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AgoraSolRooftop solar developer for Brazil
Alexandre Martins, Peter Gajdos, Ashwin Madgavkar, Karl Skare, Lauren LaustsenContact: [email protected]
We will market, design, install and finance customized rooftop solar photovoltaic systems to residential and
commercial customers in Brazil
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AgoraSol: uniquely positioned to capture Brazilian rooftop solar marketAgoraSol: uniquely positioned to capture Brazilian rooftop solar market
Brazil presents a massive unrealized opportunity for solar energy Solar market potential $3B+ per year due to dense population, lots of sun, and high energy prices Brazilian government recently implemented virtual net metering, making rooftop solar economical Minimum competition to date: companies unable to obtain low-cost debt financing for equipment;
existing developers mostly focused on off-grid or utility-scale solar projects
AgoraSol is generating the market traction to gain first mover advantage AgoraSol employs a capital efficient SolarCity-like business model adjusted to Brazilian realities Co-founders have extensive experience and contacts in solar and Brazil Surveyed over 100 individuals, generating first potential customers and confirming value proposition Developing pilot project to confirm business model and obtain debt financing agreement
Seeking $100k seed funding to establish company and execute pilot projects $20K from DRF will establish Brazilian entity and consumer-facing website for lead generation Additional $80K will advance pilot project to make AgoraSol the first mover in a very attractive
market. Project will consist of 3-4 commercial and residential customers, totaling ~20 KW. In negotiations to partner with Brazilian solar developers and large companies to execute pilot
Upon success of pilot, will raise $1M Series A to hire operating team, establish partnerships, and begin sourcing customers
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AgoraSol team has relevant management, technical, and international experienceAgoraSol team has relevant management, technical, and international experience
School Experience
Alexandre Martins
Stanford Sloan
• BEng Process Control / Automation Engr.• Global sales and general management• 10+ years large EPC experience in Brazil
PeterGajdos
Wharton MBA
• B.A. in Business Administration• 5 years cleantech VC/PE (Silver Lake, VGF)• Energy investment banking at JP Morgan
Ashwin Madgavkar
Stanford MBA, E-IPER
• B.S. Electrical Engr., UT Austin• Renewable energy experience in Brazil• 4 years consulting with BCG
Karl Skare
StanfordMBA, E-IPER
• B.A. Finance/Env. Science, Wash U• Energy efficiency project manager• Rural solar in Uganda with BBOXX
Lauren Laustsen
Stanford MBA E-IPER
• B.S. Chemical Engr., Rice University• Solar experience in US and Cambodia• 3 years consulting with BCG
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Why Brazil?Why Brazil?
Large, urbanized population with growing GDP:
– 199 million population– 87% urbanization rate– GDP of $2.5 Trillion– 3.8% average real growth in the past 10 years
Electricity demand growth above GPD:– Total grid consumption: 433,034 GWh– 111,000 GWh residential (28% > 300
kWh/month)– Expected growth (2012-2020): 5% yoy
Negligible solar industry: – 32 MW solar installed in Brazil by the end of
2012 vs. 8 GW in China and 7 GW in the US
Low wholesale generation costs:– Mostly hydro - almost 90% generation
High retail electricity costs:– High transmission and distribution costs– High taxation
Need to diversify renewable sources– Hydro depends on raining season– Reduce T + D costs (generate closer to
consumers)
Regulatory changes– Virtual Net Metering model allowed– Distributed generation (< 1 MW) with simplified
permitting and interconnection
Government incentives (BNDES) available– Clima Fund debt financing with 4-5% interest
rates
Solar Lease or PPA not known in Brazil Team experience from US / EU models +
deep knowledge of local market (EPC)
Country Background Key Opportunities
Source: 2012 Electrical Energy Annual StatisticsMinistry of Mines and EnergyBrazilian Government
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Brazil has excellent, stable solar irradiance conditionsBrazil has excellent, stable solar irradiance conditions
No weak solar region in Brazil – all regions are better than Germany, the largest solar market Stable year-round production with no true winter season – production typically between 80% and
120% of yearly average
Source: Atlas Brasileiro de Energia Solar – 2006, Science Direct
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$3B+ immediate opportunity for solar development in Brazil with no subsidies$3B+ immediate opportunity for solar development in Brazil with no subsidies
Grid Parity Locations
(13 / 27 States in Brazil)
0.10 0.15 0.20 0.25 0.301100
1150
1200
1250
1300
1350
1400
1450
1500
Inso
latio
n (
Wh
/ W
p /
ye
ar)
Local Utility price (USD / kWh)
Source: 2012 Electrical Energy Annual StatisticsMinistry of Mines and EnergyBrazilian Government
Minas Gerais
Rio de Janeiro
Espirito Santo
Mato Grosso
Mato Grosso do Sul
Bahia
Paraiba
Piaui
Maranhao
Tocantins
Para
Rondonia
Acre
xx
$42.6 BillionTotal Market
$3.2 Billion Serviceable
Market
$16 BillionTotal Addressable
Market
Distributed Solar Generation
( $3.2 Billion / year )
- $ 0.23 / kWh- Individual consumption > 300 kWh- Insolation > 1300 Wh / Wp / year
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AgoraSol’s customer experience will make going solar convenient and affordableAgoraSol’s customer experience will make going solar convenient and affordable
Homeowner Carlos faces high, rising electricity prices
He learns AgoraSol can save him money and fix future rates
AgoraSol evaluates home and designs a solar system
Carlos signs a power purchase agreement to buy solar energy
AgoraSol installs and maintains system, Carlos pays monthly
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Survey confirmed value proposition and generated customer leads for projectSurvey confirmed value proposition and generated customer leads for project
Note: 5 Phone interviews and 110 responses to Google Docs online survey
83%
3% 14%
Interested if Solar price same as utility price?
YesNoNot Sure
Appeal of value proposition
62%
7%
31%
Would you sign a 20 years contract with us?
Yes
No
Not Sure
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Sales and marketing will be done through multiple channelsSales and marketing will be done through multiple channels
Online– Ads through search and social media– AgoraSol website for customers to learn and request a
quote
In-home– Door-to-door salespeople– Direct mail
Potential partnerships– Market to residents of creditworthy communities– Merchandising at home improvement and furniture stores– Send ad to utility customers included with bill
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Financing is key component of business modelFinancing is key component of business model
Corporate equity
AgoraSol
InstallSolar
Projects
Project equity
Project debt
Capital recycling
SellSolar
Projects
Exit
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Financing StrategyFinancing Strategy
Corporate Equity
Seed Funding: $100K – move to Brazil, establish Brazil entity, consumer facing website, develop pilot project Dorm Room Fund Angels: David Arfin – ex-VP Bus Dev at
SolarCity, thought leader on solar Friends & family
Series A: $1M – fully scale the company, automate lead generation, project development and financing Robert Wilson Chris Reed Valor Capital Other local Brazilian VC funds and Bay
Area funds active in Brazil (Sequoia, Peter Thiel, etc.)
Project Equity
Initially fund through own equity and module manufacturers
Upon establishing a large enough portfolio of customers, refinance with project equity:
– Solar module manufacturers as project co-investors
– Infrastructure funds– Brazilian National Development Bank
(BNDES)
Project Debt BNDES
– 4-5% debt through BNDES Clima Fund– Will need to fulfill local content
requirements (60%) and minimum project level size ($3m)
OPIC– US gov’t entity supporting developing
markets through low interest loans
Local Brazilian banks– For any project parts not covered by
BNDES / OPIC debt
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Operations StrategyOperations Strategy
Sourcing Materials
Initiatives Commenced: Partner with Tier 2 panel manufacturer to
get favorable credit terms and equity investment
Source a system with specifications that cannot be met by Brazilian panel manufacturer Tecnometal
Get ex-tariffario (import tariff exclusion) certification to satisfy BNDES’s local content requirements
Installation and Maintenance
Significant part of customer experience and value proposition – aim to create standardized, repeatable process
Working with Demostenes Barbosa da Silva from BASE Energia Sustentavel to understand process for interconnection in Brazil. BASE is currently installing grid-connected rooftop systems in Rio and Sao Paulo
Hire a team of Brazilian solar installers License software to monitor the system
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Potential PartnershipsPotential Partnerships
Development Partnerships
Working on 3 separate pilot projects– Social project electrifying favelas in Rio with solar– Project in Sao Paulo to supply 50 houses with solar– Project to electrify 1000 houses in Bahia that were
built through Minha Casa Minha Vida program, Brazil’s social housing project for lower income families
We are looking to co-develop a pipeline of creditworthy residential customers
Energy company of EBX Group, conglomerate controlled by Eike Batista, Brazilian billionaire
Looking to move into residential solar; currently distracted by funding issues and sale rumors
Discussions to commence shortly
Advisory and Angel
David Arfin: Former VP of Bus Dev at SolarCity, Elon
Musk owned leader in residential solar Created SolarPPA model and sold it to
SolarCity. One of solar thought leaders worldwide
Currently working on rooftop solar start-ups in Mexico and India
Looking to assist our team with knowledge, market credibility and potentially also seed financing to drive the Brazilian market
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Seeking $100k to fund pilot project and achieve first mover advantageSeeking $100k to fund pilot project and achieve first mover advantage
Expenses Goals
Prove business model
Set up supply chain
Establish partnerships and build network
1
2
Expense Cost (US$) AssumptionsFlights/ transportation 5000 3 people airfare
Food/ lodging/ incidentals 20000 1 apartment + hotels
Solar equipment 75000Panels 20000 $1/WInverter 5000 $0.25/WBOS 20000 $1/WLabor 30000 $1.5/W for 20 KW
Total 100000
3
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Long Term PlanLong Term Plan
Pilot project
Month
Train installers
$100K $1MFundraising (preliminary
)
Begin sales cycle
0 24
6 12
18
Negotiate partnerships
$20M+
Obtain project financing
Begin sourcing components and installing systems
Company Timeline
Hire operating team
Establish Brazil entity
Create website for
lead gen
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Offering homeowners a green, convenient, and affordable energy solution…
Offering homeowners a green, convenient, and affordable energy solution…
AgoraSolAgoraSol
…and sparking a solar revolution in Brazil
…and sparking a solar revolution in Brazil
