1. Considerations in Determining the Role for Solar in Missouri’s State Energy Plan Presented by Rick Hunter, Board Chair for the Missouri Solar Energy Industry Association (MOSEIA) October 30, 2014

2. Agenda 1.State of Solar in Missouri 2.Shifting Role of Solar in Planning 3.What Solar Can and Cannot Do Well 4.Benefits of Solar 5.Related Topics Worthy of Discussion 6.Resources

3. State of Solar in Missouri 1.Fastest growing industry in Missouri (257%) - $115 million invested, 78 Solar Companies, 2800 employed 2.17 th nationally in installed capacity (28 MW) - 2013 20 th nationally in total installed capacity - 2013 3.Missouri was ramping up further, moving to #6 nationally as of Q2 2014. 4.Legislative 6 Year phase out of solar rebate was expected to put the industry on a long term stable growth pattern. 5.The unexpected loss of the solar rebate at the end of 2013, is erasing many of the economic gains for Missouri 6.Utilities are increasingly investing in solar which will improve the overall solar capacity, but will not affect distribute PV industry

4. State Rankings – Q2 2014 PV Installations Source: GTM Research & SEIA MO = #6

5. Shifting Role of Solar in Energy Planning 1. RPS – nationally, state Renewable Portfolio Standards (RPS) goals are being exceeded, costs are lower than anticipated, targets are being increased, and solar is now outpacing wind in its growth curve. 2. IRP – largely due to pending EPA regulations, Utility Integrated Resource Plans (IRPs) are all shifting to include earlier phase out of coal, and a shift to natural gas and renewables (including the IRPs of all 3 IOUs in MO). 3. Distributed PV (customer sited) - shifting from becoming a minor factor to a mainstream market-driven phenomena 4. Economic Development - The strong economic benefits of solar have become a factor in planning efforts. 5. Grid Resiliency - becoming a major factor, in the wake of Storm Sandy, Joplin, and the realities of climate change. Distributed PV and Microgrids going to be a necessary part of a strong resiliency plan. 6. Grid Security – increasing concerns by the military about the vulnerability of central plants and transmission, leading to push for decentralization.

6. What Solar Can & Cannot Do Well 1. Solar Cannot Replace Baseload Capacity, due to intermittency However – Solar has very high value to the grid, due to other benefits it offers 2. The Levelized cost of solar (unsubsidized), although continually dropping, is still higher than many other sources (10-18 cents/kWh); However – generation sources are evaluated on the basis of costs vs benefits, and solar has many valuable benefits. Bottom line – solar is a sensible part of the plan; it is just a question of how much solar makes sense.

7. Benefits of Solar PV 1.Shave Peak - Solar generally follows load – produces power at times of the day that are most expensive to grid operators. 2.Fewer new plants - Solar (like efficiency) helps reduce and put off the need for large, expensive central power plants and transmission and distribution upgrades 3.Hedge - Solar is a good hedge against often volatile fossil fuel prices (natural gas in particular). Solar construction and O&M costs are more predictable than those of any other energy source 4.Scalable, easily deployed - Solar is easily scaled to fit need and can be located strategically, to relieve grid congestion, provide ancillary services 5.Compliance benefits – RPS and EPA 6.Environmental benefits – clean power, with very low adverse impact

8. Benefits of Distributed PV 1.Capital efficient – private investment reduces cost of new generation to ratepayers 2.Efficient use of infrastructure – no line losses, produce power where it is used 3.People like it – 93% of people want more solar. This is more relevant than it may seem. Value of Solar Tariffs (VOST) State policy is increasingly considering replacement of net metering with a direct purchase rate paid by utilities to DG owners for energy produced, and where the rate paid is based on a more comprehensive assessment of solar benefits and costs. MN, NY, Austin, GA, others. This non-subsidized approach is winning advocates across the political spectrum

9. Further Topics Worthy of Discussion 1.Energy Storage costs are projected to plummet in the next 10 years, potentially making solar’s intermittency less of a factor 2.Demand response technologies are making headway, which makes higher grid penetration rates for solar more feasible 3.Grid defection – As grid rates rise and solar prices continue to drop, distributed PV, combined with CHP or battery storage could lead to more ratepayers going off grid (electric) 4.Regulatory framework inadequacies - Shifts to clean energy would be best accomplished if accompanied by a shift in regulatory models that decouples utility profits from kWh used. 5.Grid Parity & Investment - As more states approach “grid parity” and billions of investment dollars continue to flow into the solar sector; the solar train is picking up steam - will Missouri be on board?

10. Solar Leads for New Generation Capacity Sources Source: FERC, GTM Research

11. Resources 1.Moseia.com 2.Seia.org 3.Sepa.org 4.DOE.gov 5.GTMresearch.com 6.Rmi.org 7.Acore.org 8.Ases.org Rick Hunter rhunter@microgridsolar.com (314) 265-6143 Rick Hunter rhunter@microgridsolar.com (314) 265-6143

12. Solar competes w/ NatGas for Leading NewGen Sources

13. Solar Parity with Retail Grid Rates is Coming

14. Value of Solar - MN

15. Value of Solar – Austin, TX