# EDGAR Filing Document

**Accession Number:** 0002063297
**File Stem:** 0001193125-26-232089
**Filing Date:** 2026-5
**Character Count:** 72322
**Document Hash:** 2e479d8759321dbad220d3c4444e5e3b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-232089.hdr.sgml**: 20260520

**ACCESSION NUMBER**: 0001193125-26-232089

**CONFORMED SUBMISSION TYPE**: ABS-15G

**PUBLIC DOCUMENT COUNT**: 7

**CONFORMED PERIOD OF REPORT**: 20260520

**ITEM INFORMATION**: Findings and Conclusions of the Third Party Due Diligence Provider Obtained by the Issuer

**FILED AS OF DATE**: 20260520

**DATE AS OF CHANGE**: 20260520

**ABS RULE**: RULE-15GA2

**REGISTERED ENTITY**: N

**ABS ASSET CLASS**: Other

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Palmetto HASI Holdings LLC
- **CENTRAL INDEX KEY:** 0002063297

**ORGANIZATION NAME:**
- **EIN:** 932481496
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** ABS-15G
- **SEC ACT:** Dodd Frank Act
- **SEC FILE NUMBER:** 025-07636
- **FILM NUMBER:** 261002524

**BUSINESS ADDRESS:**
- **STREET 1:** 1616 CAMDEN RD., SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28203
- **BUSINESS PHONE:** (855) 339-1831

**MAIL ADDRESS:**
- **STREET 1:** 1616 CAMDEN RD., SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28203
**DEPOSITOR**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Palmetto HASI Holdings LLC
- **CENTRAL INDEX KEY:** 0002063297

**ORGANIZATION NAME:**
- **EIN:** 932481496
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** ABS-15G
- **SEC ACT:** Dodd Frank Act

**BUSINESS ADDRESS:**
- **STREET 1:** 1616 CAMDEN RD., SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28203
- **BUSINESS PHONE:** (855) 339-1831

**MAIL ADDRESS:**
- **STREET 1:** 1616 CAMDEN RD., SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28203
**SECURITIZER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Palmetto HASI Holdings LLC
- **CENTRAL INDEX KEY:** 0002063297

**ORGANIZATION NAME:**
- **EIN:** 932481496
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** ABS-15G
- **SEC ACT:** Dodd Frank Act
- **SEC FILE NUMBER:** 025-07636

**BUSINESS ADDRESS:**
- **STREET 1:** 1616 CAMDEN RD., SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28203
- **BUSINESS PHONE:** (855) 339-1831

**MAIL ADDRESS:**
- **STREET 1:** 1616 CAMDEN RD., SUITE 300
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28203

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

**FORM ABS-15G** 

**ASSET-BACKED SECURITIZER** 

**REPORT PURSUANT TO SECTION 15G OF** 

**THE SECURITIES EXCHANGE ACT OF 1934** 

**Check the appropriate box to indicate the filing obligation to which this form is intended to satisfy:** 

☐ **Rule 15Ga-1 under the Exchange Act (17 CFR 240.15Ga-1) for the reporting period<u> </u> to<u> </u>** 

**Date of Report (Date of earliest event reported)<u> </u>** 

**Commission File Number of securitizer:<u> </u>** 

**Central Index Key Number of securitizer:<u> </u>** 

**Name and telephone number, including area code, of the person to** 

**contact in connection with this filing** 

Indicate by check mark whether the securitizer has no activity to report for the initial period pursuant to Rule 15Ga-1(c)(1) ☐

Indicate by check mark whether the securitizer has no activity to report for the quarterly period pursuant to Rule 15Ga-1(c)(2)(i) ☐

Indicate by check mark whether the securitizer has no activity to report for the annual period pursuant to Rule 15Ga-1(c)(2)(ii) ☐

☒ **Rule 15Ga-2 under the Exchange Act (17 CFR 240.15Ga-2)** 

**Central Index Key Number of securitizer: 0002063297** 

## Sabal Issuer 2026-2 LLC
**(Exact name of issuing entity as specified in its charter)** 

**Central Index Key Number of issuing entity (if applicable): Not applicable** 

**Central Index Key Number of underwriter (if applicable): Not applicable** 

**Liz Coddington, (855) 339-1831<u> </u>** 

**Name and telephone number, including area code, of the person to** 

**contact in connection with this filing** 

------

**INFORMATION TO BE INCLUDED IN THE REPORT** 

**FINDINGS AND CONCLUSIONS OF THIRD-PARTY DUE DILIGENCE REPORTS** 

**Item 2.01 Findings and Conclusions of a Third Party Due Diligence Report Obtained by the Issuer** 

Attached as <u>Exhibit 99.1</u> hereto is a consultant's report, dated April 23, 2026, obtained by Palmetto Clean Technology Inc. which report sets forth findings and conclusions of DNV Energy Systems for certain residential photovoltaic solar assets.

------

**SIGNATURES** 

Pursuant to the requirements of the Securities Exchange Act of 1934, the reporting entity has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

**Palmetto HASI Holdings LLC** 

Date: May 19, 2026

---

| | |
|:---|:---|
| /s/ Liz Coddington | /s/ Liz Coddington |
| Name: | Liz Coddington |
| Title: | Chief Financial Officer |

---

------

**EXHIBIT INDEX** 

---

| | |
|:---|:---|
| Exhibit Number | Description |
| 99.1 | [Technical Due Diligence Report, dated April 23, 2026, of DNV Energy Systems, setting forth findings and conclusions of DNV Energy Systems' technical due diligence review of certain residential photovoltaic solar assets.](d133178dex991.htm) |

---

## Exhibit 99.1

**Exhibit 99.1**![LOGO](g133178g06x18.jpg)

**Q2 2026 ABS** 

**Technical Due Diligence Report** 

**Palmetto Clean Technology Inc.** 

**Document No.** 10621597-HOU-R-01

**Issue:** B, **Status:** Final

**Date:** 23 April 2026

![LOGO](g133178dsp005b.jpg)

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![LOGO](g133178g06x18.jpg)

**IMPORTANT NOTICE AND DISCLAIMER** 

This document is intended for the sole use of the Customer as detailed on page iii of this document, to whom it is addressed and who has entered into a written agreement with the DNV entity issuing this document ("DNV"). No other person or entity is entitled to rely on this document for any purpose. To the maximum extent permitted by law, neither DNV nor any its group companies (collectively the "Group") assumes any responsibility or liability whether in contract, tort (including without limitation negligence), or otherwise, to any Third Party (being any individual or entity other than the Customer). No company in the Group other than DNV shall be liable for any loss or damage whatsoever suffered by virtue of any act, omission or default (whether arising by negligence or otherwise) by DNV, the Group or any of its or their servants, subcontractors or agents. To the extent that any Third Party is deemed to have a right to rely on this document by operation of law, statute, or otherwise, such reliance is subject to DNV's standard reliance letter terms, including without limitation, the limitation of liability, such that DNV's total liability shall never exceed the lesser of i) five (5) times the remuneration payable to DNV for the work performed pursuant to the Agreement, and ii) USD300,000 (three hundred thousand United States dollars) in the aggregate.

This document must be read in its entirety and is subject to any assumptions, limitations and qualifications expressed herein as well as in any other relevant communications in connection with it. This document may contain detailed technical data intended solely for use by individuals possessing requisite expertise in its subject matter.

This document is protected by copyright and may only be reproduced and circulated in accordance with the confidentiality conditions stipulated and/or in DNV's written agreement with the Customer. No part of this document may be disclosed in any public offering memorandum, prospectus or stock exchange listing, circular or announcement without the express and prior written consent of DNV. Distribution of this document to any Third Party (including by consent) does not confer any rights of reliance unless such Third Party has executed a reliance letter with DNV. Any unauthorized distribution or use of this document shall not create any duty of care or liability on the part of DNV or the Group. The Customer shall not alter or modify this document in any way without DNV's prior written consent.

This document has been produced from information relating to dates and periods referred to in this document. This document does not imply that any information is not subject to change. Except and to the extent that checking or verification of information or data is expressly agreed within the written scope of its services, DNV shall not be responsible in any way in connection with erroneous information or data provided to it by the Customer or any third party, or for the effects of any such erroneous information or data whether or not contained or referred to in this document.

Any estimates or predictions are subject to factors not all of which are within the scope of this document and nothing in this document guarantees any particular performance or output.

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page i

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![LOGO](g133178g06x18.jpg)

---

| | | |
|:---|:---|:---|
| Project name: | Q2 2026 ABS | DNV Energy Systems |
| Report title: | Technical Due Diligence Report | Renewables & Power Grids |
| Customer: | Palmetto Clean Technology Inc. | 1999 Harrison Street, Suite 2150 |
|  | 997 Morrison Drive, Suite 200 Charleston, SC 29403 | Oakland, CA 94612 |
| Contact person: | Andrew O'Brien | Tel: +1 510-891-0446 |
| Date of issue: | 23 April 2026 |  |
| Proposal reference: | OPP-00461779-SF-P-01-A |  |
| Document No.: | 10621597-HOU-R-01 |  |

---

Task and objective:

The Report describes DNV's technical due diligence review, in its capacity as Independent Engineer, for a residential, third-party owned portfolio.

---

| | | |
|:---|:---|:---|
| Prepared by: | Verified by: | Approved by: |
| Rebecca Ambresh | Sarah Heller | Ben Dodge |
| Consultant | Consultant | Team Lead |

---

**Distribution outside of DNV:** 

---

| | |
|:---|:---|
| ☐ PUBLISHED | Available for information only to the general public (subject to the above Important Notice and Disclaimer). |
| ☒ CUSTOMER'S DISCRETION | Distribution for information only at the discretion of the Customer (subject to the above Important Notice and Disclaimer and the terms of DNV's written agreement with the Customer). |
| ☐ CONFIDENTIAL | Not to be disclosed outside the Customer's organization. |
| ☐ NONE | Not to be disclosed outside of DNV. |

---

<sup>©</sup> 2026 DNV Energy USA Inc. All rights reserved.

Reference to part of this report which may lead to misinterpretation is not permissible.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Issue** | **Date** | **Status** | **Reason for Issue** | **Prepared by** | **Verified by** | **Approved by** |
| A | 16 April 2026 | DRAFT | Preliminary Report | R. Ambresh | D. Karnosky | S. Heller |
| B | 23 April 2026 | FINAL | BESS equipment replacement modeling | R. Ambresh | S. Heller | B. Dodge |

---

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page ii

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![LOGO](g133178g06x18.jpg)

**Table of contents** 

---

| | | | |
|:---|:---|:---|:---|
| 1 | INTRODUCTION | INTRODUCTION | 1 |
|  | 1.1 | Scope of work | 2 |
|  | 1.2 | Methodology and assumptions | 2 |
| 2 | ENERGY ANALYSIS AND PERFORMANCE GUARANTEE | ENERGY ANALYSIS AND PERFORMANCE GUARANTEE | 3 |
|  | 2.1 | Description of the data set | 3 |
|  | 2.2 | Weather correction | 3 |
|  | 2.3 | Accuracy of Customer's energy production forecasts | 4 |
|  | 2.4 | Forecasting | 5 |
|  | 2.5 | Degradation | 8 |
|  | 2.6 | Performance guarantee payout modeling | 9 |
| 3 | TECHNICAL INPUTS TO FINANCIAL MODEL | TECHNICAL INPUTS TO FINANCIAL MODEL | 13 |
|  | 3.1 | PV equipment replacement modeling | 13 |
|  | 3.2 | BESS equipment replacement modeling | 20 |
|  | 3.3 | Technical inputs to financial model conclusion | 23 |
| 4 | REFERENCES | REFERENCES | 24 |

---

**List of tables** 

---

| | |
|:---|:---|
|  Table 1-1 Palmetto Portfolio summary | 1 |
|  Table 2-1 Regional PI of the Production Sample | 4 |
|  Table 2-2 Inverter PI of the Production Sample | 5 |
|  Table 2-3 PTO PI of the Production Sample | 5 |
|  Table 2-4 Forecast Sample distribution | 5 |
|  Table 2-5 Future uncertainty by region | 6 |
|  Table 2-6 Portfolio exceedance values considering IAV only | 7 |
|  Table 2-7 Portfolio degradation rates | 8 |
|  Table 2-8 Performance guarantee Correction Factors and standard deviation | 9 |
|  Table 2-9 Performance guarantee payout forecasts for the Portfolio, 25 years with a 3-year payout schedule | 10 |
|  Table 2-10 Performance guarantee payout forecasts for the Portfolio, 25 years with a 2-year payout schedule | 11 |
|  Table 2-11 Performance guarantee payout forecasts for the Portfolio, 25 years with a 1-year payout schedule | 12 |
|  Table 3-1 Portfolio inverter OEM | 13 |
|  Table 3-2 Portfolio module OEM | 14 |
|  Table 3-3 Labor costs by failure type | 14 |
|  Table 3-4 Total annual equipment replacement costs for the Portfolio | 18 |
|  Table 3-5 Annual equipment replacement costs for the Portfolio in $/kWdc | 19 |
|  Table 3-6 Portfolio BESS Breakdown | 20 |
|  Table 3-7 Portfolio BESS Breakdown | 20 |
|  Table 3-8 Annual BESS equipment replacement cost forecast for the Portfolio | 21 |
|  Table 3-9 Annual BESS equipment replacement cost forecast for the Portfolio per unit | 22 |
|  Table 3-10 Portfolio equipment replacement model summary | 23 |
| **List of figures** |  |
|  Figure 3-1 DNV primary residential inverter and optimizer failure rates | 16 |
|  Figure 3-2 DNV primary module failure rates | 17 |
|  Figure 3-3 Meter failure rates | 17 |

---

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page iii

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![LOGO](g133178g06x18.jpg)

---

| | |
|:---|:---|
| **1** | **INTRODUCTION**  |

---

At the request of Palmetto Clean Technology Inc. ("Palmetto", the "Customer" or the "Sponsor"), DNV has performed a technical due diligence review of the Sponsor's portfolio of residential PV and PV + battery energy storage systems (BESS) projects (the "Portfolio") in support of an anticipated securitization.

The purpose of this Report is to summarize DNV's review of the Sponsor's capabilities and the documentation received; to evaluate technical risks and mitigation measures relative to typical industry practice; and to advise on the status of any issues that appear technically incorrect and inconsistent with documentation or that remain unresolved at the time of the preparation of this Report.

Per the datatape DNV received, a summary of the Portfolio attributes is provided in Table 1-1.

**Table 1-1 Palmetto Portfolio summary** 

---

| | | |
|:---|:---|:---|
| **Region** | **Number of systems** | **Capacity (kWdc)** |
|  AZ | 879 | 7789 |
|  CA | 1694 | 9797 |
|  CO | 252 | 1739 |
|  CT | 482 | 5157 |
|  FL | 2117 | 24526 |
|  GA | 169 | 1558 |
|  IA | 43 | 411 |
|  IL | 1202 | 13418 |
|  KS | 5 | 39 |
|  MA | 208 | 2163 |
|  MD | 196 | 2375 |
|  ME | 16 | 176 |
|  MI | 100 | 745 |
|  MO | 5 | 50 |
|  NC | 17 | 169 |
|  NH | 3 | 34 |
|  NJ | 473 | 4783 |
|  NM | 18 | 113 |
|  NV | 364 | 3517 |
|  NY | 325 | 3407 |
|  OH | 56 | 535 |
|  OK | 10 | 75 |
|  OR | 38 | 270 |
|  PA | 199 | 2311 |
|  RI | 48 | 379 |
|  TX | 729 | 6898 |
|  VA | 484 | 5358 |
|  WV | 58 | 850 |
|  **Grand Total** | **10190** | **98642** |

---

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 1

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![LOGO](g133178g06x18.jpg)

**1.1** **Scope of work** 

The DNV scope of work is defined in the Frame Work Agreement ("Agreement") OPP-00461779-SF-P-01-A , dated 13 March 2026 and work order, dated 01 April 2026, between Palmetto and DNV Energy USA Inc. This technical due diligence report (the "Report") is provided pursuant to the terms and conditions of the Agreement, and disclosure of the Report to other potential investors and/or lenders is subject to provisions of the referenced terms and conditions and the disclaimer at the front of this Report.

The DNV scope of work includes the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Energy and performance guarantee forecasting

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Technical inputs to the financial model

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Equipment replacement modeling

Result tables presented herein are also presented in the attached spreadsheet deliverable *10621597-HOU-XL-01-B Palmetto Q2 2026 ABS TDD_23 April 2026.* 

**1.2** **Methodology and assumptions** 

This Independent Engineering (IE) Report is a high-level technical due diligence review intended for financial institutions, customers, and project developers. DNV is well qualified to conduct this study, with extensive experience in solar independent engineering and technology due diligence work.

This Report summarizes DNV's assessment of the Portfolio and relies on the accuracy of the information provided. All those supplying product information have been open and forthcoming in providing the data that DNV has requested. This Report is based on some information not within the control of DNV. DNV believes that the information provided by others is true and correct and reasonable for the purposes of this Report. DNV has not been requested to make an independent analysis or verification of the validity of such information. DNV does not guarantee the accuracy of the data, information, or opinions provided by others. In preparing this Report and the opinions presented herein, DNV has made certain assumptions with respect to conditions that may exist or events that may occur in the future. DNV believes that these assumptions are reasonable for purposes of this Report, but actual events or conditions may cause results to differ materially from forward-looking statements.

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 2

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![LOGO](g133178g06x18.jpg)

---

| | |
|:---|:---|
| **2** | **ENERGY ANALYSIS AND PERFORMANCE GUARANTEE**  |

---

DNV analyzed production data from Palmetto's Fleet of deployed systems to assess the accuracy of Palmetto's energy production estimates with the goal of establishing expectations for future production risks going forward for the Portfolio.

**2.1** **Description of the data set** 

DNV received a production data file in January 2026 ("2026 data set") with production estimates, actual production, and metadata for 26,614 systems with data through the end of January 2026 [1]. DNV used this production data for energy and performance guarantee payout forecasting for the Palmetto Portfolio.

DNV analyzed Palmetto's operational data from the Production Data File using the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Clean the data to remove erroneous and excludable values;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjust the production data to long-term average behavior with regard to irradiance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Calculate system performance indices based on the accuracy of Palmetto's forecasts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Apply uncertainties to the future Portfolio;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Forecast future production.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Of the 26,614 systems, 17,915 systems had sufficient production and metadata with which to perform a historical production
analysis (the Production Sample). These systems represent systems with data until January 2026. DNV notes that systems with historical performance indices below 50% and greater than 150% are not included in the Production Sample.

**2.2** **Weather correction** 

DNV calculated the extent to which over/under production in a region can be attributed to differences between the irradiance during the operational period relative to the reference irradiation for that region. The analysis compared monthly global horizontal irradiation (GHI) over the operational period to the long-term reference GHI. DNV procured monthly GHI data from DNV Solcast, a web-based service that provides gridded satellite-based irradiance data with global coverage. Solcast's global solar dataset is based on over a decade of high-resolution visible satellite imagery via the broadband visible wavelength channel. This data has been processed using a combination of peer-reviewed, industry standard techniques and processing algorithms developed in-house, including a cloud-index algorithm that produces consistent results when used with the large number of satellites that must be combined to construct a global dataset. The resulting time series of cloudiness (or cloud index) is then combined with other information to model the amount of solar radiation at the Earth's surface. The outcome is a 17+ year dataset that provides hourly and sub-hourly estimates of surface irradiance (GHI, DNI, and DIF) for all the Earth's land mass at a spatial resolution of approximately 3 km (2 arc minutes).

DNV mapped each system in the Residential Production Sample in order to run a clustering algorithm that selects irradiance tile locations based on the geographic distribution and climactic regime of each of the systems in the Residential Production Sample. A total of 81 tile locations were selected. The actual production of each system in the Residential Production Sample is adjusted according to the irradiance adjustment factor during the measurement period from the nearest irradiance tile. The irradiance adjustment factor is the ratio of the annual long-term average compared to the period of record of each system.

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 3

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![LOGO](g133178g06x18.jpg)

**2.3** **Accuracy of Customer's energy production forecasts** 

For each system, DNV computed the mean actual and expected monthly production for each of the twelve (12) calendar months. A Performance Index (PI) was then computed for each system by dividing the sum of monthly means for the actual production by the sum of monthly means for the expected production.

The Production Sample consists of 17,915 systems and the distribution of the performance indices in the Production Sample by region is displayed in the table below.

**Table 2-1 Regional PI of the Production Sample** 

---

| | | | |
|:---|:---|:---|:---|
| **Region** | **System count** | **Total capacity (kWdc)** | **Irradiance adjusted PI** |
|  AZ | 2974 | 27217 | 1.01 |
|  CA | 3258 | 22219 | 0.97 |
|  CO | 744 | 4978 | 0.98 |
|  CT | 540 | 5591 | 1.02 |
|  FL | 3848 | 41041 | 0.95 |
|  GA | 380 | 3386 | 0.97 |
|  IL | 1163 | 12907 | 0.96 |
|  KS | 101 | 829 | 0.89 |
|  MA | 609 | 5408 | 0.99 |
|  MD | 100 | 1038 | 0.92 |
|  ME | 59 | 547 | 0.92 |
|  MI | 60 | 429 | 0.91 |
|  NC | 145 | 1320 | 0.97 |
|  ND | 1 | 6 | 1.02 |
|  NH | 40 | 345 | 0.95 |
|  NJ | 105 | 1038 | 0.98 |
|  NM | 119 | 782 | 0.99 |
|  NV | 657 | 5984 | 1.00 |
|  NY | 17 | 178 | 0.98 |
|  OH | 326 | 2950 | 0.94 |
|  OK | 215 | 1943 | 0.93 |
|  PA | 560 | 4594 | 0.98 |
|  RI | 28 | 231 | 0.97 |
|  TX | 1865 | 19717 | 0.95 |
|  WA | 1 | 14 | 1.03 |
|  **Total** | **17915** | **164693** | **0.97** |

---

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 4

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![LOGO](g133178g06x18.jpg)

The distribution of the performance indices in the Production Sample by inverter type is displayed in the table below.

**Table 2-2 Inverter PI of the Production Sample** 

---

| | | |
|:---|:---|:---|
| **Inverter** | **System count** | **Irradiance adjusted PI** |
|  Enphase | 12837 | 0.97 |
|  SolarEdge | 2903 | 0.98 |
|  Tesla | 2154 | 0.96 |
|  Tigo | 21 | 0.88 |
|  **Total** | **17915** | **0.97** |

---

The distribution of the performance indices in the Production Sample by PTO is displayed in the table below.

**Table 2-3 PTO PI of the Production Sample** 

---

| | | |
|:---|:---|:---|
| **PTO year** | **System count** | **Irradiance adjusted PI** |
| 2023 | 420 | 0.97 |
| 2024 | 17491 | 0.97 |
| 2025 | 4 | 0.83 |
|  **Total** | **17915** | **0.97** |

---

**2.4 Forecasting** 

A representative sample of systems from the Production Sample was used to forecast for the (yet to be built) Portfolio with a total capacity of 98,642 kWdc as shown in the table below (the "Forecast Sample"). Systems in the Production Sample were randomly selected from the corresponding region to achieve the capacity for each region in the Forecast Sample. As shown in the Forecast Sample, the capacity of the Forecast Sample is 98,797 kWdc and the target capacity of the Portfolio is 98,642 kWdc. The number of systems in the Forecast Sample is higher than the target number of systems. DNV has calculated a Correction Factor for each region based on the weighted Performance Index of each asset in the Forecast Sample. The Correction Factor is the performance index of the systems selected for the Forecast Sample.

**Table 2-4 Forecast Sample distribution** 

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| | | | | |
|:---|:---|:---|:---|:---|
| **Region** | **Anticipated number of<br>systems** | **Anticipated capacity<br>(kWdc)** | **Forecast Sample<br>systems** | **Forecast Sample<br>capacity (kWdc)** |
|  AZ | 879 | 7789 | 846 | 7792 |
|  CA | 1694 | 9797 | 1442 | 9803 |
|  CO | 252 | 1739 | 261 | 1748 |
|  CT | 482 | 5157 | 500 | 5166 |
|  FL | 2117 | 24526 | 2294 | 24536 |
|  GA | 169 | 1558 | 149 | 1563 |

---

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 5

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![LOGO](g133178g06x18.jpg)

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| | | | | |
|:---|:---|:---|:---|:---|
| **Region** | **Anticipated number of<br>systems** | **Anticipated capacity<br>(kWdc)** | **Forecast Sample<br>systems** | **Forecast Sample<br>capacity (kWdc)** |
|  IA | 43 | 411 | 57 | 413 |
|  IL | 1202 | 13418 | 1208 | 13426 |
|  KS | 5 | 39 | 4 | 43 |
|  MA | 208 | 2163 | 256 | 2172 |
|  MD | 196 | 2375 | 270 | 2379 |
|  ME | 16 | 176 | 18 | 176 |
|  MI | 100 | 745 | 91 | 750 |
|  MO | 5 | 50 | 6 | 58 |
|  NC | 17 | 169 | 19 | 173 |
|  NH | 3 | 34 | 5 | 40 |
|  NJ | 473 | 4783 | 490 | 4795 |
|  NM | 18 | 113 | 19 | 120 |
|  NV | 364 | 3517 | 384 | 3521 |
|  NY | 325 | 3407 | 333 | 3413 |
|  OH | 56 | 535 | 59 | 535 |
|  OK | 10 | 75 | 11 | 85 |
|  OR | 38 | 270 | 31 | 272 |
|  PA | 199 | 2311 | 280 | 2316 |
|  RI | 48 | 379 | 44 | 393 |
|  TX | 729 | 6898 | 661 | 6900 |
|  VA | 484 | 5358 | 549 | 5359 |
|  WV | 58 | 850 | 82 | 852 |
|  **Totals /Average** | **10190** | **98642** | **10369** | **98797** |

---

2.4.1 Irradiance uncertainty

DNV calculated the uncertainty or the interannual variability (IAV) of the solar resource for each region in the Portfolio as shown in Table 2-5.The Portfolio level IAV, which is influenced by each regional IAV value, is used to forecast portfolio level uncertainty in the table below.

**Table 2-5 Future uncertainty by region** 

---

| | |
|:---|:---|
| **Region** | **Inter-Annual<br>Variability** |
|  AZ | 1.45% |
|  CA | 1.87% |
|  CO | 1.81% |
|  CT | 2.71% |
|  FL | 2.20% |

---

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| | |
|:---|:---|
| **Region** | **Inter- Annual<br>Variability** |
|  GA | 2.20% |
|  IA | 1.93% |
|  IL | 2.57% |
|  KS | 2.98% |
|  MA | 2.36% |
|  MD | 2.45% |
|  ME | 2.11% |
|  MI | 2.26% |
|  MO | 2.98% |
|  NC | 2.66% |
|  NH | 2.11% |
|  NJ | 2.69% |
|  NM | 2.10% |
|  NV | 1.43% |
|  NY | 2.64% |
|  OH | 2.28% |
|  OK | 3.16% |
|  OR | 1.89% |
|  PA | 2.45% |
|  RI | 2.55% |
|  TX | 3.19% |
|  VA | 2.49% |
|  WV | 2.64% |
|  **Portfolio** | **1.92%** |

---

**2.4.2** Annual forecasts inclusive of irradiance uncertainty only

Table 2-6 shows probability of exceedance values for the Portfolio for any given year when the only source of uncertainty considered is IAV. Availability losses or historical performance of the systems in the forecast sample and degradation are not considered in Table 2-6 below. Values are not specific to Year 1 of the Portfolio, but represent the probability of exceedance of the IAV for any 1-year period given the historical IAV of the regions represented in the Portfolio.

**Table 2-6 Portfolio exceedance values considering IAV only** 

---

| | |
|:---|:---|
| **Exceedance value** | **1- year** |
|  P50 | 100.00% |
|  P75 | 98.71% |
|  P90 | 97.54% |
|  P95 | 96.84% |
|  P99 | 95.53% |

---

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**2.5** **Degradation** 

For an individual system utilizing standard crystalline modules, DNV utilizes an asymmetric system-level degradation distribution with a mean of 0.81% . This system-level degradation rate distribution is based on a peer-reviewed study published by NREL and DNV. The study analyzed a quality-controlled performance data from numerous PV installations to isolate the effect of degradation from other performance factors. For Maxeon systems, DNV utilizes an annual system-level P50 degradation factor of 0.25% .

DNV notes that the study was primarily based on performance data from larger-capacity PV systems, rather than residential-scale systems study.

There are notable differences between long-term module level degradation rates, such as the rates detailed in manufacturers warranties, and system level degradation. This difference is often attributed to BOS losses and system level degradation, which is the sum of the module level degradation and BOS degradation effects. It should be emphasized that a module can degrade at a rate independent of other modules. Over time the variation of these rates leads to system mismatch where the optimum operating current and voltages of modules may vary. For hardwired arrays this can lead to none of the degraded modules working as well in the array as they would individually, and this impact is expected to increase with time.

The Portfolio will utilize microinverters and module-level-power-electronic (MLPE) technology. The utilization of micro-inverters and module-level-power-electronics technology on residential sites can theoretically mitigate some of the electrical mismatch that can further degrade system performance; however, DNV currently lacks sufficient and statistically robust data to evaluate this behavior.

DNV performed a simulation on the Portfolio systems to estimate the uncertainty in Portfolio-level degradation. A key assumption is that each module model behaves independently. Other factors can create either correlation or independence in degradation; however, little data is available to inform how these factors behave. In each realization of the simulation, a degradation rate is randomly sampled from a distribution unique to each module model, and this degradation rate is assigned to all systems utilizing that same module make and model. The Portfolio-level degradation rate was calculated as an energy estimate-weighted average of the degradation rates for all systems within the Portfolio. The results of 20,000 simulations of the Portfolio are presented in the table below.

**Table 2-7 Portfolio degradation rates** 

---

| | |
|:---|:---|
| **Percentile** | **Degradation rate** |
|  P50 | 0.80% |
|  P75 | 0.92% |
|  P90 | 1.04% |
|  P95 | 1.11% |
|  P99 | 1.26% |

---

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**2.6** **Performance guarantee payout modeling** 

DNV anticipates that in some cases the Customer's performance guarantee under its customer agreements will result in reimbursements paid to homeowners. Performance guarantee payouts are observed throughout the residential solar industry.

DNV understands that the Customer guarantees 90% of expected production for both PPA and lease systems. Actual production in a given true-up period below 90% results in a refund to the customer, while actual production above 90% will be used to offset future underperformance. The true-up period for systems in the Portfolio is three years or two years depending on the contract.

When forecasting performance guarantee payouts DNV considers the historical performance of assets in the portfolio (defined as Correction Factor or Regional Correction Factor), IAV, and degradation. In the performance guarantee model, DNV calculates Correction Factor by averaging the annual Performance Index values for all systems in the Production Sample for that region that have more than two years of production data. The Correction Factor standard deviation for a given region is calculated by taking a standard deviation of annual Performance Index values for each system in a region. Then all system level standard deviations are averaged to determine a regional standard deviation for modeling purposes. The table below shows the performance guarantee Correction Factor and Correction Factor standard deviation for the performance guarantee calculations.

**Table 2-8 Performance guarantee Correction Factors and standard deviation** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Region** | **Systems with 2+ yrs data in<br>Production Sample** | **Systems with 2+ yrs data in<br>Production Sample** | **Correction Factor** | **Correction Factor** | **Standard deviation** | **Standard deviation** |
|  US |  | 4527 |  | 0.98 |  | 0.08 |

---

DNV has forecast performance guarantee payouts for the Portfolio based on each system having either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 25 year agreement with a 3-year pay schedule, with the last year being a 1-year true-up

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 25 year agreement with a 2-year pay schedule, with the last year being a 1-year true up

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 25 year agreement with a 1-year pay schedule

The model was run at a 90% guarantee level via Monte Carlo simulation for the Forecast Sample of 10,369 systems, which were sampled from the 4,527 systems with sufficient data. The methodology employed for these calculations for both the lease and PPA systems is as follows:

The calculations were performed on the 10,369 systems in the Forecast Sample. Each asset was assigned a first-year generation estimate corresponding to the year 1 contract energy estimate from the production sample used for synthetic dataset creation.

For each system, production was simulated for each year of the customer agreement according to the following process:

A Regional Correction Factor was sampled from the system's Regional Correction Factor distribution for each year of each system realization.

A degradation rate was sampled for each system for each realization. DNV's degradation distribution for PV systems has a median of 0.64% and a mean of 0.81% .

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For each year of each system realization, inter-annual variability values were sampled from the Portfolio variability distributions for each year. These variability values were applied to the simulated production from (b).

If production for any year was below either 90% of the estimate for that year, the difference was considered reimbursable energy, and a refund is issued to the homeowner. If production exceeded the guaranteed production, that amount is banked against future underproduction.

For each system, the annual reimbursement rates were calculated as the ratio of the reimbursable energy to the estimated production in that year. The system's total reimbursement rate was calculated as the ratio of the total reimbursable energy to the total energy produced. The average reimbursement rate was calculated for each region for both the annual and the lifetime results.

The model was run with 1,000 realizations and the P50, P75, P90, and P99 reimbursement rates were calculated.

Results are presented in Table 2-9 below as the ratio of reimbursable energy to the forecast energy for that three-year period (one year period for the last year of contract term). DNV's forecast assumes that each system starts on the same date. The forecasts can be applied proportionally across different start years.

**Table 2-9 Performance guarantee payout forecasts for the Portfolio, 25 years with a 3-year payout schedule** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Year** | **P50** | **P75** | **P90** | **P95** | **P99** |
| 1 |  |  |  |  |  |
| 2 |  |  |  |  |  |
| 3 | 0.19% | 0.28% | 0.38% | 0.44% | 0.55% |
| 4 |  |  |  |  |  |
| 5 |  |  |  |  |  |
| 6 | 0.10% | 0.13% | 0.15% | 0.17% | 0.21% |
| 7 |  |  |  |  |  |
| 8 |  |  |  |  |  |
| 9 | 0.32% | 0.36% | 0.40% | 0.42% | 0.46% |
| 10 |  |  |  |  |  |
| 11 |  |  |  |  |  |
| 12 | 0.69% | 0.75% | 0.80% | 0.83% | 0.89% |
| 13 |  |  |  |  |  |
| 14 |  |  |  |  |  |
| 15 | 1.14% | 1.21% | 1.26% | 1.30% | 1.37% |
| 16 |  |  |  |  |  |
| 17 |  |  |  |  |  |
| 18 | 1.65% | 1.73% | 1.80% | 1.84% | 1.91% |
| 19 |  |  |  |  |  |
| 20 |  |  |  |  |  |
| 21 | 2.21% | 2.29% | 2.37% | 2.41% | 2.50% |
| 22 |  |  |  |  |  |
| 23 |  |  |  |  |  |
| 24 | 2.81% | 2.90% | 3.00% | 3.05% | 3.14% |
| 25 | 3.25% | 3.35% | 3.45% | 3.53% | 3.61% |

---

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**Table 2-10 Performance guarantee payout forecasts for the Portfolio, 25 years with a 2-year payout schedule** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Year** | **P50** | **P75** | **P90** | **P95** | **P99** |
| 1 |  |  |  |  |  |
| 2 | 0.26% | 0.37% | 0.51% | 0.59% | 0.72% |
| 3 |  |  |  |  |  |
| 4 | 0.06% | 0.09% | 0.12% | 0.14% | 0.19% |
| 5 |  |  |  |  |  |
| 6 | 0.12% | 0.14% | 0.17% | 0.19% | 0.23% |
| 7 |  |  |  |  |  |
| 8 | 0.26% | 0.30% | 0.34% | 0.36% | 0.40% |
| 9 |  |  |  |  |  |
| 10 | 0.49% | 0.53% | 0.58% | 0.61% | 0.67% |
| 11 |  |  |  |  |  |
| 12 | 0.76% | 0.82% | 0.87% | 0.90% | 0.96% |
| 13 |  |  |  |  |  |
| 14 | 1.06% | 1.12% | 1.18% | 1.22% | 1.29% |
| 15 |  |  |  |  |  |
| 16 | 1.38% | 1.46% | 1.53% | 1.56% | 1.63% |
| 17 |  |  |  |  |  |
| 18 | 1.74% | 1.82% | 1.88% | 1.93% | 2.00% |
| 19 |  |  |  |  |  |
| 20 | 2.11% | 2.20% | 2.27% | 2.31% | 2.40% |
| 21 |  |  |  |  |  |
| 22 | 2.50% | 2.58% | 2.67% | 2.73% | 2.81% |
| 23 |  |  |  |  |  |
| 24 | 2.92% | 3.01% | 3.11% | 3.16% | 3.24% |
| 25 | 3.25% | 3.35% | 3.45% | 3.53% | 3.61% |

---

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**Table 2-11 Performance guarantee payout forecasts for the Portfolio, 25 years with a 1-year payout schedule** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Year** | **P50** | **P75** | **P90** | **P95** | **P99** |
| 1 | 0.37% | 0.54% | 0.74% | 0.85% | 0.99% |
| 2 | 0.15% | 0.20% | 0.28% | 0.33% | 0.45% |
| 3 | 0.06% | 0.09% | 0.13% | 0.15% | 0.21% |
| 4 | 0.06% | 0.09% | 0.11% | 0.13% | 0.16% |
| 5 | 0.09% | 0.12% | 0.15% | 0.16% | 0.20% |
| 6 | 0.15% | 0.17% | 0.20% | 0.22% | 0.26% |
| 7 | 0.22% | 0.25% | 0.29% | 0.30% | 0.34% |
| 8 | 0.31% | 0.35% | 0.39% | 0.41% | 0.45% |
| 9 | 0.42% | 0.47% | 0.51% | 0.54% | 0.60% |
| 10 | 0.55% | 0.60% | 0.65% | 0.68% | 0.75% |
| 11 | 0.69% | 0.74% | 0.80% | 0.83% | 0.87% |
| 12 | 0.83% | 0.89% | 0.95% | 0.98% | 1.05% |
| 13 | 0.98% | 1.04% | 1.09% | 1.14% | 1.22% |
| 14 | 1.13% | 1.20% | 1.26% | 1.30% | 1.35% |
| 15 | 1.30% | 1.37% | 1.44% | 1.47% | 1.53% |
| 16 | 1.47% | 1.55% | 1.62% | 1.66% | 1.72% |
| 17 | 1.65% | 1.72% | 1.80% | 1.85% | 1.91% |
| 18 | 1.82% | 1.91% | 1.97% | 2.01% | 2.09% |
| 19 | 2.01% | 2.10% | 2.18% | 2.21% | 2.29% |
| 20 | 2.21% | 2.29% | 2.37% | 2.41% | 2.50% |
| 21 | 2.40% | 2.49% | 2.57% | 2.62% | 2.70% |
| 22 | 2.59% | 2.68% | 2.77% | 2.83% | 2.92% |
| 23 | 2.81% | 2.91% | 3.01% | 3.05% | 3.13% |
| 24 | 3.03% | 3.12% | 3.22% | 3.27% | 3.36% |
| 25 | 3.25% | 3.35% | 3.45% | 3.53% | 3.61% |

---

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| | |
|:---|:---|
| **3** | **TECHNICAL INPUTS TO FINANCIAL MODEL**  |

---

DNV has reviewed the Portfolio financial model (the "Model") to assess reasonableness of revenue projections, construction and interconnection budgets, and operating cost assumptions.

DNV has not independently verified Model mechanics. The DNV analysis is exclusive of assumed impacts of inflation and dollar values provided are in 2026 dollars unless otherwise noted.

**3.1** **PV equipment replacement modeling** 

The DNV model is designed to simulate an ownership model in which Palmetto is responsible for all O&M costs. DNV's model considers equipment failure rates, projected equipment costs, equipment warranties, system size, likelihood of multiple non-critical failures on a single system, and labor costs. For modeling purposes, DNV has modeled 25 years starting in year 2026.

3.1.1 PV equipment replacement assumptions

3.1.1.1 Portfolio

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The lease/PPA for all systems is 25 years; no lease renewals or defaults are considered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No equipment replacement costs past lease expiration date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All equipment is expected to be installed in 2025.

DNV modeled the inverter capacities in Table 3-1.

**Table 3-1 Portfolio inverter OEM** 

---

| | | |
|:---|:---|:---|
| **Inverter OEM** | **Capacity [kWdc]** | **% of total capacity** |
|  Enphase | 50353 | 51.05% |
|  SolarEdge | 25546 | 25.90% |
|  Tesla | 17913 | 18.16% |
|  QCells | 4795 | 4.86% |
|  Tigo | 36 | 0.04% |
|  **Total** | **98642** | **100.00%** |

---

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DNV modeled module capacities and quality classifications in Table 3-2.

**Table 3-2 Portfolio module OEM** 

---

| | | | |
|:---|:---|:---|:---|
| **Module OEM** | **Capacity [kWdc]** | **% of total capacity** | **Quality classification** |
|  Qcells | 26174 | 26.53% | High |
|  Ja Solar | 19638 | 19.91% | High |
|  Jinko | 13082 | 13.26% | High |
|  Canadian Solar | 12258 | 12.43% | High |
|  Hyundai | 7863 | 7.97% | Typical |
|  LongI | 6074 | 6.16% | High |
|  Trina | 4174 | 4.23% | High |
|  Silfab | 2935 | 2.98% | Typical |
|  Sirius (By Elin) | 1696 | 1.72% | Typical |
|  SEG | 1658 | 1.68% | Unknown |
|  Vsun | 1408 | 1.43% | Typical |
|  REC | 1021 | 1.04% | Unknown |
|  Mission | 309 | 0.31% | Unknown |
|  Maxeon | 253 | 0.26% | High |
|  ZNShine | 91 | 0.09% | Typical |
|  Other | 8 | 0.01% | Unknown |
|  **Total** | **98642** | **100.00%** |  |

---

3.1.1.2 Labor

DNV modeled the anticipated costs to replace all PV equipment (modules, string inverters, optimizers, microinverters, and monitoring and communications equipment) in the Portfolio. DNV assumed the labor costs are fully born by Palmetto for the entire Portfolio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Truck roll costs are synonymous with labor costs and are exclusive of equipment costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Palmetto provided DNV with average historical truck roll costs by equipment type as well as the average number of truck
rolls required for each type of failure to fully remedy [2]. The table below presents the average truck roll costs presented to DNV and the average number of truck rolls required for each type of failure.

**Table 3-3 Labor costs by failure type** 

---

| | | | |
|:---|:---|:---|:---|
| **Equipment type** | **Truck roll cost range** | **Average number of**<br>**truck rolls required** | **Total replacement**<br>**labor cost per failure** |
|  Microinverter | $430 | 1.11 | $478 |
|  Optimizer | $398 | 1.11 | $442 |
|  String | $366 | 1.11 | $407 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Labor costs per failure have been modeled at a blended rate of $456, which considers the distribution of microinverter,
optimizer, and string inverter systems in the Portfolio.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The failure of one module, optimizer, or microinverter, all considered non-critical components, only decreases system production incrementally by the proportion of energy represented by that part in the system. DNV's model requires that at least five (5) non-critical components
fail before a truck roll is allowed on a given system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In order to model the number of truck-rolls required, DNV used the binomial distribution to calculate the number of sites
which had a minimum threshold of failed non-critical components. For example, a minimum threshold could be one (1) failed microinverter and one (1) failed module on an Enphase system. The binomial
distribution can be used to calculate how many sites have two (2) non-critical component failures necessitating a truck roll.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Labor cost escalation has not been modeled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV did not model reimbursement from manufacturers for warranty replacement labor.

3.1.1.3 Equipment

DNV's O&M cost forecasting assumes the Sponsor possesses mature logistics capabilities and is able to exercise and enforce all relevant equipment warranties to their fullest extent. Under successful warranty claims, the equipment and shipping costs to replace failed components are fully covered by the original equipment manufacturer. Each equipment manufacturer provides distinct warranty terms, after which all replacement equipment costs are fully borne by the system Owner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Equipment is modeled considering the following warranties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Modules:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• High Durability: 30 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Typical Quality: 25 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unknown Quality: 25 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inverters:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SolarEdge Inverters: 25 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SolarEdge Optimizers: 25 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Tesla Inverters: 12.5 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Enphase microinverters: 25 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Qcells: 25 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Tigo: 12.5 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Monitoring hardware: 5 years for all manufacturers

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV assumes monitoring hardware count is the same as the number of string inverters, and for systems with microinverters 1
monitoring system is used per project

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV assumes 1.2 string inverters per system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For each Tesla inverter installed, Palmetto holds $600 back from each installer. This is put into a reserve to be allocated
toward Tesla inverter failures after the Tesla 12.5-year inverter warranty expires. DNV modeled a reserve of $1,309,680 ($600 \* 2,183 Tesla inverters) against which equipment costs of Tesla inverters are
offset after the warranty expires. The reserve covers inverter equipment costs until 2046.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV assumes all warranties are honored for the full term and has not derated any warranty terms based on the financial
strength of the OEMs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV considers primary and secondary equipment failures, meaning equipment that is replaced can fail again.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV assumed the following equipment costs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Palmetto provided average equipment pricing from 2025 for a sample of modules and inverters [3].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Modules: $0.417/Wdc

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inverters:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• String: $0.395/Wdc

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Micro: $0.326/Wdc

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Optimizers: $0.180/Wdc

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV assumes pricing will decrease by 2.5% year over year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV has not considered recent tariffs or supply chain challenges seen in the solar market in these assumptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DNV assumes an annual meter cost of $250/meter for the 25-year modeled term.
Palmetto confirmed its historical data supports this $250 blended rate for meter replacement costs. [4]

3.1.2 Inverter failure rates

DNV assumes the inverter and optimizer failure rates as shown in the below figure. DNV's projected failure rates are based on available data.

![LOGO](g133178dsp024.jpg)

**Figure 3-1 DNV primary residential inverter and optimizer failure rates** 

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3.1.3 Module failure rates

DNV assumes the module failure rates as shown in the below figure. DNV's projected failure rates are based on available data.

![LOGO](g133178dsp025a.jpg)

**Figure 3-2 DNV primary module failure rates** 

3.1.4 Meter failure rates

DNV assumes the meter failure rates as shown in the below figure. The Portfolio was modeled to assume a 15-year meter useful life.

![LOGO](g133178dsp025b.jpg)

**Figure 3-3 Meter failure rates** 

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![LOGO](g133178g06x18.jpg)

3.1.5 Solar replacement costs

Table 3-4 and Table 3-5 below show the results in annual and lifetime $/ kWdc and total $/ Portfolio. DNV also notes that these costs are exclusive of labor inflation. Given the high uncertainty of long-term forecasting, DNV is presenting a ± 30% range on the cost estimate to represent potential conservative and optimistic outcomes.

**Table 3-4 Total annual equipment replacement costs for the Portfolio** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Equipment** | **Equipment** | **Labor** | **Labor** | **Total** | **Total** |
| **Year** | **Low** | **High** | **Low** | **High** | **Low** | **High** |
| 1 | $0 | $0 | $22322 | $41456 | $22322 | $41456 |
| 2 | $0 | $0 | $14348 | $26646 | $14348 | $26646 |
| 3 | $0 | $0 | $14029 | $26053 | $14029 | $26053 |
| 4 | $0 | $0 | $14029 | $26053 | $14029 | $26053 |
| 5 | $0 | $0 | $14029 | $26053 | $14029 | $26053 |
| 6 | $0 | $0 | $14029 | $26053 | $14029 | $26053 |
| 7 | $0 | $0 | $14029 | $26053 | $14029 | $26053 |
| 8 | $350 | $650 | $14985 | $27830 | $15335 | $28480 |
| 9 | $2100 | $3900 | $19448 | $36118 | $21548 | $40018 |
| 10 | $9450 | $17550 | $39183 | $72768 | $48633 | $90318 |
| 11 | $32200 | $59800 | $106889 | $198509 | $139089 | $258309 |
| 12 | $85400 | $158600 | $238240 | $442446 | $323640 | $601046 |
| 13 | $178150 | $330850 | $418593 | $777386 | $596743 | $1108236 |
| 14 | $290675 | $539825 | $621135 | $1153536 | $911810 | $1693361 |
| 15 | $371525 | $689975 | $759226 | $1409992 | $1130751 | $2099967 |
| 16 | $371525 | $689975 | $764604 | $1419979 | $1136129 | $2109954 |
| 17 | $290675 | $539825 | $640058 | $1188679 | $930733 | $1728504 |
| 18 | $178150 | $330850 | $471669 | $875957 | $649819 | $1206807 |
| 19 | $85400 | $158600 | $372238 | $691300 | $457638 | $849900 |
| 20 | $39625 | $73589 | $393379 | $730561 | $433004 | $804151 |
| 21 | $450219 | $836121 | $529092 | $982599 | $979310 | $1818719 |
| 22 | $453170 | $841601 | $429172 | $797034 | $882342 | $1638635 |
| 23 | $393899 | $731526 | $358716 | $666187 | $752615 | $1397713 |
| 24 | $299428 | $556080 | $314420 | $583923 | $613848 | $1140004 |
| 25 | $211729 | $393211 | $297797 | $553051 | $509525 | $946262 |
|  **TOTAL** | $**3743669** | $**6952527** | $**6895659** | $**12806223** | $**10639327** | $**19758750** |

---

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 18

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![LOGO](g133178g06x18.jpg)

**Table 3-5 Annual equipment replacement costs for the Portfolio in $/kWdc** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Equipment** | **Equipment** | **Labor** | **Labor** | **Total** | **Total** |
| **Year** | **Low** | **High** | **Low** | **High** | **Low** | **High** |
| 1 | $0.00 | $0.00 | $0.23 | $0.42 | $0.23 | $0.42 |
| 2 | $0.00 | $0.00 | $0.15 | $0.27 | $0.15 | $0.27 |
| 3 | $0.00 | $0.00 | $0.14 | $0.26 | $0.14 | $0.26 |
| 4 | $0.00 | $0.00 | $0.14 | $0.26 | $0.14 | $0.26 |
| 5 | $0.00 | $0.00 | $0.14 | $0.26 | $0.14 | $0.26 |
| 6 | $0.00 | $0.00 | $0.14 | $0.26 | $0.14 | $0.26 |
| 7 | $0.00 | $0.00 | $0.14 | $0.26 | $0.14 | $0.26 |
| 8 | $0.00 | $0.01 | $0.15 | $0.28 | $0.16 | $0.29 |
| 9 | $0.02 | $0.04 | $0.20 | $0.37 | $0.22 | $0.41 |
| 10 | $0.10 | $0.18 | $0.40 | $0.74 | $0.49 | $0.92 |
| 11 | $0.33 | $0.61 | $1.08 | $2.01 | $1.41 | $2.62 |
| 12 | $0.87 | $1.61 | $2.42 | $4.49 | $3.28 | $6.09 |
| 13 | $1.81 | $3.35 | $4.24 | $7.88 | $6.05 | $11.23 |
| 14 | $2.95 | $5.47 | $6.30 | $11.69 | $9.24 | $17.17 |
| 15 | $3.77 | $6.99 | $7.70 | $14.29 | $11.46 | $21.29 |
| 16 | $3.77 | $6.99 | $7.75 | $14.40 | $11.52 | $21.39 |
| 17 | $2.95 | $5.47 | $6.49 | $12.05 | $9.44 | $17.52 |
| 18 | $1.81 | $3.35 | $4.78 | $8.88 | $6.59 | $12.23 |
| 19 | $0.87 | $1.61 | $3.77 | $7.01 | $4.64 | $8.62 |
| 20 | $0.40 | $0.75 | $3.99 | $7.41 | $4.39 | $8.15 |
| 21 | $4.56 | $8.48 | $5.36 | $9.96 | $9.93 | $18.44 |
| 22 | $4.59 | $8.53 | $4.35 | $8.08 | $8.94 | $16.61 |
| 23 | $3.99 | $7.42 | $3.64 | $6.75 | $7.63 | $14.17 |
| 24 | $3.04 | $5.64 | $3.19 | $5.92 | $6.22 | $11.56 |
| 25 | $2.15 | $3.99 | $3.02 | $5.61 | $5.17 | $9.59 |
|  **TOTAL** | $**37.95** | $**70.48** | $**69.91** | $**129.83** | $**107.86** | $**200.31** |

---

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 19

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![LOGO](g133178g06x18.jpg)

**3.2** **BESS equipment replacement modeling** 

DNV modeled the cost of replacing BESS within the Portfolio. The Portfolio has been modeled with 2,451 BESS units according to the distribution in the table below.

**Table 3-6 Portfolio BESS Breakdown** 

---

| | | |
|:---|:---|:---|
| **Supplier** | **Units** | **Concentration** |
|  Tesla | 1025 | 41.80% |
|  SolarEdge | 681 | 27.77% |
|  Enphase | 717 | 29.24% |
|  Franklin | 28 | 1.14% |
|  Unknown<sup>1</sup>  | 1 | 0.04% |
|  **Total** | **2452** | **100.00%** |

---

DNV made the following assumptions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BESS units cost $6,250 in Year 1 and decline in cost at 3.5% annually for 20 years after which equipment costs remain flat.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Secondary failures are also modeled, meaning that a replaced unit can fail again.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Each unit that fails is required to be replaced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Palmetto confirmed that a BESS truck roll is $366 and the average number of truck rolls to replace a failed BESS is 1.11
[5]. Therefore, DNV modeled the cost of labor as $407 per BESS failure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All units were modeled as installed in the same year. DNV notes that most assets in the Portfolio were installed in 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No labor escalation has been modeled.

Each BESS product follows manufacturer specific warranty and labor reimbursement terms as provided by Palmetto and shown in the table below. To the extent that manufacturer labor reimbursement does not cover the full modeled labor cost, DNV considers the difference to be payable by Palmetto, which has been considered in the modeled results. DNV assumes warranties begin at the start of installation of the first unit of a project and do not extend if a unit fails within the warranty period.

**Table 3-7 Portfolio BESS Breakdown** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Supplier** | **Warranty term<br>(years)** | **Labor<br>reimbursement<br>term (years)** | **First labor<br>reimbursement** | **Second labor<br>reimbursement** |
|  Tesla<sup>2</sup>  | 12 | 5 | $450 | $450 |
|  SolarEdge | 10 | 10 | $250 | $125 |
|  Enphase | 15 | 15 | $350 | $350 |
|  Franklin<sup>3</sup>  | 12 | 12 | $750 | $750 |

---

<sup>1</sup> Not modeled

<sup>2</sup> DNV notes that given Tesla's first and second labor reimbursement is greater than the modeled cost of a truck roll ($407), DNV assumed that Tesla's reimbursement would only be up to the truck roll cost of $407. 

<sup>3</sup> DNV notes that given Franklin's first and second labor reimbursement is greater than the modeled cost of a truck roll ($407), DNV assumed that Franklin's reimbursement would only be up to the truck roll cost of $407. 

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 20

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![LOGO](g133178g06x18.jpg)

All products except for Enphase were modeled along DNV's generic BESS failure curve. DNV's generic curve is based on a 10-year warranty term and 70% capacity up to Year 10 and 60% capacity up to Year 25. Enphase BESS units were modeled along the Enphase 70% BESS primary failure curves provided in *10585605 HOU-R-01-C Enphase Replacement Curves Analysis* [6].

**Table 3-8 Annual BESS equipment replacement cost forecast for the Portfolio** 

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| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Primary failures** | **Primary failures** | **Primary failures** | **Primary failures** | **Primary failures** | **Primary failures** | **Secondary failures** | **Secondary failures** | **Secondary failures** | **Secondary failures** | **Secondary failures** | **Secondary failures** | | |
|  | **Equipment cost** | **Equipment cost** | **Labor cost** | **Labor cost** | **Total primary** | **Total primary** | **Equipment cost** | **Equipment cost** | **Labor cost** | **Labor cost** | **Total secondary** | **Total secondary** | **Total BESS replacement costs** | **Total BESS replacement costs** |
|  | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** |
| 1 | $0 | $0 | $4743 | $8808 | $4743 | $8808 | $0 | $0 | $0 | $0 | $0 | $0 | $4743 | $8808 |
| 2 | $0 | $0 | $1660 | $3083 | $1660 | $3083 | $0 | $0 | $544 | $1010 | $544 | $1010 | $2204 | $4093 |
| 3 | $0 | $0 | $1215 | $2256 | $1215 | $2256 | $0 | $0 | $381 | $707 | $381 | $707 | $1596 | $2963 |
| 4 | $0 | $0 | $1024 | $1901 | $1024 | $1901 | $0 | $0 | $345 | $641 | $345 | $641 | $1369 | $2542 |
| 5 | $0 | $0 | $1941 | $3605 | $1941 | $3605 | $0 | $0 | $332 | $616 | $332 | $616 | $2273 | $4221 |
| 6 | $0 | $0 | $8887 | $16504 | $8887 | $16504 | $0 | $0 | $1792 | $3328 | $1792 | $3328 | $10679 | $19832 |
| 7 | $0 | $0 | $7472 | $13877 | $7472 | $13877 | $0 | $0 | $1992 | $3699 | $1992 | $3699 | $9464 | $17576 |
| 8 | $0 | $0 | $14599 | $27112 | $14599 | $27112 | $0 | $0 | $1901 | $3531 | $1901 | $3531 | $16500 | $30644 |
| 9 | $0 | $0 | $51460 | $95568 | $51460 | $95568 | $0 | $0 | $3114 | $5783 | $3114 | $5783 | $54574 | $101351 |
| 10 | $0 | $0 | $53153 | $98712 | $53153 | $98712 | $0 | $0 | $9209 | $17102 | $9209 | $17102 | $62362 | $115814 |
| 11 | $24823 | $46100 | $5906 | $10969 | $30729 | $57069 | $57791 | $107326 | $13493 | $25058 | $71284 | $132384 | $102013 | $189453 |
| 12 | $23381 | $43421 | $5802 | $10775 | $29183 | $54196 | $30484 | $56613 | $7376 | $13698 | $37860 | $70311 | $67042 | $124507 |
| 13 | $178682 | $331838 | $19975 | $37097 | $198657 | $368935 | $67227 | $124850 | $6713 | $12466 | $73939 | $137316 | $272597 | $506251 |
| 14 | $428080 | $795006 | $50791 | $94326 | $478871 | $889332 | $91245 | $169455 | $9456 | $17560 | $100700 | $187015 | $579571 | $1076347 |
| 15 | $534574 | $992781 | $64748 | $120246 | $599322 | $1113027 | $136340 | $253204 | $14626 | $27163 | $150967 | $280366 | $750289 | $1393393 |
| 16 | $668151 | $1240852 | $74186 | $137773 | $742337 | $1378625 | $154732 | $287360 | $17180 | $31906 | $171912 | $319266 | $914249 | $1697891 |
| 17 | $243878 | $452916 | $28060 | $52112 | $271938 | $505028 | $167008 | $310158 | $19216 | $35686 | $186224 | $345844 | $458162 | $850872 |
| 18 | $233853 | $434298 | $27883 | $51782 | $261735 | $486080 | $210425 | $390790 | $25089 | $46594 | $235514 | $437384 | $497250 | $923464 |
| 19 | $112372 | $208690 | $13884 | $25785 | $126256 | $234475 | $257368 | $477969 | $31799 | $59056 | $289167 | $537025 | $415423 | $771500 |
| 20 | $59710 | $110890 | $7645 | $14198 | $67355 | $125088 | $189537 | $351997 | $24268 | $45069 | $213804 | $397065 | $281159 | $522153 |
| 21 | $67271 | $124932 | $8613 | $15996 | $75884 | $140928 | $132231 | $245573 | $16930 | $31442 | $149162 | $277015 | $225046 | $417943 |
| 22 | $51330 | $95327 | $6572 | $12205 | $57902 | $107533 | $163440 | $303532 | $20926 | $38863 | $184366 | $342395 | $242269 | $449928 |
| 23 | $28853 | $53585 | $3694 | $6861 | $32548 | $60445 | $230811 | $428649 | $29552 | $54883 | $260363 | $483532 | $292911 | $543977 |
| 24 | $37621 | $69867 | $4817 | $8946 | $42438 | $78813 | $290668 | $539811 | $37216 | $69116 | $327884 | $608927 | $370321 | $687740 |
| 25 | $101225 | $187990 | $12961 | $24070 | $114186 | $212060 | $279600 | $519257 | $35799 | $66484 | $315399 | $585741 | $429585 | $797801 |
|  **Totals** | $**2793804** | $**5188493** | $**481690** | $**894567** | $**3275494** | $**6083060** | $**2458907** | $**4566541** | $**329250** | $**611464** | $**2788156** | $**5178005** | $**6063650** | $**11261064** |

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DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 21

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![LOGO](g133178g06x18.jpg)

**Table 3-9 Annual BESS equipment replacement cost forecast for the Portfolio per unit** 

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Primary failures** | **Primary failures** | **Primary failures** | **Primary failures** | **Primary failures** | **Primary failures** | **Secondary failures** | **Secondary failures** | **Secondary failures** | **Secondary failures** | **Secondary failures** | **Secondary failures** | | |
|  | **Equipment cost<br>(per unit)** | **Equipment cost<br>(per unit)** | **Labor cost<br>(per unit)** | **Labor cost<br>(per unit)** | **Total primary<br>(per unit)** | **Total primary<br>(per unit)** | **Equipment cost<br>(per unit)** | **Equipment cost<br>(per unit)** | **Labor cost<br>(per unit)** | **Labor cost<br>(per unit)** | **Total secondary<br>(per unit)** | **Total secondary<br>(per unit)** | **Total BESS<br>replacement costs<br>(per unit)** | **Total BESS<br>replacement costs<br>(per unit)** |
|  | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** |
| **1** | $0 | $0 | $2 | $4 | $2 | $4 | $0 | $0 | $0 | $0 | $0 | $0 | $2 | $4 |
| **2** | $0 | $0 | $1 | $1 | $1 | $1 | $0 | $0 | $0 | $0 | $0 | $0 | $1 | $2 |
| **3** | $0 | $0 | $0 | $1 | $0 | $1 | $0 | $0 | $0 | $0 | $0 | $0 | $1 | $1 |
| **4** | $0 | $0 | $0 | $1 | $0 | $1 | $0 | $0 | $0 | $0 | $0 | $0 | $1 | $1 |
| **5** | $0 | $0 | $1 | $1 | $1 | $1 | $0 | $0 | $0 | $0 | $0 | $0 | $1 | $2 |
| **6** | $0 | $0 | $4 | $7 | $4 | $7 | $0 | $0 | $1 | $1 | $1 | $1 | $4 | $8 |
| **7** | $0 | $0 | $3 | $6 | $3 | $6 | $0 | $0 | $1 | $2 | $1 | $2 | $4 | $7 |
| **8** | $0 | $0 | $6 | $11 | $6 | $11 | $0 | $0 | $1 | $1 | $1 | $1 | $7 | $13 |
| **9** | $0 | $0 | $21 | $39 | $21 | $39 | $0 | $0 | $1 | $2 | $1 | $2 | $22 | $41 |
| **10** | $0 | $0 | $22 | $40 | $22 | $40 | $0 | $0 | $4 | $7 | $4 | $7 | $25 | $47 |
| **11** | $10 | $19 | $2 | $4 | $13 | $23 | $24 | $44 | $6 | $10 | $29 | $54 | $42 | $77 |
| **12** | $10 | $18 | $2 | $4 | $12 | $22 | $12 | $23 | $3 | $6 | $15 | $29 | $27 | $51 |
| **13** | $73 | $135 | $8 | $15 | $81 | $151 | $27 | $51 | $3 | $5 | $30 | $56 | $111 | $207 |
| **14** | $175 | $324 | $21 | $38 | $195 | $363 | $37 | $69 | $4 | $7 | $41 | $76 | $236 | $439 |
| **15** | $218 | $405 | $26 | $49 | $245 | $454 | $56 | $103 | $6 | $11 | $62 | $114 | $306 | $568 |
| **16** | $273 | $506 | $30 | $56 | $303 | $562 | $63 | $117 | $7 | $13 | $70 | $130 | $373 | $693 |
| **17** | $100 | $185 | $11 | $21 | $111 | $206 | $68 | $127 | $8 | $15 | $76 | $141 | $187 | $347 |
| **18** | $95 | $177 | $11 | $21 | $107 | $198 | $86 | $159 | $10 | $19 | $96 | $178 | $203 | $377 |
| **19** | $46 | $85 | $6 | $11 | $52 | $96 | $105 | $195 | $13 | $24 | $118 | $219 | $169 | $315 |
| **20** | $24 | $45 | $3 | $6 | $27 | $51 | $77 | $144 | $10 | $18 | $87 | $162 | $115 | $213 |
| **21** | $27 | $51 | $4 | $7 | $31 | $57 | $54 | $100 | $7 | $13 | $61 | $113 | $92 | $171 |
| **22** | $21 | $39 | $3 | $5 | $24 | $44 | $67 | $124 | $9 | $16 | $75 | $140 | $99 | $184 |
| **23** | $12 | $22 | $2 | $3 | $13 | $25 | $94 | $175 | $12 | $22 | $106 | $197 | $120 | $222 |
| **24** | $15 | $29 | $2 | $4 | $17 | $32 | $119 | $220 | $15 | $28 | $134 | $248 | $151 | $281 |
| **25** | $41 | $77 | $5 | $10 | $47 | $87 | $114 | $212 | $15 | $27 | $129 | $239 | $175 | $326 |
|  **Totals** | $**1140** | $**2117** | $**197** | $**365** | $**1336** | $**2482** | $**1003** | $**1863** | $**134** | $**249** | $**1138** | $**2113** | $**2474** | $**4594** |

---

As stated above, DNV's model assumes all BESS units are installed in 2025 and the modeled term starts in 2026. The Model also does not account for assets tailing out at the end of a contract. DNV's generic BESS failure curve considers primary and secondary failures and assumes that all BESS products fail within 20 years. DNV's modeled forecast BESS equipment replacement costs are between $2,474 - $4,594 per BESS unit in 2026 dollars.

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 22

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![LOGO](g133178g06x18.jpg)

**3.3** **Technical inputs to financial model conclusion** 

A summary of the PV equipment replacement model and the BESS equipment replacement model is presented below.

**Table 3-10 Portfolio equipment replacement model summary** 

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Total PV Equipment** | **Total PV Equipment** | **Total PV Labor** | **Total PV Labor** | **Total BESS Equipment** | **Total BESS Equipment** | **Total BESS Labor** | **Total BESS Labor** | **Total Cost** | **Total Cost** |
|  | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** | **Low** | **High** |
| **1** | $0 | $0 | $22322 | $41456 | $0 | $0 | $4743 | $8808 | $27065 | $50264 |
| **2** | $0 | $0 | $14348 | $26646 | $0 | $0 | $2204 | $4093 | $16552 | $30739 |
| **3** | $0 | $0 | $14029 | $26053 | $0 | $0 | $1596 | $2963 | $15624 | $29017 |
| **4** | $0 | $0 | $14029 | $26053 | $0 | $0 | $1369 | $2542 | $15397 | $28595 |
| **5** | $0 | $0 | $14029 | $26053 | $0 | $0 | $2273 | $4221 | $16302 | $30275 |
| **6** | $0 | $0 | $14029 | $26053 | $0 | $0 | $10679 | $19832 | $24708 | $45886 |
| **7** | $0 | $0 | $14029 | $26053 | $0 | $0 | $9464 | $17576 | $23493 | $43629 |
| **8** | $350 | $650 | $14985 | $27830 | $0 | $0 | $16500 | $30644 | $31836 | $59124 |
| **9** | $2100 | $3900 | $19448 | $36118 | $0 | $0 | $54574 | $101351 | $76122 | $141369 |
| **10** | $9450 | $17550 | $39183 | $72768 | $0 | $0 | $62362 | $115814 | $110994 | $206132 |
| **11** | $32200 | $59800 | $106889 | $198509 | $82614 | $153425 | $19399 | $36028 | $241102 | $447762 |
| **12** | $85400 | $158600 | $238240 | $442446 | $53865 | $100034 | $13178 | $24473 | $390683 | $725554 |
| **13** | $178150 | $330850 | $418593 | $777386 | $245909 | $456688 | $26688 | $49564 | $869339 | $1614487 |
| **14** | $290675 | $539825 | $621135 | $1153536 | $519325 | $964460 | $60247 | $111886 | $1491381 | $2769707 |
| **15** | $371525 | $689975 | $759226 | $1409992 | $670915 | $1245984 | $79374 | $147409 | $1881040 | $3493360 |
| **16** | $371525 | $689975 | $764604 | $1419979 | $822883 | $1528212 | $91366 | $169679 | $2050378 | $3807845 |
| **17** | $290675 | $539825 | $640058 | $1188679 | $410886 | $763074 | $47276 | $87798 | $1388895 | $2579376 |
| **18** | $178150 | $330850 | $471669 | $875957 | $444278 | $825088 | $52972 | $98376 | $1147069 | $2130271 |
| **19** | $85400 | $158600 | $372238 | $691300 | $369740 | $686660 | $45683 | $84841 | $873061 | $1621400 |
| **20** | $39625 | $73589 | $393379 | $730561 | $249247 | $462887 | $31913 | $59267 | $714164 | $1326304 |
| **21** | $450219 | $836121 | $529092 | $982599 | $199502 | $370505 | $25544 | $47438 | $1204356 | $2236662 |
| **22** | $453170 | $841601 | $429172 | $797034 | $214770 | $398859 | $27499 | $51069 | $1124610 | $2088562 |
| **23** | $393899 | $731526 | $358716 | $666187 | $259664 | $482233 | $33247 | $61744 | $1045525 | $1941690 |
| **24** | $299428 | $556080 | $314420 | $583923 | $328288 | $609678 | $42033 | $78061 | $984170 | $1827743 |
| **25** | $211729 | $393211 | $297797 | $553051 | $380825 | $707247 | $48760 | $90554 | $939111 | $1744062 |
|  **Totals** | $**3743669** | $**6952527** | $**6895659** | $**12806223** | $**5252711** | $**9755034** | $**810939** | $**1506030** | $**16702977** | $**31019815** |

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DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 23

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| **4** | **REFERENCES**  |

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[1] Palmetto, *Copy of DNV - Jan 2026._with_zipcode_lat_long,* 27 January 2026.

[2] Fairbank, David, Re New Palmetto Fund IE Report, 12 September 2025.

[3] Fairbank, David, *Excel; 202603_Equipment Pricing_Palmetto,* 03 March 2026.

[4] Fairbank, David, Re: Equipment Replacement Reports, 15 September 2025.

[5] D. Fairbank, *Email from David Fairbank Subject Line: Re: Equipment Replacement Reports,* 12 September 2025.

[6] DNV, *10585605 HOU-R-01-C Enphase Replacement Curves Analysis,* 30 October 2025.

[7] DNV, 10585605 HOU-R-01-C Enphase Replacement Curves Analysis, 30 October 2025.

DNV Document No.: 10621597-HOU-R-01, Issue: B, Status: Final – www.dnv.com Page 24

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