Offsite Renewable Energy Purchase Options Direct Ownership Direct

Offsite Renewable Energy Purchase Options • Direct Ownership: Direct control and responsibility over specific project; options vary based on local market design/regulation • Unbundled Renewable Energy Credits (RECs): Purchase RECs without energy; may or may not create additionality or establish a clear impact on a specific project • Community Solar: Customers participate in shared renewable energy project developed in a local area; available in limited U. S. markets • Utility Green Tariffs: Ability to purchase a larger percentage of green energy from local utility; may charge premium • Power Purchase Agreement (PPA)/Structured Transaction: Purchase energy and green attributes from a specific project, with 3 rdparty responsibility for performance; options vary based on local market design/regulation

Benefits and Potential Risks of a Virtual PPA Benefits Risks ü Customer benefits from lowest prices by purchasing from more ideally located projects • Power price risk: wholesale power prices may decline below the agreed PPA price ü Enables a single project to power multiple assets (or multiple assets to power single Buyers) • ü Ideal for companies with a scattered portfolio, fluctuating loads or facilities in areas with inadequate renewable energy resources Counterparty credit risk: energy supplier may go bankrupt and be unable to meet its payment obligations should energy prices rise above the established PPA price • Power consumption risk: consumption patterns may change and customer may not be able to consume all power produced but still has to pay for it ü ü ü Provides predictability and a long term financial hedge against electricity prices • Creates “additionality” by enabling electricity users to sponsor existing or planned solar generation projects by purchasing the electricity generated by the project over 15+ years Avoids regulatory, interconnection and deliverability issues in jurisdictions that prohibit traditional PPAs and direct sale of power • Accounting risk: PPAs may trigger derivative accounting and show up on customer’s balance sheet Regulatory risk: change in subsidies may impact renewable energy power prices

ty i c ri RE ct e l E ve e R e nu $ Wholesale market 15 -year fixed price $ Environmental benefits Renewable Energy Project $ Revenues to offset utility bill ci i r t id r G Local Utility c e l E U it til ty m y y Pa t en $