Modeling Services
PARGEN uses a proprietary modeling system as a stand-alone service as well as a tool in our funding process. The model determines the feasibility and efficiency of a distributed generation system and its financial viability. We breakdown this model into three steps which are the same steps used on any distributed generation modeling. The following solar modeling illustrates the three steps:
1. Production Forecast:
The first module determines the distribution of solar energy as a function of installed PV capacity, latitude, longitude, tilt, azimuth and time. We determine the effectiveness of solar production based on physical location and sunlight hours.
The second module integrates solar production with the end-user load and utility tariff on an hourly basis. The model maps your current usage rates over the solar capacity to determine the avoided cost from the utility.
The third module is a discounted cash flow analysis, where the avoided costs determined in the second module provides an ROI on the PV system.
Financing Opportunities for Distributed Generation include:
Because of the accuracy of our model, PARGEN has acted as a consultant on many stand-alone projects. As a service we provide this modeling for existing and prospective renewable energy projects separate from our own PPA ventures.
PARGEN will work with their strategic partners to bring the best financial solution to the project. PARGEN works closely with Institutional Financing, Banking and Private Investors.
1. True Lease – A specific type of multi-year lease, which does not pass on ownership rights of the asset to the lessee. A true lease is an arrangement where the lessor (the person granting the lease) bears both the risk and rewards of ownership of the property. The lessee merely gets to use the property in a rental fashion. For accounting purposes, this lease would not appear on the lesses balance sheet.
2. Capital Lease – A specific type of multi-year lease. A capital lease allows the lessee (customer) to select an asset (distributed generation system) and the lessor (the person granting the lease) purchases the asset. The lessee will use and make installment payments on the asset, with an option to acquire ownership of the asset upon expiration of the lease. For accounting purposes, this asset would appear on the lessee’s balance sheet.
3. Power Purchase Agreement (PPA) or Energy Service Agreement (ESA) – A Power Purchase Agreement is a legal contract between an electricity generator (provider) and a power purchaser (buyer, typically a utility or large power buyer/trader). Contractual terms may last anywhere between 5 and 20 years, during which time the power purchaser buys energy, and sometimes also capacity and/or ancillary services, from the electricity generator. Such agreements play a key role in the financing of independently owned (i.e. not owned by a utility) electricity generating assets. The seller under the PPA is typically an independent power producer, or “IPP”.
In the case of distributed generation (where the generator is located on a building site and energy is sold to the building occupant), commercial PPAs have evolved as a variant that enables businesses, schools, and governments to purchase electricity directly from the generator rather than from the utility. This approach facilitates the financing of distributed generation assists such as photovoltaic, micro-turbines, reciprocating engines, and fuel cells
To run your personal model, please click here to get started.
