1. Solar PV as an Investment Grade Asset
Increase IRR and reduce risk in large scale PV plants
Solar PV as an Investment Grade Asset
Thomas Götz
PV Plant Conference 2014 – Istanbul, 9th April 2014

2. Disclaimer
IMPORTANT LEGAL NOTICE This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of SMA Solar Technology AG (the "Company") or any present or future subsidiary of the Company (together with the Company, the "SMA Group") nor should it or any part of it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for any securities in the Company or any member of the SMA Group or commitment whatsoever. All information contained herein has been carefully prepared. Nevertheless, we do not guarantee its accuracy or completeness and nothing herein shall be construed to be a representation of such guarantee. The information contained in this presentation is subject to amendment, revision and updating. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on the management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements as a result of, among others, factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements which speak only as of the date of this presentation. This presentation is for information purposes only and may not be further distributed or passed on to any party which is not the addressee of this presentation. No part of this presentation must be copied, reproduced or cited by the addressees hereof other than for the purpose for which it has been provided to the addressee. This document is not an offer of securities for sale in the United States of America. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933 as amended.

3. 1 2 3 Agenda Overview SMA What makes an „Investment Grade“ PV project
Main factors determining the financial success of a large PV Asset 3

4. Comprehensive Product Range All performance ranges
SMA Facts & Figures
Facts & Figures
Founded: 1981
Sales 2012: EUR 1.5 billion
Installed global capacity : > 35 GW
Employees: worldwide
R&D Professionals: >1.000
Invest R&D 2012: > € 100 Mio.
Comprehensive Product Range
On-grid
Residential
2 – 30 kW
Industrial
> 1 MW
Backup
Off-grid
< 2 kW
Commercial
30 – 500 kW
All PV applications
All performance ranges
Global Presence
Canada
Chile
USA
Germany
Belgium
Czech Republic
France
Greece
Italy
Poland
Portugal
Spain
United Kingdom
Australia
China
India
Japan
South Korea
Thailand
United Arab Emirates
South Africa 21
Subsidiaries
Worldwide
SMA is the global market and technology leader for solar inverters

5. 1 2 3 Agenda Overview SMA What makes an „Investment Grade“ PV project
Main factors determining the financial success of a large PV Asset 5

6. Example of an Investment Grade PV Project Many are bankable,… SMA is INVESTMENT GRADE!
Equity
$ 850 Mio. (BBB-)
First Investment Grade PV-Plant in history

7. What makes a Solar Project „Investment Grade“? Example Fitch
Completion Risk:
Probability to achieve commercial operation date
Experienced Contractor
Completion Risk:
Probability to achieve commercial operation date
Experienced Contractor
Operation Risk:
Stability and adequacy of plant performance
Qualified operator
comprehensive maintenance
reliable technology
Operation Risk:
Stability and adequacy of plant performance
Qualified operator
comprehensive maintenance
reliable technology
Solar Resource:
Scope, Quality and reliability of project‘s energy
production forecast
Revenue Risk:
Strength, duration and flexibilty of power purchase
agreement. Stability of regulatory framework.
Debt Service:
Free Cashflow to pay debt
Debt Structure:
Terms and conditions of debt payment
Debt Service:
Free Cashflow to pay debt

8. 1 2 3 Agenda Overview SMA What makes an „Investment Grade“ PV project
Main factors determining the financial success of a large PV Asset 8

9. The „brain“ of a PV Plant Difference between great and a distressed asset
RELEVANT CATEGORIES
Experience
Quality
Service
Technology
Grid Mgmt.
Inverter = only 10%
of Project Value …
PERFORMANCE
&
RELIABILITY
INCREASE THE CASHFLOW
LOWER INVESTMENT RISK
… BUT MOST VITAL ! 9

10. Experience: how much. / how big. /where
Experience: how much? / how big? /where? Real life Experience is a vital selection criteria
Germany [38 MW]
United Arab Emirates [10 MW]
USA [16 MW]
Italy [85 MW]
Solar PV ist still a comparatively young technology
Vendors go through learning curves
A large installed base and experience with large projects lead to higher availability and less risk
Total installed capacity >> +25GW installed wordlwide
Experience in large scale projects? >> +6GW installed worldwide
Years of large scale experience? >> +10years PPS & +30y MPS
Experience in different climate? >> From Alaska to dessert

11. Quality - increased availability + long life -> higher cashflow + reduced risk
Routine Tests
Endurance Tests
Optical inspection / Wiring test
Protective conductor inspection
High-voltage test / Function test
1000-h endurance test at max. temperature and full power
Powercycle: 1000 cycles “start-operation-stop”
Advanced Tests
Seismic
Humidity
Electromagnetic
Climate
Dust
Lightning

12. Quality - Small details make a huge difference
Dangerous Condensation
Fall-Down-Test
Detailed Measurements (> 120 sensors)
Fuses need to last 20Years or more
Tests beyond „Standard“
>50C (Standard 25C)
60C over 3h (50C – 3h)
Several fuses (1 fuse)

13. Service - increased cash flow – reduced risk
1. Longterm spare parts strategy:
Optimal quantity
Right quality
Fixed price
2. Predictive Maintenance
Remote Monitoring
Comprehensive Data Collection
Data Analysis (complex Algorisms/Experience)
Planned Maintenance possible (e.g. at night)
Full Warranty & Full Service

14. Technology - Efficiency and Selfconsumption
Topic:
Inverters with similar performance (efficiency) show strong difference in self consumption.
Problem:
Higher Costs
Higher thermal strain on components = shorter life !!
Comparable product of a competitor

15. cheaper can be more expensive !
Technology and Money
cheaper can be more expensive ! 15

16. Financial simulation: Higher efficiency16

17. Financial simulation: Lower self consumption
Self consumption W
Efficiency 98,4% 17

18. Financial simulation: Higher availabilty
Availability 99,3%
Efficiency 98,4%
Self consumption W 18

19. Grid Stability / Grid Management - reduced risk + potentially new revenue streams
PV poses huge threat to grid stability
-> big challenges to utilities
Growing PV penetration -> “tougher” regulations
In new markets frequent changes and introduction of new requirements
Important to “understand” utilities
Grid Stability = highest priority
Potential for additional revenue streams
Reactive Power at night (optional !!)
“Utility supporting” services
“Future proof” Projects
“Investment Grade” inverters possess comprehensive grid management functions
Easy Software upgrades possible if required

20. Summary - Selection Criteria Inverter
-> Project Size
-> “Harsh” Conditions
Experience
Quality
Service
Technology
Grid Mgmt.
-> Relevant Certificates
-> Modern Test Equipment
-> Local Footprint / Experience
-> Spare Parts Supply (longterm !)
-> Predictive Maintenance
INCREASE THE CASHFLOW
LOWER INVESTMENT RISK
-> Efficiency
-> Self consumption
-> Temperature Behaviour
-> Grid Code Compliance
-> Future Proof 20

21. 1. Inverter = „brain“ of a PV Installation
Thank You
1. Inverter = „brain“ of a PV Installation
2. Determines performance and risk
3. Difference between great and distressed
4. Just converting DC to AC is not enough
DISTRESSED Asset
GREAT Asset
Thomas Götz
Vice President Sales
Power Plant Solutions
Tel
Mob 21