Company LOGO K2 Solar Confidential Solar Photovoltaic (PV) Systems Overview April 21, 2015 CA License #919458

K2 Solar Confidential Agenda  Global and US Solar PV Markets  US Market Segments and Challenges  Government Policies  Solar PV System Design  Financing  Emerging Trends in Solar

K2 Solar Confidential Global Solar PV Market Source: EPIA 2014 Global PV Cumulative Installed Capacity Share

K2 Solar Confidential Solar PV Market Growth

K2 Solar Confidential US Solar PV Market 2014 Total Installations: 6,201 MW DC Total US Market: $16B YOY Growth: 31% Source: GTM Research / SEIA 2015 ITC Drops: 30%=>10%

K2 Solar Confidential Solar Irradiance Levels in the US Approximate Area required to generate solar energy for entire US (CPV- Nevada Solar One) (Apple, Ikea, Capital Partners) NC: 35% State Tax Credit

K2 Solar Confidential Centralized Solar Distributed Solar Solar PV Market Segments Residential  System Size: 3-15 kW DC  Installation Type: Sloped roofs (composition shingle / ceramic tile)  Cost: $3.25-$5.00/watt DC  Key Issues: Cost Savings/month, Made in the USA Commercial and Industrial  System Size: 30-1,000 kW DC  Installation Type: Flat Roof, Ground Mount, Carports  Cost: $2.50-$4.00/watt DC  Key Issues: Return on Investment & Cash Flow Utility Scale  System Size: MW DC  Installation Type: Ground Mount  Cost: <$2.00/watt DC  Key Issues: ROI / Minimal Risk / Bankability

K2 Solar Confidential Residential Installations

K2 Solar Confidential Commercial & Industrial Installations

K2 Solar Confidential Solar Carports: Schools/Government

K2 Solar Confidential Utility Scale Installations

K2 Solar Confidential US Renewable Energy Production Source: eia.gov Solar: 1% Renewables: 16%

K2 Solar Confidential What Went Wrong at Solyndra?  Groundbreaking Technology beaten by the market  Unique design enabled 20% greater energy harvest from reflected light  Reduced Balance of System (BOS) costs  Simplified installation- No anchoring  IRS Private Ruling to include roofing costs in 30% Investment Tax Credit  High cost structure (fully automated production line)- could not ramp volume and reduce costs as quickly as market  Misrepresentation by management

K2 Solar Confidential Aug 2011 Declared Bankruptcy $100M in Revenue Sep 2010 Fab 2 Opened ~60% Drop in Price Effects of Government Industry Support 2006: First systems installed  Solar Trade Tariffs  2013 Solar PV Cells Manufactured in China: 31%+  2014 Solar PV Modules Manufactured in Taiwan and China: 26%-59%  7 of top 10 PV module manufacturers are now in China SOLYNDRA TIMELINE

K2 Solar Confidential Shift in Solar Cell/Module Manufacturing 15 Source: NREL  Solar PV Module Costs  ~50% of module cost driven by cost of polysilicon wafer  Polysilicon Cost -2007: $450/kg -2015: $18/kg

K2 Solar Confidential 16 How a Solar PV System Works Monitoring System PV Module Arrays PV Combiner Box(es) DC/AC Inverter DC Disconnect Switch AC Disconnect Switch Main AC Service Panel UTILITY ELECTRIC GRID AC Loads Electric Meter www Irradiance, Wind, Temp Meters PV Output Meter

K2 Solar Confidential Solar PV Modules  Solar PV Modules  Poly- or mono-crystalline silicon  60 or 72 Cell Modules (Black anodized frames for residential market)  Size: 60 Cell (250W-265W) / 72 Cell (300W-320W)  Manufacturers’ Warranty:  10-year Product  25-year Performance: Linear: yrs, yrs  Leading Manufacturers (2014): 1. Trina 2. Yingli 3. Canadian 4. Jinko 5. JA 6. Sharp 7. Renesola 8. First Solar 9. Hanwha SolarOne 10. Sunpower 10. Kyocera China Japan China USA China USA Japan Leading US Residential Brands: Poly-crystalline Frameless Module with Clear Backsheet Bi-facial PV Modules Mono-crystalline

K2 Solar Confidential Solar PV Inverters  Solar PV Inverters  Residential: Single Phase Inverters & Micro-inverters => Power Optimizers  Commercial: Three Phase Central Inverters => String Inverters => Power Optimizers  Utility: Factory Integrated Central Inverter and Transformer- MW Scale

K2 Solar Confidential How Solar Saves Money  Utility Rate Schedules  Residential: Tiered Structure  Rates increase as the consumer uses more energy. Solar shaves off top tiers (most expensive)  Commercial Rates: Time-of-Use (TOU) Structure  Energy (kWh) and Demand charges (kW)  Energy (kWh)- Actual energy consumed over time:  Demand (kW)- Energy draw rate: Set by any 15-minute interval in the entire month  Net Metering  Solar produces ~70% of its annual energy during summer months between 9a-4p  Allows over-production (kWh) in summer months to create credits ($) that offset debits in the winter months.  Monthly Statements with Annual True-up Billing

K2 Solar Confidential Cost Savings Calculation with New A-6 TOU Rate Schedule: Commercial Electricity Rate Analysis Existing E-19 Medium Commercial Demand Rate Schedule:

K2 Solar Confidential Example- Cash Flow Analysis

K2 Solar Confidential Example- Cash Flow with PACE Financing Courtesy of: Cash Flow Positive

K2 Solar Confidential Solar Financing  Equipment Loans  Residential: year loans. Homeowner owns solar system. (Remaining Electric Bill (with Solar) + Loan Payment < Existing Monthly Electric Bill)  Commercial: 5-7 year commercial loans (Short term = Negative cash flow), Solar eqpt is collateral  Leases  Residential: year Leases where 3 rd party installs, owns, and maintains the system (Remaining Electric Bill (with Solar) + Lease Payment < Existing Monthly Electric Bill)  Commercial: 5-7 year Operating Leases (off-balance sheet, at end of lease). Short term => high payments => Negative cash flow  Power Purchase Agreements (PPA’s)  3 rd Party installs, owns, and maintains systems.  Property owner pays for all energy generated by system for $/kWh price + annual price escalator.  Limited benefits to property owner. 3 rd party gains cost savings, tax benefits, incentives, and depreciation deductions  Property Assessed Clean Energy (PACE) Financing  Property owner obtains loan from local County. County puts special assessment on property taxes. Property owner pays back loan over term (up to 20-years) with additional payment on property taxes.  County sells municipal bond (PACE bond) to private accredited investor  Funds flow through County to property owner to pay for system  Off-balance sheet, automatically transferable upon sale

K2 Solar Confidential Emerging Trends in Solar Market  Solar PV + Energy Storage  Solves problem of intermittent generation from solar/wind  Reduces customer demand charges  Li-Ion battery systems & Flow batteries- Vanadium / Zinc / Aqueous Hybrid Ion  PACE (Property Assessed Clean Energy) Financing  Loan against the equity in the property and invoiced as assessment on property taxes  Covers any Energy Efficiency and/or Renewable Energy Project  No Capital & Cash-Flow Positive Solar Deals  Off Balance sheet and no additional debt load  Automatically transferable upon sale of property  Government Policy  Reduction of Federal Investment Tax Credit  State incentives programs for renewables  National Energy Policy  Utility Pushback  Although small, Distributed Solar threatens utility monopolies and business model  Efforts to eliminate Net Metering, Shifting cost to Demand rates, Fixed charges for solar  SolarCity’s Grid Logic (Micro-grids) & SunVerge (Solar Integrated Storage)

K2 Solar Confidential Building Integrated PV Installations

K2 Solar Confidential Building Integrated Photovoltaics (BIPV)

Company LOGO K2 Solar Confidential Thank you!