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hello everyone and thank you for attending today's webinar the key to solar recovery in closing sales ez zero down financing for nonprofits I'm Kelsey miss Brenner editor with solar power world before I begin we wanted to let you know about our application widgets at the bottom of your screen you can move and resize them however you'd like slides are available to view at any time the other resource widget emit any questions related today's webinar via the Q&A widget our presenters will answer your questions at the end of the webinar we encourage you to tweet with us simply sign in through the Twitter box today's hashtag is automatically added to your tweets and finally if you're watching this on demand you can still use all the features I went over let's get started with today's webinar the key to solar recovery and closing sales ez zero down financing for nonprofits today's speakers are Kim Olsen and Matt Brennan Tim is the director of solar and storage for Green Works lending and oversees their national renewable energy efforts and contractor Network Matt is the VP of Sales for collected funds he is a solar installation expert with experience in both residential and commercial projects and now I'll turn it over to Tim thanks Kelsey really excited to be here today talking to everybody about collective pace a product of Green Works lending and collective Sun and going over how this tool can be used for solar recovery and closing sales with nonprofits I think this is an especially timely webinar given the change in the economic landscape that we're seeing with kovat I think there's a lot of nonprofits who could really benefit from the savings of solar especially as they've seen declines and revenues due to restrictions on gatherings and things like that but also more difficulty finding traditional financing or putting up the cash to that solar system so we really see collective Sun as eclectic tastes as to that problem and want to go over how that works with you all today but thank you to solar power world for hosting this webinar with us and really excited to it and get into it so here's what we're going to go over today what we really want you all to get out of this so first we'll just start with a brief overview of our companies and the product that we put together I'm going to go through what pace is in cases property assessed clean energy and I'll explain kind of the history how it works Matt will give you an overview of collective Sons third-party ownership structure called their solar power agreement and then we'll really go over what it means when we combine these two so pace financing for collective Sun solar power agreement - what we call collective pace what is the benefit how can you use that to close more deals one of the mean and then we're end it with the with the qualification process how you can reach out to us vehicle project qualifies and then walk you through the process from there to close and building a solar system on an on process a quick overview here of Green Works lending so again my name is Tim Olson I oversee our solar and storage work Green Works lending is a commercial property assessed clean energy finance provider we're a hundred percent private capital pace originally started this idea sort of financing solar on residential buildings in California but then several years ago the Connecticut Green Bank was tasked with setting up the first successful commercial pace program so paid financing for commercial property owners the architects of that first program saw huge potential to grow the program and spread it throughout the country as a solution to help commercial property owners access affordable capital to make these energy-saving water saving building improvements so five years ago they started Green Works lending and since then we've grown tremendously and they're now in 15 plus state having closed over 260 paise transactions three years ago we did the industry's first paid securitization and we really see ourselves as kind of a white glove service we work with contractors on how to market and sell pace financing we work with the property owners on what does this mean how do you go through the process how do you apply we handle everything with the pace administrators which I'll go over and and how we walk them hand at hand through that whole process so we see ourselves there from the very beginning through the sales process to the underwriting to the application process to closing and then after working with contractors on disbursements and making sure the project gets built we really care about the success of pace and making sure that this is going towards our mission of helping commercial property owners decrease their energy and water usage through affordable financing I'll go over really how case works and you know it helps explain this map in a little bit but just so people understand right now pace that's being able to through state legislation this has grown rapidly over the last several years the dark green here is where Green Works lending is currently financing projects so you can see a lot of the mid-atlantic up to Massachusetts will soon be online a lot of the Midwest the Rocky Mountains Colorado Texas the West Coast California or again really all over and medium and light green are states that are in the process of setting up their pace programs and we should be there in the next year or two financing projects I'm going to hand it over to Matt to talk to you about collective Sun thanks Tim I'm Matt Brennan I'm the VP of Sales at that collective Sun in little background on collective Sun we started in 2011 and focus has been with Ron profits and other tax-exempt entities of all kinds and we work across the country when we talk about tax-exempt entities we'd be a lot of our clients are faith-based organizations but there are lots of kinds of tax-exempt organizations HOAs there are some golf courses may not know but the club houses are organized and they type of a patter than entities we've done a case project that collected pace projects people bid it can actually in a golf course so whenever a customer doesn't have a tax appetite and that could be a for-profit as well support for process doing the tax appetite that's that's our client and our main product is a solar power agreement we started this a few years ago some of you are already familiar with it but the best way to describe it is a it's like a prepaid power purchase agreement it's a it is a prepaid service contract when we started a few years back it was a prepaid PPA we change from a prepaid power purchase agreement for a number of reasons one the tax reform bill of 2017 changed somebody telling treatment a prepaid PPA they make it less favorable to investors so we switch to a service contract but that had another benefit of working no getting away from at PPA you know the host still sees really all the same benefits but with a service contract it allows us to operate in even more areas for example in a large project that we just completed in Los Angeles buses or Department of Water and Power they don't allow pph but the allowances and energy service agreements and things like that that kind of third party ownership so we're allowed to operate there so for those of you across the country who may work in areas where certain kinds of third party ownership is allowed there's a good chance we can operate there but again our main process is SBA and basically what it is we provide 12% it's like a tax like credit or discount to tax-exempt organizations and again for profits or tax appetite we own the system we operate we maintain it and we performance guaranteed to the installers and I'm sorry poems can't keep to the host and only ship of the system so the own the system and at the end of the six-year-old should transfer it back to the customer so the customer really is a second order of the system with a first order the jump in next slide here so once I said we work across the country most of our clients are mostly a lot of our clients are tears of faith churches synagogues work with boss temples of different kinds spiritual centers but also with schools HOAs we've done Salvation Army projects so whenever you run into a situation where the customer doesn't count attacks appetite for another reason no a solar power agreement might be a really good option for them and then we combine and is talking with more this a little bit when we combine it with the basil or things it becomes a zero down option this is really nice wean going these nonprofits or any tacky guns organization offer them zero down and they know they have to borrow twelve percent less in Tim I wind it back to you to talk a little bell CK's yeah great so I'll just give you a pretty brief explanation on how pace financing in general works and then we'll really get into how the combination of pace with the structure Matt just explained works I know this can be a little confusing so I definitely encourage everybody to use that Q&A button at the bottom for any questions and we'll make sure to leave plenty of time at the end to get to them so speed pace is stands for commercial property assessed clean energy basically this is enabled through state legislation that defines certain types of commercial real estate improvements as a public benefit and then this allows them to place a voluntary tax assessment on their property to finance those improvements and then pays that loan back through a line item on their tax bill so what does that really mean it means that we as a private capital finance provider can finance a hundred percent of their project cost over a long period of time over a long term at a fixed rate and then rather than paying monthly payments back to a bank or putting any cash up front they can build that system and then start making payments back to through their property tax bill this really when we take this to go to capital markets and raise our financing this looks like a very secure system of finance so that's what allows us to do twenty twenty-five or even up to thirty year terms in many states at that low fixed rate so it's like a security enhancement for us but for the property owner what it looks like is rather than putting up cash rather than going to a bank for a shorter five seven maybe ten year term financing they're able to get the longest term financing at a fixed rate which helps them bring down their annual payment as low as possible and really the only mechanical difference is they're paying it on their property tax bill rather than monthly installments so whenever they would normally pay their property tax bill is when they would make those paced payments over the next 10 15 20 25 years this provides a number of other benefits that will we'll go over in a minute but I want to just stop there and let Matt go over the solar power agreement in a little more detail thanks thanks Jim so it's chin pointed out you know this the C phase rule provides you know the bulk probably funding for these projects and they're providing typically eighty percent of the funding we're providing 12 percent enlarge of a minimum size of 50 kilowatts so you know larger projects we can increase our discount and then no realtor will wind a little bit less we use know we're doing projects obviously all solar projects also storage so storage in our eligible for CrossFit constitutional power agree so keep that in mind so the sta the solar-powered lemur I mentioned earlier is like a familiar with prepaid convenience or pre finkley's get to give it that way but it is a service contract the time of SBA is technically 20 years it's a 20-year agreement where we only operate and maintain the system again we provide a performance guarantee but at the end of the six year old ownership of the system transfers back to the to the customer so keep in mind we've collected pace the customers borrowing money they may be borrowing money at a 10-year loan 20 years see face alone could be you know 25 years he pays well possibly even longer but the customer will own the system at the end of the sixth year but they'll still have this looks like that obligation to green words for a little bit longer than that now then the question comes up you know concern storage being included they said earlier it can I think may have any questions on that just reach out there are some considerations to event that make sure the storage is a hundred percent eligible for the tax credit in most cases it is these days and we're responsible as the owner of the system collect the Sun with its solar power agreement cause all they own em so all operations immediate is our ultimate our responsibility so there's a lot of contractors on the call today a lot of brokers you know we would work with the contractor that we're doing business with not to perform at all them if something wasn't covered under the warranty that would be collective some responsibility between the contractor to fix it we're posting equipment all that falls on us so when they jump to the next slide here and just talk a little bit what is collective pace in collective pace is really simply just a combining of a green work sea piece alone so it takes long from Green Works and our solar power grid our solar power agreement you know low the cost that the customer needs to borrow they only need about typically 18 percent of the project cost because we're putting in at least 12% so this is a zero down solution so if you have a you know a for profit that the total tax act or any tax exempt entity you have a zero down option it can go and talk a little bit more about you know sort of the benefits of the underwriting from C pace but generally speaking we have a rhythm much fairer lot you know getting Rowlands for nonprofits that typically have trouble getting money from traditional lenders so really is you know can make make it much easier for you to close projects and it's really just a pretty simple it's a simple process a simple concept collective faith is really just combining a prepaid service agreement or the C phase loans now there are quite a few benefits that I've mentioned ending up the next slide here now is you know zero down you know all the projects we see our cash flow positive and then of course when the powers 12% less when you use a solar power agreement the economics just get o it is get better a typical question that comes up is what happens in markets where there are extracts or there are other utility rebates or maybe in the state repay all of those stay with the host the customer gets to keep all of that really the only benefits that we are monetizing on the tax credit and depreciation that's it a nice thing Tim we'll talk a little bit more about this that where the timing works with the C phase loan because the peaceful in the property tax bill there's a payment holiday typically there's half a year or so where there aren't any payments due the one question that comes up a lot people ask okay well this is a this if it's a non-profit in a fifth on the property tax bill I thought nonprofits don't they probably do a lot of times that's true but there's still run of property tax rolls let's get a bill for zero so piece he pace still works and clinic pace still works for nonprofits and you know in alt accident entities great thing about this we've collected pace and see pace in general now there is no credit score there is no personal guarantee the loan is based on a property value dockside and that's a really big thing particularly with nonprofits so keep that in mind when you're going out there you know it's a zero down solution it's very easy to qualify the terms are long so they're cashflow positive and health know we're seeing a lot of interest from nonprofits in general jump to the next slide Tim's going to talk a little bit more about just that you know over on pace and sort of the benefits of doing these kinds of loans yeah and definitely repeating some of these points that they are powerful solutions I just want to make sure that everybody really gets you know what why this is such a powerful tool also just really quickly I'm going to address a couple of the questions I've seen come in so one that I forgot to mention this is paid back through the property tax bill but nonprofits even though they are property tax exempt are all people to take advantage of this program so they still have a property tax ID number and often do pay these tax assessments so even though they're not paying property taxes based on the value of their property they may still pay for a sewer line or a sidewalk or something like that this is the same as that so they're able to voluntarily place an assessment but they pay through their property tax bill even though they are taxes them so this is 100% open and available to nonprofits I saw some other questions I think will get answered in this slide so I want to just go over a couple more the benefits of pace and collective pace so we talked about the hundred percent financing that really means it covers all of the hard costs all of the soft costs so if there needs to be a feasibility study or the legal fees involved or they're you know the restructuring things to be this happened all of those costs and all of cost of financing can get included into the loan so they're paying zero dollars upfront this collective paste option is very very powerful for the solar where we provide the discount but we can also add in non solar components into the loan as well so in most states pace can cover solar a new group so if they have an aging group and they need to replace that to put the solar on the roof we can include that as well and most situations they can get some of the discount on that as well if they want to replace their HVAC or a boiler or chiller energy efficiency improvements like windows lighting building control system and then on a lot of states water efficiency as well so if they're doing tenant improvements or something maybe not send improvements for a profit but if they want to put a new low-flow toilets or things like that we can wrap that all up into the same loan where they're getting the 12 percent discount on the solar some of the storage or the roof and finance all these other improvements over a long period of time and those are all improvements that are going straight towards their operating expenses and reducing those so we still have those cash flow benefits and even for some of those improvements that don't necessarily have a cash flow associated with them like the roof replacement oftentimes the savings and the cash flow savings from the solar and energy efficiency go to offset that capital expenditures so churches that need a new roof it's often a difficult process for them going out raising money from congregation members or things like that or Civic Center or a Youth Center or something like that they need to replace their roof they can combine that with a solar installation to help offset some of that cost so they're not coming out of pocket up front so that 100% financing is really powerful when you have when you look at a building holistically and all of the improvements that they need to make also one thing that is really powerful as we talked about it and these are often entities that you know these aren't Target or amazon where they they have plenty of cash on hand to be able to cover these types of installations these are often you know nonprofits who can if they don't have to make that upfront capital expense on their new roof or on their solar system that money goes towards their mission and that's something we really care about I saw one question about this this transfer is automatically on sale so that's another huge benefit to taste plus this collective sign arrangement and in all case ones because it's placed on the property tax bill it stays with that property on sale so if they're not sure what they want to do with their property in three years six years whatever that can be a detriment to them tried to go out and get a traditional bank loan where you know if they end up needing sale or they want to sell for short or something like that they're gonna have to pay off that loan this never accelerates so no point do they need to pay off the remainder of the pace loan so they can finance a solar system over 20 years so that building in five years gives those five years of benefits sell it and then the next owner has that same solar system but picks up where they left off on payments so it's really useful when you run into a property owner if he has it in to sign and move forward because they're not a hundred percent sure of you know what their plans are for their building it also you know avoid having to go to your bank to take out another loan that reverse preserves their borrowing capacity if something else comes up and they need to make non pace eligible improvements or they're building in a couple of years this is a long-term fixed financing that doesn't use up their credit or borrowing capacity with their with their bank so that's another thing if you have someone hesitating I really want to do the solar system but what if I need those five hundred thousand dollars next year for some of some damage to the building or something like that or some program that they want to invest it so this really allows them to preserve that capital and then because we're secured by the property values because we're being paid back through the property tax bill what we really look to is you know the value in that building so this allows them to unlock some of that value in their building and we don't do a credit check we're not requiring personal guarantees we do we do a basic underwriting to make sure that they're capable of paying their debt service because we don't want to put any nonprofits underwater and obviously we care about making sure they stay in business but it's not so the same degree as other traditional financing that they may not be able to qualify for so we've done the one talking about kind of the benefits I want to give you a real world example of how this worked and hitting on all those points out of projects that we did last year through collective pays so beginning of 2019 there was a Golf & Country Club in Central Valley of California they was working with a local solar installer and was really interested in doing a large solar installation they had very high electricity rates they were paying about 20 cents a kilowatt hour and they're charging up their golf carts and there's a large event center there's really nice golf course would look a large area that they use for weddings and things like that like a typical Country Club so they had really high electricity bills and we're looking for ways to cut that down they did not have sort of the 300 kilowatt systems was about seven hundred twenty thousand dollars they did not have the cash on hand to make that type of capital expenditure and went to banks and we're having trouble as a nonprofit entity so they're structured as a non-profit a benefit to their community in the social club they were having difficulty qualifying for traditional financing so it was looking like this project was going to move forward they couldn't pay cash they couldn't get a loan they heard about collected case and came to us we were very quickly able to pre-screen the project let them know yes this is somewhere where we can do it this is the project we're interested in we worked hand in hand with the property owner and the contractor collective son owns this system so this is a 300 kilowatt system with carports rooftops and some solar panels on the cart barns as well so this is a really cool project I think they own the system and they passed along a 15% discount this means that instead of having to finance $720,000 collective son provided $100,000 of the project cost and then borrower finance $600,000 with us and we were able to finance that over 25 years and as I said they're paying 20 cents a kilowatt-hour they saved $42,000 in the first year I also want to make sure I hit on the timeline which is a huge benefit to this as well if they were to take out a bank loan they would have had to start paying immediately on this system from monthly payments as soon as they take out the loan here we started working with the contractor we started building the system we closed on financing and they started building the system over the summer in California property tax bills are paid every December so they were able to close on financing build the system and not make a single payment until December 10th of 2019 and that payment they were already cashflow positive on the savings from the electricity bill so as you can see here we were able to take a project that was about to fall apart and provide a solution that got it done and helped them start realizing savings and now they're going to realize almost two million dollars of savings that is going to go to their operating income over the next 20 25 years so it's a really powerful solution when you have nonprofits who are running into a lot of the you know traditional problems they have with getting cooler dough and nonprofits are a huge subset of the property owners in the country I think it's all sources there's maybe 1.5 million different nonprofits in the United States with 5 trillion dollars in assets so this is really huge subset of property owners who are having a difficult time financing solar projects that can go to immediately help their bottom line and so we at least be collective face is a powerful tool to help unlock that entire property segment I'll go over this one pretty quickly because I apologize the text is really small but this is a change the numbers are out a little bit this is a sample cash flow if anybody's curious to look at the exact numbers of a there's a 220 kilowatt system $500,000 in that example I just went over the Capri owner and the contractor came to us we were able to put together something that looks very similar to this to say ok here's what we can finance here are the costs involved here's what your annual payment will be compare that against your utility bill savings and see see the positive cash flow so here at a 20 year term 6.2 percent and 14 cents a kilowatt-hour their annual payment went from you know having to put five hundred thousand dollars upfront or doing bank financing over five seven years which would be closer to $100,000 a year we were able to bring their annual payment down to forty three thousand dollars a year and that 14 cents per kilowatt-hour their you know their cash flow positive from year one happy to if anybody is looking for additional details or examples and things like that please follow up with Matt and I after this and we're happy to I realize you can't see commercials are so happy to provide that I know we're really deterring some of these points home but want to go over one more time comparing cash to a bank loan to collect at pace you know a lot of these benefits we've gone over the no personal guarantees this is fixed rate financing so we don't have to worry about ballooning payments that property owner Wendy will be close and show them that cash flow they know exactly what their payment is going to be for the next 20 years and comparing that to escalating electricity prices there's a lot of value there transferability we went over and then one other thing I just wanted to make sure to hit on obviously in that scenario they were the closed in early summer and not make a payment until their next property tax bill which was December in a lot of situations if they are interested we can push that out up to 24 months so they can close build the systems the electricity savings and they're just accruing some interest in that time but it allows them to see those savings before they have to make their first payment I think especially right now where people aren't really sure what's going to happen in the next six months I think that option to kind of get back on their feet get their operations going again before they have to make a payment it will help get a lot of deals across the finish line there's a couple other things that aren't on this list that I also want to hit on this and that talked about if you're financing it with cash or a bank loan they're owning system they're not going to be able to take advantage of the tax credit they won't have that production guarantee the collective Sun provides a production guarantee that they're going to at least see a certain amount of saving but they won't have that OEM they don't have the partnering Collective son operating it maintaining and monitoring at letting them know if there's a problem so this tape there's a ton of additional benefits with having a third party there that you know nonprofits are worried about their day-to-day operations they're not you know energy experts and so having an energy expert like Matt and collective son there is really helpful getting them comfortable with the expectations or the statements that they're going to be seeing so that was a lot about the benefits I'm sure people have questions about ok well how do I go about actually qualifying and getting the financing so I'll turn it over to Matt to talk about that thanks Tim so just to take a quick step back and I'm gonna talk about the coffee qualification process which is very very simple but just a quick recap there are really just two agreements here you know we have the taste loan right that provides the 88% of the funding they may provide a real bit less if it's a bigger project because I just jumped will will come up a bit but that's once contracted one set of document the loan documents and what I'm talking about here in a qualification process well excuse me one second the other contract is a solar power agreement that's at 12% discount that's what collective Sun so there are two contracts the solar power agreement or the SBA between us and the customer and then the the custom will have the loan docs with green works so when you come across a client again a non-profit or for-profit or tax appetite typically what you want to know is what's the annual payment you know you have a million dollar system what's the annual payment what's that kind of cost if you want to get a quote from us it's very simple all you need to do is send an email to collect a case of Green Works lending including who they are you know the address the total system size and the total system cost if the storage just be sure that the entire storage project of ITC eligible I won't get into details on that but if you call either myself or Kim basically all you need to be sure of is that the storage is charged 100% by solar that there aren't any electrons from the grid hitting the pending the batteries if that's the case the entire discount applies so if you just send those four simple things to court the pace at Greenwich learning will send you looking in your payment it is now if you want a little more information if you want to see a project cash flow which they went over a few slides previously we need just a little bit more information we need to know you know what does what thing ain't no saving this so compared with the annual savings is to the annual loan payment to see the cash flow and also include the kilowatt hours if you can now the question comes out and says well what's the kilowatt hour rate on these projects well you know it's a loan coupled with that sort of power being so it really gives in a kilowatt hour rate but if you but you can calculate one we could helping with that base you add up all the loan payments and then you divide that into a total production of the system the issue with that is you may be comparing it against a 25-year PPA or thirty-year PPA so you have to get that you want you know talk think about that a little bit of talk about that compare the same time frames but that is the qualification process very simple just send an email to the email address shown here with very basic information and we'll tell you what we gain your loan pain because now to be kind of collective paces a few things that you need to include and we've made some enhancements here that I think really great news at least simplifies things one thing women do require is an extended warranty em universe of 20 years so if you're using something like solar which we really like or SMA you know solar edge is a 12 year inverter warranty I believed the optimizers have a 25 year button convert a warranty is 12 include the cost extend next attorny the contract isn't required 10 workmanship warranty not that you know I really came out of that our tax and technically the adventures at a California that's where we get our start so that's game really California does that's an issue is that cause of any heartburn for anybody and contracts on the call it to give us give me a ring we can talk it over we also have a two-year performance guarantee with every contractor now it's a very modest performance guarantee i meant to bikini live in anyway and it's set to 90 percent of pd rocks so if it only kicks in it underperforms 90 percent of TV watts and that's after all be really a tradition he rates or including some soil inc as a great it would come after that so again it is modest and on the insurance requirements just want to touch on these briefly and happy to talk about these in more detail but either insurance requirements for the contractor and you probably have you know four out of five of these now july ability require that workers comp is required if it's required by law it's not required in the state you don't need it automobile insurance should we have that professional liability insurance for errors and omissions a lot of times you people refer that refer to that as email insurance the person stamps to plan to does structural typically they have you may not have that in house but the PE the professional engineer who end up putting like the stamp on structural and generally speaking already has that and that's all we need now builders risk insurance you may or may not have that it's great when you do and builders risk really it comes a number of things but it went amazing the covers is you know equipment on site that hasn't been installed yet now i wouldn't be covered on the property insurance so we've had this happen we kind of put me stolen from a job site we have you know some storage equipment you know there was quite a bit so it was quite a bit of money but it was covered in stone but builders risk insurance covered that so it's important to have that now if you don't have that a great enhancement that we have now with reworks is that they have a foolish wrist insurance program so it's possibly you can opt into that for a very modest fee and that those things are all built into the cost of the system so if you don't have builders risk insurance this reached out to Greenworks and we jump to myself and we can put you in touch with the right people and propped in your project so that's a basic qualification process process just something you're not going to just shown there and some very basic information will give you back the annual payment so we've started work with more more contractors across the country we've got some great testimonials came in over a really fantastic project with the Golf Course in California so we're hoping to hear from you know mostly its contractors and sales professionals on the call hoping hear from a bunch and they're really getting a lot of traction with the nonprofit community you have to go out the country I think that wraps it up for us if you have any questions please reach out to myself or the tenn directly I think we're gonna go to Q&A Q&A here yep alright just a reminder that you can continue to submit questions at any time in the Q&A widget and we'll start with the first question can brokers charge consulting fees or receive a broker fees thank you that I've never - oh yes they can we can finance we can finance that into the loan if they if they have an agreement with the property owner or the contractor Robert is that they're working with if there are broker fees those can be included into the loan and then we can include that thank you next question someone asks if you have an analysis tool that you can share yeah yeah you want to answer that yeah sure yes we do our typical process is if we have a contractor we wants to work with us we normally take a look at like a first project together make sure you know we go over all the steps and we're on the same page and we like to walk them through it once we have an NGO executed with them we have a tool that contractors can build their own proposals and the collectives the collective pays courses on ownership option is built into that tool so they can put in you know the project cost the year one savings here one kilowatt out or things like that select collective paces the owner and then see kind of that something similar to that cash flow that slide that I went over so we're happy to with any contractors work with you to kind of get you uploaded into our system so we can start will first start sending you some proposals and then teach you how to use that analysis tool yourselves hey Kelsey can I add something to that real quick sure yep and it was any any contractors do you use you know Angie tool days or something like or solar we have custody centers built in for this so just reach out to me and I can show you how to do that thank you next question where did Merced save the two million on operating costs that you mentioned yes oh that was this was a purely solar project so all of the operating costs were utility bill savings so I collected son owns the solar system but a hundred percent of the electricity goes to the property owner so everything generated by that 300 kilowatt system is offsetting the electricity bills for that property owner so they're in a you know it's a very unique position where they're in Central Valley and PG&E and they have 20 cents a kilowatt hour electricity so every kilowatt hour is offsetting that much they were saving about $40,000 in the first year and then assuming a 3% escalation and utility cost which is in California right now a little bit conservative we've seen seven eight nine percent escalation this year and I think PG&E will continue to go up over 25 years that's you know two million dollars in savings thank you next question how much equity on the property is required to be eligible for pace in Maryland so that the equity requirement change a bit state to state I'd actually have to check on Maryland I believe at ten percent so really what that question I think is asking is when you combine pace with any other debt secured by the property and how much leverage can we have on that property so Greenworks our minimum requirement is a 5% equity so if you take the mortgage plus to paste that it can't be more than ninety five percent of the value of the property we also have and I think there's some other questions about this and we can finance on standard commercial property types up to thirty five percent of the value of the property and then for special use and a lot of nonprofits fall into that most do we can find up to twenty five percent of the value of the property so if you have twenty five percent of the value of the property loan for the solar system and any other upgrades plus any mortgage it just can't exceed 90 or 95 percent of the value of the property in if there are you know we realize this is one of the difficulties of pace is that it is different in every single state because they have to pass their own legislation and everybody wants to be a little bit unique and once the state patches with little legislation counties has to opt into a program and can set up their own program so there are some minor differences and for the most part there they're almost exactly the same but there are little tweaks like that equity requirement we are more than happy if you just have an address and water to is this eligible for a collective pays product and what are some of the things I should know about this jurisdiction please email Matt or myself and we're more than happy to give you an initial screen and let you know about that jurisdiction thank you next question could a non-profit build a system that covers their usage and creates extra power that could offer his community energy to members of their institutions Matt you want to go on we've had to take a little closer look at what the overproduction would be you know my initial answer is yes it's possible but we'd have to take a little bit closer look we have built systems that over produce because they were planning on you know for extra equipment I think there's more on the order of 10% you know they were gonna do a big increase in air conditioning or doing an AV in addition to the property so we'd have to get a little more details but you know reach out to him or I we can talk a bit more about yeah there's nothing about pace that would prevent that although we do need to look at where it is and the state on for profit who don't have a huge electricity load and and are in one of those states where they can do community solar we have been able to finance those types of projects they're they're a little bit more complicated because of some of the legislative requirements for pace so yeah like matt said we're happy to look we're always getting more creative coming up with new products and so we were more than happy to help work through that process thank you next question what's the difference between a pace financing arrangement and a PPA let me jump by Regan jump on more formal you got that yeah yeah so yeah there's a there's taste there's collective pace and I'm PPA so comparing those case by itself can be used to finance a solar installation where they own it they take all the tax credits by they I mean the property owns and it takes all the tax credits comparing a PPA to collective space collected cases there's a lot of similarities they're both you know upfront zero $0 down financing PPA normally they're paying for exactly the energy that they produce and or that the system produces with the the solar lease arrangement that we have with collective face it's also zero dollars upfront they they get a hundred percent of the electricity and they make a set payment each year so they know exactly how much they're going to pay if it over produces that's just extra benefits for them also a lot of PPA is the way they're financed they will look at the they rely on the underlying operating business to be able to pay that bill annually or monthly or whatever it is and so there's a much more rigorous kind of credit review application process for that and there are nonprofits who can't qualify for a very attractive PPA but because we're secured by the property value we're able to provide solutions for those property owners who aren't able to get a very strong PPA option and they met you can go over kind of some of the nuance between a PPA and your least structure as well yeah yeah that's a really good question so PPA is is literally you know agreement to purchase power so let's say you have let's take a church for example it's honey kilowatt system for a church if they go and get a PPA and let's say the PPA rate comes in as twenty years and it's ten cents per kilowatt hour you know maybe there's an estimator maybe there isn't but that was somebody else in the PPA and it again it's ten cents per kilowatt hour to get to buy energy at whatever produces at ten cents a kilowatt hour that would be a key PA now whoever is offering that PPA have to underwrite that project so it's going to be based on the credit so that's one thing to consider you know it could be a good option for them I don't know but can be based on the credit worthiness of that entity and so a lot of times those that can be hard to do so then when you compare it to collective pace it's going to be typically a lot of times we've seen case one will also be twenty years okay now they're not going to borrow a hundred percent of the project cost you and about eighty eight percent that's at a system that size may have a twenty year pace name so if you're going to compare it basically you compare what the PPA is your compare collect efficiency of PPA it's not not really that difficult to do basic as compared for the annual payments are on a PTA versus the annual payments on a collective pace project now one of the big differences here is that you know a lot project is going to be a lot easier to get you know court toothpaste qualifies like it's not going to be based on the the credit of the nonprofit now if it's a seaman Eagle seals for example which is a non-profit probably a lot easily to the creditworthiness of an entity like that might be a lot easier that's under right but a lot of pressure you see out there collected pays in the great option near the person that loan is based on the property not on the credit and I know personal guarantees so you know those are some of the differences and again if you want to compare the numbers just compare the annual payment on a CPA versus the annual payment on a collective patient this whole thing is really based on what the contractor charges for the system you know if you have a $4 per watt installation cost another thing your payment's going to be high and you know be effective kilowatt hour rate if you will know you can pack into kilowatt hour a walk will be high you know if you see a project at its are 75 a lot you know we're seeing some very low effective to give you a wage rates and some very low annual payments and some big saving numbers over the years I think Marianna asked that question and you have any questions for Tim rely on that's a really good one let's go through the RICO thank you next question our municipal owned buildings like police stations eligible for this yeah so this is something I forgot to mention when going over just pace financing but unfortunately publicly owned property is not eligible for pace because they actually don't have the property tax bill and we can't enforce them to pay a property tax bill so there's really very few commercial type building so we can't do they are municipal owned building gas station and any residential that's under five unit so we can do multifamily and we can do a portable multi-family housing but we can't do it if it's under five units because then it's considered residential so we also can't finance residential property but otherwise you know basically any type of privately owned commercial property we went over allows it nonprofits but also you know retail office space multifamily hospitality all of those qualified and if they don't have the tax liability like we went over can qualify for costed pace as well or can take advantage of the classic base discount yeah it just real quick to add to that I mean there's a huge universe of taxes and entities that you know are eligible for toothpaste and but you know if I mean if they're a for-profit for example can use a tax and they can use a tax credit obviously collected things is not the best option you should talk to Tim though about a seedings world will let them monetize a tax credit you don't need you know collective some des PA for that you know that's a whole different whole different thing but you know if you do run into up like we've done a Police Association and we done museums some utilities you know that doesn't new is being to the court this patient universe but there are other option though they could potentially be other options that we can talk about for for some of those thank you next question what are the disadvantages to see pace yes I can I can try and you know take this for a couple so one of the disadvantages is just the structure of CPAs obviously you need state enabling legislation and then you need the county to opt in so it is not available everywhere happy to send around that map to anybody interested and like I said send us the address of any potential projects and we can let you know if it's adopted in one other thing I didn't mention is you know if it is in a state with a naval legislation what we're constantly working with new states that pass enabling legislation but if it's in a state where the legislation has been passed at that County for some reason has an up student we're more than happy to inhabit the past many times worked with that property owner the contractor and connecting them with the county officials to get it up to them a lot of times the county just hasn't had the motivation to pass an ordinance yet but if they have a local nonprofit a property owner in their county saying hey I want to take advantage of this that's sometimes all the motivation it takes to get them to pass that ordinance so we're happy to work on that one of the others doesn't come up as much with nonprofits but we mean to always be contracting with their financing the property owning entity because they're placing the voluntary tax assessment on the property so if this is a non-profit who is leasing the building we would need to be connected with the property owner in order to place that assessment on the property that said pace actually has another benefit that I didn't mention but a lot of times that nonprofit if they're leasing you know their long term lease on a building for a butte center or something like that their lease agreement if it's a standard triple net lease will have them paying the property tax as well as the electricity bill so where you normally would have disalignment of incentives between the owner of the building and that to be paying the electricity and the owner of the building being the one who would normally need to finance the system here you can align those incentives so the nonprofit could connect us with the property owner and then they would pay for the system to the tax bill as well as see the electricity savings so it's unique structure with a ton of benefits and when it does work it absolutely helps get projects done but might not otherwise go but we need to make sure you know we're working with the right entity I think some people have asked some questions obviously if you have a huge system on a property with very little property value we're not going to be able to find out more than 25 or 30% of that value so we need the right kind of property or they need to come up with cash or other financing for the remainder of that project cost and we just need to make sure it's in the right area but when it is and those things align it's actually a very streamlined process working with collectives on the America shelves to get these done thank you we have time for one more question someone asks is there a prepayment penalty for C pace yeah so for pace loans there there is a prepayment penalty that is standard if we know what you know what the aversion is of the property owner what what they what their building plans are we can work with them to decrease that or move it around however that it works for them that said I'll let Matt go over there's some they need to own the system for at least six years so there's some structure to that side as well yeah I mean our you know the property I mean the property owners can change I can go to a new owner that's nice other issue we need to be sure that the probably equipment stays there for at least six years so we can fully monetize the tax benefits other than that there aren't any issues that issue the question yeah and that's one thing I did want to make sure to mention you know as they are selling the building obviously with the traditional loan they would need to pay off that they would need to pay that off and there might be a prepayment penalty involved here there isn't really any need for them to prepay it unless obviously there are somnus they want to take out additional leverage on the property or something like that it's a very small it's it's five percent or less five percent for the first five years so they're not normally hang it off to get rid of the system or something on fat in the first five years when it's a three percent or two percent that's on the remaining principle so normally it's a fairly minimal prepayment penalty but again happy to discuss how to make it work with their plans or the building owner if they have any concerns about that alright thank you that was all the questions we have time for today if you have any additional questions or we didn't get yours please feel free to contact our on your own again this webinar will be shared with all registrants so you may view it again at your convenience I'd like to thank Tim and Matt again for being here and collective Sun and green work funding for sponsoring today's webinar some thanking to everyone in our audience for participating I hope you enjoyed our presentation and we invite you to join us for more solar power world webinars thanks everyone