Navigant Consulting is a global consulting firm specialized in renewable energy technology and strategy. It has over 1,900 consultants across 40 offices in 4 countries. Its renewable energy practice has 50 consultants with over 25 years of experience, and provides services to financial investors, utilities, private corporations, and government agencies for solar and wind projects, including due diligence, corporate strategy, and policy support. Key risks for renewable energy projects in Ontario are low, though some technology and resource risks can be moderate. Project due diligence examines technical factors like permitting and interconnection plans, as well as financial factors like capital costs and tax considerations, to de-risk investments.

1. Introduction Navigant Consulting
Navigant Consulting, Inc. (NCI) is a specialized consulting firm and global
leader in renewable energy technology and strategy.
NCI Energy Practice Renewable Energy
(1,900 Consultants) (250 Consultants) (50 Consultants)
• Publicly traded since • Power Systems, Markets Professionals
1996 (NYSE: NCI) and Pricing • 50 staff with over 25 years
• 2008 revenues - • Business Planning and experience in RE
$811 million (21% 6 Performance Improvement • Exceptional depth and
yr CAGR) • Emerging Technologies breadth of market &
• 40 offices in 4 and Energy Efficiency technology expertise
countries • Recognized thought leaders
committed to RE
Global Practice
Navigant Consulting named • Over 150 RE engagements
"Best Advisory – Renewable world wide in last 3 yrs
Energy" in the • Public and private sector
9 th and 10th Annual
clients in over 10 countries
Environmental Finance and • 25% of clients are non-US
Carbon Finance Market
Survey
©2010 Navigant Consulting, Inc. 1

2. Introduction Solar/Wind Service Offering
In solar and wind, we serve financial investors, operating companies and
government agencies in due diligence, corporate strategy and policy.
Clients and Service Offerings
Utilities Private Government
Financial Investors
Corporations Agencies
Due Diligence • New business • Corporate strategy • Policy support
• Project due models • Profit pool and • Public funding
diligence • Entry strategy value chain opportunities
• Manufacturing due • Technology and analyses • Economic
diligence market • Mergers and development
• Risk analysis assessments acquisitions support
• Market due • Solar program
diligence development and
implementation
• Management team
due diligence • RPS compliance
• Have conducted
~40 due diligences
over last 3 years
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3. Risk Categories
Investment risk for renewable energy projects in Ontario is fairly low.
Risk Category Risk Level Comments
Counterparty Risk • Low • OPA is rated AA (low) by DBRS
Technology Risk • Low for proven • Land-based wind and crystalline silicon solar are
technologies proven technology (20 year track record)
• Moderate for • Off-shore wind and thin film solar are new technology
new technologies and have limited track record
• Product quality can vary (China)
Construction Risk • Low • Wind and solar are relatively straightforward
compared to other energy technologies
Resource/ Output • Low for Solar • Avg. annual output can be difficult to estimate
Risk • Moderate for • Solar has a lower standard deviation (4%) and less
Wind downtime due to maintenance than wind
Financial Risk • Low to • For lenders, with DSCR>1.4-1.5 (P50), risk is low
Moderate • For equity investors, risk is low to moderate After 1st
year, IRR is very predictable
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4. De-Risking Renewable Energy Projects Technical
In project due diligence, there are a number of technical items that must
be examined…
Due Diligence Item De-Risk Requirement
Interconnection • Interconnection plan completed
Permitting, environmental • Connection Impact Assessment with utility
review, community • System Impact Assessment with system operator
opposition • Simplified Renewable Energy Approval Process
Resource assessment / output • Wind / solar assessment completed
assessment • Output forecast completed (uptime est. / de-rate factor)
Conceptual design / • Technology with track record
technology / vendors
O&M Plan • O&M agreement with established O&M provider
Domestic Content • Domestic content rules met
• Final sign-off does not occur until project is completed
• (No Domestic Content requirement for RESOP)
Schedule Review • Schedule is doable; EPC contractors are available
• When does the contract expire if COD is not met?
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5. De-Risking Renewable Energy Projects Financial
…and a number of financial items.
Due Diligence Item De-Risk Requirement
Contract with OPA • Application
• Transmission capacity available or Capacity Allocation
Exempt
• Contract offered
Capital Cost / O&M Cost • Contracts with EPC company and O&M company
• Equipment warranties
• All costs have been considered: site prep, equipment,
installation, interconnection
Tax Considerations • Tax benefits can or cannot be taken
Financial Model / Coverage and • DSCR>1.4-1.5 for P50 scenario and >1.2-1.3 for P90
Leverage Ratios • Have all available benefits (revenue/43.2 tax benefit/
Aboriginal involvement) been captured?
• Allowance for operation costs not covered by contracts or
warranties (e.g. inverter replacement)
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6. Contact Information
Andrew Kinross
Director
Direct phone: 781-270-8486
Cell phone: 508-740-9638
E-mail: akinross@navigantconsulting.com
77 South Bedford Street
Burlington, Massachusetts 01803
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