1. NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Industry Snapshot; Inside the Project; Development Process and Way Forward Identifying, Financing and Developing Renewable Energy Projects on Brownfield Sites Brownfields, 2011 Bob Springer, MBA, PE April 5, 2011

2. NATIONAL RENEWABLE ENERGY LABORATORY 2 Solar Industry Snapshot

3. NATIONAL RENEWABLE ENERGY LABORATORY International Solar Power Snapshot Unprecedented Growth over past 5 years, 63% CAGR for PV Data Source: EPVIA, www.PV-Magazine.comwww.PV-Magazine.com Significant investment in Solar Sector – reported $125,000,000,000 since 2007 Data Source: Bloomberg New Energy Finance (www.BNEF.com)www.BNEF.com Investment in and diversification of supply chain Polysilicon production facilities (Billions since 2008, Billions announced) Thin Film and CPV market share Concentrating Solar slated for explosive growth Spain and the U.S. lead the way with 51 and 33% share of pipeline 12 GW in CSP pipeline (through 2015) CSP prior to 2005 in US include 350 MW plant in 1980’s (NREL 2008 Solar Technologies Market Report)

4. NATIONAL RENEWABLE ENERGY LABORATORY Solar Power Sector Drivers Scale Technology Cost reduction Energy Demand Fossil Fuel Decline

5. NATIONAL RENEWABLE ENERGY LABORATORY Global Annual Installed Capacity 5-Yr CAGR 63% Sources : Based on data from European Photovoltaic Industry Association and PV-Magazine.com

6. NATIONAL RENEWABLE ENERGY LABORATORY Drivers – Technology Innovation/Performance

7. NATIONAL RENEWABLE ENERGY LABORATORY Drivers – Manufacturing Costs Down

8. NATIONAL RENEWABLE ENERGY LABORATORY Demand 8 Source: http://www.eia.doe.gov/oiaf/ieo/highlights.html

9. NATIONAL RENEWABLE ENERGY LABORATORY Supply Example 9

10. NATIONAL RENEWABLE ENERGY LABORATORY 10 1955 Source: http://www.porticus.org/bell/belllabs_photovoltaics.html

11. NATIONAL RENEWABLE ENERGY LABORATORY 11 Inside a Solar Power Project

12. NATIONAL RENEWABLE ENERGY LABORATORY Inside the Solar Project Elements of a Solar Project 12 ScienceEngineering Policy Finance Market Environment / / 1 2 34 5 “Outside the Fence” Interconnection Integration Transmission/Access to Market

13. NATIONAL RENEWABLE ENERGY LABORATORY 13 Science 1 Solar Resource Varies: o over time (hour, month) o geography o climate o atmosphere o local conditions Solar Technologies Vary: o PV (Si, CPV, thin film) o electrical energy o CSP o heat to electricity o Other DIF (clouds) DNI (no clouds) Solar Basics http://www.nrel.gov/learning/re_solar.html GHI (total) Resource Performance Tool - PVWatts http://www.nrel.gov/rredc/pvwatts/

14. NATIONAL RENEWABLE ENERGY LABORATORY 14 Engineering 2 Resource Engineering: o Through measurement and models o Use both to drive down variability o Hourly, monthly, annual variability can be 20-30% down to 3% (std. dev.) o Best Practices can get within 3-5% System Engineering: o 25-year warranties o BOS design and construction (EPC) o Performance well understood o Improved efficiencies across board o It works, it lasts, you should be confident IMBY (In my back yard) http://www.nrel.gov/eis/imby/ System Advisor Model (SAM) https://www.nrel.gov/analysis/sam/

15. NATIONAL RENEWABLE ENERGY LABORATORY 15 Policy (ies) 3 Numerous: Federal State Local Utility 1.Make the market – RPS 2.CAPEX Oriented Grants Tax credits Rebates 3.Revenue Oriented REC’s SREC’s ITC/PTC MACRS – Depreciation 4.Successful Projects Layer the value of all available Policies 5.Policies Change… DSIRE http://www.dsireusa.org/about/ Policy Analysis http://www.nrel.gov/analysis/poli cy_analysis.html

16. NATIONAL RENEWABLE ENERGY LABORATORY 16 Finance – Pro Forma 4 Capital Grants Rebates Equity Tax Equity Debt Cash Flow Year 1 2 3 4 5 6 7 8 9 10 11 12…. $$ $$ $$ $$ $$ $$ $$ $$ $$ $$ $$ ( x,xxx,xxx ) Risk- Adjusted Project Yield CREST Model http://financere.nrel.gov/finance/content/CR EST-model System Advisor Model (SAM) https://www.nrel.gov/analysis/sam/ Revenue: REC’s, SREC’s, Sales, MACRs Year 1 2 3 4 5 6 7 8 9 10 11 12…. “Gross to Net”

17. NATIONAL RENEWABLE ENERGY LABORATORY 17 Market(s) Context 5 Electricity Market – Price Electricity Market – Structure Capital Market – Equity Capital Market – Tax Equity Capital Market – Debt Capital Market – Development “Policy Market” REC Market SREC Market Labor Market Construction Market Technology Market Insurance Market Commodity/Raw Materials Market Supply Chain Global Market Impact for Solar Permit Market Site/Land Market Alternative Energy Markets Competing Solar Markets Competing Renewables Markets Carbon Markets Utility Economic Dispatch/Ancillary Services

18. NATIONAL RENEWABLE ENERGY LABORATORY 18 Project Development; A Way Forward

19. NATIONAL RENEWABLE ENERGY LABORATORY Project Development & Finance When This

20. NATIONAL RENEWABLE ENERGY LABORATORY Project Development & Project Finance Finance? “and then?” Finance Or? Hey that doesn’t make sense! And Who?! Me? WHEN?! Your FAULT Feels Like This

21. NATIONAL RENEWABLE ENERGY LABORATORY Project Development Framework Team Technology Off-take Capital Permits Resource Site SROPTTC

22. NATIONAL RENEWABLE ENERGY LABORATORY Development Risk Capital Project Finance (Construction) Asset Finance Site Resource Off-take Permits Technology Team Capital Unknowns Risk $ Time Self Assess NREL Support Private Sector

23. NATIONAL RENEWABLE ENERGY LABORATORY Inside the Solar Project Process to Move a Project Concept Forward 23 Use Available Resources to Self-Assess Explore NREL Support at low/no Cost Engage Private Sector/Integrate Brownfield Component (Money/Risk)

24. NATIONAL RENEWABLE ENERGY LABORATORY Inside the Solar Project 24 NREL as a Services Provider TAP Program – Federal DOE EPA RE-Power – Federal EPA Local And Federal Grant Programs NREL Services: Resource and Technical Assessment Financial / Economic Analysis Incentives/Market Review Project Development & Finance Support

25. NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Bob Springer Project Development & Finance robert.springer@nrel.gov