Presentation by Shayle Kann, Senior Vice President, GTM Research. Learn more: www.greentechmedia.com

1. The Evolution of The U.S. Solar Market
Shayle Kann
Senior Vice President, Research
GTM Solar Summit
April 2015

2. www.gtmresearch.com
The First U.S. Solar Wave By the Numbers
-2-Source: GTM Research/SEIA U.S. Solar Market Insight
Start Of 2010 Start Of 2015
1.2 GW Operating
18.3 GW Operating
15X Growth in Five Years

3. Solar Project Utility
Solar Customer

4. Utility-Scale Solar

5. www.gtmresearch.com
Utility Solar PPA Prices Now Consistently Below $70/MWh
-5-
$0
$25
$50
$75
$100
$125
$150
$175
$200
2008 2009 2010 2011 2012 2013 2014 2015
PPAPrice($/MWh)
Contract Execution Date
Source: GTM Research U.S. Utility PV Tracker

6. www.gtmresearch.com
The Result: 5.4 GW of Utility Solar Procurement Outside the RPS
-6-
Utility RFP
1,828 MW
Utility-Owned
Generation
237 MW
PURPA
1,648 MW
Merchant Solar
65 MW
Bilateral Utility
Contract
1,132 MW
Offsite
Wholesale
Solar
484 MW
Source: GTM Research U.S. Utility PV Tracker

7. www.gtmresearch.com
Large-Scale Solar: It’s Not Just For Utilities Anymore
-7-
130 MW, 25 year PPA from
California Flats project
3 MW, 2 year PPA from
21 MW Barilla project
110 MW, 20 year PPA from
485 MW Blythe project
80 MW, 25 year PPA from two
projects in Fresno County 4.3 MW, 25 year PPA from project in MA
Source: GTM Research U.S. Utility PV Tracker

8. Distributed Solar

9. www.gtmresearch.com
Residential Solar’s Limits
-9-
113
73
38
29
9
0
20
40
60
80
100
120
U.S. Households …That Own Their
Home…
...In the 20 States
With A Solar
Market…
…With a FICO
Score Over 680…
…With a Solar-
Friendly Roof
Households(Million)
Community Solar
Recent activity in NM, TX, SC
Source: GTM Research, U.S. Census Bureau

10. www.gtmresearch.com
Enter Community Solar
-10-
5.2
20.2
148.2
280.9
0
50
100
150
200
250
300
2013 2014 2015E 2016E
CommunitySolarInstallations(MW)
Colorado Massachusetts Minnesota California Other Markets
Upfront fee or
Monthly Payment
On-Bill Credits
Developer
• Incentives
• Wholesale rate for
unsubscribed power
Delivery and Admin Charge
Utility Subscriber
Source: GTM Research

11. www.gtmresearch.com
DG Compensation Is Getting More Complex
-11-
Below Retail Rate Retail Rate Varies No NEM
CA and HI: Ongoing
discussion of NEM
2.0
MN, Austin, TX: Value-
of-solar tariffs
VOST bills pending in
MI, CT
>5 States: Current
docket re: fixed charges
SRP: Among the first
residential demand
charges
NY: REV Initiative –
many possibilities
Source: GTM Research

12. What Happens if Solar Exports Lose Full Retail Credit?

13. www.gtmresearch.com
Southern California Edison: A Case Study
Customer Profile
Customer Type Large Residential
Utility Southern California Edison
Tariff Time of Use, Option B
Year of Installation 2016
Scenario 1 - Today
Full Retail NEM
Weighted Avg. Electricity Price: $0.20/kWh
Optional Time-of-Use Pricing
Scenario 2 - Theoretical
PV Export Price Drops to $0.10/kWh
-13-Source: GTM Research

14. www.gtmresearch.com
How Residential Energy Storage Actually Works
-14-
0.0
0.5
1.0
1.5
2.0
2.5
1:00AM
2:00AM
3:00AM
4:00AM
5:00AM
6:00AM
7:00AM
8:00AM
9:00AM
10:00AM
11:00AM
12:00PM
1:00PM
2:00PM
3:00PM
4:00PM
5:00PM
6:00PM
7:00PM
8:00PM
9:00PM
10:00PM
11:00PM
12:00AM
ElectricityConsumption(kWh)
Baseline Load
Source: GTM Research

15. www.gtmresearch.com
How Residential Energy Storage Actually Works
-15-
0.0
0.5
1.0
1.5
2.0
2.5
1:00AM
2:00AM
3:00AM
4:00AM
5:00AM
6:00AM
7:00AM
8:00AM
9:00AM
10:00AM
11:00AM
12:00PM
1:00PM
2:00PM
3:00PM
4:00PM
5:00PM
6:00PM
7:00PM
8:00PM
9:00PM
10:00PM
11:00PM
12:00AM
ElectricityConsumption(kWh)
Baseline Load Net Consumption With Solar
Source: GTM Research

16. www.gtmresearch.com
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Export(kWh)
Export - Solar Only
How Residential Energy Storage Actually Works
-16-
0.0
0.5
1.0
1.5
2.0
2.5
1:00AM
2:00AM
3:00AM
4:00AM
5:00AM
6:00AM
7:00AM
8:00AM
9:00AM
10:00AM
11:00AM
12:00PM
1:00PM
2:00PM
3:00PM
4:00PM
5:00PM
6:00PM
7:00PM
8:00PM
9:00PM
10:00PM
11:00PM
12:00AM
ElectricityConsumption(kWh)
Baseline Load Net Consumption With Solar
Exporting: 8 AM-5 PM
Source: GTM Research

17. www.gtmresearch.com
0%
20%
40%
60%
80%
100%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
StorageStateofCharge(%)
Export(kWh)
Export - Solar Only State of Charge (%)
How Residential Energy Storage Actually Works
-17-
0.0
0.5
1.0
1.5
2.0
2.5
1:00AM
2:00AM
3:00AM
4:00AM
5:00AM
6:00AM
7:00AM
8:00AM
9:00AM
10:00AM
11:00AM
12:00PM
1:00PM
2:00PM
3:00PM
4:00PM
5:00PM
6:00PM
7:00PM
8:00PM
9:00PM
10:00PM
11:00PM
12:00AM
ElectricityConsumption(kWh)
Baseline Load Net Consumption With Solar
Charging:
8 AM-12 PM
Discharging:
4 PM-8 PM
Source: GTM Research

18. www.gtmresearch.com
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Export(kWh)
Export - Solar Only Export - Solar Plus Storage
How Residential Energy Storage Actually Works
-18-
0.0
0.5
1.0
1.5
2.0
2.5
1:00AM
2:00AM
3:00AM
4:00AM
5:00AM
6:00AM
7:00AM
8:00AM
9:00AM
10:00AM
11:00AM
12:00PM
1:00PM
2:00PM
3:00PM
4:00PM
5:00PM
6:00PM
7:00PM
8:00PM
9:00PM
10:00PM
11:00PM
12:00AM
ElectricityConsumption(kWh)
Baseline Load Net Consumption With Solar
Reduce Export Avoid Peak Prices
Source: GTM Research

19. www.gtmresearch.com
How Residential Energy Storage Actually Works
-19-
0.0
0.5
1.0
1.5
2.0
2.5
1:00AM
2:00AM
3:00AM
4:00AM
5:00AM
6:00AM
7:00AM
8:00AM
9:00AM
10:00AM
11:00AM
12:00PM
1:00PM
2:00PM
3:00PM
4:00PM
5:00PM
6:00PM
7:00PM
8:00PM
9:00PM
10:00PM
11:00PM
12:00AM
ElectricityConsumption(kWh)
Baseline Load Net Consumption With Solar Net Consumption With Solar and Storage
Source: GTM Research
New Load Profile

20. www.gtmresearch.com
The Result: Energy Storage Can Improve System Economics
Source: GTM Research
Model inputs: 6 kW PV System at $3.05/W, 5 kW/9.4 kWh Lithium-Ion Energy Storage System at $1,165/kWh. Model includes Federal ITC and
$1.31/W SGIP Incentive. Cost of equity: 10%. For additional inputs, email kann@gtmresearch.com
13%
9%
11%
0%
2%
4%
6%
8%
10%
12%
14%
Solar Only - Current NEM Solar Only - $0.10/kWh Export
Tariff
Solar-Plus-Storage -
$0.10/kWh Export Tariff
UnleveredInternalRateofReturn(%)

21. www.gtmresearch.com
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Export(kWh)
Export - Solar Only Export - Solar Plus Storage
How Residential Energy Storage Actually Works
-21-
0.0
0.5
1.0
1.5
2.0
2.5
1:00AM
2:00AM
3:00AM
4:00AM
5:00AM
6:00AM
7:00AM
8:00AM
9:00AM
10:00AM
11:00AM
12:00PM
1:00PM
2:00PM
3:00PM
4:00PM
5:00PM
6:00PM
7:00PM
8:00PM
9:00PM
10:00PM
11:00PM
12:00AM
ElectricityConsumption(kWh)
Baseline Load Net Consumption With Solar Net Consumption With Solar and Storage
Load Control
Source: GTM Research

22. www.gtmresearch.com -22-
The Emerging Ecosystem of “Solar Plus”
Solar + Energy Management/Load Control
Solar + EV
Solar + Storage
Source: GTM Research

23. www.gtmresearch.com
What Should Be the Regulated Utility’s Role in Distributed Solar?
-23-
Finance DG,
Earn Cost
Recovery
Own/Rate
Base Full
System,
Subcontract
Installation
Interconnect,
Credit Excess
Generation,
Maintain Grid
Reliability
Default in
Traditional
Distributed
Solar
Markets
Act As
Distribution
System Platform
Provider
New York
REV Order
Rate-Base
Purchased DG
Value Streams
SolarCity
Proposal
(March
2015)
Own/Rate
Base Grid-
Interactive
Portion of
Systems
Various
Proposals
Own/Rate
Base Full
System, Self-
Installation
RESIDENTIAL SOLAR
NON-RESIDENTIAL SOLAR
COMMUNITY SOLAR
Utility Program Administration, 3rd Party
Project Ownership
Utility Project Ownership
Utility Project Ownership and
Customer Acquisition
Entirely 3rd Party Entirely Utility-Run
Source: GTM Research

24. Final Thoughts
Shayle Kann
Senior Vice President, Research
Greentech Media
Questions? Visit www.gtmresearch.com
Or contact kann@gtmresearch.com