$0 down pay as you go solar

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The Proposition

Clean energy, from your own roof,

that’s more affordable than the

grid – a no brainer!

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Solar Adoption is on a High Tech Trajectory:

Source: CTIA – The Wireless Asscoiation

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MONTHLY SAVINGS

Before Solar SolarLease

Utility Bill $287 $106

SolarLease Payment $146 Total Monthly Cost $287 $252

Net Monthly Savings $35

$300 $200 $0 $100 OLD UTILITY BILL SOLARLEASE PAYMENT NEW UTILITY BILL

Pay-as-you-go solar

• Lease finance with performance guarantee: you pay a fixed amount every month, with annual adjustments to match performance

• PPA: The solar company owns the solar panels. You pay for the electricity.

• In both cases, no large upfront payment means more people can go solar

• How it works in the US:

• 15-20 year lease

• Sungevity owns and maintains system

• Customer gets clean solar power

• A typical homeowner saves about 15% net with $0 down in their first year

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 Idea of $0 down cash-flow positive is very attractive

Why Solar Leasing works in US

30% federal government tax incentive

=

interested investors

What has worked in Australia

 Solar loan is perceived as debt

 Solar loan is not cash flow positive

 Friction in the credit approval process

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Market share growth in California from

March 2011 to February 2012

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The US industry

Third-party-owned solar pumped more than $938 million

into California’s economy in 2012.

Source: Sunrun & PV Solar Report

Third-party finance is set to propel the growth of the solar

residential market in the US from $1.3 billion in 2012 to

$5.7 billion in 2016.

Source: GTM Research report

This model was rare five years ago!

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Major Financial Players Are Going Big on Solar

Berkshire Hathaway US Bank & East West Bank Capital Dynamics Dupont GE Google Kohlberg Kravis Roberts MetLife US Bancorp Credit Suisse

Dollars Invested ($millions) Recent Investments

$5.7B

Recently announced investments

$109B

Saudi Arabia’s 20-year solar investment plan

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Hurdles in Australia

 High cost of funds

 Lack of debt finance

 Currently requires straight equity (industry participants or private investors)

 Lack of simple customer credit check processing

Sungevity’s Experience

 In the US 97% go for financed solar

 Trialing 7 year solar payment plan here - struggle to be cash-flow positive

 To be attractive offer has to be cash-flow positive from Day 1

 Need a smooth transition into and out of the finance process

 People are wary of debt

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What’s required for success

You need to have in place:

 Rigorous credit control & assessment of end customer

 Simple, online, “instant” credit assessment of customer

 Billing systems

 Accurate monitoring systems

 Longer term agreement with customer

 Longer term finance to enable cash flow positive proposition

(Currently at 5-7 year money)

 Bankable product - recognised manufacturers with reliable

warranties

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The good news is…

 Pay-as-you-go solar is off the ground here in Australia

 Today there are many people working on financed solar

products

 We’re educating about solar as an asset class

 Banks, investors and the market are starting to understand this new asset class

 No longer an un-trodden path

 To make it work in the future we need $0 down cash-flow

positive

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iQuote includes:

• Pay-as-you-go cost • Savings • PAYG vs. Buying • Environmental impacts

Sungevity can then

install, manage,

and maintain

through life of

agreement

Sungevity’s “ONLINE SUNSHINE”

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Sungevity Monitoring

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To buy or not to buy – that is the question!

We’re giving consumers options

• Do consumers want to own generation assets?

• Ownership isn’t necessarily for everyone

Solar as a service can bring solar to more Australians,

not only because it eliminates the upfront cost, but

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Benefits to the industry Benefits to the consumer

Ongoing relationship with the customer

$0 upfront cost = accessibility Greater control over the solar

performance

Solar power is cheaper than grid power

Creates a greater market reach Immediate Savings

Steady return on investment Warranty & maintenance handled by Sungevity

Benefits of pay-as-you-go

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Get ready for the Rooftop Revolution

• Solar has barely scratched surface of $2.2 trillion market!

• A game changer for solar industry and retail electricity industry • New investment opportunities for investors

• Great return profile for superannuation funds • Innovating renewable energy financing

• Creating an investment vehicle for direct investment into 1000’s of solar generators

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