1. SHAREHOLDERS MEETING 2010 WATERFURNACE RENEWABLE ENERGY, INC.

2. SHAREHOLDERS MEETING 2010 WATERFURNACE RENEWABLE ENERGY, INC.

3. SHAREHOLDERS MEETING 2010 WATERFURNACE RENEWABLE ENERGY, INC.

4. TOPICS FOR THIS MEETING WATERFURNACE RENEWABLE ENERGY, INC. 2009 Activities & Results First Quarter 2010 A Changing Industry and a Look Forward

5. 2009 ACTIVITIES & RESULTS WATERFURNACE RENEWABLE ENERGY, INC.

6. 2009 ACTIVITIES & RESULTS WATERFURNACE RENEWABLE ENERGY, INC. Record earnings on slightly lower sales Successfully tapped two replacement markets a)Traditional HVAC equipment change-outs b)Mining of old data bases to upgrade old geothermal installations

7. STATE OF WATERFURNACE WATERFURNACE RENEWABLE ENERGY, INC. Closed at $28.59 March 31, 2010 High of $32.15 April 16, 2010

8. FIRST QUARTER 2010 vs 2009 WATERFURNACE RENEWABLE ENERGY, INC.

9. Q1 EVENTS & ACTIVITIES WATERFURNACE RENEWABLE ENERGY, INC. Net sales increased by 9.8% YOY Some large expenses pulled forward from Q2 Great Dealer Meeting Operating favorably relative to our 2010 operating plan Earnings per share were $0.05 vs. $0.07 prior year

10. STATE OF WATERFURNACE WATERFURNACE RENEWABLE ENERGY, INC. Water Furnace Renewable Energy, Inc. Geothermal 330 shipments are up 13% 2010 March YTD compared to 2009 March YTD.

12. Take a proactive approach on shaping public policy Develop Public Relations campaigns for awareness & education Create consumer confidence by promoting standards, training, and certification/accreditation programs GEOs MISSION WATERFURNACE RENEWABLE ENERGY, INC.

17. GEOTHERMAL EXISTING RESIDENTIAL TAX INCENTIVES WATERFURNACE RENEWABLE ENERGY, INC. Federal Income Tax Credit: 30% of total GHP system cost No cap on maximum credit Can be used to offset AMT tax Can be combined with other tax credits Can be used in more than one year

18. GEOTHERMAL EXISTING RESIDENTIAL TAX INCENTIVES WATERFURNACE RENEWABLE ENERGY, INC. Eligibility: Home must be located in the U.S. Includes houses, cooperatives, condos, mobile homes Does not have to be your main home GHP must meet Energy Star requirements Placed in service before 2017

19. GEOTHERMAL EXISTING BUSINESS TAX INCENTIVES WATERFURNACE RENEWABLE ENERGY, INC. Federal Income Tax Credit: 10% of total GHP system cost No cap on maximum credit Can be used to offset AMT tax Can be used in combination with subsidized financing Can be used in more than one year

20. GEOTHERMAL EXISTING BUSINESS TAX INCENTIVES WATERFURNACE RENEWABLE ENERGY, INC. Accelerated Depreciation: 5 year MACR depreciation for entire GHP system Eligible for bonus depreciation in 2009 (50% write-off in first year) Eligibility: Building located in the U.S. Original use begins with taxpayer Placed in service before 2017 Can be used by regulated utilities Must be claimed by the owner of the property

21. GEOTHERMAL EXISTING STATE INCENTIVES WATERFURNACE RENEWABLE ENERGY, INC. 37 States have Financial Incentives for GHPs Many are new Sales tax and property tax exemptions, income tax credits, grants 17 States have tax credits or grants 28 States have Regulatory Incentives for GHPs Green public building requirements 36 States have Utility Incentives for GHPs Voluntary DSM loans and rebates

22. GEOTHERMAL OVERVIEW WATERFURNACE RENEWABLE ENERGY, INC. GHPs are not geothermal steam power generation 50 state technology Uniquely address one of the largest components of US energy consumption Incremental cost is the underground heat exchange piping Cannot be imported from China Local skilled job creation GHPs do not fit neatly into existing policy boxes Renewable and Energy Efficiency Geothermal Technology and Building Technology

23. CURRENT FEDERAL POLICY INITIATIVES JOBS-RELATED BILLS WATERFURNACE RENEWABLE ENERGY, INC. Home Star (Cash for Caulkers) Silver Star would provide up to $3,000 in instant rebates GHPs are eligible Gold Star would provide up to $8,000 in instant rebates GHPs are eligible Rural Energy Savings Program Administered through electric co-ops 10 yr very low interest (max 3%) financing for EE retrofits Paid on electric bill Strong bipartisan and bicameral support GHPs are eligible

24. NORTH AMERICAN GEOTHERMAL INDUSTRY SHIPMENTS WATERFURNACE RENEWABLE ENERGY, INC. 16% Increase Single Family Residential - 63% of Total New Homes 65% Existing Homes 35% Commercial – 37% of Total Schools and Universities Public and Government Religious Buildings Multi-family Housing Office Buildings Retail

25. GEOTHERMAL DOE INDUSTRY ROADMAP GROWTH GOAL WATERFURNACE RENEWABLE ENERGY, INC. 1 Million GHPs Annually by 2017 (39% CAGR) Results in 3.3 million cumulative GHP installations by 2017 26 MMT annual CO 2 reduction 520 MMT lifecycle CO 2 reduction over 20 yr GHP life Creates 100,000 new jobs Conventional A/C and heat pump market is 6 to 8 million units annually

26. GOOD NEWS WATERFURNACE RENEWABLE ENERGY, INC. Federal tax credit of 30% uncapped should remain in place until 2016 Many other pieces of legislation are in the works – mostly positive for geothermal Mainstream dealers and distributors looking to branch out into geothermal

27. BAD NEWS WATERFURNACE RENEWABLE ENERGY, INC. Residential new construction will be below 1 million starts in 2010 By 2012 most forecasts are for an industry that is between 1.2 million to 1.5 million The Wild Card: Fuel Costs

28. SUMMARY WATERFURNACE RENEWABLE ENERGY, INC. 2009 was our highest earnings year on record despite lower sales First quarter 2010 better than internal plan As new construction gains traction, WaterFurnaces performance should accelerate

29. WATERFURNACE RENEWABLE ENERGY, INC. QUESTIONS & ANSWERS SHAREHOLDERS MEETING 2010

30. WATERFURNACE RENEWABLE ENERGY, INC.