attractive returns: where and why now?. costs declining, deployment increasing as costs of wind,...

Attractive Returns: Where and Why Now?

Costs Declining, Deployment Increasing

As costs of wind, solar and energy storage decline precipitously…

The rate of deployment of wind, solar, batteries andelectric vehicles all show exponential levels of growth

Are You Still Stuck in Old Energy?

A: Number of Years,start – peak - trough

B: N

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C: 1% penetration of target market

D: Number of yearsfrom 1% to 70% penetration of target market

YEARS

NU

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N (%

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THE INNOVATION CURVES:How new fundamental technologies happenand how they capture market share


B: N

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YEARS

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S

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N (%

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THE AUTOMOBILE:A: 35 yearsB: 250 companiesC: 1912D: 48 (happened in 1950, but would have been 28 without Great depression and World War II)

1896 1912 1950


B: N

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YEARS

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THE PERSONAL COMPUTER:A: 20 yearsB: 200 companiesC: 1986D: 17 years (happened in 2003)

1975 1986 2003


B: N

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YEARS

NU

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SOLAR PHOTOVOLTAICS:A: 24 yearsB: ~200 companiesC: 2014D: too early to tell but current growth rates would suggestabout 25 years

1990 2014 2039?


B: N

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YEARS

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POWER STORAGE:A: ~30 years?B: ~100 companiesC: ~2020?WHERE ARE WE TODAY?

1990 2014 2039?

BIOFUELS:A: ~30 years?B: ~75 companiesC: ~2020?WHERE ARE WE TODAY?

YEARS

MAR

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OTHER FAMILIAR TECHNOLOGIES:

1900 1945 2005

INTERNETMOBILEPHONE

THE VCR

MICROWAVE

COLOR TELEVISION

WASHINGMACHINE

REFRIGERATOR

RADIO

AUTOMOBILE

TELEPHONE

19901975196019301915

100

75

50

25

10

0

Important Historical Parallels

Enables shift from utility-scale to corporate and personal energy solutions Growing industry of financial innovations, applications and solutions Value increasing through network demand response, time shifting and storage Will spur the development of a large storage industry, perhaps in concert with EV’s Spawning an entire industry of linked in home appliances and software tools

“Personal Mobility”

Automobiles

“PersonalTechnology”

the PC

“Personal Energy”Solar PV

Shift from train to personal transportation Grew industry of financing models, applications, solutions and components Value dramatically increased by the “network” – roads and highways Developed its own version of storage – the gas station Its “features and functions” continue to be greatly enhanced by the IT revolution

Shift from enterprise to “personal” computing Grew industry of software applications and new business solutions Massive industry around information storage Value dramatically increased through Ethernet, then Internet network Spawned an entire new industry of software tools, applications and “big data”

ConsumerProduct

Power/InfoStorage

LeveragesNetwork

Applications & Solutions

+ + =TransformativeInvention

+

A Realistic Perspective on Achieving Success

(Understanding Patterns of Failure, Challenge, and Success)

Defining the Market Segments(Where you are playing defines risk/return)

The area of Hardest Lifting that Remains Challenged from a

Financing Perspective, it is the path that SunPower and first Solar made it through, but many other struggle

to survive in a much leaner financing environment –NO REWARD FOR EARLY

INVESTMENTS

The “Project Finance Area” which remains more challenging for first factory and not yet bankable products, but is providing significant

liquidity for more mature and later stage bankable products/companies – RATES OF RETURN DROP RAPIDLY AS

PERCEIVED RISK IS REDUCED

This is where Tesla and Nest Labs

succeeded with product solutions

that leveraged others hardware – LIMITED

REWARDS FOR EARLY INVESTING

This Uber, SolarCity, Airbnb and other

“capital light” solutions –

SIGNIFICANT REWARDS FOR

EARLY INVESTING

Companies gettingto this stage

are attractive long-term

holdings

Targeted Returns and typical returns to Date

(Expectations and Experiences have failed to line up)

Targeted IRR of 30%+ with

potential of 10X return

Average Actual

Return is negative

Targeted IRR of 30%+ with

potential of 5-10X return

Limited sample size but better

return

Targeted yield of 15-

18%Targeted

yield of 8-10%

Actual yield of 0-18%

Actual yield of 4-6%

Interesting Development

Company possibilities

Limited sample size

but best returns so far from

companies that have made it

here

Targeted IRR of 15%+ with potential of

3X return

Targeted IRR of 20%

+ with potential

of 10X return

Limited sample size

but good returns

Targeted yield of 10-

15%Actual yield

of 6-10%

Investment-Ready Sectors(focus on those technologies now experiencing hyper growth)

Solar PV & Advancing Distributed Generation

Advancement of Energy Storage

Technologies

Proliferation of Electric and Autonomous

Driving Vehicles

Corporate Solar PPA’s & Deployments

Energy Efficiency

Management

Community Solar

Smart GridHardware

Demand Response

Consumer Premises

Management

Micro-grid Deployments

Intelligent Load

Management

Smart Energy Trading/ Arbitrage

Smart Devices & Appliances

Energy Security

Storage Deployment

Distributed Storage

Management

Vehicle Charging Networks

Virtual Power Plants

Vehicle to Grid

New Mobility Solutions

Ride SharingTaxi plus Solutions

Road Condition Reporting

Active Traffic Management

Intermodal Solutions

Fleet Management

Parking Management

Solar Securitization

Distribution Automation

SmartInfrastructure Management

Impact of Internet of Things and “Big Data” Analytics

SmartCities & Traffic

SmartBuildings &

Homes

Indicates Need/Benefit

of Project Finance

attractive returns: where and why now?. costs declining, deployment increasing as costs of wind,...

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