Attractive Returns Where and Why Now Costs Declining

Attractive Returns: Where and Why Now?

Costs Declining, Deployment Increasing As costs of wind, solar and energy storage decline precipitously… The rate of deployment of wind, solar, batteries and electric vehicles all show exponential levels of growth

Are You Still Stuck in Old Energy?

B: Number of Companies, at peak NUMBER OF COMPANIES How new fundamental technologies happen and how they capture market share A: Number of Years, start – peak - trough YEARS C: 1% penetration of target market MARKET PENETRATION (% of US Population adopting ) THE INNOVATION CURVES: D: Number of years from 1% to 70% penetration of target market

D: Number of years from 1% to 70% penetration of target market B: Number of Companies, at peak NUMBER OF COMPANIES A: 35 years B: 250 companies C: 1912 D: 48 (happened in 1950, but would have been 28 without Great depression and World War II) A: Number of Years, start – peak - trough 1896 YEARS C: 1% penetration of target market 1912 MARKET PENETRATION (% of US Population adopting ) THE AUTOMOBILE: 1950

B: Number of Companies, at peak NUMBER OF COMPANIES A: 20 years B: 200 companies C: 1986 D: 17 years (happened in 2003) D: Number of years from 1% to 70% penetration of target market A: Number of Years, start – peak - trough 1975 YEARS C: 1% penetration of target market 1986 MARKET PENETRATION (% of US Population adopting ) THE PERSONAL COMPUTER: 2003

A: Number of Years, start – peak - trough 1990 YEARS C: 1% penetration of target market 2014 MARKET PENETRATION (% of US Population adopting ) A: 24 years B: ~200 companies C: 2014 D: too early to tell but current growth rates would suggest about 25 years D: Number of years from 1% to 70% penetration of target market B: Number of Companies, at peak NUMBER OF COMPANIES SOLAR PHOTOVOLTAICS: 2039?

B: Number of Companies, at peak NUMBER OF COMPANIES A: ~30 years? B: ~100 companies C: ~2020? WHERE ARE WE TODAY? BIOFUELS: A: ~30 years? B: ~75 companies C: ~2020? WHERE ARE WE TODAY? A: Number of Years, start – peak - trough 1990 D: Number of years from 1% to 70% penetration of target market YEARS C: 1% penetration of target market 2014 MARKET PENETRATION (% of US Population adopting ) POWER STORAGE: 2039?

MARKET PENETRATION (% of US Population adopting ) 100 OTHER FAMILIAR TECHNOLOGIES: REFRIGERATOR 75 50 RADIO MICROWAVE AUTOMOBILE THE VCR 25 TELEPHONE MOBILE PHONE COLOR TELEVISION INTERNET WASHING MACHINE 10 0 1900 1915 1930 1945 YEARS 1960 1975 1990 2005

Important Historical Parallels Transformative Invention “Personal Mobility” Automobiles “Personal Technology” the PC “Personal Energy” Solar PV + Consumer Product + Power/Info Storage + Leverages Network = Applications & Solutions § § § Shift from train to personal transportation Grew industry of financing models, applications, solutions and components Value dramatically increased by the “network” – roads and highways Developed its own version of storage – the gas station Its “features and functions” continue to be greatly enhanced by the IT revolution § § § Shift from enterprise to “personal” computing Grew industry of software applications and new business solutions Massive industry around information storage Value dramatically increased through Ethernet, then Internet network Spawned an entire new industry of software tools, applications and “big data” § § § Enables shift from utility-scale to corporate and personal energy solutions Growing industry of financial innovations, applications and solutions Value increasing through network demand response, time shifting and storage Will spur the development of a large storage industry, perhaps in concert with EV’s Spawning an entire industry of linked in home appliances and software tools

A Realistic Perspective on Achieving Success (Understanding Patterns of Failure, Challenge, and Success)

Defining the Market Segments (Where you are playing defines risk/return) The “Project Finance Area” which remains more challenging for first factory and not yet bankable products, but is providing significant liquidity for more mature and later stage bankable products/companies – RATES OF RETURN DROP RAPIDLY AS PERCEIVED RISK IS REDUCED The area of Hardest Lifting that Remains Challenged from a Financing Perspective, it is the path that Sun. Power and first Solar made it through, but many other struggle to survive in a much leaner financing environment – NO REWARD FOR EARLY INVESTMENTS This is where Tesla and Nest Labs succeeded with product solutions that leveraged others hardware – LIMITED REWARDS FOR EARLY INVESTING Companies getting to this stage are attractive long-term holdings This Uber, Solar. City, Airbnb and other “capital light” solutions – SIGNIFICANT REWARDS FOR EARLY INVESTING

Targeted Returns and typical returns to Date (Expectations and Experiences have failed to line up) Targeted yield of 1518% Actual yield of 0 -18% Targeted yield of 1015% Actual yield of 6 -10% Interesting Development Company possibilities Targeted IRR of 30%+ with potential of 10 X return Average Actual Return is negative Targeted yield of 810% Targeted IRR of 30%+ with potential of 5 -10 X return Targeted IRR of 15%+ with potential of 3 X return Limited sample size but best returns so far from companies that have made it here Actual yield of 4 -6% Limited sample size but better return Targeted IRR of 20%+ with potential of 10 X return Limited sample size but good returns

Investment-Ready Sectors (focus on those technologies now experiencing hyper growth) Solar PV & Advancing Distributed Generation Advancement of Energy Storage Technologies Proliferation of Electric and Autonomous Driving Vehicles Impact of Internet of Things and “Big Data” Analytics Corporate Solar PPA’s & Deployments Solar Securitization Community Solar Consumer Premises Management Smart Grid Hardware Distribution Automation Energy Efficiency Management Demand Response Micro-grid Deployments Intelligent Load Management Energy Security Smart Devices & Appliances Smart Energy Trading/ Arbitrage Storage Deployment Distributed Storage Management Vehicle Charging Networks Virtual Power Plants Vehicle to Grid Ride Sharing New Mobility Solutions Taxi plus Solutions Fleet Management Road Condition Reporting Active Traffic Management Intermodal Solutions Parking Management Smart Cities & Traffic Smart Buildings & Homes Smart Infrastructure Management Indicates Need/Benefit of Project Finance