Combining PPAs and PACE: The Path

to Commercial Solar ProsperityYann BrandtEVP of Development Demeter Power GroupAugust 13, 2013

Yann Brandt, Executive VP, DevelopmentYann is the Executive Vice President of Development for Demeter Power. Demeter Power, through its innovative PACE3P financing platform, invests in distributed clean energy projects. PACE3P combines the powerful tools of energy services contracts like PPAs, leases, and shared savings contracts with PACE financing. Yann oversees the group's development relationships contractors, developers and industry associations. He also publishes a daily solar energy news brief widely subscribed on SolarWakeup.com.

Speaker Biography

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©2013 Demeter Power Group, Inc.All rights reserved.

Who is Demeter Power?

What do we do? Develop, fund and operate solar energy and other distributed generation

assets

Who are our customers? We work with contractors to develop distributed generation assets

exclusively to non-municipal, non-residential buildings in our target geographic markets

Company Background Team with expertise in solar, legal, finance and commercial real estate

development Created the first Statewide commercial PACE program in Florida Inventors of PACE3P®, the first financing product in the class

PACE3P® financing products help commercial buildings “de-meter” from the grid

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©2013 Demeter Power Group, Inc.All rights reserved.

Commercial Solar Opportunity

Solar PV Built By End Use Customer In CA

Energy Usage By End Use Customer In CA

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Residential Commercial IndustrialC

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©2013 Demeter Power Group, Inc.All rights reserved.

Lack Of Third-Party Ownership Financing

Why The Market Disparity? Residential & Government Sector: credit scores / bond rating used to

assess risk Commercial Sector: Currently there is no uniform method to

assess (or mitigate) risk5

Residential Commercial

Direct

Direct 3rd-Party Owned

3rd-Party Owned

How many of your commercial solar deals go unfunded? Why?

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What is our product?

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3rd party ownership of distributed generation systems where our revenue is secured and collected as a property tax assessment

PACE3P®

PACE Lease® - a fixed annual payment with unlimited upside benefits if and when utility rates increasePACE Shared Savings™ - a low base energy rate with upside benefits together with downside protection

©2013 Demeter Power Group, Inc.All rights reserved.

What is PACE?

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PACE – Property Assessed Clean Energy

• PACE uses the same kind of land-secured financing districts that American cities and towns have used for over 100 years to pay for improvements

• PACE eligibility begins with a State regulation that outlines how local municipalities can create PACE districts - these PACE districts are our geographic markets

• PACENow.org• http://pacenow.org/resources/all-programs/

©2013 Demeter Power Group, Inc.All rights reserved.

PACE Service Provider Segments

Banks and institutional investors invest or buy portfolios of PACE debt, typically from debt aggregators who benefit from an interest rate spread.

Demeter funds projects with private capital for property owners who select PACE3P® solution. Capital includes more than debt

Providers of individual project debt. Some debt aggregators also serve as program administrators.

Local government or 3rd party administrator creates PACE market as a land-secured financing district.

Administrators Demeter PowerDebt Aggregators

Banks/Investors

Manager of PACE special taxing districts. Handle logistics of approving and collecting PACE assessments.

Several different service providers within PACE marketDemeter provides PACE3P® as a service product unique to the PACE market

While we work with administrators and debt aggregators

we do not compete with them

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©2013 Demeter Power Group, Inc.All rights reserved.

How PACE3P® Works

Demeter manages solar asset & collects revenue as PACE assessments on property tax bill for terms up to 20 years.

Demeter funds projects with private capital for property owners who select PACE3P® solution.

This PACE district is Demeter’s target “micro-market” for offering PACE3P® finance solutions.

Local government or 3rd party administrator creates PACE market as a land-secured financing district.

Target PACE Markets

Develop ProjectsOffer PACE3P® Collect Revenue

Access property-assessed clean energy (PACE) programs, created as special taxing districts.

PACE is approved in over 31 States + D.C. ( > 50% of U.S. market)

Bipartisan political supportProprietary, tailorable financing solutions: PACE Lease® and PACE Shared Savings™

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©2013 Demeter Power Group, Inc.All rights reserved.

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How is PACE3P® different?

Bankable? Bankable!

Traditional Solar PPA / Lease Credit based on each individual customer Costly to negotiate collateral for every deal Corporate guarantee typically a non-starter Change of ownership presents credit risk Finance only solar-related equipment

Standardization streamlines underwriting

Credit runs with property; automatically assigned upon change of ownership

Finance any building-integrated technology

PACE3P® Credit based on property

We finance the building and not the offtaker!

©2013 Demeter Power Group, Inc.All rights reserved.

How does an off-taker pay?

Payments Listed as a non-ad valorem property tax on the property tax bill Typically listed at the bottom of your property tax bill

Non-Ad Valorem Taxes An additional line item created by a taxing authority such as

Fire assessment fees Neighborhood improvements Individual sewer connections PACE charges

PACE uses an old financing method to pay for clean energy improvements

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©2013 Demeter Power Group, Inc.All rights reserved.

Where and what can we finance?

Where is PACE active with local market? Over 200 Cities in California Statewide in Connecticut Various local areas in

Michigan Missouri Florida Washington D.C. See PACENow.org for live

updates

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What technologies are financeable? Solar Battery Storage Fuel Cells Cogeneration Energy Efficiency Most other clean energy products

Our focus is financing projects in California and Connecticut but will evaluate projects in other areas with PACE markets

©2013 Demeter Power Group, Inc.All rights reserved.

How to work with Demeter Power

1. Register with Demeter Power!

www.demeterpower.com/register-with-us

2. Receive a Demeter Contractor Package

a. Informational sheets on financing productsb. Backup information on relevant PACE marketc. Training on how to effectively sell PACE3P® Financingd. Development and contract support from Demeter team

3. Start selling PACE3P®

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©2013 Demeter Power Group, Inc.All rights reserved.

Path to a term sheet?

Project Registration

www.demeterpower.com/project-registration

Project Information Needed (highlights)

1. System Size2. EPC Cost3. Expected Production Yield4. Current mortgage on property5. Address of property, to see property tax data and PACE eligibility

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©2013 Demeter Power Group, Inc.All rights reserved.

What is your customer’s value proposition?

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What does the customer want?

1. Savings: what type of discount or future savings are expected?

2. Utility cost stability: how will TOU pricing affect them moving forward?

3. Profits: Is this an investment for the customer?

What kind of structure is best?

PACE Lease® works well with lower usage customers and those looking to fix their electric costs

PACE Shared Savings™ is ideal for high usage customers and those looking for innovative systems that include storage alongside the solar installation

To provide term sheets, Demeter must understand from you what the customer wants

©2013 Demeter Power Group, Inc.All rights reserved.

What is Demeter’s value proposition?

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Development

1. Repeatable financial product that you can sell in a geographic market

2. Little to no contract negotiations to stand in the way of development

3. Knowledgeable team ready to help you sell effectively

Financing

1. Credit is based on building data – not corporate or personal guarantees

2. Underwriting does not involve customer financial statements

3. Sell a single financing product that provides backlog to your organization

©2013 Demeter Power Group, Inc.All rights reserved.

What do we need from you?

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1. Sell The Value Proposition

2. Understand and sell within geographic markets

3. Know the details about your market utility rate & tariff schedules

Yann BrandtEVP of DevelopmentDemeter Power GroupOffice +1-855-336-8700Cell +1-954-224-4967ybrandt@demeterpower.comTwitter: @DemeterPowerwww.demeterpower.com

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Questions and Discussion

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Uniform, Scalable Financing For Distributed Solar Energy

www.demeterpower.com