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Distributed Energy
Specialist Niche Manufacturer

Specialist Niche Manufacturer

Ras Al Khaimah, UAE.2020

16 %

IRR

6 years

Break Even Period

2.3 X

Target total return

5 years

Target investment period

Specialist Niche Manufacturer

Ras Al Khaimah, UAE.2020

16 %

IRR

6 years

Break Even Period

2.3 X

Target total return

5 years

Target investment period

Specialist Niche Manufacturer – Energy Customer Profile

Founded in 1992, the Energy Customer is a specialist niche vehicle manufacturer and has a new-state-of-the-art manufacturing factory in Ras Al Khaimah, UAE, as a means to further their presence in the international market and improve their ability to provide their unique services to a growing client list.

The proposed project is for powering the Energy Customer’s factory in Ras Al Khaimah, UAE using a combination of rooftop solar and battery storage solution. Given that the Energy Customer is completely off-grid, this is a means to not only reduce the reliance and expenses of purchasing diesel for their rented generators but also for preserving the environment, by using a clean source. Based on the proposed installation capacity, the total system cost is $307,000. However, the investable amount for this UAE based project is $153,500 (Energy Customer’s Equity: 50% of Project Value).

A 400kW solar system can be installed and we are quoting for the same. Distributed Energy provides the Energy Customer the option of BOOT Model. Under this plan, we will install the solar system at the Energy Customer’s premises. The lease duration is 5 years and the annual energy generation from the solar installation system is 605,900 units.

Power Purchase Agreement

How do distributions work?

In terms of monthly payment, the Energy Customer is charged on the basis of monthly instalments. The Power Purchase Agreement (PPA) has been signed for 5 years with the Energy Customer and both parties involved agree to a rooftop lease for the full lease period and also an O&M contract with Distributed Energy – beyond the lease period, the project will be transferred to the Customer at a mutually agreed residual cost.

 
The Energy Customer will pay 50% of the total system cost upfront and the balance in monthly instalments. The maximum investment amount is $153,500 and degradation of the asset is 1% per annum. Once the solution design is approved and arrangement of finance is finalised, the procurement of materials is initiated, followed by installation and commissioning of the project.

 

Location

Why Invest?

The proposed project has a 16% return on investment with a target total return of 2.3x and break-even period of 6 years. Additionally, the Energy Customer has established a strong market position in a relatively short time, maintains a high net working capital, and has expanded its services to several niche markets across various countries. As the Investor, you shall have 50% equity of the solar asset for the PPA period. The Energy Customer is currently off-grid and depends exclusively on diesel generator setup to meet its day-to-day energy requirements (averaging 10,000 gallons per month in 2019).

From a clean energy mobilisation perspective, the implementation of this solar plant will not only reduce the Energy Customer’s carbon footprint, but the percentage savings the Energy Customer will be making over time as a result of this project implementation are substantial.

Distributed Energy