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NYSERDA Business Development program Review. May 31, 2010 Update. Introduction to Solartech Renewables. NYSERDA Business Development program Review.

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nyserda business development program review1
Introduction to SolartechRenewablesNYSERDA Business Development program Review

SolartechRenewables LLC is a limited liability company formed in 2009 to establish a manufacturing facility for advanced photovoltaic panels and array configuration hardware in the Tech City complex in Kingston, NY

This manufacturing facility development project is the team effort of SolartechRenewables LLC, Spire Corporation and The Solar Energy Consortium (TSEC)

Solartech’s partnership with NYSERDA began with first funding under PON 1176 in March 2010

By June 30, 2010, Solartechwill have the installed capacity to produce 12MW, or 55,000 panels, per year

Solartech’s facilities at Tech City could comfortably produce more than 100MW per year

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Products and Product DevelopmentNYSERDA Business Development program Review

Solartech’s first generation production panel will be a 60 cell polycrystalline Spire certified design using Spectrawatt solar cells produced in Hopewell Junction, NY

American Capital Energy has submitted a proposal to NYPA using 12MW of these 100% Made in New York panels as part of its RFP response in NYPA’s 100MW solicition

Solartech’s pre-production panels are 60 cell polycrystalline and monocrystalline designs produced in Portugal on similar Spire machinery. These panels are UL 1703 approved for sale in the United States and Canada, and served primarily a market and product R&D function in Q1 2010

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Products and Product Development (continued)NYSERDA Business Development program Review

Solartech’s second generation production panel will be a 100% Made in New York model which will use proprietary materials and process improvements to extend the field life and warranty period for the panels to beyond 30 years

Solartech’s R&D program is focused on RELIABILITY and DURABILITY

Solartech is developing an on-site RELIABILITY LAB with state of the art environmental testing chambers and materials research capability for designs that are ready to go into commercial production on Solartech’s expanded capacity production lines

Spectrawatt’s R&D program is focused on solar cell efficiency – will have selective emitter production equipment installed by the end of 2010 – first in North America. Technology roadmap targets 24% efficiency cells (up from current market of 16.5%)

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Target MarketNYSERDA Business Development program Review

The global market is enormous and growing – now more than 5GW per year

US market will top 1GW of new installations in 2011, and the Northeastern Region will top 400MW in 2011 – through 2020, the US will be the fastest growing market in the world

Solartech is now the only US-owned producer of commercial solar panels (at MW volumes) in the Eastern United States

Significant shortages of Made in USA product are already being encountered – almost all planned capacity expansions in the US through 2012 are going into foreign-owned plants

Substantial barriers to entry are encountered in setting up new production – eg., equipment lead times, product designs and other intellectual property hurdles, market certifications in the US (UL 1703, CEC), and raw material supplies

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Sales and Sales ChannelsNYSERDA Business Development program Review

Focus first on our core Northeastern US market – NY, NJ, PA, MA, MD, CT

Focus first on economic development customers – large developers, governments and agencies, schools, utilities, large commercial users

Offer PPA and other solutions – our product is clean energy, not just equipment

Offer installers hands-on experience with the production line and reliability lab

Develop established distributor network for other US markets and overseas

Solartech’s current backlog of projects is in excess of 30MW for 2011 – letter of intent stage, some subject to RFP selection or other conditions

Sales goal for 2011 is $100 million – will require expansion of the manufacturing line and significant job growth if these orders are secured

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EconomicsNYSERDA Business Development program Review

EBITDA margins are projected at $0.05 to $0.30 per watt in 2011.

Before 2012, EBITDA run rate will exceed $7 million if current sales targets are reached

No current debt (other than Empire State Development Corp forgivable loan of $2 million)

PPA solutions produce financing revenues in addition to sales revenues – ROE for PPA solutions exceed 20% per annum. A significant amount of additional capital is required to fully address this opportunity

Tight capital management is a priority - total burn from inception to profitability is less than $1 million

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Next StepsNYSERDA Business Development program Review

Complete the current commissioning of the 12MW production line

Develop a matured infrastructure for business and line operations – IT projects for finance, marketing and quality control; ISO 9001 certification; full product improvement roadmap with IP control; brand recognition and advertising

Capitalize an expanded PPA program for 2010 and 2011 product sales

Commission the on-site reliability lab

Expand the production line for first generation product sales growth

Expand the production line for second generation product manufacturing and development