2

Agenda

I. Introduction to the Global Solar Market

II. Solar in India

III. Proposed Solutions

IV. Policy and Costs

V. Appendix

3

Introduction to the Solar Market

4

Global Electricity Demand

$9 Trillion in investments expected globally in the power sector from 2005-2030, led by Asia at $4T, US/South America at $1.5T, Africa at $0.5T

5

Solar market growing at 42% CAGR

Source: DB Alternative Energy Solar Photovoltaic Industry

6

What is the addressable market?In 2010, $100 billion (approximately 5%) of global retail electricity demand

could be competitively addressed with solar power…

~600 GWs ($2 Trillion of Solar)

1

10

100

1000

10000

100000

1000000

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

>27

MW

h

US Cents per kWh

# of MWh sold at each price point

201020152020

Area of solar competitiveness

Electricity Price Rising

7

Solar Pricing Trends

System prices have fallen 40% in 2009 vs. 2008, more to come in 2010, then stabilizing to long-term trend of 5% p.a.

System Efficiency increases will be most interesting

Average System size of 1 MWCrystalline 08 09 10 11 12

Average Silicon price (USD/ kg) 170.00$ 65.00$ 55.00$ 54.00$ 53.00$

Silicon utilization (Grams/ Wattdc) 9.00 6.50 6.00 5.50 5.00

Cell Efficiency 16.0% 17.5% 18.0% 18.5% 19.0%Wafer ($/Wdc) 1.85$ 0.69$ 0.56$ 0.52$ 0.46$

Conversion Cost ($/Wdc) 1.20$ 0.96$ 0.90$ 0.84$ 0.81$ Minimum total module PRICE 3.05$ 1.65$ 1.46$ 1.36$ 1.27$

Balance of Systems (with EPC Profit) 2.60$ 1.56$ 1.40$ 1.33$ 1.27$ Total System Cost ($/ Wdc) 5.65$ 3.21$ 2.86$ 2.70$ 2.53$ System Cost Annual Reduction -43.3% -10.7% -5.8% -6.0%

System Efficiency 77.0% 80.0% 83.0% 85.0% 89.0%Total System Cost ($/ Wac) 7.34$ 4.01$ 3.45$ 3.17$ 2.85$

5 years

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Demand lags Supply by over 12 months

Pipeline 6 – 24 monthsConstructible Backlog

3 – 6 monthsConstruction 3 – 12 months

• Land & title

• Host credit

• Interconnection

• Rebate application

• Large Buildings• Unusable Land• Open Fields• Lighting/Off-grid

• Power purchase agreement

• Renewable credit

• Tax profile

• Margin analysis re-run

• Secured bank commitment

• Construction sign off

• CFO sign off on budget

• Aligned panels / site prep

• Margin analysis

• Site prep• Mechanical• Electrical work

• Panels installed over time

• Interconnection

• Independent Engineering

• Sold / funded

•Tollgate

$$$

$$$

$$$

9

Solar in India

10

Global Solar Resource

Source: Global Green USA

India has the best solar resource in Asia

All technologies work in India even technologies that generates electricity only from direct normal insolation (DNI)

Areas where utility scale solar farms will be deployed

Thin-Film and Multijunction solar cells can easily be mfg in India and have ½ performance degradation due to temperature

Latitude Zones Best Suited for HCPV

CPV is a technology well suited for India

Industry Leading LCOEIndustry Leading LCOE

Low Cost Reliability

Small Footprint

Built-in Tracking

Most cost-effective through highest performance PV

technology available

Design hardened through 15 years of

real-world utility experience

>40% higher energy generation than fixed flat plate PV systems

4- 6 acres/MW of installed capacity

Low Environmental

ImpactWater is not required to operate HCPV, pedestal

mount requires little excavation

Solid Path to Bankability

Nearly 13 MW installed worldwide in the utility scale

installations

Extended system life through field

replaceable/upgradeable solar cell

Reduced Risk

Visible

Systems make highly visible

statement of clean energy production

Complete 53kWComplete 53kW(AC) (AC) Solar GeneratorSolar Generator

Easily Replicable and Scalable Easily Replicable and Scalable

One to Hundreds of MegawattsOne to Hundreds of Megawatts

12

Solar in India

14

Defining Utility 2.0

• The main challenge is that Utilities do not know how to profit under the coming financial model “2.0”

• Energy Efficiency

• Self Generation

• Independent Power Producers

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Utility 2.0

Control

Generation

LoadStorage

Storage• Energy Storage• Thermal Storage

(Ice Storage)

Load• Demand Reduction• Solar Load Controllers• Storage Based Load• Load Shifting (Ice Energy)

Control• DG Operations Center• 24 Hour irradiance • Forecasting• SCADA• Monitor, Analyze, Report & Control• Tariff Optimization

Generation• Point of Load DG • Substation Level DG

18

Module and system price trends

Global financial crisis is accelerating the price reductions above

- Liquidity is available from multilateral organizations

- India has created solar projects over the last 18 months and is ready for deployment

» Distributed Generation is fast but still takes 12 months

» Central Station plants take 2 years from signing to construction Prices are collapsing – question is brand, liquidity, warehousing

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Proposed Solutions

20

India Solar Programs

India has been a leader in Solar Energy for over 20 years Rural Electrification Program

Solar Home Systems Water Pumping

Public Facility Solar Projects Government should lead with its buildings and

land PV in Communications, Weather, Long-Distance

Pipelines, Railways and Highways Large-scale PV & Solar Thermal Power Stations

50 MW MNRE program with other State programs

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Suggested Grid Connected Solar program New Goal: 20,000 MW program by 2020, starting

with 100 MW in 2010 Grow at 50% annually to meet ~2% of India’s

needs by 2020 Allow for 80% depreciation on all systems Encourage State Electricity Boards to provide the

full tariff without incremental support from MNRE Encourage construction of integrated solar

manufacturing Creates 1,000,000 direct job-years of

employment Target is that solar should reach ~2% of grid by

2020 India becomes the most important World Market

by 2012

22

Policy and Costs

20,000 MW by 2020 – Get out in Front! Generous 20 year Feed-in

Tariff (FIT) – set Rs 15 per kWh at the start of the program to show seriousness and attract players

Reduce FIT based on MW targets – not calendar

Obligation for hassle free interconnection to the grid and purchase electricity through renewable sources in priority to conventional electricity.

Training program for contractors to learn how to install solar PV – grant funding

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24

Suggested Policy Changes

Incentives A 20,000 MW program across India,

example: Tier MW (% of

grid)Total FIT Price – Utility

plus Central (20-25 yr)

% of Grid

Jobs Years

1600 $ 0.30/kWh 0.1%

18,000

2800 $ 0.25/kWh 0.2%

24,000

31,200 $ 0.23/kWh 0.3%

36,000

41,500 $ 0.21/kWh 0.5%

45,000

51,900 $ 0.19/kWh 0.6%

57,000

62,300 $ 0.17/kWh 0.8%

69,000

73,000 $ 0.15/kWh 1.0%

90,000

84,000 $ 0.14/kWh 1.3%

120,000

94,700 $ 0.13/kWh 1.6%

141,000

Total 20,000MW $0.30/kWh 1.6% ~600,000

25

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Suggested Policy Changes

Utility Rates and Revenue Policies Charge customers real cost of electricity – peak and off-

peak Subsidize rates for the poor: tiered rate structure, lowest

price for the first 150 kWh used per month, higher after that to encourage middle-class and wealthy people to conserve

Interconnection Allow consumers to interconnect without interference,

hassle Streamline process for projects up to 10% of distribution

feeder capacity Accept all internationally recognized standards with which

local manufacturers are already comfortable (UL, TUV, IEC)

27

Suggested Policy Changes

Incentives A 20,000 MW program starting with

100 MW in 2010 growing at 50% per year would meet ~2% of India’s energy needs by 2020, with a revenue impact of less than ~0.9%

Support Smart Grid Infrastructure Lowest cost way to transition from 20th

to 21st century grid. Also needed for high penetration of Solar PV.

28

Utility 2.0

Control

Generation

LoadStorage

Storage• Energy Storage• Thermal Storage

(Ice Storage)

Load• Demand Reduction• Solar Load Controllers• Storage Based Load• Load Shifting (Ice Energy)

Control• PV Operations Center• 24 Hour irradiance • Forecasting• SCADA• Monitor, Analyze, Report & Control• Tariff Optimization

Generation• Point of Load PV • Substation Level PV