1. Business Sensitive | 1 Horizon Energy Group [Solar PV]x[Microgrids] The Matrix Solution SunSpec Alliance Members Steve Pullins, President February 2013

2. Business Sensitive | 2 Horizon Energy Group Solar PV Ties to Microgrid Multiple resources Campus rooftops Active controls to support dispatch and load management Effective use of energy storage that can work in conjunction with PV Above average use of renewables

3. Business Sensitive | 3 Horizon Energy Group [Solar PV]x[Microgrids] Low Capacity Factor Low O&M Cost At or Near Peak Load No Min Capacity at Night No Emissions No Fuel Transport Cost Very High Capacity Factor Cost Competitive: 2 - 40 MW Resource Portfolio Large Diurnal Power Difference Emissions Reduction Very High Reliability Important Questions: Will natural gas be a long-term baseload affordable fuel resource? Will biogas or biomass become a long-term baseload affordable fuel resource? Will the capital cost of installing solar PV continue to lower – lower LCODE? The truth of LCODE (levelized cost of delivered energy)

4. Business Sensitive | 4 Horizon Energy Group Example: 1 Microgrid / 3 Sites / 7 Systems …in San Diego

5. Business Sensitive | 5 Horizon Energy Group Natural Gas Challenge

6. Business Sensitive | 6 Horizon Energy Group Natural Gas Challenge Source: EIA AEO2012 2017

7. Business Sensitive | 7 Horizon Energy Group Natural Gas Challenge Source: EIA AEO2012

8. Business Sensitive | 8 Horizon Energy Group Natural Gas Challenge Source: EIA AEO2012

9. Business Sensitive | 9 Horizon Energy Group Projecting Volatility Source: EIA AEO2012

10. Business Sensitive | 10 Horizon Energy Group Natural Gas Competition Source: EIA AEO2012

11. Business Sensitive | 11 Horizon Energy Group Emissions Challenge Source: EIA AEO2012

12. Business Sensitive | 12 Horizon Energy Group Renewables Challenge Source: EIA AEO2012

13. Business Sensitive | 13 Horizon Energy Group Energy Storage Challenge Source: EIA AEO2012

14. Business Sensitive | 14 Horizon Energy Group Case Study – Sports Venue 4.2 MW of PV 1.6 MW of energy storage 107% renewable energy served for venue load (523 MWh excess) Consider 50 MWh excess production available for charging 228 kWh available for charging at 219 events annually for 3 hrs 76 EV’s charged on solar energy The sports venue has a unique customer service that can set it apart. Now consider the dispatchable 76 kW regulation service that could be used by the utility on this 10 MVA circuit at a peak time.

15. Business Sensitive | 15 Horizon Energy Group Load and Resource Profile

16. Business Sensitive | 16 Horizon Energy Group Levelized Cost of Energy (LCOE at Gen Output) Source: EIA AEO2012 Capacity Factor? 2017 NG Fuel Cost runs ~$4.30/mmBTU. None of these costs include the T&D costs to get the power to the consumer, which adds ~10%.

17. Business Sensitive | 17 Horizon Energy Group Levelized Cost of Energy (LCOE at Gen Output) Source: EIA AEO2012 “The levelized cost calculations presented in the tables apply only to utility-scale use of those technologies.”

18. Business Sensitive | 18 Horizon Energy Group OK, Let’s Talk Capacity Factors Source: Data from EIA Electric Power Annual 2011 (Jan2013) 2011 Fleet Average Capacity Factor = 43.2%

19. Business Sensitive | 19 Horizon Energy Group Levelized Cost of Delivered Energy (LCODE) Technology Cap. Factor Corrected Cap. Factor LCOE ($/kWh) Corrected LCOE ($/kWh) LCODE ($/kWh) Coal85%63.8% $0.097 - $0.139 $0.157$0.173 NG-fired CC87%42.2% $0.063 - $0.090 $0.158$0.174 NG-fired CT30%10.1% $0.102 - $0.128 $0.342$0.376 Nuclear90%90.3%$0.114 $0.125 Geothermal91% $0.098 $0.108 Biomass83% $0.115 $0.126 Wind33%33.9%$0.096 $0.106 Central Solar PV25% $0.153 $0.168 Distributed PV*22% $0.136 / $0.075** Hydro53%39.8%$0.089$0.119$0.131 All in 2010 USD *One of our projects - 7% cost from Energy Storage **With Federal Investment Tax Credits

20. Business Sensitive | 20 Horizon Energy Group Conclusions The distributed solar PV resource will almost always find a place in microgrids because of the cost and partial coincidence with peak load. Need to push lower PV installation costs. Need more high quality PV sources that prove 30+ year lifetimes. While the 0.5% annual degradation could be lower, it is financially workable now. Converged distributed PV / Energy Storage provide options that are well suited to microgrids.

21. Business Sensitive | 21 Horizon Energy Group Thank you! Questions? Contact info: Steve Pullins spullins@horizonenrgygroup.com 865.300.7395 www.horizonenergygroup.com