The document summarizes the benefits of stationary fuel cell systems for commercial real estate. Fuel cells provide clean, efficient distributed energy generation that can significantly reduce energy costs and carbon emissions compared to grid power. They operate at a lower cost per kWh than utility rates and can provide both electricity and heat for buildings. Various incentives are available to support the installation of fuel cell CHP systems.

1. N Stationary Fuel Cells For Commercial Real Estate May 19, 2010 Ryan Stepp Sales Manager / Business Development

2. What Are You Going to Learn? Green Building Focus Shift: from reducing energy consumption to sustainable energy generation. Fuel Cells as Distributed Generation It’s about clean, highly efficient energy! Savings & Incentives Tax Credits, Rebates, Financing How do Fuel Cells Compare to Solar? Fuel Cells, Photovoltaics & Solar Thermal

3. Increasing Demand for Energy Solutions Worldwide electricity demand exceeds 20 trillion kW hours annually – a $1 trillion+ retail market projected to grow 2.3% annually for the next 20 years Alternative energy solutions are needed; the United States utility grid cannot support this increasing demand Source: http://www.eia.doe.gov/cneaf/electricity/esr/table5.html

4. Converging macro-trends favor new power solutions: Utilities facing massive capital expenditures for cleaner power generation and transmission to keep pace with growth Current alternatives constrained by cost, geography, intermittency, security & efficiency Strong global political and societal support for energy alternatives Fuel Cells offer a clean and efficient way to deliver a tangible return on capital and an immediate reduction your carbon footprint For the Future: Focus on Renewables… at a Price

5. The Power of Efficiency Energy efficiency measures to reduce consumption have been the low hanging fruit Cost effective, long term, standard equipment & build practices today Buildings are becoming very energy efficient (Title 24, HERS, Utility EE programs) What’s Next? Double Pane Windows High Efficiency Appliances Insulation Compact Fluorescent Light Bulbs

6. Fuel Cells as Distributed Generation It’s about clean, highly efficient energy! Fuels, like natural gas, are a significant source of how we get energy today, and for the foreseeable future Efficiency is key to stretching our scarce fuel resources and reducing emissions now Fuel Cells: One of the efficient ways to address today’s urgent concerns: Criteria pollutants, CO 2, and climate change Rising energy costs Energy security Increasing demand on grid infrastructure

7. The Power of Efficiency (continued)

8. The Power of Efficient Energy Generation Small, mid-sized commercial rates in PG&E range from $0.12 - $0.18 per kWh A fuel cell system can operate for as little as $.02 - $.05 per kWh at current average natural gas prices Example: Operation cost per kWh (year 1)

9. SDG&E Energy Generation Mix Electricity Generation Mix (2008): Fuel Efficiency 1 CO 2 Emissions 2 56% Natural Gas ~40% 1,100 lbs/MWh 15% Renewables ~90% zero 10% Coal ~30% 2,500 lbs/MWh 19% Nuclear ~80% zero Heat Generation: 100% Natural Gas ~80% 550 lbs/MWh Weighted Energy Mix Typical Building in SDG&E Area Electricity 80% ~59% 1416 lbs/MWh Heating 20% Fuel Efficiency measures fuel consumed and line losses vs. what is consumed by the building CO 2 emissions in pounds per MWh of energy consumed SDG&E grid estimated to be 54% efficient and emits 866 lbs/MWh of CO 2

10. LADWP Energy Generation Mix – A Time bomb? Electricity Generation Mix (2008): Fuel Efficiency 1 CO 2 Emissions 2 35% Natural Gas ~40% 1,100 lbs/MWh 20% Renewables ~90% zero 45% Coal ~30% 2,500 lbs/MWh 0% Nuclear ~80% zero Heat Generation: 100% Natural Gas ~80% 550 lbs/MWh Weighted Energy Mix Typical Building in LADWP Area Electricity 80% ~59% 2060 lbs/MWh Heating 20% Fuel Efficiency measures fuel consumed and line losses vs. what is consumed by the building CO 2 emissions in pounds per MWh of energy consumed

11. Tomorrow’s Energy Generation Mix Wind Solar Geothermal Bicycle Fuel Cells No transmission lines. Empower the energy user. Adding Clean Distributed Generation

12. Fuel Cells – What Are They?

13. Ancient History of Fuel Cell Development Humphry Davy of the Royal Institution discovers fuel cells 1839 Sir William Grove demonstrates fuel cells Francis Bacon shows the first prototype and gets a patent NASA starts research on fuel cells 1965 Gemini V rocket goes to space using fuel cells Apollo 11 lands on the moon UTC deployments of PAFC systems in the USA and Japan ‘ 95-’03 Many PEM, SOFC, other fuel cell developments initiated 2003 ClearEdge Power started with the vision for fuel cell microCHP

14. Recent History of Stationary Fuel Cell Applications All manned US space flights have fuel cells on board Space shuttle has three Alkaline fuel cell systems Cryogenic H 2 and O 2 as fuel Fuel cells provide drinking water for astronauts Industrial / large commercial use of 200 kW+ fuel cell CHP Japanese trials of 1 kW residential fuel cell microCHP ClearEdge Power and Bloom Energy, new US products UTC PAFC 200 kW FCE MCFC 300 kW PEFC (Japan) 1 kW ClearEdge 5 20 kW (4 x 5 kW) Bloom Box 500 kW (5 x 100 kW)

15. Types of Fuel Cells Used Today Phosphoric Acid Typically > than 250kW Commonly used for: Large industrial/food processing Can run on bio-gas with anaerobic digesters Example: Gills Onions Solid Oxide Typically > than 100kW Commonly used for: Office NOT CHP High temperature, low thermal cycle, high electrical efficiency (<60%) Example: Ebay Headquarters Proton Exchange Membrane Typically 100kw > x > 1kW Commonly used for: Transportation, Back-up power Example: Gills Onions CHP PEM Fuel Cells??????????????? Commonly used for: Large industrial/food processing Example: Gills Onions

16. Today’s Energy From Fuel Cell CHP Systems Maximizing the value of scarce fuel resources Whole Foods Supermarket Dedham, Massachusetts Boutique Hotel Palm Desert Heat & Power from one distributed generation source Gills Onions Oxnard, CA

17. IN: Natural Gas Propane Bio-Gas Fuel Processor Fuel Cell Stack Power Inverter OUT: Heat OUT: AC Power How a Fuel Cell CHP System Works

18. Cell Voltage Phosphoric Acid (150°C – 180 °C) - + H2 or Reformate How a Fuel Cell Works Cathode 2H+ + 2e- + ½O2 H2O Anode H2 2H+ + 2e-

19. Advantages Highest efficiency device, most economic value 90%, with over 40% as electricity Cleaner: No burning of fuel Addresses all areas of EPA concern NOx SOx VOC Particulates Coal Ash CO 2 Energy generation at point of use Relieves grid investment requirements Picks up future loads (electric cars) Base load power - higher reduction in CO 2 emissions and fossil fuel consumption than equivalent sized renewables Why a Fuel Cell CHP System? Disadvantages Today, runs on fossil fuels or biogas Future: on hydrogen from renewable source Cost of Systems Grid parity in some areas (CA/NE/HI) Low volume production Cost of integrating w/ heat systems Products relatively new to market Not well understood by public and policy makers Need to match CHP to heat load for max efficiency

20. Domestic Hot Water Tanks Radiant Heat Boilers Pool & Spa Heat Systems Forced Air Heating Systems Heat Captured In Hot Water Storage Tank CHP Waste Heat Reduces Monthly Heating Bill Commercial Kitchens Forced Air Heating Pool & Spa Heating

21. Power Essential Systems During Loss of Utility Power Interior Lighting Systems Refrigerators & Freezers Communication Equipment Computer Systems Cash Registers Landscape Lighting Keep the Lights On - Avoid Missed Revenue

22. Smart Fuel Cell CHP Systems Central Data Server Web monitoring system (custom integration with other home monitoring systems possible) sends SMS or email to FSE in the event of an issue Each system contains 1 GB of NVM rolling memory , equivalent to a “Black Box” Real time monitoring of all safety and control parameters via remote HMI Real Time Data Real time customer interface iPhone &

23. Fuel Cell CHP vs. Solar On a capital dollar invested basis, CHP technology outperforms solar power 10x the energy productivity 2x faster return on invested capital 2x the reduction in CO 2 emissions 2x the reduction in natural gas consumption 24/7 all-weather; grid-connected or grid-independent / back-up power 1) Grid Independent & Backup capability to be added in late 2010 *Solar Calculation Source: www.findsolar.com

24. 5kW Solar Panel Array Fuel Cell microCHP vs. Solar Comparison Solar Calculation Source: PVwatts1 Performance Calculator (San Diego Site 5kW Fuel Cell 27kW Solar Panel Array *equipment space only; clearance spaces will vary Space Requirement High Efficiency 5 kW Fuel Cell 5kW Solar 27kW Solar Electric Production-Annual 43,800 kWh 8000 kWh 43,200 kWh Heat Production 51,000 kWh None None Space Required* 6 sq. ft. 500 sq. ft. 2700 sq. ft.

25. ClearEdge5 vs. Solar—CO 2 Reduction *CCNG power plant, PG&E 4.0 Metric Tons per year 11.7 Metric Tons per year

26. Integrated Energy Systems: ClearEdge5 and Solar PV Dual System Integration: A second bi-directional meter needed ClearEdge5 supplements electricity generation directly to the power panel ClearEdge5 provides heat

27. Integrated Energy Systems: ClearEdge5 and Solar Thermal Dual System Integration: One additional heat exchanger needed Two options for ClearEdge5 heat production: Preheat water for solar thermal system to increase efficiency Feed directly to a second hot water tank for pool, spa, fan coil ClearEdge5 provides electricity generation

28. 9 units – 3x each building $1M savings in construction costs Eliminated need for solar thermal Reduced amount of solar PV needed Allowed for less expensive type of solar PV Fuel Cells qualify for City of SD Green Building Program – fast tracked through the permitting process LEED Silver Project – Energy & Atmosphere credits Commercial Application – Case Study Village Lindo Paseo Dormitories - San Diego, CA Design/Build, 193 room/386 bed student residence

29. Utility Bills – How can a fuel cell impact my energy cost? Small hotel: 30 rooms, laundry, spa, 40 kW demand, 18 MWh/mo., 800 therms Electricity Type Charge Before w/ 20 kW Fuel Cells Change kW $8,781 $4,610 - $4,171 kWh $20,225 $4,656 - $15,569 Total Electric $29,006 $9,266 - $19,740 Gas Energy/transport $9,988 $17,997 $8,010 Total Energy Cost $38,994 $27,263 - $11,730 30% Expense Reduction!

30. What Incentives are in Place For Fuel Cells? Federal Incentives ITC provides $3,000 per 1kW tax credit Grant in lieu of tax credit MACRS accelerated depreciation CA SGIP Rebate $2,500 per 1kW on natural gas $4,500 per 1kW on diverted biogas (30 kW min) Clean Energy Financing – AB811 Summer 2010 $50,000 project cap

31. Integrating a Fuel Cell microCHP with the Building

32. How Does a Fuel Cell System Work with My Building? Mechanical interface: Natural gas line ½” minimum, capable of 50,000 BTU/hour, 0.5 to 2 psi pressure Flex connections required Minimum pad requirement: 34” x 46” x 8” deep, with #4 rebar, 12” OC Clear service area: 3 feet on front and left side Indoor install: 8” class D vent, 1000 cfm of make up air, condensate drain Gas detector required 14.5” stand for garage install elevation

33. ClearEdge5 Multi Unit Installation

34. Certification & Safety Requirements Fuel Cell systems need to be certified by a Nationally Recognized Testing Lab (NRTL) CSA, UL, ETL (Intertech) are recognized ANSI / FC1-2004 is the standard Safety codes that apply NFPA 853 – Standard for installation of stationary fuel cell power systems NFPA 70 – National electric code Local building permit required

35. Our Company: Established in 2003 Headquartered in Portland Oregon, with offices throughout California Direct distribution of our product Full control of lifecycle Design & Manufacture Installation & Permitting Service & Maintenance Experienced executives and engineers Possess extensive background in fuel cell design and integration Our Products: Designed to address the urgent concerns: Environmental impact Increased demand on grid infrastructure High energy costs Manufactured in our 75,000 sq ft facility Certifications: ISO 9001 Quality Management Systems ISO 14001 Environmental Management Systems About ClearEdge Power

36. ClearEdge Power LEADING THE SMART ENERGY REVOLUTION Contact Info: Ryan Stepp, Business Development (805) 340-3626 [email_address]