CT SOLAR
                     PROGRAM    THE GEMSTONE GROUP

PV Peer Conference Call
- 09/19/08
CT Solar Lease Program Team:

             Connecticut Clean Energy Fund:
                Provides Rebate and Funds Lease
                A       t

             AFC First Financial Corporation:
                   Program Administrator/Lender/Lease Servicer

             Gemstone Lease Management, LLC:
                    Manager of   CT Solar Leasing, LLC

             US Bancorp Community Development Corp.:

    Who’s Who
AFC First Financial:                             Gemstone:
•          Valley,           Institution,
    Lehigh Valley PA Lending Institution         •   Wayne, PA, Investment and merchant bankers
    founded 1947;                                    since 1993;
                                                 •   Renewable energy practice since 2003;
•   Operating in 12 States from Maine to         •   Clients include PA sustainable energy funds,
    Virginia;                                        wind and solar developers and other
                                                         t i bl technology companies;
                                                     sustainable t h l               i
•   One of three Fannie-Mae Approved             •   Specialization in renewable energy finance-
    Energy Loan Lenders in US, only one              consumer and commercial- involving complex
    in Northeast/Mid-Atlantic;                       tax benefit monetization;
                                                 •   On behalf of client, led development of
•   Selected to be the exclusive lender for          Keystone Home Energy Program in PA;
    the Keystone Home Energy Loan                •   Community scale wind and solar developer.
    Program by the Pennsylvania Treasury

•   Endorsed energy lender for all of
    Pennsylvania’s regulated utilities and          Bancorp:
                                                 US B
    operate numerous other association           •   $242 billion in assets
    and utility financing programs.              •   6th largest US bank
                                                 •   One of nations largest tax credit investor

The Connecticut Clean Energy Fund was created by the Connecticut General
Assembly and is funded by the electric ratepayers. CCEF’s mission is to promote, develop and
invest in clean energy sources for the benefit of Connecticut’s ratepayers in order to strengthen
Connecticut s economy                       health,              environment,
Connecticut’s economy, protect community health improve the environment and promote a secure
energy supply for the state. CCEF is administered by Connecticut Innovations, a quasi-public
authority.                                                                                          3
What is CT Solar Lease Program:

                             CT Solar Lease Program

   The CT Solar Lease Program works hand in hand with Connecticut Clean Energy Fund’s existing state rebate
   It provides low and moderate (determined by State) income CT homeowners an affordable alternative to
the outright purchase of a solar photovoltaic system.
   Since CT Solar Leasing, LLC owns the solar system, it can take advantage of the expanded business tax
incentives that are not presently available to individuals - the value of these incentives reduces the cost of the CT
Solar Lease Program to the homeowner.
  Some of the unique advantages of a CT Solar Lease Program:

                  down payment
               no d          t

               qualified installer of its choice

               reduce the homeowner’s electric bill

               15 year period with an option to buy

               fixed cost for the entire 15 year period

                                y             y                                       p    y
               insurance - easily and routinely be added to the homeowner’s insurance policy

Connecticut Solar Leasing Program
                                    $$ (100% of installation cost less
How it works:                       CCEF Rebate) paid to Installer to
                                    purchase system upon completion, H
                                                                          LC owned and funded by Investor.
                                                                          Gemstone manages LC on behalf of
                                    pays CT Solar Lease Program           Investor. AFC retained to provide
    Homeowner (H) works with        payments monthly to LC                program marketing; lease origination
    installer to design system; H                                           d     i i      d
                                                                          and servicing; and customer support
    applies for CT Solar Lease
    Program; Installer submits to
    CCEF for rebate
                                      CT Solar
                                    Leasing, LLC
                                          g                              AFC makes loan to LC and then sells
                                                                         the loan to CCEF on servicing
                                                                         retained basis. Principal and interest
                                       LC                                payments on the loans are paid to
                                                                         AFC and then remitted to CCEF.
                                    Gemstone as

                                     AFC                                  CCEF

Connecticut Solar Leasing Program – How it Works

             – Homeowner chooses from list of Eligible
             – System Cost:
                 • $47,747
             – Rebate:
                 • 50% of system cost ($23,873)
             – Term:
                 • 15 years
                 • Optional 5 year extension – reduced price
             – Equity:
                 • No money down by homeowner
                 • Capital cost reduction by LC
             – Annual Payment
                 • $1,476
             – Ownership:
                 • FMV purchase at lease expiration
                 • Can offer 5 yr. lease extension at bargain


The numbers used bel ow a re ba sed on a rea l sol a r i nsta l l a ti on, but a re for exa mpl e
purposes onl y. Your speci fi c i nsta l l a ti on ma y di ffer from these numbers for a va ri ety of
rea sons, a nd those di fferences ma y be si gnfi ci ca nt.

                                                                                                                CT SOLAR
ASSUMPTIONS:                                                                           Loan Model 4            Lease Model
Cost of Solar System                                                                      ($47,747.00)           ($47,747.00)
                                 CCEF rebate                                               $23,873.50             $23,873.50
                      CT Solar Lease incentive                                                   $0.00             $9,071.93
                                    tax credit                                               $2,000.00                 $0.00
                       consumer out of pocket                                               ($6,666.67)                $0.00
                                   rebate tax                     0%                             $0.00                 $0.00
                         AMOUNT FINANCED                                             $       17,206.83            $14,801.57

                                 Total 1x Effect>                                            ($4,666.67)                 $0.00

annual payment - loan or lease                                                               ($2,505.20)           ($1,476.29)
                                                                                            ($25,051.96)         ($22,144.41)

   electricity savings (
             y                  ) per kwh $
                    g (avoidance) p                           0.245        y     g
                                                                       <15 yr. avg           $20,212.50           $20,212.50          y
                                                                                                                                   15 years
                      Years 15-20 savings $                   0.290                           $7,975.00            $7,975.00        5 years
                   SREC earnings per kwh $                    0.014                               $0.00            $1,113.75
                           # kwh per year                     5,500

              upf ront capital invested-net tax credit                                       ($4,666.67)               $0.00
 lost income on investmed capital - 20 years @ 3%                                            ($3,761.85)               $0.00
                     maintenance - 15 years 3                                                ($2,000.00)          ($2,000.00)
             total financing costs - 15 years                                               ($25,051.96)         ($22,144.41)
         revenue from kwh sales - 15 years 1                                                 $28,187.50           $28,187.50
        revenue from srec sales - 15 years 2                                                      $0.00            $1,113.75
                                                                                             ($7,292.98)            $5,156.84


                                                         1. Re ve nue as s um ptions bas e d on Conne cticut Cle an Ene rgy
                                                         Fund's e s tim ate s of curre nt and future e ne rgy price s .

                                                         2. Solar Re ne w able Ene rgy Cre dits are gre e n e ne rgy attribute s
                                                         as s ociate d w ith the s olar e ne rgy production. So long as the
                                                         le as e is in good s tanding and the hom e ow ne r provide s the
                                                         ne ce s s ary ge ne ration data, CT Solar w ill aggre gate and s e ll
                                                         the s e cre dits ,

                                                         3. M ainte nance e s tim ate bas e d on conve rs ations w ith s olar
                                                         ins talle rs look ing at typical cos ts afte r w arranty pe riod to
                                                         e xte nd the life of the s ys te m out 20 ye ars .

                                                         4. Loan bas e d on 8% loan for 10 ye ars
CCEF Perspective : Leasing Program Benefits


            increased cash benefit to homeowner with no upfront
                t dl         thl
            cost and low monthly payment,t

            Net yield on CCEF portfolio after serving costs (v. subsidized
            financing – helps shelter credit risk),

            reduced credit risk- smaller loans associated with each
            lease due to LC contribution,

            similar procedures and standards (ie: underwriting standards,
            administrative procedures and fees),

            same installer marketing network.

Leasing Program Structuring Requirements

        The leasing company (LC) must meet several IRS guidelines:
              LC must be considered the owner of the leased equipment
           for federal tax purposes,
             LC must borrow at “market rate”. Anticipate 5.5% Program
           Rate based on current rate levels. Program Rate floats every
               t     individual transaction rates fi d for life of each l
           quarter – i di id l t       ti     t fixed f lif f         h lease,
              Solar system must remain “in service” for 5 tax years or else
           suffer recapture of tax benefits. LC must aggressively monitor
           th t systems continue to operate – suggest remote monitoring.
           that     t       ti     t       t          t      t      it i
           Need action plan for homes that “go dark” or for leases that go
           into default,
             Homeowner may assign lease to successive homeowner
           upon LC’s approval of credit.


Adam St
Ad   Stern           A
                     Angela P
                         l Perondi-Pitel
                                di Pit l             Peter K j
                                                     P t Krajsa
The Gemstone Group   Connecticut Clean Energy Fund   AFC First Financial
610-293-2507               860-257-2362              610-433-7486


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