Matt Cheney; former CEO of Renewable Ventures, a wholly-owned subsidiary of Fotowatio, a global solar Independent Power Producer that is one of the largest companies of its kind worldwide

1. Solar Future II –
Vision and Strategy Conference
Munich June 2010
The Solar Industry in 2013
June 2010 CleanPath
Ventures
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2. Renewable Ventures Experience and Expertise
Accomplishments include:
• Financed, owned, and operated over $300 MM in solar energy assets
• Syndicated the first solar tax equity fund in the U.S.
• Raised and managed 5 solar tax equity funds in the past four years
• In 2007, financed and built the largest solar photovoltaic power plant
in North America (largest up to Q4 2009)
• Introduced the Power Purchase Agreement (PPA) to the U.S. solar
retail market in 2001
• First to finance amorphous, CIGS, CadTel thin film silicon projects in
the North America with leveraged partnership structure, non-recourse
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3. Reference to Experience – Nellis
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4. The Solar PV Industry in 2010
The European Market Today: Current Trends in the Europe:
 Greece, Spain, Portugal, Hungary, Ireland – who’s next?
 Copenhagen was a flop, and the carbon markets are stagnating
 $430+ BN allocated to green worldwide -- most left unspent (10%)
 Economic pressures will impact PV incentive policies forward and back,
with the oldest richest incentives being reviewed and potentially recalc’d
 Revalued currencies in EU and China may improve EU companies that
haven’t yet moved manufacturing offshore – most have moved already
 PV Parity has arrived at certain areas in the US, so why not in some of
Europe now, much less by 2013? Excessive value stripped out?
 Reserve capacities are tightening in 2009, and energy pricing rising,
particularly due to RPS drivers – will continue beyond super FITs
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5. The Solar PV Industry in 2010
The U.S. Market Today:
 World of losses – so much for tax incentives
 Stimulus programs not working, or on track for failure – Federal Loan
Guarantee Programs have orphaned the commercial PV space
 Even the most qualified can’t predict tax or public policy as administered
by the IRS and OMB, etc.
 Energy Bill can help and is needed more than ever, lots of clean-up req’d,
key extensions needed (Fed Cash Grant Depreciation)
 Pricing has improved such that parity in sight with stable incentives
 Transmission (lack thereof) is major constraint – 300,000 MWs of wind in
interconnection in queue
 Lack of carbon policy is causing confusion leading to delay/waiting
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6. The Solar PV Industry in 2013
 General feel is RD in U.S./Europe and OEM in Asia
 Still, consolidation (by 2013) will likely produce long-term winners who
will focus on market share, customer relationships, and full service and
integrated offerings
 Commercialized new PV tech can change game if we can bridge
technology to capital markets, while managing risks along the way
 Insurance will have emerged to convert balance sheet coverage (self
insurance) to actuarial methods – it may cost more, but trustworthy –
insurance today (Munich RE, etc.) is not seen as enough, but a start
 Policy will impact manufacturing strategies – local content requirements
to dominate (jobs, jobs, jobs)
 Firm power, with dispatchability and power conditioning capacities, will
be in demand and will demand a premium to complement a smarter grid
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7. The Solar PV Industry in 2013 cont.
 U.S. Carbon policy by 2013 – renewable + nuclear win big
 U.S. Power pools will begin to re-organize in favor of big regional
markets, most likely as a point of national security – who
needs 120+ balancing authorities anyway!
 U.S. – 3,250 electric utilities will begin to consolidate, and will all be
customers of solar
 Solar Industry now seen as a threat to conventional power interests which
is now using lobbying resources to shape the discussion – AB 32 example
 2013 Markets, include India, where they are around 10% deficit at peak
baseload. China market is larger. Asia and South America also
interesting.
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8. Bottom Line – Demand is On the Rise
Macro trends are increasing demand for Renewable Energy:
Energy Policy and
Security Regulation
Long term
Public
Fuel Price
Concern
Increased Risk
Demand
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9. Supply Constrained By Capital Intensity Barrier
Project development is often caught in a counter
productive cycle of capital intensity – frustrates demand
Capital
New projects slow or stop
due to lack “last mile” dev
construction financing
Constrained
Supply
Technology Expertise
Without experts or capital, Capital constraints drive out
new tech that reduce costs - experienced personnel
increase performance remain leaving less development
“risky” and are not deployed and technology expertise
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10. Emerging Business Strategy
Problem:
Capital Intensity Wall or Trap at Late Stage Solar Development
Demand is rising, late-stage capital is constrained, while early stage
developers focus resources on expanding their portfolios – no capacity
to carry thru to COD
Solution:
Mezzanine Capital and Expertise
New sources of capital managed by development experts can break
the cycle of constraints that is hold the industry back – every project is
seen as a distressed asset, requiring a boost to COD
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11. A New Large Scale Solar Initiative – Cont.
What We Are Doing:
CleanPath Ventures Manages The Workout:
Founded by pioneers of PPA model in US with over 150 MW of
solar completed and 1 GW+ pipeline – the team close and built over
50 commercial and large scale projects in the last 2 years
How We Are Doing it:
Six Key Strategies
 Roll up “distressed” assets facing a capital intensity barrier to COD
 Place “last mile” financing expertise to mid-to-late stage projects
 Workout to COD – bridge and warehouse for long-term owners
 Steer project development to emerging and underserved markets
 Add commercialization of new technologies – upstream advisory
services to downstream placement to fields of proven tech
 Manage risks throughout
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12. Project Development Cycle
NTP COD
Stage 1: Development Funding 2: Construction 3: Operations
Balance of
Fund invests Sponsor/
Plant and
development equity Developer Equity
Installation
before projects are
Equipment
construction ready. Tax Equity
Power REC Procurement
Some projects are
Sales Agreement
sold at NTP, or
before construction. Interconnection
Long Term Debt
and Transmission
Agreements
Permits Projects If not sold at NAT Projects are sold
eligible for – Fund arranges at COD to Asset
Resource
roll-up/JV construction Investor class –
Assessment Fund adds financing and Option: May hold
dev $$ invests equity asset thru tax
expertise credit recapture
Site Control Project Value as a paid service
~ Development Company ~ 12 to 36 Months (CleanPath) ~ 30 Year Owner
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13. CleanPath Ventures will Break the Cycle
CleanPath has the skilled developers and project
financiers to break the cycle of constraints through:
Provide mezzanine and “last mile”
Finance capital for stuck projects (otherwise
essentially distressed assets)
Work viable projects to NTP or COD
Develop and sell to owner-operators (may
hold thru tax credit recapture period)
Manage risks preventing the
Commercialize implementation of new technologies,
and reduce overall system costs
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14. CleanPath in the Renewables Value Chain
Risk and Reward Diminish Moving Down the Chain
Project Project
Research Commercial-
Phase Manufacturing Development/ Ownership
Development ization
Construction and OM
Late Stage
Capital
Early Stage
Venture
VC or
Private
CleanPath Tax Equity
Fund
Capital
Equity Ventures
Projected
IRR X% X% X% 7-12%
CleanPath Ventures primarily focuses on the Technology Commercialization
and Project Development/Construction Phases of the Value Chain, drawing on
its vast experience in the Project Ownership Operation phase
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15. Contact Information
Matt Cheney, Managing Director
CleanPath Ventures LLC
mcheney@cleanpathventures.com
415-244-6787
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