Tuesday, June 26, 2012

Maryland's 10 year lease net cash effect on a solar photovoltaic system - economic no brainer in Maryland in 2012

In Maryland, it is an economic no brainer to act now vs wait until tax incentives expire after September 2012.  The post 1603 (30% federal credit) world of solar project development will be largely based on jurisdictional SREC markets and rebates.  MD revised their $50,000 rebate cap to $6,000.00, and is counting on the fairly hot solar renewable energy credit (SREC) market now.  These projects can take up to 6 months to engineer, procure, construct, interconnect with the utilities and activate.  If you were considering solar power before now and have done some research into it this is not a tough decision.  Lease options get less attractive for you after the 1603 financier incentives go away and you will be stuck in long term Power Purchase Agreements without an opportunity to earn money through SRECs (the investors who own the systems will).

The above scenario looks at a 99kW system on a 10 year lease available to non-residential customers in Maryland and assumes electricity rates (including distribution and generation charges) added together to be about $0.13/kWh (the average in Maryland is $0.134/kWh, and has steadily been rising at 5.5% annually for the last 25 years like the national trend.

For those who are uncertain about dabbling in the SREC market over the next 10 years, will be forced to invest their own cash, or loans or enter into fixed rate Power Purchase Agreements like the summary below.  Energy rates start at 15% to 40% lower than your current rate and escalates at a 2% to 3% annually over the next 20 to 25 years (half the current inflation rate on energy).  Click on the images to enlarge and compare the pros and cons of each.

Call Raj Dwivedi at 410-992-2646 or email rdwivedi@mercurysolarsystems.com to learn more or get a specific free site analysis done for your site to see if solar photovoltaic power plants are a good fit.

Federal U.S. Department of Energy - Loan Guarantee Program

Federal U.S. Department of Energy - Loan Guarantee Program: Section 1703 of Title XVII of the Energy Policy Act (EPAct) of 2005 created the Department of Energy

Monday, June 18, 2012

Learn More About Solar PV Electric Vehicle Charging Stations From Mercury Solar Systems & Raj Dwivedi

  PhotoVoltaic Electric Vehicle Charging Stations in your parking lot can power 10 electric vehicles using 33 parking spaces and provide clean renewable solar energy that is metered and billed to the Electric Vehicle driver's Charge Pass RFID card like an EZ Pass.

Thursday, June 14, 2012

Finding New Ways to Cash In on Renewables

This article was sent from the CFO Magazine mobile App

This article is very appropriate today in MD, DE, PA, NJ, NY, CT, RI, MA and other states who have established renewable portfolio standards (RPS):

As longstanding renewable-energy credits expire starting this year, companies that have taken advantage of those hefty tax breaks will have to consider new alternatives to fill the void.

Wind-project developers or solar-facility owners typically have tax-equity partnerships with large-company investors such as Google or Chevron, where both sides benefit: the developers get necessary capital and the investors get the big tax write-offs.

Corporate investors in wind, solar, geothermal, and bioenergy projects are still eligible for the production tax credit (PTC), which provides a 2.2 cents per kilowatt hour income-tax credit for up to the first 10 years a facility is open. Similarly, the investment tax credit gives investors a one-time tax break of 30% on their investment or a cash payment from the Treasury Department.

But that’s all going to change. The PTC for wind projects, which allows companies to exchange the credits for cash based on production levels, is set to expire at the end of 2012, while the geothermal and other bioenergy PTCs will remain until the end of 2013. Solar tax credits expire in 2016. The 1603 grant, named after Section 1603 of the American Recovery and Reinvestment Act of 2009, is also phasing out.

The uncertainty surrounding the renewable-project market after the tax credits expire is already affecting project development, though some participants are hopeful of an 11th-hour save by Congress extending the credits. Until now, as the programs’ expiration dates near, lawmakers have tended to extend them for no more than one or two years.

Only $3.6 billion in tax-equity financing will be available for renewable-energy projects in 2012, while the demand for renewable-energy project financing in 2011 was $7.5 billion, according to an American Council On Renewable Energy survey last year.

“That source of capital that is helping the industry grow is going to slow down if those incentives are not there,” says Brent Stahl, principal and partner at law firm Stahl, Bernal & Davies.

In fact, that’s already happening, as only those projects already under way are still receiving the tax credits. “Right now we are very busy, because people started construction last year and they are all rushing to get their projects done by the end of this year,” says Mark Regante, a partner at Milbank, Tweed, Hadley & McCloy. And, he cautions, “if you have a [large wind] project that hasn’t already started construction, you are not going to get it built by the end of this year, so new projects are basically stalled.”

Investors have been particularly lured to the projects in the past few years, when the tax savings increased dramatically. “The cash-on-cash return that a firm is paying a tax-equity investor may be 3%, but in substance the tax-equity investor is earning a very high return because it’s using these tax attributes to shelter or reduce the tax burden on [its] other income,” says Regante. “In the case of accelerated depreciation deductions, the benefit is like an interest-free loan from the government.”

Before the recession, investors in solar facilities were earning 6% to 8% aftertax internal rate of return, and now they can earn more than 10% IRR on the renewable deals. With the tax credits expiring, however, other potential alternatives for soundly investing in renewable projects could catch on. For example, says Stahl, interested parties have started to discuss a master limited partnership as a financing vehicle, similar to pipeline businesses.

The concept would be a first for the renewables sector. “There’s hope and discussion out there that maybe at worst some of the things that are available in other energy sectors will become available even if some of the production tax credits no longer are,” he says.

Also, some already-existing tax-equity structures could draw new interest. Sale-leaseback structures, where the developer sells the project to the investor, could prove useful for short-term-horizon investors. And inverted-lease structures, which let the investor actually lease the project from the developer, could also become more popular, say market participants.

Similarly, accelerated-depreciation federal-tax incentives, such as for solar-project investments over a five-year period, are not expiring yet and could be more appealing with the traditional credits going away, notes Stahl. So far, relatively few companies have taken advantage of them.

Interest does vary by market, however. The wind sector may need more investor support, but the solar industry can stand more on its own because of its retail appeal, says Milbank’s Regante. There are more tax-equity investors in the solar market now than a year ago, he says, and developers are finding ways to get their projects financed.
Published: June 5 by CFO Magazine and reposted


For more information on your Solar Renewable Energy Credits and options for Energy Choices, contact:  Raj Dwivedi at 410-992-2646 office, or 301-892-0207 cell, or rdwivedi@mercurysolarsystems.com.

Tuesday, June 5, 2012

EV Charging Stations and Solar Power Plants Go Together

 Let Raj Dwivedi with Mercury Solar Systems help attract new business to your commercial space with solar powered parking ports.  33 available parking spaces will generate around 73,088 kWh which has a SREC value in MD of $18,250 at today’s SRECTrade value of $250/SREC or 1,000 kWh.
Get multiple benefits by installing PV solar carports:
  1. Shade and Protect Vehicles
  2. Maximize available land use without disturbing fields or green space for farming or playing
  3. Avoid roof repairs and costly structural upgrades to accommodate solar PV arrays 
  4. Provide smart EV charging stations in your lot space powered by solar PV arrays
This not only improves the value of your space, but brings new awareness to EV drivers of your commercially owned space.  Level 2 smart charge systems from providers such as Semaconnect provide commercial building owners with intelligent charger systems which can fully charge EV batteries in 4 hours and bill the metered usage directly to a credit card using their intelligent RFID system which functions much like the EZ Pass system.  A 15 minute trip to the store extends the range on the EV by 15 to 20 miles and EV drivers seek out EV charging sites.
The EV smart metered charging station is a profitable solution for commercial shopping sites where having a Solar PV array as the source of the power benefits the property owners in measurable ways that are extremely profitable and cash flow positive from day one. 
Commercial building owners can easily convert their parking spaces into revenue generating opportunities encouraging EV drivers to seek out their facilities. 

Contact Raj Dwivedi for more information at

301-892-0207, 410-992-2646 or rdwivedi@mercurysolarsolutions.com


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