Competitive Solar Business Models for the GCC Aaron Morrow 4/14/14

The Solar Business Model If it ain’t Broke? GW through 2013 Declining Module Prices Imminent Grid Parity

Value Potential Value Creation Value Proposition Customer Segments Global Solar Business Models What is the Business Model? Regulations and Incentives Market Competitive rates Attractive returns Stable returns Ancillary services Market Competitive rates Attractive returns Stable returns Ancillary services Societal Environmental Job Creation Future Benefit Societal Environmental Job Creation Future Benefit Key Activities Financing Project Dev. EPC Construction Management Key Activities Financing Project Dev. EPC Construction Management Key Resources Capital Key Resources Capital Key Partnerships Finance Institutions Developers EPC Key Partnerships Finance Institutions Developers EPC Customer Relationships Project Sales SPSA/PPA/Lease Customer Relationships Project Sales SPSA/PPA/Lease Sales Channels Project Dev. Project purchase Retail Sales RFPs/Tenders Sales Channels Project Dev. Project purchase Retail Sales RFPs/Tenders

Value Creation Value Potential Value Proposition Customer SegmentsCustomer Segments Customer SegmentsCustomer Segments GCC Solar Business Model What’s Different? Market Opportunity cost of fuel Ancillary services Market Opportunity cost of fuel Ancillary services Key Activities Key Resources Capital Key Resources Capital Key Partnerships Customer Relationships Sales Channels Societal Resource preservation Energy security Capacity development Environmental Societal Resource preservation Energy security Capacity development Environmental Regulations and Incentives Customer Segments

Customer SegmentsCustomer Segments Customer SegmentsCustomer Segments GCC Solar Business Model The GCC Value Proposition Market Opportunity cost of fuel Ancillary Services Market Opportunity cost of fuel Ancillary Services Societal Resource Preservation Energy Security Capacity Development Environmental Societal Resource Preservation Energy Security Capacity Development Environmental Energy infrastructure heavily dependent of depletable resources High unemployment Concern of history of PV development Concerns about carbon intensity and global trends towards lower carbon footprint Energy infrastructure heavily dependent of depletable resources High unemployment Concern of history of PV development Concerns about carbon intensity and global trends towards lower carbon footprint Real value of the energy is not directly experienced by final consumer No market pull from retail side Society as a whole indirectly pays for fuel Opportunity/production cost of consumed fuel Market cost of imported fuel Real benefits for managing grid issues Real value of the energy is not directly experienced by final consumer No market pull from retail side Society as a whole indirectly pays for fuel Opportunity/production cost of consumed fuel Market cost of imported fuel Real benefits for managing grid issues

Value Potential Customer SegmentsCustomer Segments Customer SegmentsCustomer Segments GCC Solar Value Proposition Implications on Value Potential Customer Relationships Project Sales/EPC New model for finance Revenue Ownership Customer Relationships Project Sales/EPC New model for finance Revenue Ownership Sales Channels RFP/Tenders Some project acquisition Limited opportunity for retail sales Sales Channels RFP/Tenders Some project acquisition Limited opportunity for retail sales Customer Segments Utilities Government or Governmental Agencies Customer Segments Utilities Government or Governmental Agencies

Value Creation GCC Solar Value Proposition Implications on Value Creation Key Activities Capacity development Advisory services Construction Management Finance Key Activities Capacity development Advisory services Construction Management Finance Key Resources Local experience/content Grid Integration expertise Power marketing expertise Key Resources Local experience/content Grid Integration expertise Power marketing expertise Key Partnerships Regional finance institutions Traditional finance Sharia compliant finance Global OEMs Local manufacturing= Local jobs Next generation technologies Regionally specific advantages Market specific value Differentiable global value Key Partnerships Regional finance institutions Traditional finance Sharia compliant finance Global OEMs Local manufacturing= Local jobs Next generation technologies Regionally specific advantages Market specific value Differentiable global value

Value Potential Value Creation Customer Segments Utilities Governments Government Agencies Customer Segments Utilities Governments Government Agencies GCC Solar Business Models Model for Success Key Activities Capacity development Construction Management Finance Key Activities Capacity development Construction Management Finance Key Resources Local experience Grid Integration Power marketing Key Resources Local experience Grid Integration Power marketing Key Partnerships Regional Finance Global OEM Next generation technologies Key Partnerships Regional Finance Global OEM Next generation technologies Customer Relationships Project Sales/EPC EOA Customer Relationships Project Sales/EPC EOA Sales Channels RFP Project acquisition Sales Channels RFP Project acquisition Value Proposition Market Opportunity cost of fuel Ancillary services Market Opportunity cost of fuel Ancillary services Societal Resource Preservation Energy Security Capacity Development Environmental Societal Resource Preservation Energy Security Capacity Development Environmental Regulations and Incentives