Mini Case #1 Solar Development in South Carolina (S.C.) Heidi, the manager of Micro-Panel Power Company that produces solar panel systems has been approached by a developer with a South Carolina solar project. She wants to understand how attractive the South Carolina market could be and whether or not the particular opportunity is feasible and meets Micro-Panel Power Company investment criteria. She hired you as a consultant. Your job is to provide her a report and analysis on the attractiveness of South Carolina solar market Your report should answer the following questions in essay form, and provide an Excel Analysis: 1) Does the state have any incentives for solar energy/renewable energy [tax abatements, production incentives)? 2) How many operating solar projects are currently in the state? How many MW is that? [ideally list the projects and who owns them) 3) What is the energy mix like in the state? Mostly hydro? natural gas? etc.... see if you can nd out what the breakdown is like. Do you expect this to change over the next ten years? 4) Any other question[s) you think would be interesting to ask in regards to ascertainng whether this would be an attractive market 5) EXCEL - Is the project feasible given a required internal rate of return of 8% (annual) over the life of the project? 6) EXCEL - What is the N PV of such project? Please interpret this number in your report [The Corporate Tax Rate is 35%). In order to support your analysis, please use the attached EXCEL file and the following set of assumptions to determine the feasibility of the project: Dates: 0 Investment Date: 2020 and Commercial Operation Date:2021 Capital Expenditure related assumptions: Investment Cost: $40,000,000 Depreciation: 5-year straight-line Life of the solar panels: 20 years. Salvage value: $0 Production and Cost related assumptions: 0 Production per year: 50,000 MW [Megawatt) - Price: $140 per MW [This is how much the company will be charging per MW electricity) 0 Cost: 25% of Sales for year 1 and escalating each year at CPI [Consumer Price Index or Ination). Assume CPI=2% Investment Tax Credit: 0 South Carolina provides 10% investment tax credit on the initial investment. However, this tax credit can not exceed $250,000 for any year and $2,500,000 total for 10 years. You can carry-forward the tax credit for the future periods