Tax Credits Vs. Cash Grants In Renewable Energy Deals Speakers Anita Molino – Bostonia Partners LLC Tony Grappone – Novogradac & Company LLP Moderator Ted Risher – Basile Baumann Prost Cole & Associates LLC Comments on Expiration of Section 1603 Cash Grant Program – Market Impacts Renewable Energy Finance Going Forward Q&A

Tax Credits and Deductions Federal Tax Credits Production Tax Credits Investment Tax Credits Grants/Rebates Tax Deductions

Basic Partnership Flip Structure Project Entity -Owns and operates facility General Partner (YOU!!!) Limited Partner (Tax Equity Investor) Developer Deferred Developer Fee Tax paying entities Partnerships for federal income tax purposes Denotes an ownership interest Cash flows from non owners 100% 99% Pre Flip 5% Post Flip 1% Pre Flip 95% Post Flip EPCHOST/POWER BUYER

Basic Lease Pass-Through Structure Landlord “Depreciation Entity” Tenant “Tax Credit Entity” General Partner (YOU!!!) Limited Partner (Tax Equity Investor) Developer Deferred Developer Fee Tax paying entities Partnerships for federal income tax purposes Denotes an ownership interest Cash flows from non owners Master Lease 100% 99% Pre Flip 5% Post Flip 1% Pre Flip 95% Post Flip 70% 30% Pass-through ITCs

Sale Leaseback Structure Investor Single Member LLC (Lessee ) Single Member LLC (Lessor) Project 1 $ Lease Agreement Lease Payments Host Power PPA/Lease Payments Lease Agreement Developer (YOU!) $ 100% interest Constructed Project Purchase & Sale Agreement

Contact Information Tony Grappone Novogradac & Company LLP 101 Arch Street, 10 th Floor Boston, MA Tel: Fax:

Agenda 1.Capital Stack Across the Stages of Development 2.Operating Returns of a Typical Project 3.Project and Modeling Assumptions

Capital Stack Across Stages of Development Project Stages - Development to Operations: –Early Development ($200,000): Development cash needed for permitting, front-end design, legal costs for PPA and permitting, securing land, etc. Time-frame is approximately 1 year. –Construction Stage ($26,250,000): Construction financing, early tax equity investment (1-5%), development equity needed for balance of development costs to COD. Time-frame is 6 months to 1 year. –Operational Stage ($28,700,000): Long term debt, tax equity, and long term project equity deployed to pay construction loan and various legal, financing and engineering fees due at COD. Operation is 20 – 25 years. $200,000$26,250,000$28,700,000 Development Stages of a Typical 10MW Project Shovel ReadyCOD

Operating Returns of the Project Owner

Assumptions Development Assumptions: –Project Size: 10MW –EPC Cost per Watt: $2.50 –Additional Development Costs: Interconnection, Site Work, Legal Fees, Financing Fees, Construction Interest, Independent Engineer –PPA Price: $0.10/KwH –SREC Price: $150/MwH x 9 years –Operations Expenses: O&M, Insurance, Property Tax, Administration Financing Assumptions: –85% Construction Loan to EPC Cost –10 Year Senior Loan, LIBOR swap + 350bps at a 1.35x Debt Service Coverage Ratio (48% of Capital Stack) –10 Year Debt Service and O&M working capital facility –Tax Equity investment for 99% of benefits (ITC + MACRS Depreciation) and 2% preferred cash return over 5 years (40% of Capital Stack). Buyout is sized to approximately 10% of initial investment. –Long Term Equity 20 year hurdle rate of 15% IRR (12% of Capital Stack)

Contact Information Anita Molino Bostonia Partners LLC 699 Boylston Street, 7 th Floor Boston, MA Tel: Fax: