Copyright © 2013 SolarReserve. All Rights Reserved

Copyright © 2013 SolarReserve. All Rights Reserved.

Finance Keynote Address

Michael Whalen, CFO SolarReserve

28th Global Power Markets Conference Las Vegas, NV

April 2013


Please note the following cautionary language regarding all forward-looking statements in this presentation. Caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, actual results may differ materially from expectations or projections.

Information set forth in this presentation contains financial estimates, projections and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. Please consult relevant filings with the Securities and Exchange Commission, if and when submitted, or any other relevant regulatory authority to review factors affecting SolarReserve’s future results.

SolarReserve disclaims any obligation to update or revise statements contained in this presentation based on new information or otherwise.

Forward-Looking Statements



A Nickel’s Worth

Renewable Energy: “You’ve Come a Long Way, Baby”

Renewable Energy is Evolving to Meet Market Demands

Policy Challenges Abound in Established Markets

The Pivot to Growth Market Opportunities

A Call to Action


“You’ve come a long way, baby”


Globally Wind – 44.7 GW in new capacity in 2012, estimated $74 billion of new capex Solar – 30.0 GW in new capacity in 2012, estimated $80 billion of new capex Biofuels – 31.4 billion gallons of ethanol and biodiesel produced in 2012, up

from 27.9 billion gallons in 2011

United States

Approx. 55% of MW additions to the US power fleet in 2012 were renewable energy generation sources

Europe

Renewable sources were >31 GW of 44.6 GW of generation capacity added in EU in 2012; approx. 70% of all new capacity for second consecutive year

New solar PV was 37% of this new capacity in 2012

The “Indispensable Market”


0102030405060708090

100

2006 2007 2008 2009 2010 2011 2012

US$

bill

ions

Solar PV Wind Biofuels

Global Investment in Key Renewable Sectors

Source: Clean Edge


0

500

1000

1500

2000

2500

3000

3500

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MW

(DC)

Residential Commercial Utility

US Solar PV Installations 2003 to 2012

Source: GTM Research


GTM Research forecasts that the industry will maintain its sustained growth, as an additional 4,300 MW of solar PV to be installed in 2013

29% increase over 2012

Utility segment in 2013 only 31% y-o-y versus 134% y-o-y in 2012

Longer term, 38% CAGR from 2013 to 2016

“Sustainable” growth

82% CAGR from 2009 to 2012

Increased distributed generation volumes

ITC rush for 2016 “in-service” deadline

Solar Outlook for the United States


Prices for PV Continued Its Descent in 2012

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1Q12 2Q12 3Q12 4Q12

Poly

Silic

on P

rice

($/k

g)

Com

pone

nt P

rice

($/W

)

Wafer ($/W) Cell ($/W) Module ($/W) PolySi ($/kg)

Source: GTM Research


>1,100 MWac CSP projects are scheduled to be online in 2013 and 2014

Crescent Dunes/Tonopah (SolarReserve)

Solana (Abengoa)

Mojave (Abengoa)

Genesis (NextEra)

Ivanpah (BrightSource)

Announced projects include SolarReserve’s Rice, Saguache, Crossroads and Quartzite projects and BrightSource’s Palen project

Large CSP Additions Online in 2013 and 2014


Renewable Energy is Evolving to Meet Market Demands


As penetration of renewable energy increases, market “asks” for clean power become more demanding

Reliability

Mitigation of intermittency and load misalignment

Reduction of resource variability

Cost Effectiveness

Minimization – or greater effectiveness – of policy supports

Minimization of additional system investments

Market is Seeking More from Renewables


California AB 2514 (2010) Requires CPUC to study and set energy storage procurement targets by October

2013 to be achieved by 2015 and 2020

California Public Utilities Commission Approved a long term procurement decision ordering Southern California Edison to

procure between 1,400 and 1,800 MW of energy resource capacity in the Los Angeles basin by 2021

Of this amount, at least 50 MW to be from energy storage resources, as well as up to an additional total of 600MW of capacity to be procured from preferred resources – including energy storage

February 2013 unanimous decision – move “beyond paralysis by analysis”

Lawrence Berkeley National Laboratory (Mills & Wiser, 2012) Marginal economic value of PV and CSP without thermal storage is found to drop

considerably (by more than $70/MWh) as the penetration of solar increases toward 30% on an energy basis

At solar penetration levels above 10%, CSP with thermal storage is found to be considerably more valuable relative to PV and CSP without thermal storage.

Increased Recognition of Need for Storage


Example of Solar PV Intermittency

0%

20%

40%

60%

80%

100%

6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00

Perc

ent L

oad

Time of Day

Afternoon Haze or Transient Clouds


CSP Without Storage

0%

20%

40%

60%

80%

100%

6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00

Perc

ent L

oad

Time of Day

Smoother Ride … But Same Destination


But CSP With Storage Is Another Story …

0%

20%

40%

60%

80%

100%

6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00

Perc

ent L

oad

Time of Day

8-Hour Generation Profile


… and Design Can Be Optimized to System Needs

0%

20%

40%

60%

80%

100%

6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00

Perc

ent L

oad

Time of Day

16-Hour Generation Profile


Wind Generation vs. CAISO Load Profiles

24,000

26,000

28,000

30,000

32,000

34,000

36,000

38,000

40,000

200

400

600

800

1,000

1,200

0 2 4 6 8 10 12 14 16 18 20 22 24

MW

MW

Hours


Average realized price: CSP + storage achieves 1.34x in CA Time of Day

market, while availability-initiated dispatch achieves only 1.19x

$0

$2,500,000

$5,000,000

$7,500,000

$10,000,000

$12,500,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Annu

al R

even

ue (a

ssum

es e

quiv

alen

t 250

MW

gen

erat

ion

@

$.1

0/kW

hr b

ase

rate

)

Hour

Dispatch as Available Dispatch out of Storage

Storage Maximizes Time-of-Day Revenue


Avoidance of additional investment in fossil-fueled peaking reserve

Optimization of investment in transmission upgrades by shifting generation profile to offset cyclicality of wind or solar PV

Thermal storage offers high efficiency / long cycle life alternative to costly / low cycle life battery options

Cost effective curtailment option

Available for ancillary services (ramping, firming, balancing, and reserves)

Incremental investment for additional storage in thermal storage system can be a fraction of the cost of incremental battery systems

Cost Effectiveness


California-based developer of large-scale solar power projects – includes development of CSP and PV projects

Exclusive 20-year license to the Molten Salt Power Tower CSP technology with Rocketdyne. Inherent thermal energy storage allows for dispatchable power on demand Lowest projected Levelized Cost of Energy (LCOE) of any CSP technology Significant projected future cost reductions and efficiency improvements

expected

SolarReserve Overview


SolarReserve’s CSP Technology

Multi-Extractions Reheat Steam

Cycle

Molten Salt Steam

Generation System

Air Cooled Condenser

Molten Salt Thermal Storage Tanks

Molten Salt Tower Receiver 565 MWt

Heliostats 1.08 million m2

Conventional Steam Turbine

Generator

Hot Tank

Cold Tank


SolarReserve CSP Solar Energy Plants

640 foot tall tower More than 10,000 heliostats Project Rendering


Location: Tonopah, Nevada

Technology: CSP with thermal energy storage via molten salt system

Size: 110 MW net output

Storage: 10 hours full load storage

Energy production: more than 500,000 MW-hours annually

Capacity factor: 52%

Power contract: NV Energy

EPC Contractor: Cobra Thermosolar Plants, Inc. with full EPC “wrap”

Technology Supplier: SolarReserve

Investors: SolarReserve (managing investor), Cobra, Santander

Crescent Dunes Solar Energy Project Overview


Crescent Dunes Project Arrangement

1.75 mile (2800m) diameter

640 foot tower 10,000 heliostats

Steam Turbine, Generator and Controls Hot and Cold Salt Storage Tanks

Heliostat Manufacturing

Evaporation Ponds

Offices and Construction Laydown

https://intranet.solarreserve.com/communications/Project Photos/Aerial (IMG_0977) (Miller) %C2%A9SolarReserve 1Aug12_low.jpg


Pouring receiver deck foundation Constructing receiver deck

Steel reinforcement Nearing tower completion

Construction Activities – 2012


Heliostat steel components Assembled heliostats

Molten salt tank in construction

Construction Activities – March 2013

Closer aerial view


Aerial view of tower (Pre-panel installation)

Construction Activities – Receiver Installation

First receiver panel installation

Receiver panels fully installed


SolarReserve US CSP Developments


Rice Solar Energy Project

Location Riverside County in southeast California

Turbine Capacity 170 MW gross 150 MW net

Est. Annual Output 500 GWh

PPA 25-year PPA COD mid-2016

PPA Counterparty Pacific Gas & Electric

Technology Arrangement

Molten salt system collection and storage arrangement consistent with Crescent Dunes; identical receiver and tower; full air cooling

Site Control; Permitting

Unanimous CPUC Amended PPA Approval on Jan. 2013; BLM ROD for transmission corridor on Feb. 2012; CEC AFC Final Decision on Dec. 2010; previously disturbed 3,300 acre private land site under option

Transmission 10-mile gen-tie to Western Area Power Administration network with Mead substation as point of delivery; CAISO as balancing authority

Rice Project Site


"In my personal view, projects like the Rice Solar Project will be important to demonstrate that we can firm and shape intermittent renewables with clean technology, not just with fossil technology.”

"Eight to 10 hours of fully dispatchable storage is quite impressive and offers significant benefits to the system that we don't yet know how to quantify fully, but there's definitely value there. … Hopefully this is the first of many.”

"This particular project will also offer storage, which is a key component, and make it therefore hopefully more flexible in terms of being able to help us support integration. I look forward to this technology coming into California and helping us with renewable integration.”

"I think technology diversity is critical for risk diversification, and this project brings that to the energy mix.”

Commissioner Ferron Commissioner Sandova

Commissioner Florio Commissioner Peterman

Selected Comments from CPUC Commissioners


Policy Challenges Abound in Established Markets


Europe

Collapse of feed-in-tariff policy regimes

United States

Department of Commerce Antidumping and Countervailing Duties

Phase-out of Section 1705 US Department of Energy Loan Guarantee Program

Section 1603 Expiry and Sequestration Impact

Depth of Tax Capacity Market for ITC

Question of Whether States Have Met Success in Achieving Renewable Portfolio Standard Targets

Considerable increase in distressed activity via bankruptcies and restructurings

Headwinds


02468

1012141618

GW

Germany Italy

Spain France

Rest of Europe

A Tale of Two Markets

0

5

10

15

20

25

30

GW

USA China

India Japan

Korea Australia

Rest of World

Projected CAGR (7.9%) Projected CAGR 52.8%

Source: Analyst Reports


The Pivot to Growth Market Opportunities


SolarReserve Growth Market Focus


Flat daily demand profile and energy prices

CSP value is shifting generation to nighttime for combined baseload solar alongside PV, for maximal fuel conservation without compromising grid stability

Government announced solicitation for CSP and has targeted 40GW of solar capacity

Saudi Arabia: Baseload Solar Offsets Oil Use

• Opportunity cost: Oil at $100/barrel

• Fleet requires 1.3 to 2 barrels of oil per MWh, depending on type of generating facility

• At $100/barrel, this is $134-$205/MWh in variable fuel cost alone


A Call to Action


Modify ITC recapture rules to mirror more flexible Section 1603 Cash Grant transfer rules

Convert end-2016 “in-service” deadline for 30% ITC into Section 1603 style “commencement of construction” or investment safe harbor

Redesign Federal financing support away from full loan guarantee approach and toward new technology performance risk coverage

Permit use of Master Limited Partnerships toward renewable energy properties (although changing passive income loss rules may be counter to prevailing mood against “tax shelters” for the 1%)

Allow qualifying solar projects option to convert ITC into equivalent PTC

Replace distortive tax credit incentives with technology-neutral carbon tax levy to price carbon externalities to encourage market-based investments in low- or zero-carbon alternatives

Policy Opportunities to Maintain US Solar Growth


Thank You


Contact Information

www.solarreserve.com

[email protected]

Corporate Headquarters: 2425 Olympic Blvd. Suite 500 East Santa Monica, CA 90404 Phone: (310) 315-2200 Toll-Free: (866) 622-2778 Fax: (310) 315-2201

http://www.solarreserve.com

mailto:[email protected]

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Copyright © 2013 SolarReserve. All Rights Reserved