Solar Panel Purchase Agreement

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					                      Enabling Renewable Energy:
                      Successful Policies
BIOENERGY, WIND,      Tallahassee, FL
& ENERGY EFFICIENCY   February 3, 2009
  MMA Renewable Ventures Overview
MMA Renewable VenturesOverview

       MMA Renewable Ventures is a leading developer, financier, owner and
        operator of renewable energy and energy efficiency systems in the U.S.
         —   Based in San Francisco, we have been offering PPAs since 2002

         —   41 MW of solar PV in operation including the largest PV plant in operation in the
             United States (14 MW project at Nellis Air Force Base)

         —   Raised approximately $120 million of tax equity (closed into projects)
         —   21 different customers in 10 states (investor-owned utilities, municipalities,
             corporations, military, retailers, etc.)

         —   Range of solar technologies: (crystalline, thin film, CIGS, etc.)

       Proven capabilities in project finance, due diligence, and physical asset
       Recently formed a joint venture with Suntech, the largest global solar panel
        manufacturer, to develop large scale projects
         —   In January we had our first success, a 30MW project in Austin, TX

The PPA Value Proposition

       Retail PV market shifting to Power Purchase Agreement (PPA)
        model because of its customer value proposition
        —   Capital conservation: no up-front capital expenditure
        —   Immediate savings compared to utility rates
        —   Long-term hedge on utility rates
        —   Limited operational risk for customer

       Wholesale PPA helps utilities avoid risks around newer

       PPA manages risk for the investor and developer as well

       PV PPA model began with non-residential systems; now being
        modified for residential systems

Solar – Ideal Clean Energy Option

       Can be sized to small loads
       Matches peak demand profile
       Can be sited within any utility’s or municipality’s service
       Easy to permit
       Fast to install
       Long-term supplier warranties and proven technology
       Visible demonstration of clean energy commitment

Renewable Energy Opportunity

   Federal legislation is coming and its in Florida’s best interests to get
    out in front
    —    Obama administration is expected to aggressively promote a Federal RPS
         and climate change legislation
    —    Early action can mitigate risk, for example by avoiding investment in new fossil
         fuel generation assets that lock-in costs for the long term
   Customers, investors, and industry entrants need education and
    training in renewable energy
   Renewable energy is popular and generally easy to sell. Messages
    —    Energy independence
    —    Climate change
    —    ‘Green’ Jobs from labor-intensive industries
   Renewable energy can be an engine for economic growth

5   1Energy Information Administration, 2006 data
Policy Principles to Promote Renewables

   Set a clear policy direction with a predictable long term framework
    —   Include time-bound goals with quantified targets
    —   Provide stable financial incentives sufficient to motivate key stakeholders
         >   Energy assets with long lifecycles need long term policies
         >   Predictability lowers project development and financing costs – investors and
             lenders seek secured cash flows to reduce risk
   Create an enabling environment for business by addressing key
    market impediments
    —   Markets often cannot respond if a single key policy feature is missing
    —   Consistent policies will encourage suppliers of renewable energy solutions to
        establish a long term presence in Florida
   Establish public-private partnership vehicles
   Incorporate a flexibility mechanism to correct policy errors
    —   Oversights are likely in new policy space with technological change

RPS – A Critical Piece in the Puzzle
    DSIRE:                                                                                                                              January 2009

                            Renewables Portfolio Standards
                                                                                               VT: (1) RE meets any increase     ME: 30% by 2000
                                                                  MN: 25% by 2025                                                10% by 2017 - new RE
                                                                                                    in retail sales by 2012;
                                                                  (Xcel: 30% by 2020)
               *WA: 15% by 2020                                                                 (2) 20% RE & CHP by 2017
                                                                                                                                     ☼ NH: 23.8% in 2025
                                                           ND: 10% by 2015       WI: requirement varies by
                                                                                                                                     ☼ MA: 15% by 2020
                                                                                  utility; 10% by 2015 goal
                                           MT: 15% by 2015                                                                             + 1% annual increase
OR: 25% by 2025 (large utilities)                                                                                                      (Class I Renew ables)
5% - 10% by 2025 (sm aller utilities)                                                   *MI: 10% + 1,100 MW
                                                                                                                                    RI: 16% by 2020
                                                            SD: 10% by 2015                    by 2015
                                                                                                                                  CT: 23% by 2020
              ☼ *NV: 20% by 2015
                                             *UT: 20% by 2025        IA: 105 MW
                                                                                                                               ☼ NY: 24% by 2013
                                                                                    ☼ OH: 25%** by 2025
                                                                                                                               ☼ NJ: 22.5% by 2021
                                                                                 IL: 25% by 2025
        CA: 20% by 2010                     ☼ CO: 20% by 2020       (IOUs)
                                                                                                                               ☼ PA: 18%** by 2020
                                         *10% by 2020 (co-ops & large munis)   ☼ MO: 15% by 2021
                                                                                                                               ☼ MD: 20% by 2022
                                                                                        ☼ NC: 12.5% by 2021      (IOUs)
                               ☼ AZ: 15% by 2025                                         10% by 2018 (co-ops & m unis)     ☼ *DE: 20% by 2019
                                                                                                                               ☼ DC: 20% by 2020
                             ☼ NM: 20% by 2020 (IOUs)
                                  10% by 2020 (co-ops)                                                                         *VA: 12% by 2022

HI: 20% by 2020                                          TX: 5,880 MW by 2015                                                                 28 states have
                                                                                                                          State RPS               an RPS;
                                      Solar hot water eligible
                                   ☼ Minimum solar or customer-sited RE requirement                                       State Goal         5 states have an
                                   * Increased credit for solar or customer-sited RE                                                              RE goal
                                   ** Includes separate tier of non-renewable “alternative” energy resources

Renewable Portfolio Standard

   Standards must be binding
    —    Sufficient non-compliance penalties to motivate utilities
    —    Limits on permissible extensions

   Is single best way to motivate utilities to purchase wholesale
    renewable energy
    —    Additional financial incentives are helpful, but may not be unnecessary

   Carve-outs for higher cost / higher priority technologies are effective

   Can include energy from clean coal, efficiency measures, and other
    “clean” resources to meet overall portfolio standard targets

8   1Energy Information Administration, 2006 data
Renewable Energy Financial Incentives

   In general
    —   Performance-based subsidies better motivate actual clean energy production
        than subsidies keyed to system size
    —   Subsidies via state tax code shrink investor pool. Direct payments are
        preferable to project sponsors
    —   REC-based systems require policy predictability for long term contracting
   Key incentives to motivate large scale demonstration of new
    —   Tax exempt bonds, tax-based incentives, loan guarantees, capital
        infrastructure grants, parity of incentives across alternative fuels
    —   Land use incentives to use brownfield sites for clean technology plants
   Financial incentives must be sufficient; otherwise, no market activity
   Feed-in tariffs – are they the path forward?
    —   One key issue is how to size the tariff payment to maximize economic benefit


    Tough economic conditions create budget constraints for everyone
     —   Tempting to postpone new programs to a better day, but the case for
         renewable energy remains stronger today than ever

    Private sector funding sources for renewable energy projects are
     severely limited
     —   Tax equity, a critical economic incentive for renewables, has dried up
     —   Credit crisis remains: banks are reluctant to lend
     —   Proposed Federal Stimulus package includes measures to address both tax
         equity and debt for renewable energy

    Energy policy is complicated
     —   But worth the investment of time and effort to institute policies to promote
         renewable energy

Final Thoughts

    Critical to incentivize a portfolio of renewable
     energy options
      —   Renewable energy industries are still maturing in the
      —   Careful policy design is essential to enable future
          growth of multiple technologies

    Renewable energy projects seek long term,
     fixed price contracts with creditworthy
     counterparts in clear policy regimes
      —   To match needs of capital partners
      —   To continue to drive cost reductions for renewable

    Florida is on the path towards a bright solar
      —   Execution of policy goals to actually get projects built
          can be tricky


                              Dan Halperin
            Senior Director, Project Development
                                  T: 415.229.8849


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