US Solar Energy

1. US Solar Energy

2. Presentation Overview US market demand in global context Drivers of US market Markets by state Markets by segment 2

3. Increasing global significance of the US PV market The US PV market is expected to carry greater global importance over the next three years. The US PV market is expected to carry greater global importance over the next three years.

4. The US continues its leadership in both size and diversity of VC & PE investment While the demand for solar products is starting to increase in the US, we have historically and continue to be leaders in technology innovation. From this slide, we can see that the US is the leading investor both in terms of level and diversity of investments, with notable investments in technologies such as thin film PV, CSP, concentrating PV, and next generation PV.While the demand for solar products is starting to increase in the US, we have historically and continue to be leaders in technology innovation. From this slide, we can see that the US is the leading investor both in terms of level and diversity of investments, with notable investments in technologies such as thin film PV, CSP, concentrating PV, and next generation PV.

5. Several drivers create the US solar market Federal Investment Tax Credit State Renewable Portfolio Standards and Rebate Programs Long-term increasing electricity prices Decreasing solar costs 5 The US does not have a single incentive or program that drives demand across the country. Instead, the US market is an amalgamation of 50 distinct state markets. At the Federal level, the Investment Tax Credit is a 30% credit on the capital cost of solar. In and of itself, this is not enough incentive to drive adoption. We see market growth in areas where state and/or utility policies combine with the federal ITC to drive adoption. At the state level, Renewable Portfolio Standards and state rebate programs are significant drivers. Steadily increasing electricity prices are driving market growth, along with decreasing costs of solar.The US does not have a single incentive or program that drives demand across the country. Instead, the US market is an amalgamation of 50 distinct state markets. At the Federal level, the Investment Tax Credit is a 30% credit on the capital cost of solar. In and of itself, this is not enough incentive to drive adoption. We see market growth in areas where state and/or utility policies combine with the federal ITC to drive adoption. At the state level, Renewable Portfolio Standards and state rebate programs are significant drivers. Steadily increasing electricity prices are driving market growth, along with decreasing costs of solar.

6. RPS provisions and goals vary 6 No discussion of the U.S. PV landscape would be complete without acknowledging the complex and dynamic nature of state level solar programs. Shown here are the current targets and goals for renewable energy generation – typically defined by mandating some percentage of renewable energy generation by a certain year. Solar friendly states reserve a percentage of this percentage to be met with solar generation. This is done as a means of leveling the playing field against wind, hydro, and landfill generation. An even more confusing map can be drawn to illustrate local incentive programs which can be offered at the state, city, or utility level. However, these two drivers are often coupled in that the local incentives are offered as a means of achieving the state’s renewable portfolio standard. No discussion of the U.S. PV landscape would be complete without acknowledging the complex and dynamic nature of state level solar programs. Shown here are the current targets and goals for renewable energy generation – typically defined by mandating some percentage of renewable energy generation by a certain year. Solar friendly states reserve a percentage of this percentage to be met with solar generation. This is done as a means of leveling the playing field against wind, hydro, and landfill generation. An even more confusing map can be drawn to illustrate local incentive programs which can be offered at the state, city, or utility level. However, these two drivers are often coupled in that the local incentives are offered as a means of achieving the state’s renewable portfolio standard.

7. Thus, simply adding up the solar components of each solar friendly RPS yields a lower bound estimate for the amount of net solar required by the state programs. While these numbers may be unimpressive in the near term, it’s important to note that this is a rapidly expanding state policy trend which still has ample room to grow. Additionally, the state RPS remains one of the few concrete developments that officials can point to as a sign of commitment. In the next few years however, this chart shows that the US PV market will be driven only where high electricity rates coincide with currently available state incentive programs. Thus, simply adding up the solar components of each solar friendly RPS yields a lower bound estimate for the amount of net solar required by the state programs. While these numbers may be unimpressive in the near term, it’s important to note that this is a rapidly expanding state policy trend which still has ample room to grow. Additionally, the state RPS remains one of the few concrete developments that officials can point to as a sign of commitment. In the next few years however, this chart shows that the US PV market will be driven only where high electricity rates coincide with currently available state incentive programs.

8. The increasing demand in the US varies greatly by state 8

9. Recent growth in utility-scale solar installations In 2009, about 100 MW of the 440MW installed were in utility-scale installations, up from about 25MW in 2008. This growth has continued into 2010. As you can see from this graphic, utility-scale installations use a wide range of PV and CSP technologies.In 2009, about 100 MW of the 440MW installed were in utility-scale installations, up from about 25MW in 2008. This growth has continued into 2010. As you can see from this graphic, utility-scale installations use a wide range of PV and CSP technologies.

10. Conclusions Long-term stable growth market with very high potential Complex market means slower ramp-up but also fewer boom-bust cycles overall 10 This complexity means that the US market cannot ramp up as quickly as markets with a Feed-in-Tariff, but it also means that we are less likely to experience boom-bust cycles as an overall country. This complexity means that the US market cannot ramp up as quickly as markets with a Feed-in-Tariff, but it also means that we are less likely to experience boom-bust cycles as an overall country.

11. Thank you Slide 11