Over 60,000 Honda MCHP Units at work in Japan Boiler, storage tank, and heat exchanger unit for Japanese home market Over 60,000 Honda MCHP Units at work in Japan All in just last 4+ years Honda MCHP unit

The Heating System That Makes Electricity! Warm Air freewatt System 83-92% Efficient Honda MCHP Engine Generator Module Stage One Heat 12-13 MBH Electric 1.2 kW @ 240 VAC Coolant Lines 93% AFUE High Efficiency Condensing Furnace w/ ECM Blower Second Stage Heat Full Load Hybrid Integration Module System Controller Heat Led Two Stage Heating System The Heating System That Makes Electricity!

Typical Installation Connections: - Gas - Electrical Thermostat Venting Condensate Coolant Lines - Internet Installed by Factory Authorized Dealers (Heating/Cooling Contractors)

Gas Usage and Electrical Savings (Beta Sites) freewatt uses about the same amount of natural gas as the replaced system to make the same amount of heat freewatt makes electricity as a bonus beta units average 3400 kWh per year in the Boston area beta units produce only 1.0 kWe versus 1.2 kWe for production model projected 4000 kWh/year average with production model The Heating System That Makes Electricity!

Reduced CO2 Emissions Electrical Generation Only Based on average emissions for the New England electric grid CO2 reduction could be 1to 4 or more tons per year depending on average emissions for the local grid A utility could aggregate the emissions credits for thousands of installations

freewatt Systems Now On Sale Over 50 Production Model Systems Installed to Date Hydronic freewatt systems also available

What Can freewatt Do? Nearly double the Governor’s energy savings objective -28% immediately Provide 80% of the energy and environmental benefit of residential solar electric power at 30% of the cost Neutralize residential peak demand from grid Produce significant amounts of on-site electric power at total costs comparable to typical residential utility rates Provide automatic back-up power during grid outages Widely deployable: Over 25 million candidate home sites Siting challenges: None

Energy Savings with freewatt The old way – gas fired central heat and grid power Typical home heating fuel use about 100,000,000 Btu/yr (2500 ft. sq. home) 70,000,000 Btu heating delivered at 70% efficiency Typical annual electricity consumption in NY’s single family homes is about 9,000 kWh Net average delivered efficiency of grid is 30% with line losses, etc. Total energy needed for electricity generation is about 9,000 kWh x 3412 Btu/kWh divided by 0.3 which equates to another 102,360,000 Btu/yr So, total energy consumption is 200,000,000 Btu/Yr. The new way - generate 5,000 kWh/yr by replacing old heating system at 70% efficiency with a freewatt Micro-CHP system No actual increase in gas consumption due to increase in total efficiency to 90% (70% for heating with added 20% for electricity for a total of 90%) 5,000 kWhr is 55% of total electricity needed per year. So now consuming 145,000,000 Btu/yr, i.e. 100,000,000 Btu/yr for heating and 45,000,000 Btu/yr for electricity. 55,000,000 Btu/yr saved. Percentage reduction in total home energy use is 55/200 = 28% Nearly double the Governor’s objective! (15 by 15)

Power Produced during grid outage Winter Spring Summer Fall Power Generation Profile Grid-Connected Home with freewatt Micro-CHP Power Produced During Summer or Winter Peaks ~ 100 hours per year, controlled by aggregator Power Produced during grid outage 2 kW Power Produced While Heating Home ~ 4,000 hours per year, controlled by home thermostat and hot water demand 1 kW Winter Spring Summer Fall

Consumer Selling points Significantly reduced electric bills Improved thermal comfort Ultra-quiet operation Payback on their investment Reduced impact on the environment Internet connectivity Energy Security

Benefits to the Homeowner Choice to Make a Positive Change in Energy Use and Environmental Impact without Sacrifice Compares to : Switching from SUV to compact Downsizing your home Turning off about half of all your appliances

Climate Energy freewatt vs. Solar PV Northeast Residential Application Design Basis: Reduce Grid Power Use by 50% Solar PV: 4 kW capacity CE Micro-CHP 1.2 kW capacity Utilization 10% 50% Applicability < 25% Near 100% Incremental Cap. Cost $35,000 $10,000 CO2 Reduction for Electric Generation ~ 50% ~33% NOx Reduction >40% Primary Energy Savings ~50% ~30% Bonus Feature for Customer Decorated Roof Comfort and Security Conclusion: Freewatt provides about 80% of the benefit of Solar PV for less than 30% of the cost.

What can AEE do to help fulfill the promise of Micro-CHP What can AEE do to help fulfill the promise of Micro-CHP? Let your legislators and the PSC know that you support… Net metering: keep it simple and low cost to interconnect and measure Capacity Aggregation: allow thousands of homes to combine to provide dispatchable Megawatts Incentive parity with “renewable” energy Education

Thank You! Karl Mayer Business Development Manager Climate Energy, LLC New York Office ECR International, Inc. 85 Middle Road Dunkirk, NY 14048 Phone: 877-386-5475 Ext. 3474 or 716-366-5500 Ext. 3474 Fax: 716-366-3049 E-mail: karlm@ecrinternational.com Website: www.climateenergy.com Contact Information