Instructions for design services - WRETCwretc.in/presentation/2014/day2/Arun_sunpower.pdf · SunPower ™ Developing Solar Industry in India – Key Challenges & Way forward. Arun

SunPower ™

Developing Solar Industry in India – Key Challenges & Way forward

Arun KumarManaging Director, SunPower India

Presenter

Presentation Notes

This deck is intended to provide a high level introduction to customers, partners, and financiers in the utility space. It is also designed to provide a framework for deeper dive presentations using the Swagger decklettes. The basics goal of this deck is to differentiate SunPower in the industry.

2© 2014 SunPower Corporation

Source: SunPower estimates

India Solar Market Energy Related Statistics

Avg. Irradiation (kWh/m²/year) 1960 - 2020Avg. kWh Production (kWh/kWp)

1800-1840Fixed Tilt

2020-2070Single Axis

2020 RES Target 22 GW PV by 2022Electricity Price ($kWh) 4Q 2013-Domestic Consumer-Industrial Consumer-Commercial Consumer-Captive / Backup (Diesel)

0.04-0.07 (3-5 INR/kWh)0.09-0.12 (6-8 INR/kWh)0.09-0.12 (6-8 INR/kWh)0.19-0.29 (12-18 INR/kWh)

Electricity Capacity 237 GW

Electricity Power Generation 1087 TWhElectricity Consumption Electricity Peak Demand (2008 / 2020)

803 TWh128GW / 280GW

Electricity Demand Est. CAGR 2010-2020

8~9% (taking into effect conservation, PLF/T&D losses improvement measures)

0

5000

10000

15000

20000

25000

2014 2015 2016 2017 2018 2019 2020

Market Forecast (MW/Year)

Cumulative Yearly

2%

6%2%

81%

9%

2014 Estimated Market Segmentation

Residential Retrof it

Commercial Roof <1MW

Commercial Roof >1MW

Commercial/Indus. Consumed GM

Utility Consumed Ground Mount

High level of solar resource across IndiaLand availability to locate solar plants Need for energy to achieve GDP growth by diversifying fuel mix Persistent power shortages and consequent use of diesel usage (expensive and not clean)


Policy Summary Index Country FIT Net-Metering Public

TendersOff-grid

ProgramsPrivate PPAs

Investment Subsidy

Tax/Other

Incentive

China

Chile

France

Germany

Greece

India

Israel

Italy ( )

Japan

Jordan

Mexico

Morocco

Saudi Arabia

South Africa

Spain

Turkey

UAE

USAustralia


India – Main Challenges

• Multiple and often confusing policy

• Focus on price vs. quality

• Low performance of solar plants

• High cost financing

• Long project development cycle

• Land acquisition

• Interconnection and evacuation

• PPA bankability

• Financing

Source MNRE – July 2013

5© 2014 SunPower Corporation5

Financing: What Makes a Deal BankableOn the Equity Investors side:• Prior experience on projects of similar size with track-record• Team competence• Balance sheet• Investment horizon

On the EPC contractor side:• Contractor Balance Sheet• Single Provider for Entire System

– Fewer suppliers, better relationship pre- and post-sales– Direct responsibility on key components warranty

• High Vertical Integration– Assure on-time and on-budget deliverables

• Guarantees on Power Plant operations– Indemnification for production loss during plant lifetime at a system level– Top notch product guarantees at components level


SunPower’s ‘must haves’ on bankable EPC contractsParent Company Guarantee covering all contract liabilities;

Components level warranties (backstop guaranteed for min 2 yrs)25 year warranty of module structure

25 years warranty for module performance,

5 years for main equipment: tracking system, inverters, junction boxes, combiner boxes and inverter houses

Performance GuaranteeAt System level

Yearly Weather Adjusted Energy Guarantee extendable up to 25 yrs (linked to O&M contract duration)

System performance monitored each 15 minutes

Accurate simulations taking into account irradiance, weather degradation and technology used

At Module level

<= 0.4%/yr degradation warranty

Delay liquidated damages in case EPC commissioning not achieved by a certain date.

Delay LDs are capped at percentage of the EPC Price. Delay LDs designated to compensate for loss of energy revenues (no harm no foul principle applies)

On-demand guarantees to protect equity and debt:

Construction bank guarantee delivered during works execution until Provision Acceptance

Warranty bank guarantee from Provisional Acceptance until the end of the Warranty Period (2 years)

(RISK)

PEACE OF MIND


..and on bankable O&M contracts

Full service fixed price O&M Agreement (preventive and corrective)

Preventive MaintenanceRoutine maintenance in line with O&M Manual;

Measurement of output comparing current and nominal values;

Remote monitoring and daily review of data;

Bi- annual site inspections and cleaning of panels;

Periodic measurement of the array I-V curves and hot spot analysis.

Module cleanings to ensure performance guarantee obligations are met

Corrective MaintenanceOnsite SCADA system with near real-time readings;

Response targets – incidents to be reported within 4 hours of occurrence and resolved within 48 hours.

Minimum Spare Parts InventorySpare parts inventory sized for each project individually; any spare parts used to be replenished.

Monthly and Bi- annual reportingMonthly communication of production data, evacuation data, availability, spare parts status;

Monthly and Bi-annual reporting on production and performance data, corrective and preventative maintenance.


SunPower Corporation

Highest efficiency1 Highest production2 Highest reliability3

• World record for highest efficiency silicon solar panel1

• >2.5 GW solar PV deployed

• Diversified portfolio: roofs to power plants, on-grid and off-grid applications

• Publicly listed on NASDAQ

• 2013 revenue: $2.5B

• 1.2 GWp total production capacity at end of 2013

• >6,000 employees

• We only do solar, more than 200 patents

• Majority owned by Total Group (#10 Fortune 500)4

1 Large-area silicon record, Green, M. A., et. al. “Solar Cell Efficiency Tables,” Progress in Photovoltaics, 2013, vol. 21, p1-11.2 BEW Engineering, part of DNV KEMA, SunPower Yield Report, Jan 2013. Compared to Conventional panel: Conventional Panel” is a 240W panel, 15% efficient, approx. 1.6 m2, made with Conventional Cells. “Conventional Cells” are silicon cells that have many thin metal lines on the front and 2 or 3 interconnect ribbons soldered along the front and back.3 #1 rank in "PV Module Durability Initiative Public Report," Fraunhofer ISE, Feb 2013. Five out of the top 8 largest manufacturers were tested. Campeau, Z. et al. "SunPower Module Degradation Rate," SunPower white paper, Feb 2013. See www.sunpowercorp.com/facts for details.”4 Source: 2012 Fortune 500 Global Ranking

Presenter

Presentation Notes

For more than a quarter of a century, SunPower has been leading the solar revolution. We design, manufacture and deliver high efficiency solar solutions for homeowners, businesses, and utilities. With over 25 years of R&D and 200 patents, world-leading technology and a global footprint, SunPower was a natural fit for Total, the French oil giant . In 2011 they acquired a 66% ownership stake in SunPower, making SunPower the centrepiece of Total’s new energies activities.

http://www.sunpowercorp.com/facts


Superior technology

Lower Levelized Cost of Energy (LCOE)

+ =Financial stability

SunPowerMore Energy. For Life.

Presenter

Presentation Notes

This slide is the outline for our argument in this deck. By excelling at the 2 items in yellow, we are able to deliver a lower LCOE. 1. Financial stability means that SunPower will still be here in 25 years 2. Superior technology is our different and better cell and panel technology integrated in finally tuned systems designed to maximize energy output.


Lower total lifetime costs(Module + BOS + Land + O&M)

Higher lifetime energy production(Sunlight Collection x Conversion Efficiency)Lower LCOE1

Cost/kWh over life of project

=

Lower LCOETwo components impact the cost of solar energy delivered:

1LCOE analysis shows SunPower silicon PV power plants generate electricity at a price competitive with other peak power resources. See SunPower Report, “The Drivers of the Levelized Cost of Electricity for Utility-Scale Photovoltaics” 2008 for analysis detail.

Presenter

Presentation Notes

This slide is used to outline the numerator and denominator in the LCOE equation. The goal here is to demonstrate how the content in this presentation should be directly translated into the financial modeling of a SunPower project.


SunPower advantage LCOE impact

Financial stability Lower financing and transactional costs

Highest efficiency technology Lower land, development, and permitting costs

Lower material, labor, and construction costs

Lower O&M costs

Oasis Modular Platform Lower design, labor, and construction costs

=

Lower lifetime cost

Lower LCOECost/kWh over life of project

Higher lifetime energy production

Lower total lifetime costs

Presenter

Presentation Notes

Here we are talking about the numerator of the equation and demonstrating how our solution drives down project costs ultimately delivering a lower cost of energy.


SunPower advantage LCOE impact

Highest production (panel energy yield) Higher lifetime cash flows

Lowest degradation Higher lifetime cash flows

Highest plant availability Higher lifetime cash flows

Greatest lifetime production

=Lower LCOECost/kWh over life of project

Higher lifetime energy production

Lower total lifetime costs

Presenter

Presentation Notes

Here we are talking about the denominator of the equation and how our solutions drive up lifetime energy production, ultimately delivering a lower cost of energy.


Financialstability

Through proven financial strength and project execution, and the industry’s most reliable technology, SunPower has delivered the most financed megawatts of solar on the planet.

Presenter

Presentation Notes

We’d rather speak about Financial stability instead of bankability. Bankability is more applicable for a start-up. It is a better reflection of our place in the industry.


Proven strength

• 2013 revenue of $2.5B

• Sale of 579 MW Solar Star Projects to MidAmerican Solar for an agreed

amount between $2.0B and $2.5B

• $4.4B of project financing across 1.2 GWp of projects

• Highly reliable technology, backed by the most guarantied power in the

industry1

• First ever investment grade solar bond rating2 (Montalto 51 MW, Italy)

• Majority owned (66%) by Total Group3

1 of the top 20 manufacturers. SunPower Warranty Review, Feb 2013. 2 Investment grade rating for Montalto project bond, Italy, Dec 20103 source: 2012 Fortune 500 Global Ranking


• 460 Total employees globally at SPWR

• Office in Paris, adjacent to Total HQ

• Global downstream footprint, offices in >15 countries

• Country managing directors carry P&L responsibility

• Co-development for international power plants, includes selective equity positions

• 130 country presence, with

• 100,000 employees

Total Partnership

Presenter

Presentation Notes

• We view there to be significant opportunities in PP segment internationally We now have a great international team developing this pipeline SunPower has international HQ in Paris, walking distance from Total’s global HQ 460 international employees with offices > 15 countries, establishing country managers responsible for P&L and to grow the business We are working closely with Total. They have a dedicated team to codevelop power plant projects. And will selectively invest and be an owner of the projects. It is great to be working with one of the world’s biggest energy companies, with 100,00 employees and footprint in 130 countries This partnership gives us the opportunity to expand our global reach and research and development for future product innovation, with financial backing that makes SunPower a reliable and stable choice for the lifetime of a solar system


• Sold to MidAmerican Solar for an agreed amount between $2.0B and $2.5B

• Two long-term PPAs with Southern California Edison (SCE)

• SunPower EPC with Oasis C1 and O&M services

• Power approximately 400,000 homes

579 MW Solar Star Projects World’s largest permitted solar development

Presenter

Presentation Notes

Each 1.5 MW Oasis power block features SunPower Maxeon cell technology and the proprietary T0 single-axis Tracker, the world’s most installed tracking system, complemented by sophisticated plant controller tools.


0

400

800

1,200

1,600

2,000

SunPower Ground Mount Power Plants (MW)

SunPower Tracker First Installation

First Modular Tracking System (T20)

First Large PV Plant in US Nellis AFB 14 MW

First UtilityOwned PV Plants FPL 35 MW

First 1 MW Modular PV Power Block- Oasis

First Bond Financing for Solar 72 MW Montalto

First Modular 1.6 MW CPV System (C7)

Largest PV Plant Financing CVSR 250 MW / NRG

Largest Permitted Solar Development

AVSP 579 MW

First 8 MWPower Plant in the World

Proven leadership$ 4.4B of project financing across 1.2 GW of solar projects

EOY 2011 in Operation

Current in Operation or Under

Construction

Total in Operation, Under Construction,

or Under PPA

2004 2005 2006 2007 2008 2009 2010 2011 2013200320022001 2012 2014in Operation

Presenter

Presentation Notes

SunPower has a legacy of leadership and “firsts”. We have continually built projects that redefine the solar industry. This proven ability to lead in the industry should help customers feel confident that a project with SunPower will come to a successful conclusion.


Proven execution of power plants

Americas3,100MW

Existing/New Installations & Pipeline

Additional Project Pipeline

300 Projects, 45 Countries, 6+ GWdc CapacityEurope

830MWAPAC

1,020MWMiddle East / Africa1,480MW

Presenter

Presentation Notes

Final map slide shows our pipeline. You can see our coverage expanding. Dark areas: Existing /new installations+pipeline Yellow areas: additional pipeline 6+ GW, 450 projects It has been 2 years since Total invested in SPWR, and we have been working cooperatively since then…and are now hitting our stride. Robust global pipeline. 33 MW in South Africa with Total. 40+MW in France with Total. We expect more announced projects this year >6,000 MWdc pipeline across 300 global projects 1,100 MWdc with total AMERICAS 2,796 MW w/o Total, 225 MW w/ Total EUROPE 821 MW w/o Total, 0 MW w/ Total MIDDLE EAST / AFRICA 644 MW w/o Total, 831 MW w/ Total APAC (excluding China JV), 936 MW w/o Total, 139 MW w/ Total SunPower’s global Power Plant pipeline consists of over 300 opportunities, spanning 46 countries, equaling approximately 6.4GWs. Over 1/3 of the pipeline is US based, however the geography with the greatest growth and next largest proportion is the Middle East / Africa, which represents ~25%. Our co-development efforts with Total to date have significantly contributed to the pipeline growth in the Middle East / Africa. Globally, Total has helped co-develop 1.1GWs in the Middle East, Africa, Japan, Latin America Australia. 1.2GWs of the pipeline is in mid- to- advanced sales stages. We anticipate installing 250-300MWs of this pipeline in the next 18 months, including the Quinto project. Approximately half of pipeline is in the early development stages, which will allow us to ensure smooth revenue growth as we prepare to build these projects in 2015 and beyond. These numbers do not include our Distributed Generation Global Commercial business, which has approximately 390MWs (160MWs US, 230MWs International), in the pipeline, nor does it include our joint venture in China. CHINA JV GW stated in MOU signed: 7.5 GW in Inner Mongolia (see text below from definitive documents) MW pipeline total: 450 MW* Early stage: 427 MW Mid-late stage: 23 MW MW expected to ship 2013? BOQ3 = 18MW 2014? BOQ3 = 141MW 2015? BOQ3 = 300MW (up to you how/if to sandbag or communicate upside which there is) * Pipeline opportunities based on salesforce May 13, 2013 IM0001 (Greenhouse) – preliminary authorization received – 19.5MW AC – 23.25 DC IM0006 (Helin 3A) – Feasibility study being submitted tomorrow – 4 phases for 2014 build – 177MW AC – 210MW DC IM0004 (Helin 1) – 49.5MW AC – 58.9 DC IM0008 (Wuchuan 1) – 3 phases – 130.5MW AC – 155MW DC Note (1) the DC/AC ratio is still floating around so i slightly rounded down the DC numbers Note (2) there is more MW under MOU so the total funnel is larger but I can point to 450MW which are further down the development path (site ID, boundary study, preliminary geo, layout, cost estimate, etc)


Superior technology

SunPower delivers state of the art solar solutions built around fundamentally different cell and panel technology.

Presenter

Presentation Notes

In this section we want to drive home the fact that we have “fundamentally different cell technology, building into a fundamentally better solar panel, integrated into rooftop and ground mount solutions .” Every piece of every SunPower solution is designed to maximize the unique benefits of SunPower Maxeon technology.


The SunPower™ Maxeon™ solar cell is fundamentally different solar

• Patented back contact cell technology• Built on solid copper foundation• Record breaking efficiency panels1

• Exceptional performance• Unmatched reliability2

Up to 24.2% efficiency

1 Large-area silicon record, Green, M. A., et. al. “Solar Cell Efficiency Tables,” Progress in Photovoltaics, 2013, vol. 21, p1-11.2 #1 rank in "PV Module Durability Initiative Public Report," Fraunhofer ISE, Feb 2013. Five out of the top 8 largest manufacturers were tested. Campeau, Z. et al. "SunPower Module Degradation Rate," SunPower white paper, Feb 2013. See www.sunpowercorp.com/facts for details.

Presenter

Presentation Notes

What makes our solar solutions different is our superior technology. All of our systems are built around SunPower fundamentally different MaxeonTM all-black contact solar cells: their unique design captures and converts more sunlight into electricity, while a solid copper foundation makes them incredibly durable, guaranteeing long-term performance. • Our solar cells can convert more sunlight into more energy than any other system in the world, • Everything is made possible with our superior SunPower® Maxeon® All-Back Contact, High Efficiency Solar Cell technology, which offer the highest efficiency available • Maxeon cells are fundamentally different from the standard solar cells and are built on a solid copper foundation – which not only handles the additional power each cell generates, but also makes it practically immune to the cracking and corrosion that causes standard solar cells to steadily lose power over time • By locating the electrical contacts on the back surface, SunPower achieves conversion efficiencies of up to 24% • The cell design allows for superior performance at higher temperatures and less degradation than other cells, which means more energy is delivered per watt • Which makes our technologies a preferred choice to make the most from the investment in solar For much more detail on Maxeon cell technology, content from the Swagger Module deck can be inserted here.


Conventional panel1 (same size)SunPower panel with Maxeon

FRONT BACK

No metal Copper-plated

327WFRONT

Thin lines of metal paste

BACK

Full-coverage metal paste

240W

• The Maxeon cell has a fundamentally different design from a Conventional Cell: it’s built on a solid copper foundation.

• Copper plated solar cells cost more to manufacture than Conventional Cells, but the investment pays off with a much more reliable and high-performing solar cell.

• SunPower is the only manufacturer with a cell built on a solid copper foundation – the Conventional Cells are made by baking a metal paste onto the silicon wafer – just like screen-printing a logo onto a T-shirt.

1 Definitions used throughout presentation: “Conventional Panel” is a 240W panel, 15% efficient, approx. 1.6 m2, made with Conventional Cells. “Conventional Cells” are silicon cells that have many thin metal lines on the front and 2 or 3 interconnect ribbons soldered along the front and back.

The heart of the SunPower panelis the Maxeon solar cell

Presenter

Presentation Notes

The Maxeon Solar Cell is the heart of the SunPower panel. As everyone understands, those cells produce far more energy in the same space. In the example shown here for two panels of the same size, the SunPower 327W and the most common wattage rating for conventional panels: 240W. Also, the front-side is clearly different because there’s no metal grid-lines, and that provides the clean premium look associated with SunPower panels. But the increased power output and the different appearance is not the fundamental difference which justifies the high reliability value of the SunPower panels. That difference is that the Maxeon solar cells are built on a SOLID COPPER FOUNDATION. This is absolutely unique in the solar industry, and in fact it costs SunPower considerably more to build cells on a solid copper foundation – the machines that do the plating process to create this foundation are each a football field in length. The picture on the left shows the front of the Maxeon cell, with no metal at all. The interesting side is actually the back: it’s entirely covered with copper plating. That’s the foundation. In contrast, the picture on the right shows a conventional panel. The metal on the front and back of the cell is not really metal at all – it’s a conductive paste that’s made of tiny bits of silver and aluminum that’s baked onto the silicon wafer. In fact the process of making those cells is the same as screen-printing a design on a tee-shirt: you create a template, wipe the paint across the template and the remove the template to leave the paint where you want it on the tee-shirt, and then bake the tee-shirt to cure the paint onto the fabric. This same screen-printing process is used to apply the thin lines of metal paste on the front, and the full-coverage metal paste on the back, to create a conventional solar cell. But unlike the strength and ductility of the solid copper foundation of the SunPower cell, the metal paste of the conventional cell offers NO strength to the thin silicon wafer, and as we’ll talk about soon, this fundamental design difference drives the big reliability advantages of the SunPower panels.


SunPower Oasis C1

SunPowersolar panels

Ground solutionsRooftop solutions

The foundation of high efficiency solar solutions


Delivering fundamentally better results

21%High efficiency1

Panel efficiency means more wattsper square foot than conventional

solar

~9%High production2

More energy per ratedwatt than conventional solar

0.25%High reliability3

The industry’s lowest averagedegradation rate means more energy

over the total life of the panel

1 High efficiency solar panel: Large-area silicon record, Green, M. A., et. al. “Solar Cell Efficiency Tables,” Progress in Photovoltaics, 2013, vol. 21, p1-11.2 Photon International, Jan. 2013, shows SunPower panels with the most energy per watt of any of the panels tested, and 9% more energy compared with the average of the other top-ten solar manufacturers. 3 #1 rank in "PV Module Durability Initiative Public Report," Fraunhofer ISE, Feb 2013. Five out of the top 8 largest manufacturers were tested. Campeau, Z. et al. "SunPower Module Degradation Rate," SunPower white paper, Feb 2013. See www.sunpowercorp.com/facts for details.”

Presenter

Presentation Notes

This is critical. There are three pillars to our technology advantage: Efficiency, Production, and Reliability. Each of these cumulatively contribute to SunPower's ability to deliver the most possible energy over the life of our systems. The value of these three pillars of our technology advantage are cumulative over time. The following slides illustrate how efficiency + production + reliability allows SunPower to generate significantly more energy than conventional solar. We have 3rd party validation (Photon) that back up the 8% average and the .25% degradation rate. SunPower recommends using a 1% degradation assumption for conventional solar. For large scale projects, degradation assumptions around can have dramatic impact on project economics. SunPower technology is different, and a result the standard industry assumptions and metrics can not be used to model system performance. For much more detail on SunPower module technology, content from the Swagger Module deck can be inserted here.

http://www.sunpowercorp.com/facts


Superior technology integrated into a bankable power plant solution: SunPower™ Oasis™ C1

Oasis optimises the unique advantages of Maxeon cell technology to provide scalability, performance, and a lower total cost of energy

State of the art power plant solution:

Presenter

Presentation Notes

This is the payoff slide that shifts the conversation from cell/panel technology to our complete solution. Key points: Our systems are specifically designed to maximize the unique advantages of Maxeon cell technology. We deliver a finally tuned system that can not be replicated by simply piecing together commodity components from multiple manufactures.


• SunPower acquires Greenbotics, Inc• Expanding energy services portfolio for global customers with the SunPower Oasis

Power Plant product• The robotic solar panel cleaning technology improves LCOE • Reduces water usage

Leading the way in business development expanding service offering

Not all solaris the same

Presenter

Presentation Notes

This deck is intended to provide a high level introduction to customers, partners, and financiers in the utility space. It is also designed to provide a framework for deeper dive presentations using the Swagger decklettes. The basics goal of this deck is to differentiate SunPower in the industry.

Documents

Instructions for design services - WRETCwretc.in/presentation/2014/day2/Arun_sunpower.pdf · SunPower ™ Developing Solar Industry in India – Key Challenges & Way forward. Arun