1. The basics of PV Sales
Creating PV Proposals (aka Selling Solar)
 Sales Team structure
 Lead & Site Qualification
 Quick Quoting (size and gross price estimate)
 Utility Rates and Incentives structure
 Detailed System Sizing and Pricing
 Proposal pro forma (ROI and cash flow)
 Financing options CPF’s Proposal Creation Tool
with
These topics are presented in theory and put to practice
using CPF Tools, with an emphasis on financial return.
Presented by Jock Patterson
(jpatterson@cleanpowerfinance.com)

2. Instructor
• Jock Patterson (jpatterson@cleanpowerfinance.com)
• Clean Power Finance (5/09 - current)
• Tools Product Design & Support
• Sales Technical Support
• Newsletter Contributions
• Trainer: PV and CPF Tools
• General In-house ‘PV’ person
• Real Goods Solar (10/06 – 6/08)
• Lead Qualification
• Proposal Generation
• Proposal Tool Creation (Excel)
• CRM Tool Management

3. Presentation Contents
Objectives:
Students will learn how to
$ • Manage the Sales Process:
• Solar sales staffing
• CRM Pipeline: Leads, Opportunities, and Customers
• Qualify a lead and their site/location
• Pencil a Quick Quote
! • Create and Explain PV Proposal:
• Inventory and Pricing
• Utility Rates, options, and Incentives
• Solar Savings net of tax effects
• Return on Investment metrics
• Financing and Leasing options
? Jock will learn what students know

4. Gotta know how PV works!
1) Solar Energy absorbed by the array is first converted to what? TE & EE
2) Where does the string inverter go and what does it do? DC to AC 60Hz
3) What happens to the AC electricity that leaves the inverter? Load & Line

5. Acronym Test
# Acronym Short Match with best Meaning or Association
Term Ltr For
11 kW
kW kiloWatt
A California power rating of PV system (Arrays & Inverters)
22 PTC
PTC PV USA (Utility Scale tax applied to utility services like electricity
B County or City Application) Test Conditions
33 CEC-AC
CEC-AC California Energy Commission – Alternating Currentof an investment
C Interest/discount rate that indicates the yield
44 TOU
LCOE Levelized Cost of Energy unit of clean energy; also called a Green Tag
D ‘clean’ component
55 PACE
PACE Property Assessed outputEnergy of DC Array
E ‘Real World’ Clean rating
66 STC
IRR Internal Rate of Return conditions for ‘Nameplate‘ PV panel rating
F Environmental test
77 REC
REC Renewable Energy Credit real property tax assessments
G Financing paid with
88 IRR
STC Standard Test Conditions
H Power rating equivalent to 1,000 Volt-Amps
99 NOCT
TOU Time of Use
I Unit energy cost of PV system over lifetime
10 LCOE
NOCT Nominal Operating Cell Temperature
J Energy/power rates based on when electricity is used
11 UUT
UUT UtilitySolar cell temperature in Standard Operating Conditions
K Users Tax
1H, 2E, 3A, 4J, 5G, 6F, 7D, 8C, 9K, 10I, 11B

6. Solar Sales Staff (1/2): Ability
• Qualifications
• Sales experience, especially in bldg/home construction
• Technical and Financial aptitude a bonus
• An understanding of and ability to communicate
• the value of PV solar
• how PV systems work
• Skills & (Cap)abilities
• Computer-based
• Internet search and email
• Mapping tool use (e.g. Google Earth)
• Word-processing, Presentation, & Spreadsheet apps
• Site Evaluation
• walk on most roofs safely
• measure roof dimensions, condition, and major penetrations
• measure azimuth, tilt (pitch), and shading
• Evaluate electrical service and circuit panels

7. Solar Sales Staff (2/2): Market
PV Market Divisions and Sales Niches
It’s hard to cover it all; specialize in sector, size, type or create niche
• By Major Sectors
• Private:
• Residential: houses, townhomes, condos
• Commercial: Warehouses, Office Bldgs, Plants
• Public: Federal, State, & Local Government
• By Territory
• County(ies)
• Zip Codes
• By Customer Type , Minor sector, or Size
• Specialty User: Wineries, Dairy Farms, Apartment
Buildings, Utilities, Churches, Non-profits, schools
• PV Size (kW): Small (<10), Medium (10-<100), Large (100-
<500), Industrial (>500kW)
• Special Installation: Ground Mounts, Car Ports, Off-Grid

8. Sales Process Overview
• Lead Qualification:
• Payoff, Back-up Power, Resale value, Price
• Site Assessment:
• Energy Analysis, Building
Parameters, System Sizing
• Sales Presentation:
• Financial & Environmental Analysis of
system; why you?
• Closing:
• Make Affordable & Sign Contract
• Installation/Commission => Commission
• Referral Request

9. Lead Qualification (1/2)
What’s the customer really want?
“To be energy independent!”
• Then go off the grid Does Solar Fit ???
• Buy a generator
 “To use clean energy/reduce carbon footprint”
• Get a green rate
• Consider EE first
 “To be patriotic (CAlifornia not CAnada)”
• Buy American-made (Incentive Bonus)
• Reduce energy import (e.g. Hawaii)
• “To Save Money” Go Net Metering!
• Traditional: No Annual NEG Credit
• Sell Excess: Annual NEG Credit/Payment
• “To Make Money” Feed-in Tariff, baby! Sell it All !!
9

10. Lead Qualification (2/2)
Challenges in selling ‘Go Solar’
• High Cost:
• Reduce Upfront cost:
• “Float” incentives
• Suggest Loan/Lease
• On-going cost concern: • Appearance:
• Admin is up-to-you • Aesthetics: architectural clash
• Maint. is low • Visibility: Can you hide it?
• Return on Investment (ROI) • Tomorrow will be better, right?
• IRR (commercial) • Price
• Payback Period (residential) • Technology
• Resale Value (Com & Res)
10

11. Site Assessment (1/2): Array Area
• Solar access/shading
• Insolation Resource (e.g. NSRDB)
• Azimuth & Tilt (175 deg x 23 deg)
• Soft Shading (shadow casting)
• On-site (e.g. Roof Penetrations)
• Off-site (e.g. Utility Poles)
• Future Growth (e.g. Bldgs, Trees)
• Hard Shading: Soiling and Leaves
• Foundation readiness:
• Roof: Original 1970’s Tar & Gravel
• Roof: Real Slate
• Marshy, muddy, quagmire bog?
• terra (really darn) firma?
11

12. Site Assessment (2/2): Electric Service
• Electrical compliance
• Adequate power panel
• Bus & Main Breaker Amperage rating
• Available breaker slot(s)
• Line-side tap option (commercial) ?
• Acceptable transformer (commercial) ?
[NEC 690.64(B): load-side connections]
WARNING!
Be careful inspecting
panels, especially old
ones that are
corroded, filthy, or wet
12

13. System Sizing (1/2)
Customer says, “Super-Size Me?”
• Foundation surface area & setbacks
• Array shape and dimension
• Building and Fire code setbacks
• Penetrations
• Roof weight limit
 Electric Service Panel and Transformer limits
 95% of Electricity Consumption limit if net metering
 Budget limitations: What’s the upfront expense limit?
 Module dimensions/orientation
13

14. System Sizing (2/2)
Home Installer says, “Let’s get you the best ROI”
Season Tier Rate Breakpoint
Summer 1 (Baseline) $0.13 0 < 100% Residential Rates
2 $0.16 100 < 130% are often tiered in
CA; Baseline
3 $0.27 130 < 200% amount depends
4 $0.29 200% + on location and
Winter 1 (Baseline) $0.13 0 < 100% heat source
2 $0.16 100 < 130%
Etc …
14

15. System Sizing (3/3)
Customer says, “The smallest possible, please”
• Poor ROI unless high rates or progressive tiered rates
• High Cost per Watt due to fixed costs
• Consider micro-inverters v. small string inverter
15

16. Quick Quote: Size & Price (1/3)
• System Size DC = (# Modules) * (Watts STC / Module)
• Gross System Price = (System Size DC) * ($ / Watt STC)
• $ / Watt STC may vary with system size but tends to fall in the range of
$6.00 to $8.00 per Watt residentially at this time, depending on equipment
and labor needs
• Net System Price = Gross System Price less initial incentives
• Incentives can include upfront rebate(s), tax credit(s), and performance
rebates

17. Quick Quote: % Offset (2/3)
Size based on how much utility usage to offset
System Size DC = ( (Annual Usage * % offset) / Operational Effectiveness )
Gross System Price = System Size DC * ($ / Watt STC)
[ Note: kWh and Watt are canceled out leaving “$” : (Annual kWh) / (Annual kWh/Watt) * ($ / Watt) ]
Example
• Annual Usage = 12,000 kWh
• % Offset = 80%
• Operational Effectiveness = Annual 1.5 kwh/Watt
• $ / Watt stc = $6.50
= (12,000 * .8) / 1.50 = 6,400 Watts
= ( 6,400 * 6.50) = $41,600

18. Quick Quote: Largest Fit (2/2)
System Size STC1 = (Array Surface Area) / (Module Surface Area) * Module STC
This is the optimistic method
System Size STC2 = Max [Truncate (Array Length / Module Length) *
Truncate (Array Width / Module Width),
Truncate (Array Length / Module Width) *
Truncate (Array Width / Module Length)] * Module STC
System Price = System Size STCX * ($ / Watt STC)
Example
• Array Dimensions & Surface Area = 20 ft x 30 ft = 600 s.f.
• Module Dimensions & Surface Area = (65+1)” x (39+1)” = 2,640 s.i. = 18.33 s.f.
• Module STC = 225W
• $ / Watt stc = $6.50
STC1 = Truncate [600 / 18.33] = 32 modules ; 7.2kW STC
STC2 = Max [Trun(30/5.5)*(Trun(20/3.33), Trun(30/3.33)*(20/5.5)] =
Max[(5*6),(9*3)]= 30 modules ; 6.75kW ; $43,875

19. Break Time

20. Electric Service & Tariffs
• Electric Service
• Current: 60 Hz AC (DC no longer)
• Voltage: 120+V (RMS)
• Phase: 1 & 3 phase (2 phase no longer)
• Rates
• Energy: Power x Time rate
• Demand: Maximum Power Mgt rate
• Power Factor: Reactive Power Fee
PG&E used for examples

21. Tariff Book Review
Four Basic Charge types
1. Customer or Meter Charge ($/timeperiod)
2. Energy use ($/kWh)
3. Demand peak ($/kW)
4. Taxes, surcharges, adjustments, credits
($/kWh, %, $,)
Common Voltage Service levels
1. Primary: 2.4 – 20.78kV
2. Secondary: 120 – 480V (most customers)
3. Transmission: >12kV
[see www.pge.com/tariffs]
21

22. Billing Period Charges
Fixed Charge per billing period or per day; unrelated to
consumption or demand. Minimum charge may differ
Customer/Meter Charge: $/month (per meter)
• E1 (Basic Residential): $0.1478/day = $4.50 per avg month
• A1 (Small Commercial): ~ $9
• A6 (Small Commercial TOU): ~ $15
• A10-TOU (Medium Commercial): ~ $120
You can’t remove a customer/meter charge
with solar energy credits! You may be able
to select a cheaper tariff option or a whole
new tariff, but you can’t apply energy
credits to a non-energy charges.
22

23. Energy Rates (1/4)
Energy Consumption Charges: $/kWh
The Aggregate (“Bundled”) Rate has charges for
• Generation: Power plant generation
• Transmission: Power plant to Substation transmission
• Distribution: Substation to service end-users
Rates can be further altered by various ‘riders’ to the tariff
• Fuel Charges
• Plant Decommissioning
• Energy Credits
• Environmental Fees
• etc
23

24. Energy Rates (2/4)
Example Consumption Charge
Schedule A-10 : Secondary Summer Rate = $0.13578/kWh
(non-TOU) (winter rate is $0.10538)
A flat rate composed of
• Generation: $0.08164
• Distribution: $0.02124
• Total: $0.10288
• Other Charges
• Public Purpose Program $0.01467
• Nuclear Decommissioning $0.00066
• Competition Transition Charges $0.00778
• DWR Bond $0.00505
• Energy Cost Recovery Amount $0.00472
24

25. Energy Rates (3/4)
Energy Charge Variation
Usually Flat but variable by Time:
Flat v. Tiered: rates change with Volume
• Residentially: rates tend to increase
• Commercially: rates tend to decrease
Constant v. TOU: rates change with Day Time
• More Common commercially
• TOU period times can vary
• From weekday to weekend
• Seasonally
• TOU period rates and non-TOU rates can vary seasonally
25

26. Energy Rates (4/4)
Energy Consumption TOU Charges: $/kWh
Example: Schedule A6-TOU
• Secondary Summer Rates
• Peak = $0.44815/kWh
• Part-Peak = $0.20063/kWh
• Off-Peak = $0.11987/kWh
• Summer TOU Periods
• Peak: 12p – 6p M-F
• Part-Peak: 8:30a – 12p and 6p – 9:30p M-F
• Off-Peak: 9:30p – 8:30a M-F ; All Weekend & Holidays
26

27. Time of Use (1/2): Overview
• TOU Tariffs have time-dependent rates (versus fixed rates)
– Days are divided into TOU periods:
– Off-Peak: lowest cost; usually late evening to early morning; often the whole weekend
and holidays.
– On-Peak: highest cost, especially expensive in summer months; often occurs midday
when utility demand is high (machinery, A/C) but may not apply in winter season (e.g.
temperate climates);
– Part-Peak: if it exists, it occurs between Peak and Off-Peak periods; that means it usually
occurs twice in a day. For TOU tariffs with no winter peak period, a part-peak often exists.
– Two or three TOU rate periods most weekdays
– Period names vary among utilities (“Mid-Peak” or “Part-Peak”)
– A TOU period & rate can vary seasonally
• Other possible TOU tariff attributes:
– Tiered TOU rates
– TOU & Demand:
• Base Only: Regardless of when max demand occurs
• TOU with Highest Demand: Depends on when max demand occurs
• Each TOU Period: A max demand is measured and charged for each TOU period.

28. TOU (2/2): Period Usage Allocation
TOU period usage is allocated by combining the TOU schedule with
“Energy Usage Patterns” (or Demand Curves):
Demand
3 3.0
2.5 2.5
2 2.0
1.5 1.5
1 1.0
0.5 0.5
0 0.0
1 3 5 7 9 11 13 15 17 19 21 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
The area under the graph for each TOU period represents the amount of usage

29. Demand Rates (1/2)
Demand Charges ($/KW): Maximum Monthly Demand
• Measured every 15 minutes (every 5 minutes in some cases).
• Common for commercial but not seen in residential in CA
• Customer Power Demand often determines what rates are
available for a customer.
• Solar may lower demand during daylight hours but it won’t
necessarily lower maximum demand and it’s difficult to quantify.
• Non-TOU : Only one Demand Charge at Base Rate
• TOU : Charges in one or more periods
• Off-peak only
• Single TOU period with highest demand
• Each TOU period with respective highest demand
29

30. Demand Rates (2/2)
Examples of Demand Charges ($/KW)
• A10-TOU Primary Voltage
• Summer $10.09
• Winter $6.16
• A6 Primary Voltage
• No Demand Charges
• Can switch if have PV and don’t exceed
1,000 Watts demand
Still don’t get demand? Ask about the swimmer or track runner analogy.
30

31. Taxes and Surcharges
Taxes
• Sales Tax: state sales tax (none in CA)
• CEC Tax: : $0.00022 / kWh consumed
• Utility User’s Tax : municipal sales tax (0 - 10%)
Surcharges: see individual bills
31

32. Financial Incentives to Purchase
Installation Cost Reduction
• Upfront Rebates
• Federal (DOT) Grant in-lieu of ITC (Section 1603), aka TGP
Tax Credits/Deductions
• No CA tax credit
• 30% Federal Investment Tax Credit (ITC)
• Depreciation Deductions (Federal and State)
On-going Reductions to Cost of Ownership
• Performance-based Rebates
• SRECS
• Avoided Green Tags
32

33. Initial Financial Incentives (1/3)
California Solar Initiative (CSI)
Expected Performance-Based Buydown (EPBB) Rebate
• Authorization: SB1 2006; launched 2007
• Administration: Each CA IOU administers their territory and CSI allocation
• Applications: Reservation and Payment Request
• Amount per array = product of the following:
• Nominal Rebate Step Rate [Step 8 for PGE = $0.35/Watt-AC]
• EPBB Design Factor [EPBB Calculator: www.csi-epbb.com]
• AC Array Size [Array PTC * Inverter CEC Efficiency]
• ACME Array #1:
• AC Array Size = 26.74kWac
• Rebate Rate = $0.35
• Design Factor = .9761
• EPPB Rebate = 26,740 * $0.35 * .9761 = $9,135.33
• Q: Why won’t the ACME system proposal include EPBB?
33

34. Initial Financial Incentives (2/3)
Federal ITC Grant Q: Is Jock an
For use in-lieu of “30% Solar ITC” accountant, tax
advisor, or lawyer ?
• Authorization: section 1603 of the ARRA A: No, he is not any of
• Administration: Department of Treasury these !
• Qualification: Investment NOT Individual
• Commercial for-profit entities only
• Projects must start before 2012 (extended by Relief Act … of 2010)
• Application:
• Funds wired to specified account (<60 days)
• Payee can be assigned
• see http://www.treas.gov/recovery/1603.shtml
ACME
30% * Cost Basis where cost basis is net of untaxed upfront rebates
ACME Cost Basis = $289,590 (Total Price) - $0.00 (no rebates) = $289,590
ITC Grant = 30% of $289,590 = $86,877
34

35. Initial Financial Incentives (3/3)
Tax Credits: The ITC’s Initial? Well, it can be carried
over to subsequent tax years if
No State tax credits in CA since 2005 tax credit > tax liability
Federal tax credits per US Code 26 (IRS): “Credits Against Tax” (26,A,1,A,IV)
• “Individual” Tax Credit: really “Personal” Tax Credit (PTC) (form 5695)
• Authorization: IRS Code § 25D
• Title: Residential Energy Efficient Property
• Amount: 30% of qualified PV property expenditures during tax year
• Restriction: for residential property or ‘dwelling’
• “Investment” Tax Credit; the real ITC (forms 3468 & 3800)
• Authorization: IRS Code § 48
• Title: Energy Credit
• Amount: 30% of the cost basis of solar energy property placed in
service
• Q: Which ITC does a Sole Proprietorship use? 35

36. Depreciation (1/3)
Federal Depreciation via MACRS
(CA uses the same depreciation method; so combine income tax rates)
• Accelerated Depreciation of a PV installation’s Cost Basis
• As Energy Property [§48a3Ai], it has a 5 year period [§168e3BviI & 168c]
• default method is 20% declining balance (v. straightline)
• Half-year convention: considered installed in middle of tax year
• Salvage Value
• Zero after recovery period
• If system sold, must consider ‘recapture’ tax
• Q: How many tax years does it take to depreciate a 5 year property?
36

37. Depreciation (2/3)
Tax Recovery Adjusted HY: 200% to Straight Line Method 5-yr Straight-line
Year Period Basis for 40% annually Annually Revised Method for
Remain- Depreciation (200% / 5yrs) Straight-line (Basis comparison
ing / yrs left)
1 5.0 $100,000 $20,000 $20,000 $ 10,000
2 4.5 $ 80,000 $32,000 $17,778 $ 20,000
3 3.5 $ 48,000 $19,200 $13,714 $ 20,000
4 2.5 $ 28,800 $11,520 $11,520 $ 20,000
5 1.5 $ 17,280 $ 6,912 $11,520 $ 20,000
6 0.5 $ 5,760 $ 2,073.6 $ 5,760 $ 10,000
Total $100,000 $100,000
Tax % of Year 1 Cost Basis
Year Half-Year Mid-Quarter
1 20.00% 5.00%
2 32.00% 38.00%
3 19.20% 22.80%
4 11.52% 13.68%
5 11.52% 10.94%
6 5.76% 9.58%
37

38. Depreciation (3/3)
ITC Amount $ 86,877
50% ITC $ 43,438
Tax Rate 42%
MACRS Basis $246,151 Credit Balance Tax Savings
Apply 50% ? No $ - $ 246,151 $ -
Year 1 20% $ 49,230 $ 196,921 $ 20,677
Year 2 32% $ 78,768 $ 118,153 $ 33,083
Year 3 19.2% $ 47,261 $ 70,892 $ 19,850
Year 4 11.52% $ 28,357 $ 42,535 $ 11,910
Year 5 11.52% $ 28,357 $ 14,178 $ 11,910
Year 6 5.76% $ 14,178 $ - $ 5,955
Total $ 246,151 $ 103,384
Q: What is the Cost Basis for MACRS?
38

39. Start Residential Job in CPF Tools
tools.cleanpowerfinance.com
Login Credentials?
Add Job:
follow Jock’s example … switch to CPF Tools screen ….

40. End of Session #1
Wednesday we will get into Proposal creation, discuss ROI metrics, and consider
financing options.