1. Financing Wood Pellet Boilers Presentation to BTEC Webinar October 22 2014

2. First a Little About Pelletco Pelletco was formed in 2010 to provide heat from wood pellets to commercial and institutional customers. As of October 2014 we have 15 installations and over 25 boilers operating We provide a turn-key heating soution for customers and operate and maintain the units which we call HeatPods™ Pelletco uses 100% sustainable local wood pellet fuel to create an energy source that burns cleaner than other materials. Pelletco replaces oil and propane and reduces emissions by 90%

3. Pelletco HeatPod™ examples include 3 Currently 15 Installations with additional 20-50 in next 12 months Schools Municipal offices Multi family housing Commercial

4. What is holding back Adoption? Cost advantage But…slow growth Source: EIA data and Pelletco analysis Quad BTU Residential Commercial

5. Concentration in NorthEast

6. Energy Conscious with High Incomes

7. 80% of households earn under $80k/year

8. Facing the challenge of financing Ease of use Propane and Natural gas are Cheap…today Willingness to change Upfront capital 8 Source: US DOE/EIA

9. Financing At $15-$30K installed the Capital Cost is too much for most homeowners Commercial customers view wood pellets as “risky” and a “bother” Most Institutions do not have the budget Requires capital availability Credit risk Technology risk

10. Financing alternatives Source: US DOE and DSIRE

11. Loans Banks are largely unwilling to lend against the boiler Project finance Tough to get at the collateral Most view it as personal loan or 2 nd mortgage/home equity credit line A few exceptions PACE financing is a great step forward Lien the property through property tax Municipality collects the payments Lower risk for banks Dealers do not have the financial capability tp provide financing Third party market has not yet developed

12. Rebate Programs for Renewables. www.dsireusa.orgwww.dsireusa.org / January 2013. 16 States, + Washington DC and 2 territories offer rebates for renewables. 16 States, + Washington DC and 2 territories offer rebates for renewables. Notes: This map does not include rebates for geothermal heat pumps, daylighting or other energy efficiency technologies.

13. Property Assessed Clean Energy (PACE).. www.dsireusa.orgwww.dsireusa.org / April 2013. 29 states, + Washington DC, authorize PACE (27 states have passed legislation and HI permits it based on existing law). 29 states, + Washington DC, authorize PACE (27 states have passed legislation and HI permits it based on existing law). *The Federal Housing Financing Agency (FHFA) issued a statement in July 2010 concerning the senior lien status associated with most PACE programs. In response to the FHFA statement, most local PACE programs have been suspended until further clarification is provided. statement

14. State Incentives Commercial http://www.dsireusa.org/incentives/index.cfm?EE=1& RE=1&SPV=0&ST=0&sector=Commercial&implementi ngsector=S&technology=boilers&sh=1&printable=1 http://www.dsireusa.org/incentives/index.cfm?EE=1& RE=1&SPV=0&ST=0&sector=Commercial&implementi ngsector=S&technology=boilers&sh=1&printable=1 Residential http://www.dsireusa.org/incentives/index.cfm?EE=1& RE=1&SPV=0&ST=0&sector=Residential&implementin gsector=S&technology=boilers&sh=1&printable=1 http://www.dsireusa.org/incentives/index.cfm?EE=1& RE=1&SPV=0&ST=0&sector=Residential&implementin gsector=S&technology=boilers&sh=1&printable=1

15. Grants US Forestry USDA Northern Forest

16. So, what’s to be done? 1.Bring down cost to install 2.Sell the banks 3.Lobby for incentives 4.Help one another

17. If you have a commercial or institutional customer who needs financing…maybe we can help 207-370-0350 info@peleltco.com This presentation is on our website at www.pelletco.com