Photovoltaic Systems (P/V) Brochure

IOANNOU ALTERNATIVE ENERGY LTd Photovoltaic system 150 kWp in Cyprus Business plan A photovoltaic system is a system which uses solar cells to convert the sun’s energy to electricity. Such a system consists of three basic components: 1. The solar or photovoltaic (PV) panels that capture the sun’s energy and convert it to electricity 2. The inverter that converts the electricity produced by the panels to a Form compatible with the electricity grid, and 3. The PV mounting system. PV systems can be stand-alone (not connected to the electricity network) or grid connected, which is the majority of systems installed in Cyprus. In this case the grid acts as an energy store, so the users never have their electricity supply cut- off. In fact because of the government subsidy, all the electricity produced from the PV system is sold to EAC (AHK) at a constant favorable price (see the finance section). Photovoltaic Systems in Cyprus • Cyprus has very high solar potential, with average daily sunshine 9.8 to 14.5 hours. • A PV system with nominal output of one kilowatt (1KWp), located in a Coastal area of Cyprus, with panels angled 29o and south direction, with fixed frames produces more than 1600KWh per year, as the average of the first 20 years of operation. Obstacles to widespread use of photovoltaic systems • The efficiency of a PV system is reduced significantly by increasing the temperature of the PV framework. In most frameworks efficiency decreases approximately 0.4-0.45% from the normal price for each 1 ° C warming over the 25 ° C. • Commit major land-surfaces for the creation of high power PV systems. Licensing Procedures - Entities Involved Identify areas for possible installation of PV system If the land is not privately owned, then the investor must provide the leasing of land by the owner or buy the land. Apply to the Cyprus Energy Regulatory Authority (CERA) for exception of license to production of electricity generation from renewable energy (for systems> 20KW) Securing planning and building permission for the installation of the system Contract-Signing of Technical and other terms of interconnection of the PV system to the network of EAC Submit a request for subsidy from the Management Committee of the Special Fund for RES. There will be a priority in mature projects that will provide all permits Applications: Before beginning the project together with all necessary certificates Finance Grants & Subsidies In order to promote the uptake of RES, the Cyprus government adopted a Framework for support measures which included the first Action Plan for the Promotion of Renewable Energy Sources, 2002-2010. Based on the experience gained during the first 5 years of operation of the Action Plan, a New Support Scheme was approved by the Council of Ministers and is now in operation. The New Support Scheme (2009-2013) provides more generous incentives than the previous Scheme and sets more ambitious targets for the increase of renewable energy share in Cyprus. Photovoltaic (PV) systems For individuals and organizations that are not engaged in economic activity (e.g. private households), and for system with installed power up to 7kWp the scheme offers the following plan: ? No contribution to initial costs and a feed-in tariff of 28 cents/kWh, for 15 years The above tariff is fixed for the duration of the scheme, and the maximum Installed power allowed is 7 kW, more than enough for all the energy needs of a typical Cypriot household. With current market prices, payback time of the project should not be more than a few years (5,5-6 years). For the 7 kW to 150 kW range, the tariff is 25 cents/kWh, with no contribution to initial costs. The producer remains connected to the EAC grid and uses electricity normally; the amount produced by the PV system is measured by special meters installed by EAC and sends regular payments to the producer. The documentation required to apply and register for this scheme will be taken care by Ioannou Alternative Energy the same with all the licensing procedures. The approval time varies, and is depended by the load of application of the same category and the available MW according to the action plan that each year Cyprus Regulatory Authority is approving. Bank Loans Due to the favorable financing schemes offered by the government, a lot of banks have decided to offer loans and payment aids to their customers to finance their PV or solar thermal project. A bank loan can be tailored to each individual case, but it is possible to direct all EAC payments to finance the loan, effectively paying nothing. The main characteristics of the loans are as follows: • Loans of up to 100% of the investment for the purchase and installation of photovoltaic systems • Loan duration of up to 15 years. • No customer contribution required when adequate tangible security is provided. • Very favorable pricing Useful Information: Customers must present the pre-approval or approval for the installation of a photovoltaic system from the Department of Energy of the Ministry of Trade & Industry. Customers must deposit part or full the government subsidy received from the Ministry into the loan account. For the best protection of the customer’s investment, the photovoltaic system will be insured against damage due to fire, earthquake, flood, etc. Photovoltaic economics Some important terms related to photovoltaic system economics are presented herein. The most important PV economic parameters are the total costs of installing a PV system, electricity price, Feed-In tariffs and the energy payback time - EPBT. Investments into renewable energies, particular into PV and wind technologies are another economics related area. The cost of a PV system is measured in price-per-peak-watt (€/Wp). "Peak Watt" is defined as the power at standard test conditions (solar irradiation 1000 W/m2, AM of 1.5 and temperature 25°C). Photovoltaic system costs encompass both module and BOS costs. Module costs typically represent 60-80 % of total PV system costs. Typically the cost of installing a photovoltaic system having a power of 1 kW ranges from 1800 € to 2200 €/kWp (if the land, property doesn’t need to be purchased). Approximately about half of this investment would be for the PV modules, and the inverter, PV array support structures, electrical cabling, equipment and installation would account for the rest. Please note that BOS and installation costs can vary significantly. For example: when costs for site preparation, laying a foundation, system design and engineering, permitting, as well as assembly and installation labor are higher, total installations costs are higher also. The life cycle cost (LCC) of a PV system may also include costs for site preparation, system design and engineering, installation labor, permits and operation and maintenance costs. Photovoltaic systems have an anticipated 25- year lifetime. Operation and maintenance costs, ranging between 0,02 to 0,1 cents/kWh. However, these costs can vary significantly, ranging between as low as 0.01 €/kWh to 0.10 €/kWh. Higher reported costs included capital replacement costs due to environmental factors such as extreme temperatures and vandalism. Some studies report that operation and maintenance costs are well correlated to the system size, so 1 % of total hardware costs (investment) operation and maintenance costs is expected. The maintenance of the plant will be secured by Ioannou Alternative Energy’s experience. Financial Data: Profit/Loss Statement, Balance sheet, free cash flow calculation For financial plan an extensive is prepared with all costing details. At the moment we present a basic outline. 1. 150 kWp System with fixed mounting system The financial plan is based on a number of facts and assumptions: The major are: Economic Efficiency Calculation System Data PV Output: 149,96 kWp System Operating Start: 1/1/2011 Total Degradation: 14,00 % Electricity Feed-in Grid Concept: Full Feed-in For the First 20 Years: 0,2500 €/kWh Thereafter: 0,1350 €/kWh Basic Economic Efficiency Parameters Assessment Period: 20 Years Interest on Capital: 0,00 % All entries with sales tax Income and Expenditure Investments: 280.000,00 € Operating Costs: 1.960,00 €/a Feed-in Payment Received in First Year: 60.413,64 €/a Financing Loan 1 Totalloan: 280.000,00 € Tax Tax Rate: 10,0 % Depreciation Period: 10 Years Type of Depreciation: Linear Depreciation Depreciation Rate: 10,00 % Results According to Net Present Value Method Net Present Value: 675.984,03 € Minimum System Operating Period 7,0 Years Electricity Production Costs: 0,08 €/kWh Detailed List of all Payments Received and Made Investments Investments 280.000,00 Operating Costs Running Costs 1.960,00 Income from Export to Utility Grid Income from Export to Utility Grid 60.413,64 Financing Loan 1 Totalloan: 280.000,00 € Payment Amount: 280.000,00 € Term: 10 Years Loan Interest: 7,50 % Repayment Free Initial Years: 0 Years Repayment Period quarterly Position Total [] Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Self-Financing 0 0 0 0 0 0 0 0 0 0 0 0 0 Income from Export to Utility Grid 1179878 60414 59991 59568 59145 58722 58299 57876 57453 57030 56608 56185 55762 Depreciation -280000 -28000 -28000 -28000 -28000 -28000 -28000 -28000 -28000 -28000 -28000 0 0 Total Investments -280000 -280000 0 0 0 0 0 0 0 0 0 0 0 Total Operating Costs -41160 -1960 -1960 -1960 -1960 -1960 -1960 -1960 -1960 -1960 -1960 -1960 -1960 Total Loan Payments -387625 -48213 -46113 -44013 -41913 -39813 -37713 -35613 -33513 -31413 -29313 0 0 Total Loan Interest -107625 -20213 -18113 -16013 -13913 -11813 -9713 -7613 -5513 -3413 -1313 0 0 Results before Tax 751093 10241 11918 13595 15272 16950 18627 20304 21981 23658 25335 54225 53802 Tax Refund -75109 -1024 -1192 -1360 -1527 -1695 -1863 -2030 -2198 -2366 -2534 -5422 -5380 Outstanding Loan Payments -339413 -293300 -249288 -207375 -167563 -129850 -94238 -60725 -29313 0 0 0 Results after Tax 675984 9217 10726 12236 13745 15255 16764 18273 19783 21292 22802 48802 48422 Cash Flow after Tax 675984 9217 10726 12236 13745 15255 16764 18273 19783 21292 22802 48802 48422 Cash Balance (Accrued Cash Flow) 9217 19943 32179 45924 61179 77943 96216 115999 137291 160093 208895 257317 Cash balance less outstanding loans -330195 -273357 -217108 -161451 -106383 -51907 1979 55274 107979 160093 208895 257317 Position Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Self-Financing 0 0 0 0 0 0 0 0 0 Income from Export to Utility Grid 55339 54916 54493 54070 53647 53224 52802 52379 51956 Depreciation 0 0 0 0 0 0 0 0 0 Total Investments 0 0 0 0 0 0 0 0 0 Total Operating Costs -1960 -1960 -1960 -1960 -1960 -1960 -1960 -1960 -1960 Total Loan Payments 0 0 0 0 0 0 0 0 0 Total Loan Interest 0 0 0 0 0 0 0 0 0 Results before Tax 53379 52956 52533 52110 51687 51264 50842 50419 49996 Tax Refund -5338 -5296 -5253 -5211 -5169 -5126 -5084 -5042 -5000 Outstanding Loan Payments 0 0 0 0 0 0 0 0 0 Results after Tax 48041 47660 47280 46899 46519 46138 45757 45377 44996 Cash Flow after Tax 48041 47660 47280 46899 46519 46138 45757 45377 44996 Cash Balance (Accrued Cash Flow) 305358 353018 400298 447197 493716 539854 585611 630988 675984 Cash balance less outstanding loans 305358 353018 400298 447197 493716 539854 585611 630988 675984 2. 150 kWp System with Tracking system (production is increased 20-25%) Economic Efficiency Calculation System Data PV Output: 149,96 kWp System Operating Start: 1/1/2011 Total Degradation: 14,00 % Electricity Feed-in Grid Concept: Full Feed-in For the First 20 Years: 0,2500 €/kWh Thereafter: 0,1350 €/kWh Basic Economic Efficiency Parameters Assessment Period: 20 Years Interest on Capital: 0,00 % All entries with sales tax Income and Expenditure Investments: 300.000,00 € Operating Costs: 2.100,00 €/a Feed-in Payment Received in First Year: 73.527,82 €/a Financing Loan 1 Totalloan: 300.000,00 € Tax Tax Rate: 10,0 % Depreciation Period: 10 Years Type of Depreciation: Linear Depreciation Depreciation Rate: 10,00 % Results According to Net Present Value Method Net Present Value: 878.927,27 € Minimum System Operating Period 6,1 Years Electricity Production Costs: 0,07 €/kWh Detailed List of all Payments Received and Made Investments Investments 300.000,00 Operating Costs Running Costs 2.100,00 Income from Export to Utility Grid Income from Export to Utility Grid 73.527,82 Financing Loan 1 Totalloan: 300.000,00 € Payment Amount: 300.000,00 € Term: 10 Years Loan Interest: 7,50 % Repayment Free Initial Years: 0 Years Repayment Period quarterly Position Total [] Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Self-Financing 0 0 0 0 0 0 0 0 0 0 0 0 0 Income from Export to Utility Grid 1435998 73528 73013 72498 71984 71469 70954 70440 69925 69410 68896 68381 67866 Depreciation -300000 -30000 -30000 -30000 -30000 -30000 -30000 -30000 -30000 -30000 -30000 0 0 Total Investments -300000 -300000 0 0 0 0 0 0 0 0 0 0 0 Total Operating Costs -44100 -2100 -2100 -2100 -2100 -2100 -2100 -2100 -2100 -2100 -2100 -2100 -2100 Total Loan Payments -415313 -51656 -49406 -47156 -44906 -42656 -40406 -38156 -35906 -33656 -31406 0 0 Total Loan Interest -115313 -21656 -19406 -17156 -14906 -12656 -10406 -8156 -5906 -3656 -1406 0 0 Results before Tax 976586 19772 21507 23242 24977 26713 28448 30183 31919 33654 35389 66281 65766 Tax Refund -97659 -1977 -2151 -2324 -2498 -2671 -2845 -3018 -3192 -3365 -3539 -6628 -6577 Outstanding Loan Payments -363656 -314250 -267094 -222188 -179531 -139125 -100969 -65063 -31406 0 0 0 Results after Tax 878927 17794 19356 20918 22480 24042 25603 27165 28727 30289 31850 59653 59190 Cash Flow after Tax 878927 17794 19356 20918 22480 24042 25603 27165 28727 30289 31850 59653 59190 Cash Balance (Accrued Cash Flow) 17794 37151 58069 80548 104590 130193 157358 186085 216374 248224 307877 367066 Cash balance less outstanding loans -345862 -277099 -209025 -141639 -74941 -8932 56389 121023 184967 248224 307877 367066 Position Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Self-Financing 0 0 0 0 0 0 0 0 0 Income from Export to Utility Grid 67351 66837 66322 65807 65293 64778 64263 63749 63234 Depreciation 0 0 0 0 0 0 0 0 0 Total Investments 0 0 0 0 0 0 0 0 0 Total Operating Costs -2100 -2100 -2100 -2100 -2100 -2100 -2100 -2100 -2100 Total Loan Payments 0 0 0 0 0 0 0 0 0 Total Loan Interest 0 0 0 0 0 0 0 0 0 Results before Tax 65251 64737 64222 63707 63193 62678 62163 61649 61134 Tax Refund -6525 -6474 -6422 -6371 -6319 -6268 -6216 -6165 -6113 Outstanding Loan Payments 0 0 0 0 0 0 0 0 0 Results after Tax 58726 58263 57800 57337 56873 56410 55947 55484 55021 Cash Flow after Tax 58726 58263 57800 57337 56873 56410 55947 55484 55021 Cash Balance (Accrued Cash Flow) 425793 484056 541856 599192 656066 712476 768423 823907 878927 Cash balance less outstanding loans 425793 484056 541856 599192 656066 712476 768423 823907 878927 Remarks: The choice for investment is yours but we’ll be glad to be the partner you wish. We would like to be part of that change and to take part in the development of RES in Cyprus as well as in the region. Ioannou Alternative Energy Ltd. has from its foundation emphasized on the Engineering part of the value chain with highly qualified members of the team M.Sc. degrees in Engineering and years of experience in Renewable Energy Projects both in Europe and the Middle East, as well as economists and lawyers. The quality of our services, our products and our choice of suppliers is a clear statement of our commitment to quality and durability. We welcome you to contact us and hope that we can offer our services to you and your company Christos Ioannou General Manager IOANNOU ALTERNATIVE ENERGY L.T.D. 24 AGIAS IRENIS, LIMASSOL, CYPRUS. TEL. 25030383 FAX 25355639 http://www.ioannoualternative.com Email: info@ioannoualternative.com