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Subject:  Re: Found a new solar investment Date:  9/26/2013  3:00 PM
Author:  convexvalue Number:  947 of 1287

Hi Jim, thanks for sharing your model!
A few questions/comments:

- As I understand, RV doesn't include income taxes, selling&marketing, general&admin and CapEx. Why don't you adjust RV downward to account for those items?

- RV also doesn't include the revenue generated by the purchase&installation of the solarpower system for customers who didn't choose the $0 upfront-cost-though-higher-fixed-lease-payments. Or does it? That extra revenue should increase the fair value.

- Would it you deem it too preposterous to try to model the gross expenses? Based on the $1409M value of ENPR, if you assume that they are evenly distributed throughout the next 20 years as an annuity, you get a PV(@6%) of $808M. Contrast it to the NoRenewal RV value of $364M and you would get something akin to a gross margin of 45%. This of course ignores the timing of the cashflows (specifically, the purchase of expensive solar power systems in the begining), so we can't model them as annuities. I'm thinking that maybe we can roughly solve this issue by comparing RV changes relative to SolarPowerSys Purchases investing outflows and figure out a way to model gross expenses.

- Why use a 6% discount rate? How did the company come up with that figure? Why don't you use a higher figure, and how would you go about doing that?

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