Enabling Renewable Energy: Successful Policies Tallahassee, FL February 3, 2009

1. Enabling Renewable Energy: Successful PoliciesTallahassee, FLFebruary 3, 2009

2. MMA Renewable Ventures Overview MMA Renewable Ventures Overview • MMA Renewable Ventures is a leading developer, financier, owner and operator of renewable energy and energy efficiency systems in the U.S. • Based in San Francisco, we have been offering PPAs since 2002 • 41 MW of solar PV in operation including the largest PV plant in operation in the United States (14 MW project at Nellis Air Force Base) • Raised approximately $120 million of tax equity (closed into projects) • 21 different customers in 10 states (investor-owned utilities, municipalities, corporations, military, retailers, etc.) • Range of solar technologies: (crystalline, thin film, CIGS, etc.) • Proven capabilities in project finance, due diligence, and physical asset management • Recently formed a joint venture with Suntech, the largest global solar panel manufacturer, to develop large scale projects • In January we had our first success, a 30MW project in Austin, TX

3. The PPA Value Proposition • Retail PV market shifting to Power Purchase Agreement (PPA) model because of its customer value proposition • Capital conservation: no up-front capital expenditure • Immediate savings compared to utility rates • Long-term hedge on utility rates • Limited operational risk for customer • Wholesale PPA helps utilities avoid risks around newer technologies • PPA manages risk for the investor and developer as well • PV PPA model began with non-residential systems; now being modified for residential systems

4. Solar – Ideal Clean Energy Option • Can be sized to small loads • Matches peak demand profile • Can be sited within any utility’s or municipality’s service territory • Easy to permit • Fast to install • Long-term supplier warranties and proven technology • Visible demonstration of clean energy commitment

5. Renewable Energy Opportunity • Federal legislation is coming and its in Florida’s best interests to get out in front • Obama administration is expected to aggressively promote a Federal RPS and climate change legislation • Early action can mitigate risk, for example by avoiding investment in new fossil fuel generation assets that lock-in costs for the long term • Customers, investors, and industry entrants need education and training in renewable energy • Renewable energy is popular and generally easy to sell. Messages include: • Energy independence • Climate change • ‘Green’ Jobs from labor-intensive industries • Renewable energy can be an engine for economic growth 1Energy Information Administration, 2006 data

6. Policy Principles to Promote Renewables • Set a clear policy direction with a predictable long term framework • Include time-bound goals with quantified targets • Provide stable financial incentives sufficient to motivate key stakeholders • Energy assets with long lifecycles need long term policies • Predictability lowers project development and financing costs – investors and lenders seek secured cash flows to reduce risk • Create an enabling environment for business by addressing key market impediments • Markets often cannot respond if a single key policy feature is missing • Consistent policies will encourage suppliers of renewable energy solutions to establish a long term presence in Florida • Establish public-private partnership vehicles • Incorporate a flexibility mechanism to correct policy errors • Oversights are likely in new policy space with technological change

7. RPS – A Critical Piece in the Puzzle DSIRE: www.dsireusa.org January 2009 Renewables PortfolioStandards ME: 30% by 2000 10% by 2017 - new RE MN: 25% by 2025 (Xcel: 30% by 2020) VT: (1) RE meets any increase in retail sales by 2012; (2) 20% RE & CHP by 2017 *WA: 15% by 2020 • NH: 23.8% in 2025 ND: 10% by 2015 WI: requirement varies by utility; 10% by 2015 goal • MA: 15% by 2020+1% annual increase(Class I Renewables) MT: 15% by 2015 OR: 25% by 2025(large utilities) 5% - 10% by 2025 (smaller utilities) *MI: 10% + 1,100 MW by 2015 RI: 16% by 2020 SD: 10% by 2015 CT: 23% by 2020 • *NV: 20% by 2015 *UT: 20% by 2025 IA: 105 MW • NY: 24% by 2013 • OH: 25%** by 2025 • NJ: 22.5% by 2021 IL: 25% by 2025 CA: 20% by 2010 • CO: 20% by 2020(IOUs) *10% by 2020 (co-ops & large munis) • PA: 18%** by 2020 • MO: 15% by 2021 • MD: 20% by 2022 • NC: 12.5% by 2021(IOUs) 10% by 2018 (co-ops & munis) • AZ: 15% by 2025 • *DE: 20% by 2019 • DC: 20% by 2020 • NM: 20% by 2020(IOUs) 10% by 2020 (co-ops) *VA: 12% by 2022 HI: 20% by 2020 TX: 5,880 MW by 2015 28 states have an RPS; 5 states have an RE goal State RPS Solar hot water eligible • Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE ** Includes separate tier of non-renewable “alternative” energy resources State Goal

8. Renewable Portfolio Standard • Standards must be binding • Sufficient non-compliance penalties to motivate utilities • Limits on permissible extensions • Is single best way to motivate utilities to purchase wholesale renewable energy • Additional financial incentives are helpful, but may not be unnecessary • Carve-outs for higher cost / higher priority technologies are effective • Can include energy from clean coal, efficiency measures, and other “clean” resources to meet overall portfolio standard targets 1Energy Information Administration, 2006 data

9. Renewable Energy Financial Incentives • In general • Performance-based subsidies better motivate actual clean energy production than subsidies keyed to system size • Subsidies via state tax code shrink investor pool. Direct payments are preferable to project sponsors • REC-based systems require policy predictability for long term contracting • Key incentives to motivate large scale demonstration of new technologies • Tax exempt bonds, tax-based incentives, loan guarantees, capital infrastructure grants, parity of incentives across alternative fuels • Land use incentives to use brownfield sites for clean technology plants • Financial incentives must be sufficient; otherwise, no market activity • Feed-in tariffs – are they the path forward? • One key issue is how to size the tariff payment to maximize economic benefit

11. Challenges • Tough economic conditions create budget constraints for everyone • Tempting to postpone new programs to a better day, but the case for renewable energy remains stronger today than ever • Private sector funding sources for renewable energy projects are severely limited • Tax equity, a critical economic incentive for renewables, has dried up • Credit crisis remains: banks are reluctant to lend • Proposed Federal Stimulus package includes measures to address both tax equity and debt for renewable energy • Energy policy is complicated • But worth the investment of time and effort to institute policies to promote renewable energy

12. Final Thoughts • Critical to incentivize a portfolio of renewable energy options • Renewable energy industries are still maturing in the U.S. • Careful policy design is essential to enable future growth of multiple technologies • Renewable energy projects seek long term, fixed price contracts with creditworthy counterparts in clear policy regimes • To match needs of capital partners • To continue to drive cost reductions for renewable energy • Florida is on the path towards a bright solar future • Execution of policy goals to actually get projects built can be tricky

13. THANK YOU Dan Halperin Senior Director, Project Development Dan.Halperin@mmarenew.com T: 415.229.8849 www.mmarenewableventures.com