This document discusses bringing low-cost solar energy to Texas consumers through utility-scale solar projects. It provides background on Lincoln Renewable Energy and trends in falling solar costs. System costs have declined rapidly from $5.46/watt in 2008 to as low as $1.10/watt in 2012 due to technology advances, manufacturing scaling, and standardized solutions. Policy drivers like renewable portfolio standards and investment tax credits have also contributed to growing solar markets and lower costs. The document examines key factors for successful utility-scale solar projects, such as resource quality, development conditions, and providing returns sufficient to attract necessary capital investment.

1. Bringing Low Cost/High Value Solar
Energy to All Texas Consumers
Richard Gruber, Senior Vice President
Lincoln Renewable Energy
October, 17, 2012

2. Lincoln Renewable Energy
• U.S. based developer of utility scale solar PV and wind projects across
the United States. Offices in Austin, Chicago, and Denver.
• Highly experienced management team with deep experience (3000 +
MW’s) in renewable energy development: Greenfield development to
project acquisition, project finance, power sales, construction and
operation.
• Recently completed development and construction of NJ Oak Solar, a 10
megawatt solar project in Southern New Jersey.
• Monument Power, LLC - 50/50 joint venture between Samsung C&T and
LRE, entered into March 2012.

3. Trends – Falling Costs, Evolving Role
• Annual solar MW’s installed is accelerating
• Technology advances and scale have rapidly
driven system costs lower
– PV efficiency advancements
– Supply chains continue to mature
– System level standardization/optimization
• Utility scale solar PV a viable competitor to more
established technologies – thought “impossible” 5
years ago
• Policy drivers and constraints

4. U.S. PV Demand Forecast to Grew 89% in 2011 to
Nearly 1.7 GW
PV Installations Forecast
7000
6000
5000
Megawatts (MWdc)
4000
3200*
3000
2000
1000
0
2005 2006 2007 2008
Year Q12009
Q2 Q32010Q4 2011
Forecast 2012e 2013e 2014e 2015e
Source: SEIA
*Source: GTM Research, est. of 2012 install

5. Average PV Installed System Costs
Continue to Decline in all Sectors
$5.46
$4.38
Q2 2012 update $2.60
Source: SEIA

6. How did system costs fall so fast?
Module level
– Lower cost technology solution appeared
– Scaling manufacturing and supply chains
– Increased model efficiency
Balance of System and EPC level
– Increased module conversion efficiency - shrinking footprints
– Standardized system solutions
– Scale effects on system-level supply chain
– Construction learning cycles and innovation
Finance
– Speed to install
– Falling operating risk premiums
– More institutional investors enter the market
– Innovation

7. Select events contributing to growing markets
and falling costs
GER establishes FiT
GER amends FiT
$5.00/w
FSLR IPO – 11/06
$4.50/w FSLR buys DT Solar - Germany amends FiT
FSLR buys Optisolar – 550 MW sites
$2.00./w FSLR sells 550 MW project
To Berkshire Hathaway Unit
CA establishes RPS at 20% $1.10/w FSLR announces
2016 $1.15w
CA expands RPS to 33% $0.50/w system cost
2000 2004 2008 2012 2016

8. What matters in utility scale solar?
Base case: 12.31.14 COD, west TX, 50 MW, 7% unlevered
IRR, EPC at $1.75/DCw, ITC @ 30%
20 Yr. Flat PPA Price = $76.50 MWh
Solar resource: If sited in Dallas: $91.75 (+15.25/MWh or +17%)
Scale: If sized at 2 MW’s: $138.50
Tax policy: If ITC reverts back to 10%: $99.50
Required Return: If unlevered return at 5%: $62.00
Source: market data driven estimates/assumptions

9. What Matters in Utility Scale Solar
• Access to the “best in market” renewable resource
• Favorable development conditions
• Land, permitting, access to transmission, local support, balanced
tax policy,…
• Deliver a cost/risk solution that is beneficial to
consumers, can create a sustainable market
• Provide returns required to attract capital to
develop assets
• build power plants, add jobs, increase local tax base, attract
manufacturing

10. Property Value Analysis
Thank you
Questions
10