energize NY Finance Technical Review Technical Review NYSERDA Requirements Commissioning M&V Plan PV Production Metering Electricity Cost Escalation System Production Degradation System Component Warranty energizeny.org 28 29. Energize NY Finance Financial Review Financial Review NYSERDA Incentives NY-Sun Solar PV Incentive Program 200 kW NY-Sun Solar PV Competitive Program > 200kW USDA REAP Incentive Tax Advantages Federal Business Energy Investment Tax Credit (ITC) Modified Accelerated Cost-Recovery System (MACRS) Energy Savings + Other Revenues Cash Flow Positive + SIR >1 = $$$ Approved!! energizeny.org 29 30. energizeny.org Energize NY Finance Easy Application 30 Submit online Pre-Application Submit Application with required documents Scope of Work Property Credit Documents (Market Value Appraisal, Mortgage Documents, Organizational Documents) Existing Lender Consent ENY receives Notification of Completion 31. Energize NY Working within the NYSERDA Process energizeny.org Help your customer submit an Energize NY PACE Finance Pre- Application on-line and learn how much financing the property is eligible to receive from Energize NY Conduct the renewable energy opportunity study Develop the Solar PV proposal costs, including any incentives and applicable tax benefits Work with Energize NY to model the cash flows & SIR Present your proposal with PACE financing to your customer showing positive cash flow Get the project approval from NYSERDA 31 32. Energize NY Working within the NYSERDA Process energizeny.org The customer completes the finance application documents and submits to Energize NY along with the NYSERDA approval Energize NY issues the PACE finance approval Go forth and install Commission the system and get a utility turn-on notice Energize NY pays the customer Energize NY notifies the municipality of the tax charge The customer pays the PACE financing on the property tax bill 32 33. Finance Calculator 33 34. Energize NY Why a Finance Calculator? energizeny.org Does project meet basic EIC financial qualifications? Calculate SIR Calculate Cash Flows Include NYSERDA and other incentives Estimate Tax Benefits (Energize NY Financeable) ITC MACRS 34 35. Energize NY Finance Calculator - INPUTS energizeny.org < Project Information Energize NY PACE Finance SIR & Cash Flow Calculator for Solar PROJECT INFORMATION Date of Proposal 7/22/14 SITE HOST NAME Smart Guys, Inc. STREET ADDRESS 1 Main Street CITY White Plains STATE NY ZIP CODE 10601 SYSTEM INFORMATION System Size in Watts (DC) 100,000 Roof Mount or Ground Mount? Roof Capacity Factor 13.4% Estimated Year One Production (kWh) 117,384 System Degradation 0.5% SYSTEM COSTS & INCENTIVES Turnkey Build Cost per Watt $3.25 Base Cost of System $325,000 Other Costs $0.00 Closing Costs $9,800 NYSERDA Upfront Incentive $80,000 Other Incentives $0 Upfront Cost $245,000 Finance ITC? N ITC Value $97,500 Net Financed Cost $147,500 Current Cost per Kilowatt Hour $0.20 Annual Escalation of Utility Price 2.99% < System Information < Project Costs < Incentives < Finance ITC? < Electricity Costs 35 36. Energize NY Finance Calculator INCENTIVES & TAX energizeny.org < Project Information < NYSERDA Incentives < Tax Benefits < Finance Terms 36 37. Energize NY Finance Calculator Cash Flow & SIR energizeny.org Electric Savings, Incentives & Tax Cash Flows Finance Payments NPV of Cash Flow SIR 37 38. Case Studies energizeny.org 38 39. energizeny.org Energize NY Case Study 1 Small Scale Solar PV Financed with Energize NY 5-Year Term Cash Flow Positive SIR = 1.968 *ITC Financed System Owner: Orange County Dairy Installation Type: Ground Mount Size: 53 kW Solar Offset: 105% 1st Year Savings: $ 16,340 Installation: October 2014 System Cost: $164,859 Incentives NYSERDA: $ 51,977 Federal ITC: $ 49,458* USDA REAP: $ 41,215 Total $142,650 Net Cost Financed: $ 71,677 39 CASH%FLOW%&%SIR%OVER%LIFE%OF%FINANCING% %NPV%OF%CASH%INFLOW! $141,045% %TOTAL%ENERGIZE%NY%FINANCING! $71,677% %SAVINGS=TO=INVESTMENT%RATIO! 1.968% ! 40. energizeny.org Energize NY Case Study 2 Medium Scale Solar PV Financed with Energize NY 15-Year Term Cash Flow Positive SIR = 2.410 NY Solar Summit 2014 Case Studies - Strategic Solar Growth System Owner: GAL Manufacturing Install Type: Roofmount Size: 237 kW Solar offset: 20% Installation: October 2012 Incentives NYSERDA: $196,292 Federal: ~$375,000 NYC PTA: ~$250,000 Total ~$ 821,292.60 1st year Electric Savings: $42,600 Financing Method: Cash Deal Challenges/Solutions: Cost of doing business and installing in NYC still remains high. Great efforts at CUNY are underway to tackle and reduce these challenges. System Owner: GAL Manufacturing Installation Type: Roof Mount Size: 237 kW Solar Offset: 20% 1st Year Savings: $ 42,600 Installation: October 2012 System Cost: $1,249,998 Incentives NYSERDA: $ 196,292 Federal: $ 375,000 NYC PTA: $ 250,000 Total $ 821,292 Net Cost Financed: $ 453,707 40 41. energizeny.org Energize NY Case Study 3 MW Scale Solar PV Financed with Energize NY 15 Year Term Cash Flow Positive SIR = 2.171 *ITC Financed System Owner: Manhattan Beer Installation Type: Roof Mount Size: 1.06 MW Solar Offset: 92.8% 1st Year Savings: $200,328 Installation: October 2012 System Cost: $3,442,725 Incentives NYSERDA: $1,091,000 Federal ITC: $1,032,818* NYC PTA: $ 250,000 Total $2,373,818 Net Cost Financed: $2,185,794 NY Solar Summit 2014 Case Studies - Strategic Solar Growth System Owner: Manhattan Beer, Bronx, New York Install Type: Roof Mount Size: 1.06MW Solar offset: 92.8% Current Electrical rate: .161 Cost per Watt: $3.25 Gross Cost: $3,442,725 Incentives NYSERDA: $1,091,000 Federal: $1,032,818 NYC PTA: $250,000 Total $2,373,818 Net Cost: $1,068,907 Payback time: 3.9 years 1st year Electric Savings: $90,573 Financing Method: Purchase Challenges/Solutions: Con Edison determined it needed to be in the Pilot Program - OnForce built the additional $75,000 into the project. Needed a New roof - client paid for a new roof with cost savings from solar project. Client requested ARA compliant panels Used Suniva 300 watt panels 41 42. Energize NY Finance Product Summary Uses PACE loan structure Up to 100% financing Cash flow positive Financing transfers upon sale In partnership with NYSERDA programs All commercially-owned buildings eligible Any EIC member municipality Interest rate: 3.75% - 6.75% energizeny.org 42 43. Energize NY Post-Training Qualification energizeny.org Complete the attendance confirmation form (today) Complete the online Energize NY Partner Profile (watch for follow-up email in the coming days with a link to the form) Schedule a follow up meeting (call) with Bob Fischman or Elyssa Rothe at 914-302-7300 Follow up meeting (call) to review the Energize NY Partner Profile and confirm level of participation 43 44. Q&A energizeny.org 44 45. Energize NY commercial.energizeny.org mark@energizeny.org robertf@energizeny.org (914) 302-7300 energizeny.org 45