. PANC Annual Conference May 16, 2012 Progress on the California RPS

2 First Solar Confidential & Proprietary 5/8/2010 | © Copyright 2010, First Solar, Inc. Progress on the California Renewable Performance Standard Utilities confident about meeting 33% Renewable prices have dropped dramatically Transmission is being constructed The Large Generator Interconnection Process has been reformed – again The grid is accommodating utility-scale solar

3 First Solar Confidential & Proprietary 5/8/2010 | © Copyright 2010, First Solar, Inc. Historical Renewable Procurement by CA IOUs Renewable Procurement Has Increased Substantially Source: CPUC filings. Note: are historical, 2011 and on are projections based on March 2012 CPUC Compliance Filings.

4 First Solar Confidential & Proprietary 5/8/2010 | © Copyright 2010, First Solar, Inc. Historical MPR and Solar Contract Signing By Solicitation Year Renewable Energy Prices Have Decreased Substantially Source: MPR values from CPUC through 2011 MPR. Percentage of PV contracts above and below MPR, by solicitation year, from April 2012 CEC. Note: MPR reflects the next year’s MPR (i.e MPR value reflects MPR for a project with a 2012 COD). Represents both CSP and PV. (1) 2004 MPR value reflects peaking MPR. (1) ,736 3,563 2,668 2,262 1, MW Solar Solicited

5 First Solar Confidential & Proprietary 5/8/2010 | © Copyright 2010, First Solar, Inc. Transmission upgrade Approval statusRenewable Potential Online ISOCPUCMWTWh/Yr 1 Carrizo-MidwayLGIANOC effective Sunrise PowerlinkApproved 1, Eldorado-IvanpahLGIAApproved1, Pisgah-LugoLGIANot yet filed*1, Valley-Colorado River ApprovedApproved** 4, West of DeversLGIANot yet filed TehachapiApproved 4, Tehachapi Wind/Solar Diversity N/A 1, Cool Water-LugoLGIANot yet filed South Contra CostaLGIANot yet filed Borden-GreggLGIANot yet filed Path 42ApprovedNot yet filed1, Other-Outside of ISO GridN/A 3, Total 22, TWh/year needed in ISO area to meet 33% goal: - reflected in 2010/2011 Transmission Plan 44 * Large Generator Interconnection Agreement ** Petition to modify CPCN pending. Transmission underway to meet 33% RPS in 2020 Total cost = $7.2 billion Page 5

6 First Solar Confidential & Proprietary 5/8/2010 | © Copyright 2010, First Solar, Inc. 2008: Generator Interconnection Process (GIP) Reform 1 –Increased cost to apply and stay in process –Network Upgrade costs & timing studied in cluster rather than serial process –Only large projects (>20 MW) can achieve Full Capacity Deliverability 2010: GIP Reform 2 –Combined SGIP & LGIP into a single interconnection procedure –Introduced CAISO deliverability options for all projects, including Small and previously Energy Only projects –Coordinated with the Transmission Planning Process (TPP) for 33% Renewable Procurement Goals 2012: TPP-GIP and GIP Reform 3 –Holistic GIP and TPP to approve upgrades with ratepayer funding –Aligning the interconnection process with the TPP resource portfolios –Structure GIP study process to produce realistic results even with extreme interconnection queue volume –Full Capacity Deliverability would be awarded to projects with environmental permits, PPAs and financing, or willing to pay for major upgrades without reimbursement. Progress on Transmission Interconnection Reform

7 First Solar Confidential & Proprietary 5/8/2010 | © Copyright 2010, First Solar, Inc. Agua Caliente – Supporting Grid Integration Quote from the North American Electric Reliability Corporation’s Integration of Variable Generation Task Force (IVGTF): “As VERs [Variable Energy Resources] increasingly augment and/or supplant conventional generation, the reliable operation of the grid will depend increasingly on the reactive power control, active power control and other contributions from VERs. The new reliability standards should require that VERs adequately mimic or replace the capabilities that are lost when VERS supplant conventional generation.” Agua Caliente Controls include –Reactive Power and Voltage Control –Low Voltage Ride-Through –Low/High frequency Ride Through –Active Power Control Additional features such as frequency regulation and inertial response possible, but require production curtailments IVGTF Draft Report: Special Reliability Assessment: Interconnection Requirements for Variable Generation, March (p 15)

8 First Solar Confidential & Proprietary 5/8/2010 | © Copyright 2010, First Solar, Inc. Obstacles to a Successful RPS Program Too many sub-programs: RAM, FiT, Small PV, UOG Is integration a problem? Are rates a problem? California going it alone