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Clean Energy at Cost Parity IPED Financing Solar Energy Conference May 21 & 22, 2009 The Hotel Monaco in Alexandria, VA. Pure Power Distribution, Inc.

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Presentation on theme: "Clean Energy at Cost Parity IPED Financing Solar Energy Conference May 21 & 22, 2009 The Hotel Monaco in Alexandria, VA. Pure Power Distribution, Inc."— Presentation transcript:

1 Clean Energy at Cost Parity IPED Financing Solar Energy Conference May 21 & 22, 2009 The Hotel Monaco in Alexandria, VA. Pure Power Distribution, Inc. CASE STUDY

2 Clean Energy at Cost Parity Agenda About Pure Power Distribution Opportunity: Solar Energy Market Analysis Product: Mobile Solar Power Systems (Case Study) How It Works Financing Strategies Bringing Product to Market

3 Clean Energy at Cost Parity Agenda About Pure Power Distribution Opportunity: Solar Energy Market Analysis Product: Mobile Solar Power Systems (Case Study) How It Works Financing Strategies Bringing Product to Market

4 Clean Energy at Cost Parity Who We Are Pure Power Distribution (PPD) delivers a ruggedized mobile solar generator to the marketplace via a robust marketing, sales, manufacturing, distribution and financing platform Our mission: Help business De-carbonize by providing clean energy alternatives to fossil fuel- burning products Our promise: We supply reliable, clean power at cost parity to your current carbon-based fueled power supply. Close-up of poly-crystalline solar panels

5 Clean Energy at Cost Parity PPD Values: Triple Bottom Line Case Study – Unmet need – what do we need to deliver for a clean or hybrid power system to be received by market Must deliver these bottom lines for market penetrations: – Financial benefits – Social benefits – Environmental benefits

6 Clean Energy at Cost Parity Financial Bottom Line Unmet need must be met in a cost competitive fashion Must be costs competitive with fossil fuel alternatives---cost parity is key market penetration factor Challenges---design and assembly costs high/ solar panels take a lot of real estate for power generated Potential Cost equalizers – Sec. 48 Tax Credits – Bonus Depreciation and short life depreciation – Grants in Lieu of ITC under ARRA (2009) – No fueling costs – Less maintenance

7 Clean Energy at Cost Parity Social Bottom Line Solar helps expand the green economy by: – Providing green collar jobs – engineering, manufacturing, sales, finance, etc. – Improving job site conditions – Encouraging energy reductions Grid Foreign oil Powering construction at Wildlife Care Center Society for the Prevention of Cruelty to Animals (SPCA), San Luis Obispo, CA

8 Clean Energy at Cost Parity Environmental Bottom Line (our product goals:) Assist business in De- carbonizing activities No emissions, GHG No fuel or lubricant spillage No drilling or transporting of foreign oil No fumes No noise Reducing emissions from diesel engines is one of the most important air quality challenges facing the country. US Environmental Protection Agency

9 Clean Energy at Cost Parity Team World Agricultural Expo Tulare, CA

10 Clean Energy at Cost Parity Board of Directors Scott Chaplan Executive Chair,PPD A pioneer in developing environmentally sustainable real estate projects in the inner city. Created Urban Group of Companies, an integrated multi-service firm with over $1 billion in real estate transactions and lines of affiliated businesses. Bill Hayward, CEO, Hayward Corporation CEO of one of the largest privately held construction supply companies in the US. Under Bills leadership, Hayward was first supplier to provide FSC products, first to mainstream FSC, and first to build a LEED Gold manufacturing facility in the US. Board Chair for Forest Stewardship Council (FSC). Norris Lozano CEO and President, PPD Over 25 years experience in building and leading businesses, syndicating over $1 billion in tax credit transactions, large commercial lending transactions, business financing, and running manufacturing companies. Board of ecoAmerica. Chris Wheaton CFO and COO, PPD CPA. Founded Knightsbridge Solutions leading its financial services practice grow to over $100mm in revenue. The firm was acquired by Hewlett-Packard Corporation in Price Waterhouse in both auditing and consulting Capacities.

11 Clean Energy at Cost Parity Norris Lozano CEO and President Over 25 years experience in tax credit finance, business law, and entrepreneurial activities Over $1 billion in tax credit transactions, large commercial lending transactions, business financing, and running manufacturing companies Gap financing for over $650.0 million in green buildings from LEED Silver to Platinum, ~$500.1 million in tax credit investment funds, Consulted on $645.5 million in New Markets Tax Credits allocation Closed first mobile solar power Investment Tax Credit fund in less than 30 days – JD; Southern Methodist University School of Law – BA, Political Science; University of Texas – Member, Texas State Bar – Licensed to practice before U.S. Tax Court – Board member: ecoAmerica, Hayward Corporation, Environmental Media Association. Senior Management Team

12 Clean Energy at Cost Parity Senior Management Team Tom Schnugg EVP Strategy and Products 22 years of experience in global sales, marketing and product management. Introduced over 20 products titles including those in utilities, telecommunications, water and wastewater. Morgan Hunt, EVP Operations Morgan Hunt manages Operations for Pure Power Distribution including product development and internal process flow. Mr. Hunt has over fifteen years of experience in data warehousing, financial management, accounting, and accounting systems for core and supporting financial processes Steven J. Spielberg VP, Compliance MBA. Tax credit affordable housing development, Loan Officer with E*TRADE Financial and a Consultant in IBM Global Mid- Market Business Consulting group. Norris Lozano CEO and President Over 25 years experience in building and leading businesses, syndicating over $1 billion in tax credit transactions, large commercial lending transactions, business financing, and running manufacturing companies. Scott Chaplan Executive Chairman A pioneer in developing environmentally sustainable real estate projects in the inner city, Created Urban Group of Companies, an integrated multi-service firm with over $1 billion in real estate transactions and lines of affiliated businesses. Chris Wheaton CFO and COO CPA. Founded Knightsbridge Solutions leading its financial services practice grow to over $100mm in revenue. The firm was acquired by Hewlett- Packard Corporation in Price Waterhouse in both auditing and consulting capacities.

13 Clean Energy at Cost Parity Team- continued Christopher Smith VP, Marketing 6 years in tax credits, 12 years in Marketing. Co-creator, Community Impact Reports, a comprehensive financial, social and environmental study of New Markets Tax Credits projects. Leif Regvall - VP, Tax Credits Over 20 years in tax credit finance, managed project transactions valued at over $300 million. Focused on rooftop solar Stephanie Cohen - VP Development, General Counsel Lawyer with 10 years legal and business development experience in entertainment industry. Danielle Collins – Transportation Logistics Comes to Pure Power with background in logistics management, policy compliance and problem solving for large entertainment transportation and logistics company, managing fleet of 65 vehicles. David Watson - VP Sales 15 years experience, senior sales positions at ASI International, British Telecom, Hitachi Data Systems and MetaGroup. Mike Kalweit - Sales Engineer Lead sales engineer with 12 years experience of design and practical engineering experience in the solar energy and telecommunications industries. Steven Brunk - VP, Investor Relations 17 years experience in corporate finance, venture and hedge funds, corporate development, and real estate syndication, having raised tens of millions of dollars in highly successful projects across the spectrum. Jeff Allenstein, Sales Director Over 20 years experience in sales and sales management. Focused on securing and building new markets.

14 Clean Energy at Cost Parity Solution Delivery Platform Renewable Energy Product Product Acquisition Patenting Tax Credit Qualification Ruling Third Party Capability Validation Production and Scalability R&D Large Scale Production Capability Sales and Marketing Marketing, Public Relations Distribution Partners Sales Force Tax Credit Syndication Investor Acquisition Fund Creation Fund Brokerage Compliance Tax Reporting, Audit and Filings Monitoring and Service Investor Distributions 14

15 Clean Energy at Cost Parity Significant Off-Grid Player by Geography California Products PurePowerD MSPS Goals Premium Product Own top regional markets Build domestic distribution channel Build domestic renewable energy financing engine 2010 Geography Western US Products PurePowerD MSPS Other Off-grid Renewable Energy Products Goals Scale manufacturing Expand distribution channel Add additional clean energy products Define intl renewable energy financing engine 2011 Geography North America & International Products PurePowerD MSPS Other Off-grid Renewable Energy Products Goals Expand distribution channel into Canada, Mexico Build international renewable energy financing engine

16 Clean Energy at Cost Parity Agenda About Pure Power Distribution Opportunity: Solar Energy Market Analysis Product: Mobile Solar Power Systems (Case Study) How It Works Financing Strategies Bringing Product to Market

17 Clean Energy at Cost Parity Abundant Power Source Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Al Gore Silicon is the second- most-abundant element in the earths crust. Fast Company

18 Clean Energy at Cost Parity Between 2008 and 2030, renewable electricity generation is expected to experience a 4.4 percent compound annual growth rate, compared to 1.2 percent for overall electricity consumption. – The State of Green Business 2008; Makower, Joel, et al, Greener World Media Renewable Energy Use Predictions

19 Clean Energy at Cost Parity Explosive Industry Growth Solar is a $13 billion industry today. It will hit $40 billion by 2012, unless it continues to exceed forecasts, as it has over the past five years. Fast Company, December 2008

20 Clean Energy at Cost Parity Size of Off-Grid Renewable Energy Market Top Down: The current world-wide off- grid energy market is 10,000 megawatts per year Only 500 megawatts is provided by clean sources (PV 3%, Wind/Water 2%) Off-grid growing 2x Grid The remaining 9,500 megawatts is provided by diesel generators

21 Clean Energy at Cost Parity Bottom up: ~100,000 portable diesel gen-sets are sold in the US annually Average diesel gen-set cost is $5,000 Current US Market Size is $5.5+ billion annually: – > purchase price $500M+ annually – > Fuel cost > $5.0B+ spent on fossil fuel of 5 years Market Size (continued) Two Mobile Solar Power Systems provided all power for the inaugural event for EnXco wind farm, Solano County, CA February 2008

22 Clean Energy at Cost Parity Market Timing Case Study Analysis Who is the market….what are there perceptions and needs? How do we identify these needs…who do we work with to understand individual and business perceptions? What are the market place drivers….values, needs and government……

23 Clean Energy at Cost Parity Over 80% of Americans worry about the environment Specifically: – Poisons in the environment – Asthma – Health in general – The well-being of future generations 66% of Americans believe global warming will affect them in their lifetimes 45% believe global warming is a bigger threat than terrorism Source: American Environmental Values Survey 2006 American Environmental Values

24 Clean Energy at Cost Parity An environmental non-profit that uses psychographic research, strategic partnerships and engagement marketing to shift personal and civic choices of environmentally agnostic Americans. Identifies underlying concerns, and develops programs to engage people on environmental and climate change solutions with measureable results incubates, launches and manages programs that engage Americans and connect them to the environment. ecoAmerica

25 Clean Energy at Cost Parity Coordinated effort to effect environmental change through television, film and music Green Seal Guidelines and Awards Greening Plotlines and Characters Corporate World Eco Salons, Seminars and Educational Briefings Celebrity Role Modeling Green Light Newsletter Environmental Media Association

26 Clean Energy at Cost Parity * Product Cycle= Ahead of the Curve

27 Clean Energy at Cost Parity Renewable Energy Incentives Local, State and Federal Incentives Governor Arnold Schwarzenegger, visiting with inventor of the Mobile Solar Power System at the Womens Conference, Los Angeles, 2008

28 Clean Energy at Cost Parity Federal: IRC Section 48 Solar Investment Tax Credits (ITC) ARRA Grants in Lieu of Tax Credits ARRA: multiple renewable energy stimulus programs Renewable Energy Incentives

29 Clean Energy at Cost Parity October 2008 extended for 7 years Solar Investment Tax Credits Against passive income for most, all income for certain taxpayer types (change in AMT rules) 30% of basis of solar property As soon as the unit is placed in service the tax credit is triggered Accelerated depreciation: 100% depreciation 5 years IRC Section 48 Investment Tax Credits

30 Clean Energy at Cost Parity February 2009 Grants-in-lieu of tax credits 30% of basis Grants to solar products already in service Accelerated depreciation still applies (100% in 5 years) Grants in 60 days after application H.R American Recovery and Reinvestment Act (ARRA)

31 Clean Energy at Cost Parity State of California (e.g.) California Solar Initiative AB 32 Western Regional Climate Initiative Regional Emissions Markets Renewable Portfolio Standards in 25 states Voluntary RECs Incentives (continued)

32 Clean Energy at Cost Parity Requires CA to reduce greenhouse gas emissions (GHGs) to 1990 levels by 2020 Requires the Air Resources Board (ARB) to take an economy-wide approach to reducing emissions Is anticipated to regulate all major emitting sectors using a cap-and-trade system. 20% by % by 2020 A.B. 32 Source: Element Markets.com

33 Clean Energy at Cost Parity Utah, New Mexico, Arizona, Washington, Oregon and British Columbia to form the Western Regional Climate Action Initiative. The partnership aims to reduce aggregate emissions 15 percent below 2005 levels by 2020 Western Regional Climate Initiative

34 Clean Energy at Cost Parity Arose from federal New Source Review. Enforced by the EPA Any firm building or expanding a facility emitting criteria pollutants above a pre-defined threshold in certain regions of the country must purchase ERCs. Regional Emissions Markets …when a facility reduces emissions or shuts down, ERCs can be created. Companies looking to build new facilities with the potential to emit above certain thresholds must secure ERCs from the market prior to receiving a permit to construct.

35 Clean Energy at Cost Parity Have been traded as an alternative methodology for reducing carbon dioxide (CO2) emissions. Where utilities are not already obligated to purchase RECs under an RPS or are not offering green energy, RECs are being sold to willing buyers. e.g.: EPAs Green Power Purchasing Program Participants include Fortune 500 companies, federal, state and local government agencies, and universities Have offset from 4% to 100% of their conventional electricity usage In the July 2007 report, the top 25 members of the Green Power Partnership offset 5,906,432,631 kWh of conventional electricity. Voluntary RECs

36 Clean Energy at Cost Parity Agenda About Pure Power Distribution Opportunity: Solar Energy Market Analysis Product: Mobile Solar Power Systems (Case Study) How It Works Financing Strategies Bringing Product to Market

37 Clean Energy at Cost Parity Mobile Solar Power System National Wildlife Federation Chillout shoot; Big Vision Studios, Burbank CA

38 Clean Energy at Cost Parity Market Timing Case Study Analysis---conclusions Who is the market….what are there perceptions and needs?----Market needs clean or hybrid off grid solutions How do we identify these needs…who do we work with to understand individual and business perceptions? Perception is not cost affordable…design to leasing model. What are the market place drivers….values, needs and government……Government drivers are rapidly increasing

39 Clean Energy at Cost Parity The PPD Mobile Solution Response to Unmeet Market Needs A ruggedized, reliable, superior design portable solar generator available in 5kW, 10kW and 18kW power ranges. Makes clean energy available to the marketplace at a off-grid cost parity to current fossil fuel solutions. Mitigates new product risk by including product maintenance, service and technology updates at no additional cost. Powering refreshment stand Sierra Nevada Brewing Co, Chico, CA

40 Clean Energy at Cost Parity Mobile Solar Power Systems Portable solar power generators in 5 kW, 10 kW, 18 kW systems A significant alternative to traditional diesel generators Significant benefits compared to diesel – No fumes/odor – No noise – No consumption of fossil fuels – Limited maintenance – Lower long-term cost Easy to use – Simply tow to site, deploy panels and plug in

41 Clean Energy at Cost Parity What is the Business Problem Solved? Many organizations rely on off- grid portable power, but fossil fuel generators come at a high social, environmental and financial cost (pollution, noise, etc.) Demand Businesses currently seeking a portable and reliable clean energy solution include: – Movie and TV production – Event Production – Agriculture – Construction – Military/Emergency Response Current demand drivers include: – Government regulation (i.e., AB32) – California Air Resources Board – Expanding Noise Regulation Barriers to Purchase Portable renewable energy solutions are a new innovation. Capital outlay of solar vs. carbon solutions (diesel gen-set) are significantly higher. Field reliability includes a new set of technologies Government tax incentives are not well understood or utilized. Grants are new Solution: Leasing model

42 Clean Energy at Cost Parity Market Opportunities Carbon Based Our primary competitors are those currently selling, renting and leasing fossil-fuel-based, 5 – 20KW generators to commercial entities The top five brands of all generators sold through a dealer/distributor channel are: – Cummins Onan (27%) – Kohler (22%) – Generac (18%) – Caterpillar (15%) – Honda (15%) Source: Power Systems Research, 2003 Clean Energy Our secondary competitors are those currently selling mobile solar products. Based upon our research, this provider market consists of small regional manufactures with low visibility and consumer awareness. A sampling of the competitive products:

43 Clean Energy at Cost Parity Patent pending on all trailer models;---Leasing of systems with services Tax credit syndication model; Stimulus Package - Grant Process; Vendor alliance with GE; participant in GE Innovation program; Vendor alliance with Environmental Media Association (EMA): MSPS is the only EMA certified green portable energy product. Market Differentiators for PPD PPD battery technology allows storage of power and many hours of use after dark

44 Clean Energy at Cost Parity Agenda About Pure Power Distribution Opportunity: Solar Energy Market Analysis Product: Mobile Solar Power Systems (Case Study) How It Works Financing Strategies Bringing Product to Market

45 Clean Energy at Cost Parity How It Works- Solar Fuel 1.Solar Energy (DC) strikes solar panels (1), creates electric current 2.DC current is brought through the Charge Controller (2) 3.Current flows from Charge Controller to Battery (3) and is stored as DC

46 Clean Energy at Cost Parity How It Works- Fuel to Power 4.Battery power is drawn through the Inverter to convert it from DC to AC power 5.User plugs into AC power outlets and uses from 5 kW to 18kW of pure sine wave power for up to 18 hours depending on load 4 5

47 Clean Energy at Cost Parity Target Vertical Markets

48 Clean Energy at Cost Parity Equipment Rental Companies Construction Entertainment/Events Agriculture Disaster/Emergency Equipment Leasing - Long term Target Vertical Markets

49 Clean Energy at Cost Parity System in Applied Use: Construction Construction of 17,000 sq/ft building – One 10kW unit powering a remote building site including: 2 masonry saws 2 spider boxes with multiple compressors and tools – 8 to 10 hours per day, 6 days per week Key Benefits : No generator refill requirement for this remote location Fuel cost savings More productive work environment Compliant with local noise restrictions Green energy used to build green building

50 Clean Energy at Cost Parity Construction Habitat for Humanity, Earth Day event Oakland, CA 2009 Clint Eastwoods new house Northern CA 2009

51 Clean Energy at Cost Parity Applied Use: Entertainment On-location film and TV production – One 20kW unit powering a remote base-camp site including: Three 30ft make-up trailers w/AC One 50ft film editing trailer Various other lights and equipment – 8 to 10 hours per day, 5 days per week Key Benefits : No noise/fumes in base camp Green energy used on green movie production No refueling at this remote location Actors and crew: healthier work environment

52 Clean Energy at Cost Parity Applied Use: Adam Sandler film 10 kW Mobile Solar Power System powering Base Camp including 4 production trailers Funny People starring Adam Sandler Happy Madison Productions (Judd Apatow) Malibu, CA July 2008 Diesel generator at Start-up Malibu, CA July 2008

53 Clean Energy at Cost Parity Applied Use: Warner Bros. film 10 kW Mobile Solar Power System powering Base Camp operations, catering, camera truck, satellite van Jonah Hex starring Josh Brolin Warner Bros. Pictures New Orleans, LA, May 2009

54 Clean Energy at Cost Parity Applied use: Entertainment Faces of our American Heroes Event, Raleigh Studios, Hollywood March 2009 National Wildlife Federation Chillout shoot; Big Vision Studios, Burbank March 2009

55 Clean Energy at Cost Parity Entertainment Industry Demand We showed this trailer at Paramount, Sony, Warner, Universal - - and they were blown away. Theres nothing like these solar generators in the market. You can lease these as fast as you can build them. – Denny Caira, Transportation Logistics and Power Coordinator for over 50 films

56 Clean Energy at Cost Parity System in Applied Use: Events Pebble Beach Food & Wine Expo Pebble Beach, CA April 2009

57 Clean Energy at Cost Parity System in Applied Use: Events Pacific Orchid Exposition San Francisco, CA February, 2009

58 Clean Energy at Cost Parity System in Applied Use: Agriculture Almond farm and processing plant – One 10kW unit powering multiple aspects of the farms operations including: Office building Almond processing equipment – Runs 8 hours a day, 5 days a week Key Benefits : Dramatically reduced monthly power bill May qualify for 2% sales tax rate for farm equipment Supplies power where and when needed on the ranch

59 Clean Energy at Cost Parity System in Applied Use: Disaster Recovery Emergency cellular repeaters – National cellular provider has made initial purchase of 5kW trailer to power emergency cellular repeaters. – Cellular repeater/tower will be mounted on the trailer and towed to emergency locations to provided uninterrupted cellular service. Key Benefits : No generator refills required Mobile units can adjust locations as needed Fuel cost savings No combustibles during fire emergencies

60 Clean Energy at Cost Parity Additional Emergency Response Applications Temporary building power: – Command Center – Medical Treatment Center – Temporary Housing Equipment power source: – Recharging station – Remote communications – Site security and lighting Verizon 5 kW system w/custom telecom mast

61 Clean Energy at Cost Parity Agenda About Pure Power Distribution Opportunity: Solar Energy Market Analysis Product: Mobile Solar Power Systems (Case Study) How It Works Financing Strategies Bringing Product to Market

62 Clean Energy at Cost Parity Finance Model Funding Sources Federal Renewable Energy Investment Tax Credits (ITCs) American Recovery and Reinvestment Act of 2009 (ARRA) Renewable Energy Grants Renewable Energy Loan Guarantee Program Renewable Energy Manufacturing Investment Credit Renewable Energy Certificates State and Local Credits and Incentives State Renewable Energy Credits (RECs) Renewable Energy Portfolio Standards Carbon Credits – Kyoto Protocol

63 Clean Energy at Cost Parity Business Model Product: – Provide renewable off-grid energy under operating lease at $750 - $2,500 per month depending on kW model and duration (no tax credit to lessee) – Also distributed by third parties Finance---Leasing of Systems: – Provide cost effective operating lease through a tax credit syndication model or grant model with long term service – Provide funding via Section 48 and in-lieu grant program established in ARRA – Utilize bonus depreciation go to owner Operations: – All products and designs Patented – Provide marketing, sales and distribution channel – Tax credit compliance expertisefor investors which own Leased units

64 Clean Energy at Cost Parity PurePower Investment Fund Tax Credit Syndication for Leased Systems A yield-based alternative to offset tax liability while providing investors social and environmental returns Goals of the fund are: – Reduce/eliminate federal income tax liability – Earn income for investors – Provide investors control of allocation of tax dollars – Support solar power initiatives

65 Clean Energy at Cost Parity What the Investment Fund does The Fund will acquire Mobile Solar Power Systems – Place solar generators in service will create solar tax credits – Solar tax credits passed through to fund investors at $ for $ The Fund will lease the solar generators to users and provide a complete set of services and monitoring through PPD

66 Clean Energy at Cost Parity What it does for Fund investors Redirects tax liability – Immediate 100% tax offset Provides return to tax motivated investors in excess of 15% after tax

67 Clean Energy at Cost Parity Solar Tax Credits Not to be confused with a tax deduction – Deductions reduce the amount of income that is taxable Tax credits reduce the actual amount of tax owed – A dollar-for-dollar reduction in the tax payment required for a person or entity

68 Clean Energy at Cost Parity Use of Leverage The Solar Generator Tax Credit Fund utilizes leverage to increase the 30% tax credit Conclusion: Investor equity equals tax credit providing 100% offset

69 Clean Energy at Cost Parity Who can use solar tax credits? Types of Income Income TypePassiveActive Individual YesNo Closely Held Corporation Yes Personal Service Corporation YesNo Small Corporation Yes Widely Held Corporation Yes

70 Clean Energy at Cost Parity With the adoption of the American Recovery and Reinvestment Act in February of 2009, an alternative to tax credit investors was provided Under Section 1603 a grant in lieu of the Section 48 tax credit is available within 60 days of application This allows PPD to deliver products directly without the need for tax motivated investors Tax Credits or Grants? Case Study- Game Changer --February 2009

71 Clean Energy at Cost Parity Why the government promotes this Promote the use of alternative energies Potential for solar is clear, but as with all growth- industries, early costs and barriers to entry and implementation are high – Tax credit or grants makes solar affordable – With tax credits or grants, lease rates for solar generators are comparable to or less than diesel generators, and operating expenses are less (no fuel costs)

72 Clean Energy at Cost Parity Tax Codes IRC Section 48 provides for a tax credit for equipment using solar power to generate electricity. – A 30% tax credit is available on the entire purchase price of a solar generator. H.R (Emergency Economic Stabilization Act of 2008) – Congress extended the credit through 2016 – Beginning in 2009, tax payers with AMT can use the tax credit to offset their tax liability H.R.1 (American Recovery and Reinvestment Act (ARRA)) – Administration program to un-freeze capital markets and bring capital to projects in 60 days

73 Clean Energy at Cost Parity It is simple to file

74 Clean Energy at Cost Parity ARRA Grants in Lieu of Tax Credits (H.R ) Solar ITCs excellent in theory, except for market liquidity challenges in 2009 and 2010 Economic meltdown put many tax credit investors on the sideline Obama administration moves quickly to put cash into the system through these provisions American Recovery and Reinvestment Act creates Grant-in-lieu program (similar in LIHTC) Money to flow in 60 days

75 Clean Energy at Cost Parity How are we doing it? Bridge Lender Grant Opinion provided by Nixon Peabody, LLP---to receive financing to bridge to receipt of grants One of the largest law firms in the world with over 800 attorneys in 17 offices Very strong and well respected tax practice

76 Clean Energy at Cost Parity Market Costing Case Study Analysis Our product costs is effected by our product life cycle and life cycle costs Included are: market identification, product design, engineering, testing, patents, more testing, field work, selling, testing, assembly, testing, product modification, testing, field work, product modification….assembly….FINAL PRODUCT INITIAL DESIGN----very high initial costs of systems…spread over some period to recover

77 Clean Energy at Cost Parity Mobile Solar System Development Lifecycle Research and Development Design Patent Administration Product Management Production Forecasting and Management Product Assembly Quality Assurance Inventory Control and Logistics Maintenance and Support

78 Clean Energy at Cost Parity Pure Power Now Provides Energy Products – 5 kW – 10 kW – Super 10 kW Financing Products – Tax Credit Fund – Grant Bridge Fund Newscaster at the inaugural event for the EnXco wind farm using PPD solar panels as backdrop Solano County, CA March 2009

79 Clean Energy at Cost Parity Deployment of Energy Product (5-month period 2009) Verizon Wireless Capay Canyon Ranch Warner Bros. Cresco Leasing Hayward Corporation Quixote Productions West Coast Pneumatic A new Hollywood edition of the Super 10 being placed in service last week (May 2009)

80 Clean Energy at Cost Parity

81 Deployment of Financing Product Mobile Solar Generator Fund I ARRA Fund I ARRA Fund II ARRA Fund III 20 kW Mobile Solar Power System in use on Adam Sandler film Malibu, CA Aug 2008

82 Clean Energy at Cost Parity Whats next? ARRA regulations will inform the speed with which we attack solar rooftops Aggressively hiring staff to keep up with demand (AZ, NV, CA, OR) Emergency/Municipal Military market Fostering energy-independence in the US

83 Clean Energy at Cost Parity IPED Financing Solar Energy Conference May 21 & 22, 2009 The Hotel Monaco in Alexandria, VA. Pure Power Distribution, Inc. Thank you.


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