JUNE 3, 2014

PRESENTED BY
GROUP 1

LIEBEROSE SOLAR PARK FINANCIAL
ANALYSIS
Problem Statement
Solution
Scope of Liberose Solar Park Project
Background
Liberose Construction Flow
Site Details & Optimal Installations of Solar Panel
Creating a Financing Plan
Investors involved
Cash flow/ Future Worth Analysis
Alternative Financing Solution
Future Advancement/ Deconstructioning
Conclusion

Agenda
Problem Statement
With fossil fuel prices increasing, their
stores decreasing, and the effects
of excess CO
2
in the atmosphere
becoming problematic, renewable
energies take the stage.
Problem Statement
Climate change symptoms are
becoming more harmful to the
current way of life causing for a
need of action.
Efficiency and sustainability of
current living styles are considered
for combating climate change.
However, even with their increase,
fossil fuel energy generation will
continue to put out overwhelming
amounts of CO2.
Solution
The best solution renewable and sustainable
way of generating energy, clean energy.
Wind farms and solar parks, both solar
thermal and photovoltaic technologies, have
been popping up all over the world in the
last few decades.
While these energy sources are not
consistent, modern methods make these
parks highly competitive in todays energy
market.

Solution
These parks have been making huge
impacts on clean energy consumption.
Many countries and companies are
pushing for worldwide clean energy
and one of the world leaders is
Germany.
Germany has over 120 solar parks
with the second largest solar park in
the world, Lieberose (Love Rose).

Scope of Liberose Solar Park Project




Lieberose Solar Park was built in
Turnow-Preilack county, Brandenburg
Germany.
Provides clean energy to over 15,000
homes.
Land burdened with munitions being
re-naturalized.
Outputs 53 MW or 53 million
kWh/year.
Takes up 162 hectares of land, the
equivalent of 400 acres.
It was designed to come online in the
year 2009 and last for more than 20
years.
Scope of Liberose Solar Park Project


Around 35,000 tons of CO
2
are saved
from entering the atmosphere annually.
Awarded official partner of the
Sustainable Europe Campaign by the
European Commission.

Scope of Liberose Solar Park Project
Background
Germany has been using
renewable energy technologies
since 1990.
It has about 13 million square
meters of roofs and fields covered
with solar panels and more than
21,300 wind turbines.
Major Project Developers
Juwi Group
Founded in 1996 by Fred Jung and
Matthias Willenbacher in Germany.
Juwi has implemented over 2,300
plants which produce a combined total
of approximately 3,000 MW of power.

First Solar
Worldwide, it provides more than 8 GW of
power.
It is also a financer, engineer, constructor,
and operator of many of the worlds largest
plants.

Major Project Developers
Major projects Juwi has led in development
Juwi Group and First Solar, being some of the major project development
companies, see projects through from consulting, planning, development,
financing, construction all the way to management.
Lieberose is a great example. For this solar park they took on the project of
cleaning the old military training facility and ended up selling their largest
solar park to date (back in 2009) to the investor WealthCap.

Major Project Developers
Construction
The construction of
Lieberose Solar
Park planned to
take place between
January and
December in 2009.
The project ended
up being completed
and commissioned
in October of 2009.

Construction
Early stages of construction of the project included clearing and
preparing the land from previous military use. Dangerous ammunitions
were removed from the park as part of the clearing process.
The mounting systems for the panels were
manufactured by Schletter GmbH.
Each mount holds 25 panels and costs
around $1000 USD. Therefore a total of
14,000 mounts are needed for the
700,000 panels, creating a total cost of
$14,000,000 USD.

Next, around 700,000 PV thin film
modules, predominantly supplied by the
nearby German subsidiary of market
leader First Solar in Frankfurt/Oder, were
installed.
Installation of equipments
The modules supplied by First Solar, FS-272-277
modules, had an approximate cost of $150 USD per
module.


Installation of equipments
There were also 37 SMA inverters rated at 1250MV and
one rated at 900MV installed. Though these costs were
not specifically listed it is determined that they are
between $100,000 to $200,000 USD per unit.
The company Leoni, equipped the solar power plant with
installed pipes that transport the generated power of the
700,000 solar modules to the inverters of the plant.
More than 1000 km of sophisticated cable were installed
in total.
The management of Leoni reports that the cables are
extremely weather resistant and have an expected service
life of at least 150,000 hours of operation, which is a use
of more allowed than 30 years.
The BETAflam solar cable is double insulated and
halogen-free, with a highest resistance. They are flame-
retardant, UV, ozone, hydrolysis as well, and can
withstand temperatures from -40 to +120 C.
It is also the first cable that is universally applicable for
the installation of photovoltaic systems in Europe and
America, as it is both approved by TV as well as by the
American UL (Underwriters Laboratories).

Installation of Equipments
An aerial view of Lieberose solar park
The Operation of a PV System
Photovoltaic systems are a form of energy
generation that converts sunlight into electricity.
The material used in PV cells is crystalline-silicon.
When light hits the material it releases electrons
that are collected at the metal conductors along each
cell.
These electrons then flow through the conductors to
the outputs. The output of the solar panels are not
typically connected directly to a load. Instead the
solar panels are either directly connected to a
DC/AC inverter or to a charge controller and a
battery which is then connected to the inverter.
Photovoltaic systems can be used in many different
applications.
Installations of Solar Panel for Optimal Performance


The orientation of the solar panels is
important for getting optimal performance
and energy output. Some applications
allow for the panels to vary or track the
sun throughout the day while others are
fixed in place.
Lieberose solar park is located in a
meadow on top of the old military
facilities.
While solar tracking causes for higher
efficiency in the photovoltaic panels it
costs money and energy. For Lieberose the
benefits do not outweigh the costs when it
comes to solar tracking. Therefore the
panels at the solar park are fixed in place
facing south at around a 23 degree angle.

Installations of Solar Panel for Optimal Performance
How to Install a Solar Panel
Lets have a look on video on how to install a solar panel

http://www.juwi.com/solar_energy/references/lieberose_solar_park.h
tml
Creating a Financing Plan
Juwi and First Solar implemented a financing plan that takes outside capital and refinances
through two development banks.
The outside capital accounts for 80% of the total investment and was received from multiple
banks: KfW IPEX Bank (provided 1/3 of the volume), Bremer Landesbank, DZ Bank, Landesbank
Hessen-Thringen (provided 1/5 of the volume), and NordLB.
The long-term financing includes funds from the promotional programs of the European
Investment Bank and KfW Bankengruppe.
The remaining 20% of the capital was equity, financed by the developers Juwi Group and First
Solar at first through mezzanine loans (this allow the lender to take hold of stock or ownership in a
project or company if the loan is not paid back in time).
The total investment volume was more than EUR 160 million -around $215 million. The
transaction implies a deal value of $4.06 million per MW of installed capacity.
Upon completion, the park was sold to WealthCap -subsidiary of
UniCredit bank- in 2010. WealthCap launched a fund Photovoltaic
1 for Lieberose solar park. Investors were allowed to participate
with min subscription EUR 10000 + 5% premium.
After the lease has run out, First Solar will take the modules back
into one of the companys recycling plants. Up to 95% of the
semiconductor material can be reused in new modules and 90% of
the glass can be reused in new glass products. So, Lieberose will stay
sustainable after deconstruction.
The waste load is reduced considerably, and thus the recycling
procedure relieves the environment.
Creating a Financing Plan
WealthCap, the investor who purchased the Lieberose Solar Park, has provided an article VP Solar 1 that includes a fairly detailed list of
cash outflows & inflows with only major forms of costs and revenues were consider during calculation.
Given the feed-in tariff is $0.42/kWh and some annual costs of the park beside a few assumptions, a cash flow, breakeven, and net future
worth analysis can be done.
Creating a Financing Plan
1. Liquidity of 1.1. of the year
Proceeds
2. Insert mezzanine interest accrued
3. Open deposit in the debt service reserve account
4. Liquidity reserve to repay the financing through First Solar
5. Liquidity reserve
6. Interest on investment of the liquidity reserve
7. Revenue from electricity sales
8. Income from the sale
9. To transfer liquidity for the dismantling
Inflows

Payments
10. Interest on borrowed capital
11. Repayments
12. Maintenance and technical management
13. Maintenance / Repairs / own electricity and other costs
14. Insurance
15. Leases
16. Avalgebhr dismantling guarantee
17. Care costs , "Agency Fee" and other cost assumptions
18. administrative costs of the investment
19. trade tax
20.distributions to the limited partners in % of the limited
Outflows
Liquidity at 31.12. of the year
Creating a Financing Plan
Cash flow/ Future Worth Analysis
Here the annual benefits (revenue) were ignored to determine what the Solar Park owners would have to pay in order to breakeven at the
end of the term given the annual costs, the initial investment, and salvage benefit.
Given the information from WealthCap:
1. Total annual costs (M&T, lease, insurance, repair etc.. came out to be around $3,046,400.
2. An investment benefit received in year 2 for $2,448,000
3. Salvage value of $23,800,000, the present worth was calculated considering 7% interest rate.

It can be seen that the solar park needs to have an annual revenue with
a present value of at least $238,985,054.72.
Based on the predicted revenue from WealthCaps report, the annual
benefits from Lieberose is about $22.9 million.
Using more precise numbers, the annual profit PV is found to be about
$357,501.48. Meaning that the solar park is making a sizeable annual
profit.
While the profit may not seem much, the park has a FV of
$14,655,949.00 at the end of 20 years.Thats $14.6millio in profits!
Also it's not meant for profit but for improving the health of the land
and providing clean energy.
Future Worth Analysis
This determines the value of the project in the
future after all benefits and costs have been
paid off and accumulated at their growth rate
of 7%. This analysis helps to determine
project's profitability and feasibility in the
future. If the number comes out to be negative
then the costs outweigh the benefits and the
project will only lose money.
As can be seen, net future worth
($23,019,029.44) indicates the project is
profitable.
Breakeven Analysis
This determines at what point in time the project will stop
seeing only debt at the end of each year and begin seeing profit.
A straight forward calculation was done comparing the growth
of benefits and costs over the time period of the project.
From graph, breakeven point occurs bet. Years 10 & 11.
These forms of analysis only consider the exchange of cash for
benefits & costs w/o any additional benefits that might exist,
like the Solar Park preventing 35,000 tons of CO2 from
entering the atmosphere.
This benefit is very large equivalent to preventing 37,593,985
pounds of coal being burned, or saving 28,689 acres of U.S.
forest, or preventing the consumption of 81,395 barrels of oil.
These benefits on top of monetary profits in the analysis make
this project very significant and worth pursuing.
Alternative Analysis
Another analysis on Lieberose was done by Noel Barton on a personal blog in June of 2011.
Noel determined that the peak output power, the annual power output, and the cost of power were necessary to
analyze the solar park.
She was unable to find the Poutput of the solar park. So, she estimated it based on the CO2 saved from entering the
atmosphere.
Noel determined that the annual output was 52 GWhr and the peak output was 52.8 MW at a price of EUR
3.03/Watt (4.12 $/Watt).
Using a Levelised Electricity Cost (LEC) calculation that assumes no inflation, no tax, funding is by debt, 8%
interest rate with 25 year payback period, and a standard operation & maintenance of 3% cost from total project,
Noel found the results in table.
Noel considered her results reasonable when
compared to the markets of other PV solar parks.
While her assumptions are likely due to lack of info on
the analysis, they do not cover every detail that goes
into the project financing.
Alternative Analysis
As Lieberose is only in commission for 20 years, the 25 year payback period is unfeasible.
Also the 8% interest rate is slightly high and the annual costs are only estimated. So while the
results of having a solar park cost approximately USD $518.6/MWh may be considered
reasonable, they are not accurate. They also do not inform the reader about the realistic feasibility
of the Solar Park.
While First Solar and Juwi Group decided to refinance their debt through two development banks, and it is
assumed that they pay constant annuity (principal plus interests) over the 20 year life span, there might be
more profitable ways for financing the project. A few different methods are looked at for maximizing profit,
as the input appears to be fixed.
The first method explored is charging up to EUR $0.03 (USD $0.04) additional charge for each kWh of
energy sold. The next method was to have a different payment plan for the debt. Instead of a constant
principal payments plus interests might it be cheaper to pay only interest until the end of the project in 20
year, or to have constant annual payments ever year. The last method was looking at filling the investment
of the equity through use of bonds instead of mezzanine loans.
Alternative Analysis
Additional Charge
From the cash flow analysis it was found that the annual profit that the solar park makes is
$357,501.48 with a FV at the end of 20 years of $14,655,949.00 and an 7% interest rate.
While the project has many other benefits maximizing the monetary value could prove
beneficial. By increasing the price of energy from USD $0.43/kWh to $0.48/kWh (only a EUR
$0.03 increase) the profit margins increase greatly.
The annual profits increase to approximately USD $2,669,501.48 which is 8 times the original
profit. This has a future worth of USD $109,437,527.25.
Alternative Analysis
Payment Plan
When paying off loans, debt, or investments there are multiple ways to tackle the large sums. Typically these
sums of money gain interest over time making large numbers larger and sometimes daunting.
One ways to pay off the debt can be paying a constant principal price plus the interest accumulated over the year.
Another method is to pay only the interest accumulated each year and pay off the entire capital at the end of the
projects life.
This method is not recommended as $215 million is a very large sum of money and can be difficult to tackle. The
last method looked at is paying a constant payment each year.
The total costs of these plans at the end of the 20 years can be seen in the table below.
More detailed tables can be found in the Appendix (Alternative Analysis). As clearly shown in the table the owner
would be paying almost $40 million less with plan 1, paying capital plus interest each year, than any other
proposed plan. This type of technique minimizes the input into the project

Plan 1: Capital plus interest $417,251,230.92 (USD)
Plan 2: Interest only until end of period $577,177,495.22 (USD)
Plan 3: Constant payment $454,012,270.40 (USD)
Alternative Analysis
Bonds vs. Mezzanine Loans
As mentioned earlier First Solar and Juwi Group had 20% of their total investment through equity, mezzanine
loans.
These loans or investments have a set monetary value and only increase by the interest of the development bank
in which they are placed.
Bonds on the other hand often have a higher interest rate associated with them and could prove to provide more
monetary value in the future, maximizing output from a similar input.
For the mezzanine loans, which are approximately (USD) $43 million there future worth is approximately $84.6
million at the end of the 20 years.
If bonds were purchased, assuming $3000.00 face value per bond and a total of 60,000 bonds for 10 years, with
semiannual payments and an 8% interest rate their future worth is approximately $94.5 million at the end of 20
year.
Comparing the future values it is clear that the bonds value turns out to be greater.
Alternative Analysis
Based on the analysis of the original and alternative plans the team has determined that the project would best
benefit from the following:
Constant principal payments plus interest annually, Bonds instead of mezzanine loans, and a slight increase in
charge for energy.
Ultimately this project was likely not for profit but for the betterment of the community through land cleaning
and the providing of clean energy.
According to all forms of analysis this project is very feasible and makes a decent profit even before alternative
recommendations for financing.
After recommendation for financing the project becomes highly profitable making almost 10 times the profit as is
currently predicted.
Projects like Lieberose Solar Park help to drive renewable energies into modern markets while cleaning up the
land and air, and are recommended everywhere.
Conclusion
Refrences
[1] http://www.solaripedia.com/files/242.pdf
[2] http://www.juwi.com/project_development.html
[3] http://www.firstsolar.com/en/about-us
[4]
http://secure.schletter.us/mm5/merchant.mvc?Store_Code=S&Screen=PRO
D&Category_Code=14&Product_Code=140002-001
[5] http://www.freecleansolar.com/First-Solar-Panel-Thin-Film-FS-272-
p/fs-
272.htm?gclid=CjgKEAjwzIucBRDzjIz9qMOB3TASJABBIwL17xgO7FZVneX
ehhZG2Y9tM46eYLnifgcvvfaCCLJd3vD_BwE

Q & A
What is the overall capacity of Liberose solar park
project?

53MW
40MW
53MW
Arizona, USA
Bradenburg, Germany
Where is Liberose Solar Park Located?