1. Welcome!

2. Single Family homebuilder in Southern and Western United States 4,000 homes per year Average Square Footage 1,800 to 3,500 Average Selling Price $180,000 to $350,000 Serving Entry-Level, Move-Up and Active Adult communities

3. Ice Breaker Are Residential Photovoltaic Solar Panels Sustainable? Are Residential Photovoltaic Solar Panels Sustainable? 3

4. Energy Efficiency and Sustainability Are they the Same? Energy Efficiency - Waste Reduction Energy Efficiency - Waste Reduction Sustainability - is the capacity to endure. For humans it is the potential for long-term maintenance of wellbeing, which in turn depends on the wellbeing of the natural world and the responsible use of natural resources. Sustainability - is the capacity to endure. For humans it is the potential for long-term maintenance of wellbeing, which in turn depends on the wellbeing of the natural world and the responsible use of natural resources. Toxicology Toxicology Embodied Energy / Limited Resources Embodied Energy / Limited Resources Climate Change / Carbon / Carbon Black Climate Change / Carbon / Carbon Black 4

5. Endemic / Embodied Energy Considering the Interconnectedness of Environmental, Economic, and Social Systems Considering the Interconnectedness of Environmental, Economic, and Social Systems Availability of Material (Finite / Renewable) Availability of Material (Finite / Renewable) Energy / Pollution to generate material Energy / Pollution to generate material Energy / Pollution to transport material Energy / Pollution to transport material Energy / Pollution to use material Energy / Pollution to use material Energy / Pollution to waste material Energy / Pollution to waste material Alternatives Alternatives 5

6. Customer Focus Top 5 Reasons to Buy a Green Home / Make Green Improvements to Home Cost Savings on Power and Heating Reduced Use of Water Reduce the Impact I have on the Environment Improved Air Quality in Home Increase the Value of Your Home 94% 63% 60% 53% 50%

7. Why Move Toward Energy Efficiency and Sustainability? Buildings account for almost 40% of the energy and raw materials consumed in the US. Heating and cooling homes accounts for nearly 60 percent of residential electricity usage in the United States Every year, building construction waste generates 136M tons, compared to 209M municipal tons. If the US invests $520B in improving energy efficiency in homes, the country has the potential to save $1.2T Win-Win-Win when done right

8. Old Green (1970 – 2008) Personal Sacrifice: Live Smaller Give up comfort and convenience Change Lifestyle Expensive Ugly ‘Natural’ Materials Straw Bale / Rammed Earth Natural Lighting Reduced Amenities Green only works if it is better than

9. What is the ‘standard way’ of building homes? 50% of the electricity consumed by a home provides NO BENEFIT 50% of the water consumed by a home provides NO BENEFIT Homes ‘Breath’ (i.e. leak) Old construction created hot and cold areas (discomfort) Loose – Loose - Loose

10. ‘Green’ can mean different things Green wash Energy Efficiency HERS (Energy Star, EFL …) Resource Management WaterSence, LEED, … Health Indoor Air Plus, … All Green is not the Same Scales of Green

11. Green Marketing This Decade’s ‘New and Improved’ Style Before Substance Undefined Terms Green Certified Eco Friendly Undefined Benefits Sustainable Materials Low Energy ‘Greenwash’ has confused Customers

12. Building Science Analogy 30% of a building’s energy use is lighting. 90% electrical usage is emitted as Heat 4X less energy per lumen – lasts 10x longer 9X less energy per lumen – lasts 133x longer Wa$te Reduction

13. Eating the Elephant HERS 130 HERS 100 HERS 80 HERS 65 HERS 0 HERS 25

14. New Category in Green Homes Healthier Indoor Air Quality Better Functioning Appliances More Comfortable Homes Reduce Cost of Operation Affordable Available NO SACRIFICES Focus on improving past practices

15. Our New Paradigm – Extreme Energy Efficiency 100% ENERGY STAR Certified Home and Appliances, WaterSence, Indoor Air Plus Redesigned Building Envelope Polyurethane Spray Foam, Thermal Breaks, Low E2 Windows Redesigned HVAC SEER 14, Pressure Management, Fresh Air Management, Advanced Thermostats Technology Leading Renewable Energy Integrated Solar Electric, Solar Thermal, Water Heating, HVAC, Fresh Air Management, thermostat, and energy management system Better AND Cost Competitive

16. Moving Forward – Cathedral Insulation 90 F 130 F 80 F 75 F

17. 67% Reduction in Energy Loss

18. Health Benefits : Clean Indoor Air Health & well-being are affected by the large amount of time we spend indoors More than 38% of Americans suffer from allergies* Between 1980-1994, asthma cases increased 75% to more than 17 million.* Environmental Protection Agency - “Known health effects of indoor pollutants include asthma, cancer, developmental defects and delays, including effects on vision, hearing, growth, intelligence, and learning; and effects on cardiovascular system.” Meritage Homes Extreme Energy Efficiency also provides extra protection from pollen, dust, dust mites, and smog that trigger allergy, asthma and known respiratory diseases. Proactive Air Management

19. Resource Management Weather Based Irrigation Controls Drought Tolerant Plants Zoned Irrigation

20. Benefits to Customer Reduced cost to operate Included / Integrated into every home Cleaner, quieter, safer, healthier, more comfortable EPA/DOE rated and validated Underwriting, appraisal, labeling Higher Resale Value Comprehensive Value Strategy

22. Funding Green - PITIEM Principal (Price Tag) Interest (Interest Rate) Taxes (Location) Insurance (Location +) Energy (HERS) Maintenance (Warranty, Life Cycle) The Monthly Cost of a Home

23. Consumer Awareness

24. Market Strategy/Value Proposition Deliver Better Total Value to the Consumer Retain Lifestyle, Aesthetics, Behavior and Price Point of Conventional Construction Include Holistic Energy Efficiency and Sustainability Improve Heath, Function, Comfort, and Total Affordability Demonstrate Value through: Consumer Education – Energy Labeling Validation – Appraisal Standards Monetization – Mortgage Underwriting

25. Meritage Green Learning Centers Innovative Marketing and Education

26. Renewable Energy Integrated System: Electricity (Solar Electric) Hat Water (Solar Thermal) HVAC (Air based heat exchange) Fresh Air Management (ANSI 62.2) Thermostat / Energy Control System

27. Echo Solar System Schematic and Key Components Solar Array: Solar panels connected together Water Side Mechanicals (WSM): Solar storage tank and pump group Recovers and stores heat Echo Controller: An intelligent control system Regulates echo solar system operation Energy Transfer Module (ETM): Air handler Manages energy distribution

28. Modeled performance from a 2070 watt STC DC array, offsetting electric water heating, Phoenix/Tucson, 2500 square foot home, HERS rating 75 Higher efficiency means more solar energy generated. electricity (only) electricity water heating home heating home cooling + Echo Delivers > 2 X More Usable Energy Than Basic PV

30. No Sacrifice

31. On Line Resources to Learn More Stakeholder Awareness

32. Future Consumer Awareness Code Change Management Labeling / Appraisal / Underwriting Standards Competition Cost to Retrofit / Upgrade Design Credible New Market Category Maintaining Leadership

33. Thank you for your Participation CR Herro VP Environmental Affairs CR.Herro@MeritageHomes.com 480-515-8019 (office) 480-215-7860 (cell)