AHK Business Trip - Tunisia

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1 AHK Business Trip - Tunisia Inverter Reliability and Investment Return Ahmad Rahme Special Sales Projects November 1 st, 2016

2 Disclaimer IMPORTANT LEGAL NOTICE This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of (the "Company") or any present or future subsidiary of the Company (together with the Company, the "SMA Group") nor should it or any part of it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for any securities in the Company or any member of the SMA Group or commitment whatsoever. All information contained herein has been carefully prepared. Nevertheless, we do not guarantee its accuracy or completeness and nothing herein shall be construed to be a representation of such guarantee. The information contained in this presentation is subject to amendment, revision and updating. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on the management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements as a result of, among others, factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements which speak only as of the date of this presentation. This presentation is for information purposes only and may not be further distributed or passed on to any party which is not the addressee of this presentation. No part of this presentation must be copied, reproduced or cited by the addressees hereof other than for the purpose 2 for which it has been provided to the addressee.

3 Agenda Company profile Players and phases of a photovoltaic project Technical inverter values in the financial analysis Summary 3

4 Agenda Company profile Players and phases of a photovoltaic project Technical inverter values in the financial analysis Summary 4

5 SMA IS THE CLEAR #1 IN THE GLOBAL PV INVERTER INDUSTRY Key Facts Headquartered in Niestetal since 1981 Cum. nearly 50 GW installed worldwide Sales of 1 billion EUR in 2015 > 3,500 employees, thereof 500 in R&D Present in 20 countries; 4 production sites Stock-listed since

6 SMA s COMPLETE PRODUCT PORTFOLIO OFFERS SOLUTIONS FOR ALL REQUIREMENTS WORLDWIDE SUNNY CENTRAL SUNNY TRIPOWER SUNNY BOY 24 GW cumulative installed inverter capacity cumulative 13 GW installed inverter 13 GW capacity cumulative installed inverter capacity Utility Commercial Residential SUNNY BOY STORE SUNNY CENTRAL STORE SUNNY ISLAND O&M / WARRANTY EXTENSION Off-Grid & Storage Service SMA s cumulative installed power of nearly 50 GW is the basis for a successful service and storage business 6

7 BUSINESS UNITS Residential Commercial Utility Offgrid & Hybrid 7

8 PRODUCT PORTFOLIO RESIDENTIAL SB 1.5/2.5 SUNNY HOME MANER SMA ENERGY METER SB 3.0/3.6/ 4.0/5.0 SB 3000/3600/ 4000/5000/6000TL SB 3500/4500TLMP-JP SB 3000/3800/4000/5000/ 6000/7000/7700TL-US Greater independence from rising electricity costs and therefore money savings Sustainable energy supply with solar electricity Greater transparency to household energy consumption SUNNY PLACES POWER CONTROL MODULE SBS 2.5 SB 3600/5000SE SB 9000/10000/11000TL-US STP 5000TL 12000TL Commissioning Remote Service Extended Warranty Upgrade/Modernisation System Check 8

9 SMA PRODUCT PORTFOLIO FOR DECENTRALIZED & COMMERCIAL APPLICATIONS Commissioning Extended Warranty Upgrade STP 20000TL/ 25000TL Operation & Maintenance STP 15000TL STP 10000/20000TL-JP Greater independence from rising electricity prices Efficiently use self-generated solar power to reduce operating costs Flexible systems and convenient implementation Future-proof investment with an Extended Warranty and the value of O&M Storage Solution Commercial* STP 12000/15000/ 20000/24000TL-US STP MV Station* Sunny Portal Pro STP 60 FLX PRO 15/17 SMA Inverter Manager SMA Cluster Controller/S *available early

10 SMA PRODUCT PORTFOLIO UTILITY Sunny Central CP-JP 500/630/800 kva Sunny Central 2200/2500 kva 1,000V or 1,500V Sunny Central-US 1850/2200/2500 kva 1,000V or 1,500V Sunny Central Storage 500/630/720/760/ 800/850/900 kva Sunny Central CP XT 500/630/720/ 760/800/850/ 900/1000 kva SMA Power Plant Controller SMA String Monitor SMA String Combiner Communit Ready for: Centralized and distributed plant designs Harsh environments Worldwide grid requirements Secured by: full service offering over the complete lifecycle Sunny Portal Pro Transformer Transformer Compact Station -JP Compact Station 500/630/ /630/800/900/ 1000/1250/1600/1800 Sunny Tripower 20000/25000 TL Sunny Tripower 60 Medium Voltage Block 2200 / 2500 Commissioning Preventative Maintenance Extended Warranty Operation & Maintenance * Remote Service: please clarify individually 10

11 PRODUCT PORTFOLIO FOR HYBRID ENERGY SYSTEMS WITH THE SMA FUEL SAVE SOLUTION + STORE SMA Fuel Save Controller in PV Diesel Hybrid Systems PV Inverters (Sunny Tripower or Sunny Central) SMA Fuel Save Solution Making fossil-fueled energy systems future-proof Storage Integration: Completing PV Diesel Hybrid systems and supporting the growth of Renewable Energy Sunny Central Storage SCS-500 SCS-1000 Turnkey container solution: Sunny Central Storage battery inverter, with transformer and medium- voltage switch gear SMA Remote Service SMA Commissioning SMA Preventative Maintenance SMA Extended Warranty 11

12 PRODUCT PORTFOLIO HYBRID ENERGY SYSTEMS FOR VILLE POWER SUPPLY (OFF-GRID) SI 4.4 M SI 3.0 M SI 4548-US/6048-US PV Inverters (Sunny Boys, Sunny Tripower) SI 6.0H SUNNY WEBBOX SI 8.0H Clean Energy. Anywhere. BATTERY BACKUP BATFUSE MC-Box 6 6x MC-Box 12 SMART FORMER SUNNY ISLAND CHARGER 12x 24x MC-Box 24 Commissioning Remote Service Extended Warranty Upgrade/Modernisation System Check 12

13 SMA Quality: Demanding stress tests ensure reliability under all conditions > Walk-in climate chamber in our own development test center > Inverters are tested to the limits of their operational capabilities at temperatures ranging from -40 C to +65 C > Single components (i.e. SC20Cont) are proved up to 120 C (Shock Test) > The chamber can also create relative humidity of between 10% and 90%. > Endurance tests of up to 1,000 hours Climate chamber test shows: Highest reliability in extreme climate conditions 13

14 SMA Quality: Sand & dust test > In accordance with IEC Cat. Lc1 (circulation chamber) > Particle composition similar to the desert in Arizona > Wind speeds up to 20 m/s Test result: desert-proof No sand or dust in the inverter or the ventilators 14

15 Agenda Company profile Players and phases of a photovoltaic project Technical inverter values in the financial analysis Summary 15

16 Who decides about a project? Driven by longterm financial parameters Cashflow, NPV, IRR, LCOE, DSCR Financial modeling and simulation First decision about components Decision about the project, the budget, the time schedule and the components! So for or against a supplier! Driven by costs CAPEX, OPEX Price discussion EPC supplier Final selection of the components Development Developer Investor Equity Bank Debt Development Due Diligence Due company Diligence / Consultant Project Development Phase Initial technical design / technical specifications Financial analysis / ROI / IRR Government approvals Potential energy offtaker / PPA partner Scouting of finance partners Grid specifications / grid stabillity requirements Installation & Commissionin g EPC Operation Implementation EPC selection and final purchasing decision Selection of Module and inverter type Turnkey Solution Final plant design Liability of EPC / suppliers Warranty / Service / Penalties Deliveries / Payment terms / Price 16

17 The roles in a project Future-proof Decision maker Availability IRR, NPV, Cashflow, Investor DSCR, LCOE Economy Bank Risk Money Products Project Developers, Project Due Developers, Diligence companies: Due The Diligence Translators companies EPC Supplier Components, technique, features, Service,. Manufacturer Applier 17

18 Agenda Company profile Players and phases of a photovoltaic project Technical inverter values in the financial analysis Summary 18

19 The drivers of the financial key parameters NPV Cashflow IRR LCOE DSCR Techniqu e Performanc eratio Efficiency Temperatur e range Voltage range Losses Overload capacity Availabilit y Income Political requirement s FIT Subsidies Support of renewable s CDM Depreciation Frame condition s Technical product features; Direct influence of the supplier; Indirect influence of the supplier No influence of the supplier Contractual obligations PPA Penalties Grid stability functions Active power Re-active power Costs Loan Equity O&M Interests Interest rate Repayme nt Repayme nt method Other Period of validity Fees CAPEX Best offers Payment condition s Capital facilitatio n Equity holding CDM: Clean Development mechanism MRA: Maintenance Reserve Account OPEX Service Quality Testing Self consumpti on Other MRA Failures 19

20 Compare! Apple to Apple comparison. Site Site set set up up and and assurance assurance Solargenerator Solargenerator and and DC DC system system Mounting Mounting system system Earth Earth works works Inverter Inverter and and AC AC system system Potential Potential equalization/lightning equalization/lightning protection protection Communication Communication and and controlling controlling Safety Safety equipment equipment Planning, Planning, installation, installation, commissioning, commissioning, Project management, Project management, documentation documentation Miscellaneous Miscellaneous String combiner box Single Inverter DC equipment Concrete fundament / socket Inverter Inverter options Communication equipment Transformer Medium 100 voltage switch gear Medium Mio. Costs of the Low voltage switch gear voltage Internal EUR turnkey project Power supply equipment Housing / foundation Oil containment % Implementation Installation and Commissioning Miscellaneous Power Plant Control Transport Service What is included in the competitors offer? Comparing apples with apples 20

21 What is the real meaning of a data sheet value? > Be aware that datasheet values are sometimes not shown have a lot of foot notes, explanations and restrictions are fake are not proven, tested or certified are sometimes just calculted and not measured > But often decisions about projects and are not always true components will be made on base of data sheets and glossy > So let s talk about the reality, longterm financial brochures effects and FUD! FUD: Fear, uncertainties and doubt 21

22 The added-value of SMA inverters in an example: General assumptions Example project Location Project size System costs Somewhere in Chile Chile (Atacama desert) 100 MWp EUR / kwp Share inverter system solution 10 % Operational costs per year 25 EUR / kwp 22

23 Financial study: Financial assumptions Financial parameters Values Equity / loan share 20 % / 80 % Loan interest rate 7,0 % Loan period of validity Depreciation PPA period of validity Escalation factors (OPEX, PPA) 15 years linear / 15 years 20 years None 23

24 Financial study: Frame conditions of Inverter scenario 1 Inverter solution System efficiency 97,64% Overload capacity (at 25 C) 10% Inverter self consumption (during operation) No-load losses of transformer *) 2 x W W Load losses of transformer at 75 *) W Temperature range in C Protection class IP54/Outdoor Availability (assumption) 99,3% Discount rate inverter system in % 6,0 % *) referred to power of kva 24

25 Financial results scenario 1 Project related results over project period Scenario 1 Difference Scenario 2 CAPEX Total System costs Mio. EUR +0.00% Mio. EUR Total inverter costs Mio. EUR +0.00% Mio. EUR O PEX Total OPEX Mio. EUR +0.00% Mio. EUR Inverter OPEX (self consumption) 2.25 Mio. EUR +0.00% 2.25 Mio. EUR Revenue and NPV Total revenue Mio. EUR +0.00% Mio. EUR Net Present value Mio. EUR +0.00% Mio. EUR Free Cashflow Mio. EUR +0.00% Mio. EUR Equity IRR % +0.00% % Tariffs Mio. EUR Tariff PPA 9.16 Ct/ kwh +0.00% 9.16 Ct/ kwh LCO E 7.65 Ct/ kwh +0.00% 7.65 Ct/ kwh Performance ratio Performance ratio %

26 Financial study: Frame conditions of Inverter scenario 2 Inverter solution Competitor Inverter system efficiency 97,71% 97,17% Overload capacity (at 25 C) 10% 0% Inverter self consumption (during operation) 2 x W 2 x W No-load losses of transformer *) W W Load losses of transformer at 75 *) W W Temperature range in C Protection class inverter IP54/Outdoor IP42/Indoor Availability 99,3% 99,3% Discount rate inverter system in % 6,0 % 6,0 % *) referred to power of kva 26

27 Financial results scenario 2 (differences in %) Project related results over project period Scenario 1 Difference Scenario 2 CAPEX Total System costs Mio. EUR +0.00% Mio. EUR Total inverter costs Mio. EUR +0.00% Mio. EUR O PEX Total OPEX Mio. EUR +8.76% Mio. EUR Inverter OPEX (self consumption) 2.25 Mio. EUR % 6.83 Mio. EUR Revenue and NPV Total revenue Mio. EUR -0.56% Mio. EUR Net Present value Mio. EUR % 9.05 Mio. EUR Free Cashflow Mio. EUR -7.40% Mio. EUR Equity IRR % % 8.89 % Tariffs Mio. EUR Tariff PPA 9.16 Ct/ kwh +0.00% 9.16 Ct/ kwh LCO E 7.65 Ct/ kwh +2.04% 7.81 Ct/ kwh Performance ratio Performance ratio %

28 Financial results scenario 2 (differences in %) with price difference Project related results over project period Scenario 1 Difference Scenario 2 CAPEX Total System costs Mio. EUR -2.00% Mio. EUR Total inverter costs Mio. EUR % 9.60 Mio. EUR O PEX Total OPEX Mio. EUR +8.76% Mio. EUR Inverter OPEX (self consumption) 2.25 Mio. EUR % 6.83 Mio. EUR Revenue and NPV Total revenue Mio. EUR -0.56% Mio. EUR Net Present value Mio. EUR -9.88% Mio. EUR Free Cashflow Mio. EUR -4.09% Mio. EUR Equity IRR % -3.09% 9.69 % Tariffs Mio. EUR Tariff PPA 9.16 Ct/ kwh +0.00% 9.16 Ct/ kwh LCO E 7.65 Ct/ kwh +0.92% 7.72 Ct/ kwh Performance ratio Performance ratio %

29 Agenda Company profile Players and phases of a photovoltaic project Technical inverter values in the financial analysis Summary 29

30 Summary Project decision makers speak the language of economy over the system operating period. Main key parameters are the IRR (Internal rate of return), the NPV (Net present value) and the available cashflow. The financial key parameters depend on a long experience, a mature and futureproof technique, a comprehensive test / quality concept as well as a fast and well trained Service team. The system price (CAPEX) is just one small part for the selection of an inverter solution. 30

31 Thank you for your attention! SOCIAL MEDIA