<html><head><style type="text/css"><!-- DIV {margin:0px;} --></style></head><body><div style="font-family:arial, helvetica, sans-serif;font-size:10pt"><div>Friends</div><div><br></div><div>Having had some experience in this genre, after selling my company to SunEdison in '07, here are my takeaways.</div><div><br></div><div>1. The financing community want assurances. My hunch is their expectations or what they were sold compared to what the production is, could be falling short.</div><div>2. Risk management- pushing the risk to the integrator, leverages their returns. Assignment of this responsibility, kWH harvest is hard to quantify.</div><div>3. The factor- PVWatts- .77; .82- perhaps the .77 is more conservative- over time. The amalgamation of 25 or so years of production is hard to extrapolate. Another function of risk. Who is being relegated to take the risk, is a negotiable piece of the relationship.</div><div><br></div><div>Overall, the way wrenches
can make some more $ and have a long term relationship with their clients, is having a maintenance-recurring revenue aspect to their business models. This is were you could articulate this. If you are being asked to provide warranties/assurances, build it into the deal. X cents per kW, for the system install, etc. Yes, enjoy the upside to your favor, since they are asking you to share the downside. Some years, the weather will be fantastic and hence increased production, some years, Iceland will have erupting volcanoes.</div><div><br></div><div>To me, the performance based model needs to come out of our industry and we need to wean ourselves from tax credits, buy downs etc and go FIT. This includes full blown maintenance agreements on systems we have deployed, to ensure the tax payers who have subsidized these systems at the federal and state level are getting a good return on their investment as well. It makes me wonder how many systems
that have been grid tied over the last 10 years are still fully optimized and working to spec? I surmise alot of connectors have come loose, trees have grown, dirt has accumulated, etc., to suggest a degradation of performance.</div><div><br></div><div>If we are seeking energy independence, we need to have a digital dashboard to manage the systems efficacy.</div><div style="font-family:arial, helvetica, sans-serif;font-size:10pt"><br><div style="font-family:times new roman, new york, times, serif;font-size:12pt"><font size="2" face="Tahoma"><hr size="1"><b><span style="font-weight: bold;">From:</span></b> "SOLARPRO@aol.com" <SOLARPRO@aol.com><br><b><span style="font-weight: bold;">To:</span></b> re-wrenches@lists.re-wrenches.org<br><b><span style="font-weight: bold;">Sent:</span></b> Mon, April 26, 2010 4:57:49 AM<br><b><span style="font-weight: bold;">Subject:</span></b> Re: [RE-wrenches] Volcanos, reduced solar production and kWh performance
warr...<br></font><br>
<font id="role_document" color="#000000" size="2" face="Arial">
<div>Marco:</div>
<div> </div>
<div>At what point (kW or cost) does a weather station with online monitoring
make sense? </div>
<div>What (or who ) defines "normal weather?"</div>
<div>Defining expectations for the large (> 1M) installations must
be particularly vexing - what constitutes normal or expected downtime due
to mechanical failure becomes key to structuring PPA's.</div>
<div>If making a warranty on kWh production must be part of a contract, a
number of concerns must be tackled in the way it is written, especially with
regard to the value of compensation. Maybe funds could be awarded for
<em>over</em> production or applied as a credit against lower than expected
kWh. </div>
<div> </div>
<div>Pat Redgate</div>
<div>Ameco</div>
<div> </div>
<div>
<div>In a message dated 4/26/2010 4:38:43 A.M. Pacific Daylight Time,
solar1online@charter.net writes:</div>
<blockquote style="PADDING-LEFT:10px;MARGIN-LEFT:10px;"><font style="BACKGROUND-COLOR:transparent;" color="#000000" size="2" face="Arial">
<div> </div>
<div><font size="2" face="Arial">Hi Marco,</font></div>
<div><font size="2" face="Arial"></font> </div>
<div><font size="2" face="Arial">I hope this query does not divert response to
your original question.</font></div>
<div><font size="2" face="Arial"></font> </div>
<div><font size="2" face="Arial">How is the situation of the reduced performance
due to the volcano (or other "acts of God" or the like) approached
in the Power Purchase contract? Perhaps this could be titled "Reduced Solar
Production As a Result of Reduced Solar Input". </font></div>
<div><font size="2" face="Arial"></font> </div>
<div><font size="2" face="Arial">TIA,</font></div>
<div><font size="2" face="Arial"></font> </div>
<div><font size="2" face="Arial">Bill Loesch<br>Solar 1 - Saint Louis
Solar<br></font></div>
<div><font size="2" face="Arial">PS As I remember, the last time I bought a new
vehicle, back in the Dark Ages, the auto manufacturer's warranty deferred to
the tire maker's warranty (for tires), etc. Any similarity?</font></div><font size="2" face="Arial"></font>
<div><font size="2" face="Arial"></font> </div>
<div><font size="2" face="Arial"></font> </div>
<blockquote style="BORDER-LEFT:#000000 2px solid;PADDING-LEFT:5px;PADDING-RIGHT:0px;MARGIN-LEFT:5px;MARGIN-RIGHT:0px;">
<div style="FONT:10pt arial;">----- Original Message ----- </div>
<div style="FONT:10pt arial;BACKGROUND:#e4e4e4;"><b>From:</b>
<a rel="nofollow" title="mailto:marco@pvthawaii.com" ymailto="mailto:marco@pvthawaii.com" target="_blank" href="mailto:marco@pvthawaii.com">Marco
Mangelsdorf</a> </div>
<div style="FONT:10pt arial;"><b>To:</b> <a rel="nofollow" title="mailto:re-wrenches@lists.re-wrenches.org" ymailto="mailto:re-wrenches@lists.re-wrenches.org" target="_blank" href="mailto:re-wrenches@lists.re-wrenches.org">'RE-wrenches'</a> </div>
<div style="FONT:10pt arial;"><b>Sent:</b> Sunday, April 25, 2010 10:02
PM</div>
<div style="FONT:10pt arial;"><b>Subject:</b> [RE-wrenches] Volcanos,reduced
solar production and kWh performance warranties</div>
<div><br></div>
<div class="Section1">
<p class="MsoNormal"><span style="COLOR:#1f497d;">This thread brings up a very
timely issue that I’m dealing with right now with PV Power Purchase
Providers. As an integrator providing turnkey PV systems of X kW, I’m
being asked to contractually agree to a minimum performance warranty for
said PV systems. I am EXTREMELY uncomfortable to any such clause in
any contract that I would sign. I have strong confidence in my PV
design capabilities and engineering support and in my professional
crew to install a top-quality PV system. I have a lot less confidence
in an inverter manufacturer being able to get to a site on a Hawaiian island
in the middle of the Pacific in a super timely fashion as the lost PV kWhs
rack up. And as I mentioned in a previous post today, we have an
active volcano here that’s been spewing since 1983, a volcano that could get
a lot worse on any given day. I’m leaning strongly against agreeing to
any such clause. Way too bad a precedent to set. Way too much of
a liability.</span></p>
<p class="MsoNormal"><span style="COLOR:#1f497d;"> </span></p>
<p class="MsoNormal"><span style="COLOR:#1f497d;">Anyone else had to deal with
this bugger of a performance warranty demand?</span></p>
<p class="MsoNormal"><span style="COLOR:#1f497d;"> </span></p>
<p class="MsoNormal"><span style="COLOR:#1f497d;">Thanks,</span></p>
<p class="MsoNormal"><span style="COLOR:#1f497d;">marco</span></p>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:11pt;">ProVision
Solar</span></p>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:11pt;"> </span></p>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">Marco:</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;"> </span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">Our
production <em><span style="FONT-FAMILY:'sans-serif';">schedule</span></em> has been in
tatters - lowered by perhaps 30% because of the rain.... can't plan, can't
do. Then I pay overtime on good days to (try to) catch up.</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">We
have a number of systems online and I had not thought to actually review and
compare from this year to last. I'll let ya know.</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;"> </span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">We'll
get a call like - "My bill is higher than last year (edison has a bar
graph of monthly consumption for the past 13 months) and I'd like you to
look at my system" or My meter is not going backwards, should I call
edison?" The weather is so consistently wet this
winter (think Hilo) that we usually just need to ask-</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">"Been
outside lately?"</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;"> </span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">But
everywhere is so green and the desert bloom is
outrageous.........</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;"><span><a target="_blank" href="http://www.desertusa.com/wildflo/ca.html">http://www.desertusa.com/wildflo/ca.html</a></span></span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"> </span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;"> </span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">Pat
Redgate </span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">Ameco
Solar </span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;"> </span></p></div>
<div>
<div>
<p class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">In
a message dated 4/25/2010 12:24:53 P.M. Pacific Daylight Time,
marco@pvthawaii.com writes:</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<blockquote style="BORDER-BOTTOM:medium none;BORDER-LEFT:blue 1.5pt solid;PADDING-BOTTOM:0in;MARGIN-TOP:5pt;PADDING-LEFT:4pt;PADDING-RIGHT:0in;MARGIN-BOTTOM:5pt;MARGIN-LEFT:3.75pt;BORDER-TOP:medium none;BORDER-RIGHT:medium none;PADDING-TOP:0in;">
<div>
<div>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;">Pat,</span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;"> </span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;">Kicked
your butts as far as lower output? If so, by how much on a
percentage basis?</span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;"> </span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;">On
the Big Island of Hawaii, we’ve had a very active volcano doing its thing
since 1983. With the normal trade winds, the vog (volcanic smoke +
fog) gets blown south past the volcano, around the south tip of the island
and <b><i>then back up</i></b> along the west side of the island.
Which means that Kona-side residents can be in a yucky vog zone for days
and sometimes longer. Think L.A. on a smoggy summer day. And
as far as percentage decrease in solar output, I really have little
accurate clue.</span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;"> </span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;">Marco</span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;">ProVision
Solar</span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:#1f497d;FONT-SIZE:10pt;"> </span></p>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">Kicked
out butts, in fact.</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;"> </span></p></div>
<div>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">Pat
Redgate</span><span style="FONT-FAMILY:'sans-serif';COLOR:black;"></span></p></div>
<div>
<p style="" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;FONT-SIZE:10pt;">Ameco
Solar</span><span style="COLOR:black;"></span></p></div></div>
<p style="MARGIN-BOTTOM:12pt;" class="MsoNormal"><span style="FONT-FAMILY:'sans-serif';COLOR:black;"> </span></p></blockquote></div></div></blockquote></font></blockquote></div></font>
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