About Peachtree Green Advisors2009

2009 Introduction to

PEACHTREE GREEN
ADVISORS
A Division of Peachtree Media Advisors, Inc.

GREEN TECHNOLOGY PEACHTREE GREEN ADVISORS

Discussion
I. About Peachtree Green Advisors

II. Clean Tech Defined & Market Trends

III. M&A Environment

IV. Public Market Company Valuations

V. Why Peachtree Green Advisors, Inc.

VI. The Peachtree Sale Process

This introductory About Us presentation is an evolving work in
progress and will be updated frequently

GREEN TECHNOLOGY PEACHTREE GREEN ADVISORS 2

ABOUT PEACHTREE


About Peachtree
Peachtree provides investment banking services on growth and smaller
middle market transactions in the media, tech and
clean-tech/renewable energy sectors

Over 22 completed transactions

Focus on maximizing value at each stage of the process

Substantial insight in core industry markets – 12+ years of focus in media and tech industries

Senior level access to leading industry executives, investors and entrepreneurs

In-depth technical and financial skills for value-enhancing deal structuring

Insight
Insight

Service
Service
Focus
Focus


About Peachtree Services
Capital Raise –– Peachtree has aasubstantial amount of experience helping
Capital Raise Peachtree has substantial amount of experience helping
companies raise growth and acquisition financing from venture capital and private
companies raise growth and acquisition financing from venture capital and private
equity firms;
equity firms;

DOE Grant Advisory ––Peachtree offers unparalleled federal grant writing expertise,
DOE Grant Advisory Peachtree offers unparalleled federal grant writing expertise,
transforming ideas into optimal proposals that provide the best opportunity to obtain
transforming ideas into optimal proposals that provide the best opportunity to obtain
government funding;
government funding;

Mergers and Acquisitions –– Peachtree maximizes value for sell side clients as
Mergers and Acquisitions Peachtree maximizes value for sell side clients as
well as strategic and financial buyers seeking add-on or platform acquisitions;
well as strategic and financial buyers seeking add-on or platform acquisitions;

Sales and Divestitures –– Peachtree maximizes value on the sale of properties or
Sales and Divestitures Peachtree maximizes value on the sale of properties or
the divestiture of non-strategic assets through aacontrolled auction process; and
the divestiture of non-strategic assets through controlled auction process; and

Strategic Partner/Business Development –– With unprecedented insight into end
Strategic Partner/Business Development With unprecedented insight into end
user needs, an ability to navigate markets and analyze revenue models, Peachtree is
user needs, an ability to navigate markets and analyze revenue models, Peachtree is
able to assist lower-middle market companies in developing strategic relationships in
able to assist lower-middle market companies in developing strategic relationships in
order to drive revenue growth.
order to drive revenue growth.


ENERGY TRENDS


Energy in the US in 2008
U.S. Fuel Sources Used in Electricity Generaton 2005
Three primary uses of energy Gas

Electricity
Heat Oil
Coal
Transportation
In 2008, the U.S. consumed 99.2 quadrillion BTUs Nuclear

An average of 339.2 million BTU per person
(relatively consistent for the past 30 yrs) Hydro

Fossil fuels (coal, natural gas, and petroleum) Source: Energy Information Administration 2005

accounted for 84% of this consumption (83.4
quadrillion BTUs)

2008 US Energy Consumption
CONSUMPTION BY TYPE (IN QUADRILLION BTUS)
COAL 22.5
NATURAL GAS 23.8
PETROLEUM 37.1
NUCLEAR 8.5
RENEWABLE 7.3

SOURCE: EIA, 2009.


U.S. Primary Energy Consumption by Source and Sector, 2008 (Quadrillion Btu)

1) Does not include the fuel ethanol portion of motor gasoline—fuel ethanol is included in "Renewable Energy“; 2)
Excludes supplemental gaseous fuels; 3) Includes less than 0.1 quadrillion Btu of coal coke net imports; 4) Conventional
hydroelectric power, geothermal, solar/PV, wind, and biomass; 5) Includes industrial combined-heat-and-power (CHP)
and industrial electricity-only plants; 6) Includes commercial combined-heat-and-power (CHP) and commercial electricity-
only plants; 7) Electricity-only and combined-heat-and-power (CHP) plants whose primary business is to sell electricity, or
electricity and heat, to the public. Note: Sum of components may not equal 100 percent due to independent rounding.
Source: Energy Information Administration, Annual Energy Review 2008, Tables 1.3, 2.1b-2.1f , 10.3, and 10.4.


Foreign Dependency on Oil and Price Volatility
US consumes 25% of global oil but
only produces 3%
58% of US oil consumption is
imported from foreign countries
This number is expected to
grow to 68% by 2025
Finite nature of fossil fuels renders
US reluctant to deplete oil reserves
What is the long-term outlook of
fossil fuels?
Source: Energy Information Administration (EIA), Annual
Energy Review 2007, June 2008.

Foreign dependency causes US to be extremely vulnerable to oil price volatility
US is affected by investment and production decisions by OPEC
OPEC’s willingness to cut supply to increase or maintain high prices of oil

GREEN TECHNOLOGY US ENERGY TRENDS PEACHTREE GREEN ADVISORS 9

Greenhouse Gas Emissions
Potential carbon reductions The United States accounts for only 4% of the world’s
(in MtC/yr in 2030) based on population and produces 25% of its greenhouse gases
the middle of the range of
carbon conversions Half of our country’s electricity is still produced by
burning coal, a rich domestic resource but a major
Energy Type MtC/yr contributor to global warming

Energy Efficiency 688 Carbon Emissions

Concentrating Solar Increased more than 15% between 1990 and 2006
63
Power Must be reduced by 60% by 2030 to effect global
Photovoltaics 63 warming (Intergovernmental Panel on Climate
Change)
Wind 181
Energy consumption is responsible for over 60% of CO2
Biofuels 58 emitted into the atmosphere
Biomass 75 Potential regulatory policies to address climate change are
Geothermal 83 in various stages of development at the State, regional,
and Federal levels
Source: ASES, 1/2007
For electric power companies, policy changes could be
MtC MegaTons Carbon made to limit or reduce GHG emissions


Less Energy Used in the US in 2008
Americans used more solar, nuclear, biomass and wind energy in 2008 than 2007
The nation used less coal and petroleum during the same time frame and only slightly
increased its natural gas consumption
Geothermal energy use remained the same
Est. U.S. energy use in 2008 equaled 99.2 quadrillion BTUs (“quads”), down from
101.5 quads in 2007
(A BTU or British Thermal Unit is a unit of measurement for energy, and is about
1.055 kilojoules)
The chart also shows the amount of energy rejected by the United States
Of the 99.2 quads consumed, only 42.15 ended up as energy services
Energy services are “things that make our lives better…the energy that makes
your a move and the energy that comes out of a light bulb.” (Source: LLNL)

The ratio of energy services to the total amount of energy used is a measure of the country's energy
efficiency. The remainder, is simply rejected. For example, some rejected energy shows up as waste heat
from power plants. Once energy is rejected, it is no longer useful. But more efficient power plants,
automobiles and even light bulbs really do reject less energy while providing the same energy services.

Source: Lawrence Livermore National Laboratory.


Energy use decreased in 2008 versus 2007

Source: Lawrence Livermore National Laboratory 2009. Data based on DOE numbers and does not include self‐generated electricity.


The drivers that have propelled investment in the sustainable energy
The drivers that have propelled investment in the sustainable energy
sector for the past five years, however, are still at work ––climate
sector for the past five years, however, are still at work climate
change, energy insecurity, fossil fuel depletion and new
change, energy insecurity, fossil fuel depletion and new
technologies. As well, political support remains strong, with an
technologies. As well, political support remains strong, with an
estimated $180 billion of fiscal stimulus committed to sustainable
estimated $180 billion of fiscal stimulus committed to sustainable
energy.
energy.

UN Environmental Program,
UN Environmental Program,
Global Trends in Sustainable
Global Trends in Sustainable
Energy Investment 2009
Energy Investment 2009

GREEN TECH
TRENDS


TRENDS

Economy Trends & Green Tech
Despite global recession, global investment in the sustainable energy grew 5% in 2008
From $148 billion in 2007 to around $155 billion in 2008
Lower interest rates = lower cost of capital
Central banks lowering their interest rates has reduced the cost of financing for
renewable energy projects
Limited financing available though due to credit crisis
Growth rate in demand for electricity slipped to 2.4% in 2008 from 2.7% growth in 2007
However, renewable energy’s share of the overall power generation market
increased from 3.9% to 4.4%
Share prices of clean energy stocks fell almost 70%, more sharply than the overall
stock market and has since only made up a fraction of the sell off in 2009
General flight from risk and growth sectors in late 2008

UNEP Sources: www.sefi.unep.org
and www.unepfi.org


Policy Drives Increased Use of Renewable Energy
Well-developed conditions for innovation, markets for clean energy through public
Well-developed conditions for innovation, markets for clean energy through public
procurement, energy efficiency standards and stable and simple policies are
procurement, energy efficiency standards and stable and simple policies are
essential to meet the climate change challenge (UNEP)
essential to meet the climate change challenge (UNEP)

Strong growth in the use of renewable energy for electricity generation spurred by
Renewable fuel standard in the Energy Independence and Security Act of 2007
(EISA2007)
Renewable Portfolio Standard (RPS) programs at the State level
EISA2007
36 billion gallons of qualifying credits from biofuels to be produced by 2022 (from 4.7
billion gallons in 2007)
RPS Requirements
In the US, 30 states have developed and adopted renewable portfolio standards,
which require a pre-determined amount of a state’s energy portfolio (up to 20%) to
come exclusively from renewable sources by as early as 2010 (DOE)


The American Recovery and Reinvestment Act of 2009
The US has one of the largest and most clearly defined stimulus packages with $66 billion
in funding available for sustainable energy, energy efficiency and transmission investments

* Tax Relief - includes $15 B for Infrastructure and
Science, $61 B for Protecting the Vulnerable, $25 B for
Education and Training and $22 B for Energy, so total
funds are $126 B for Infrastructure and Science, $142 B
for Protecting the Vulnerable, $78 B for Education and
Source: Recovery.gov Training, and $65 B for Energy


TRENDS

American Recovery and Reinvestment Act of 2009
$787bn stimulus package signed February 17, 2009 and includes about $90bn in
energy-related funding to encourage development of green technology
$60bn of loan guarantees to offset costs
manufacturing renewable energy equipment;

developing renewable power projects; and

building electric transmission lines
30% investment tax credit available for companies that make equipment for
renewable energy systems, energy storage equipment, smart grid, energy-efficient
lighting, electric transmission and distribution and carbon capture and
sequestration
Clean energy tax credits extended and "recession proofed" by offering choices in
how investors take the credit
The ‘bonus’ 50% depreciation extended to the end of 2009 that allows developers
to expense a major portion of the projects’ capital costs in the first year


Global Stimulus Spending Allocated to Renewable

$184.9 billion in stimulus money from 14 government entities allocated to renewable
NEF tallied up all of the spending stimuli from participating government entities and
their allocations by renewable energy segment appear below

Green Stimulus allocations to Sustainable Energy by Sector, April
2009, % share

Source: New Energy Finance


Renewable Energy Sources Still Small Portion
7.3 quadrillion BTUs of renewable energy consumed in 2008 represents 7.4% of total
energy (up from 6.8% in 2007)
Biomass and Hyrdro represent the overwhelming majority of % of renewable
energy consumed in 2008
Solar and Wind are the fastest growing, but remain a small % of energy landscape

Renewable Energy Consumption in the Nation’s Energy Supply, 2008

Source: Energy Information Administration, Office of Coal, Nuclear, Electric and Alternate Fuels


Competitive Pricing Helps Drive Use of Renewable Energy

Renewable energy technologies are becoming cheaper as they reach scale and
operating experience
The overwhelming consensus is that wind is competitive with fossil fuels and
by far the most commercially viable renewable energy source
Although the costs of developing and producing solar energy are falling, solar is still
expensive (see next page)
Solar is beginning to be competitive in favorable scenarios
Grid proximity

Location (Southwestern US, California) with abundance of sunshine

Tax credits (Source: Lux Research and RenewableEnergyWorld.com)
According to the World Economic Forum (WEF)
Solar PV electricity costs may become comparable with daytime retail
electricity prices in sunny areas within 12 to 36 months


Level-“ized” Energy Cost Comparison by $ per MegaWatt hour
Clean Energy and Traditional Technologies –
Energy Levelized Cost Range of Levelized Costs of Energy, December 2008, US$/MWh
Coal Fired
Geothermal $33-74/MWh
Natural Gas OCGT
Carbon Capture US$ over $100 per
and Storage ton of CO2
Geothermal - Flash Plant
Uneconomical, per
Onshore wind $89-126/MWh
Geothermal - Binary Plant World Economic Forum

Offshore wind $158-205/MWh Wind - Onshore
Extremely uneconomical
Sugar-based Competitive with oil Wind - Offshore now, but should decrease
ethanol $45 per barrel in half by 2010
Biomass - Municipal Solid Waste
Cellulosic and
n/a
next gen biofuels Solar Thermal - Trough

Solar PV - Crystaline
Solar thermal $241-299/MWh
$0 $100 $200 $300 $400 $500 $600

Solar PV $341-549/MWh US$/MWh
Source: New Energy Finance, World Economic Forum, January 2009.

Note:  Levelized Cost of Energy (LCOE) allows different energy generation technologies to be compared, taking into
account their cost of production and generation efficiency.  Figures indicate the required range of generation price for
each clean energy technology to be competitive.  Levelized costs exclude any subsidies.


Cost comparison analysis renewable energy sources

Coal is approx 5 cents per kilowatt-hour

Typical Energy Costs
Technology Typical Characteristics (U.S. cents/kilowatt-hour)
Power Generation
Large hydro Plant size: 10 megawatts (MW) - 18,000 MW 3-4
Small hydro Plant size: 10 megawatts (MW) - 18,000 MW 4-7
On-shore wind Turbine size: 1 - 3 MW 5-8
Blade diameter: 60-100 meters
Off-shore wind Turbine size: 1.5 - 5 MW 8 - 12
Blade diameter: 70-125 meters
Biomass power Plant size: 1 - 20 MW 5 - 12
Geothermal power Plant size: 1 - 100 MW Type: binary, single- and 4-7
double-flash, natural steam
Solar PV (module) Cell type and efficiency: single-crystal 17%;
polycrystalline 15%; amorphous silicon 10%; thin
film 9-12%
Rooftop solar PV Peak capacity: 2-5 kilowatts-peak 20 - 80
Concentrating solar thermal Plant size: 50-500 MW (trough), 10-20 MW 12 - 18
power (CSP) (tower); Types: trough, tower, dish

Source: Ren21.net compiled from IEA and various sources.


Cost comparison analysis renewable energy sources

Price of a barrel of crude at $72.54 and national average of $2.62 per gallon of gas (Sep
2009)
One gallon = 3.7854118 liters, which is ~ 69 cents per liter

Typical Energy Costs
Technology Typical Characteristics (U.S. cents/kilowatt-hour)
Hot Water/Heating
Biomass heat Plant size: 1-20 MW 1-6
Solar hot water/heating 2 2 2 - 20 household
Size: 2-5 m (household); 20-200 m
(medium/multi-family); 0.5-2 MWth (large/district 1 - 15 medium
heating); 1-8 large
Types: evacuated tube, flat-plate
Geothermal heating/cooling Plant capacity: 1-10 MW; Types: heat pumps, 0.5 - 2
direct use, chillers

Biofuels
Ethanol Feedstock: sugar cane, sugar beets, corn, 25-30 cents/liter (sugar)
cassava, sorghum, wheat (and cellulose in the 40-50 cents/liter (corn)
future) gasoline equivalent
Biodiesel Feedstock: soy, rapeseed, mustard seed, palm, 40-80 cents/liter
jatrapha, or waste vegetable oils (diesel equivalent)

Source: Ren21.net compiled from IEA and various sources.


Solar
Solar photovoltaics (PV) convert light into electricity using semiconductor materials
Remains less than 0.1% of US energy consumption
Disadvantages: High cost and inconsistency
Cost of silicon is decreasing, lowering costs of solar energy and driving demand
from project developers and rooftop systems
Spot silicon prices have fallen from $332/kg in Oct 2008 to $136/kg in Mar
2009 (New Energy Finance)

While manufacturers’ margins are squeezed, the cost of generating solar
power is cheaper


Solar
PV is expected to dramatically reduce costs through new technologies, increased
manufacturing scale, a decrease in the price of silicon
PV is also expected to break into new areas of energy demand over the coming
decades
PV is a gateway or distribution channel for storage, efficiency, smart grid metering and
other enabling technologies

Stand-Alone PV System (Off Grid) Grid Connected PV System

Diagram of a typical AC, battery-
based system. Source: DOE. Source: DOE.


Solar
Solar PV
Technology Gaps
Continued scale-up of entire crystalline silicon supply chain; process engineering to
reduce costs
Mass manufacture of scalable, high-efficiency thin film on flexible substrates
Jump to next generation of super-efficient cells
Bottlenecks
Capital
Access to transmission grid
Refined silicon, formerly bottleneck about to go into oversupply
Solar Thermal
Tech Gaps and Bottlenecks
Proof of concept for most up-and-coming technologies
Availability of steam turbines
Links to transmission grid
Permitting
A parabolic trough is the most widely
Source: New Energy Finance.
deployed type of solar thermal power plant


Wind
In 2008, wind projects generated 1.3% of U.S. electricity
Over 8,500 megawatts (MW) of new wind power capacity brought online, increasing
the U.S. cumulative total by 50% to over 25,300 MW

U.S. Wind Capacity Growth (1981-2008)

25,000

20,000
Capacity MW

15,000

10,000

5,000

0
84 3

87 6

90 9

93 2

5
96

97

98

99

00

01

02

03

04

05

06

07

08
19 98

19 98

19 98

19 99

99
19

19

19

19

20

20

20

20

20

20

20

20

20
-1

-1

-1

-1

-1
81
19

Net Capacity Additions Cumulative Capacity
Source: American Wind Energy Assoc 2009.

GREEN TECHNOLOGY WIND PEACHTREE GREEN ADVISORS 27

Wind
U.S. on pace to generate 20% of the nation’s electricity by 2030 from wind energy (American
Wind Energy Association)
Turbine pricing continues to decrease and the emergence of secondary turbine markets are
enabling higher expected rates of return
Technology Gaps
Onshore
Power storage (to reduce impact of intermittency)

Existing technology adequate, drive train improvements required to increase
reliability and decrease costs

Ever-larger turbines

Weakness of electricity grid
Offshore
Reliability of offshore turbines still a key concern

New dedicated marinized technology at larger scale being rolled out over next 5
years
Source: New Energy Finance.


Biofuel
Biodiesel is renewable, nontoxic, and biodegradable
Produced from agricultural resources such as vegetable oils
Biofuels blend with gasoline or diesel to make them cleaner-burning to reduce
emissions or used as a direct substitute
Food vs. Fuel
WEF estimates that biofuels can increase from current 1% to 5% of transport fuels
without impacting food availability
Global Biofuel Market Analysis
US Ethanol and Biodiesel Production, 2000-2007
Global ethanol production will
grow at a CAGR of 6.04%
during 2009-2018 to reach
33,895 million gallons

Source: REN21, 2007
GREEN TECHNOLOGY BIOFUEL PEACHTREE GREEN ADVISORS 29

Ethanol
The period 2004-2006 saw US investment in biofuels soar, with $9.2 billion pouring
into the sector (World Economic Forum)
Most flowed into corn-based ethanol
Disadvantage: corn is a food staple and feedstock around the world
Brazilian sugar cane-based ethanol is competitive with oil at $40 per barrel
No shortage of land (deforestation) without jeopardizing food production

Source: DOE.

Biomass and Waste to Energy
Biomass – Energy from plant and animal matter
Rural: agricultural waste, forest products waste, collected fuel wood and animal
dung burned in furnaces to provide heat energy for cooking, heating and industrial
processing
200+ producers of biomass power product in the US
More than two-thirds use forest products, and just under one-third use landfill
gas as the primary fuel source
Modern biomass consists of new technologies such as biomass co-generation for
power and heat, biomass gasification, biogas anaerobic digesters and liquid
biofuels for vehicles
Waste-to-Energy Plants: similar to coal fired plants except use garbage instead of coal
to create high pressure heat steam to generate electricity through a turbine
Disadvantages: Environmental cost

GREEN TECHNOLOGY BIOMASS PEACHTREE GREEN ADVISORS 31

Geothermal & Hydro
Geothermal is 0.3% of US energy consumption
Geothermal energy is produced by drilling into the earth and using steam or hot water to
heat a building or generate electricity
Recent advances mean that geothermal energy can play an increasing role worldwide
New drilling techniques tap into resources previously too deep to access
New ways of extracting useful power from lower temperature geothermal fields allow
productive use of resources that could not have been used economically in the past

Hydro, Ocean, and Tidal are 2.4% of US energy consumption
Hydro is power generated from water, primarily from large-scale dams
Accounts for approximately 20% of global energy production
Disadvantage: potential impact on wildlife and agriculture downstream from the dam
Tidal and wave power are being developed on a much smaller scale
Tidal power harnesses the energy of either currents created by the tides
Wave power is in a much earlier stage of development than the technology for
harnessing tidal power

GREEN TECHNOLOGY GEOTHERMAL PEACHTREE GREEN ADVISORS 32

Enabling Technologies
Enabling technologies influence the way energy is distributed, stored and consumed
These investment opportunities are critical to shifting to a low-carbon energy system
Four key enablers for a shift to clean energy are:
Energy efficiency
The cheapest way to reduce CO2 is to use less energy
Smart grids
Decentralized power supply that fluctuates with demand-side applications and
software for energy management
Energy storage
Both hybrid cars and bulk storage for homes to balance short term grid fluctuations
Carbon capture and storage
Removing CO2 from processes that utilize fossil fuels for power or industrial
applications, then trapping it in subsurface geological formations or using the gas
for other purposes

Limited government incentives

GREEN TECHNOLOGY ENABLING TECHNOLOGIES PEACHTREE GREEN ADVISORS 33

Energy Efficiency
The quickest way to reduce greenhouse emissions is to close the gap between energy
demand and energy supply through energy efficiency
McKinsey Global Institute reported $170 billion in efficiency investments that could
return and average of 17% IRR per year for investors
Policy is still needed to drive/change consumer and business behavior
Energy efficiency standards, regulations and incentives
Energy efficiency sectors of opportunity
Industrial sector (49%)
Residential (23%)
Transportation (15%)
Commercial (15%) - Source: World Economic Forum.


ENABLING EFFICIENCY SMART GRID STORAGE CARBON

Smart Grid
The US electric grid - the power infrastructure - is overtaxed and rapidly running up
against limitations
Smart (or Smarter) Grid
Comparable to the construction of the interstate highway system or the
development of the Internet
Why? Reliability (period)
The Northeast blackout of 2003 resulted in a $6 billion economic loss to the region
(DOE)
Smart Grid Technology Focuses On…
Ensuring reliability to degrees never before possible
Maintaining affordability
Reinforcing US global competitiveness
Fully accommodating renewable and traditional energy sources
Potentially reducing our carbon footprint

GREEN TECHNOLOGY ENERGY EFFICIENCY PEACHTREE GREEN ADVISORS 35

Smart Grid

It’s all about integration
Integrating a variety of technologies aimed to optimize energy supply and demand
Modern Grid: A System of Integrated Technologies
There are no “silver bullets”; the very act of looking for them costs money
The answer is a “silver buckshot” (DOE)
Analysis showed that significant modernization results from smartly integrating
suites of technology that deliver the principal characteristics, which improve grid
performance

Sensing and Advanced Control Improved Interfaces &
Measurement Methods Decision Support
IC IC

IC

Advanced
Components IC = Integrated Communication

Source: (National Energy Technology Laboratory)


ENABLING EFFICIENCY SMART GRID STORAGE CARBON

Energy Storage
Batteries and energy storage technologies become key enablers
Intermittent reality of many renewable energy and emerging energy technologies
Policy: Electric Drive Battery and Component Manufacturing Initiative
As of July 2009, more than 100 companies applied
$2.4 billion set to be divided into 32 to 35 grants in seven different categories
The cost of storing 1MWh of electricity ranges from $50 to $180
Though energy storage is currently expensive, it can increasingly be used to
smooth the supply of power or to bridge the gap between peak and night-time
electricity rates
Batteries & Flywheels
Plug-in hybrids (PHEVs) will most likely use lithium ion batteries
Sodium sulfur batteries implemented for peak power load leveling and storage of
intermittent wind energy
Flywheels are being explored as an option for high power density applications,
such as balancing short-term grid fluctuations

GREEN TECHNOLOGY ENERGY EFFICIENCY PEACHTREE GREEN ADVISORS 37

GREEN TECH
M&A ENVIRONMENT

GREEN TECHNOLOGY MERGERS AND ACQUISITIONS PEACHTREE GREEN ADVISORS 38

Global M&A Trends
Acquisition transactions by type, 2002-2008, $
According to New Energy Finance, Global billions

M&A dropped 16% in 2008
The $21.7 billion in M&A in 2008 is
significantly down from $25.9 billion in
2007
Clean tech M&A was curbed by
global credit crisis (access to
acquisition capital limited)

The majority of change of control
transactions were asset acquisitions or
refinancing transactions
A decrease in VCs exiting into the
public markets (low valuations)
Slight increase in private equity buy-
outs in 2008 as well

Peachtree Media Advisors, Inc. is currently building its internal transactions database for its Green Tech
M&A Round Up 2009 Report focusing on U.S. transactions only


Global M&A Trends
Acquisition transactions by technology, 2008, and growth
on 2007, $ billions
Wind experienced the lion’s share of the
volume of M&A transactions in 2008
Consolidation swept through
Europe’s wind market (UNEP)
In 2008, the 42 transactions in the
wind sector represented 38% growth
over 2007
Solar had 11 transactions globally,
representing a 29% increase over the
previous year
Biofuel transaction volume decreased by Note: Total values include estimates for undisclosed deals
38% to five transaction in 2008 Source: New Energy Finance, UNEP SEFI

Manufacturing and technology supply chain acquisitions
In 2008, 29.5% of all renewable energy deals were for such assets – up from11% in
2007 (source New Energy Finance)
Companies seeking to secure an end-to-end supply chain footprint

E-mail JohnD@PeachtreeGreenAdvisors.com to receive the
2009 Green Tech M&A Round Up Report in January 2010


Global M&A Trends
Global Acquisition transactions by sector. 2002-2008,
Solar was the only sector to see an $ billions
increase in M&A spending
Solar increased 60% from $4 billion in
2007 to $6.4 billion in 2008
Biofuels had the largest decrease
Biofuels decreased 27% from $2.6
billion in 2007 to $1.9 billion in 2008
Equipment manufacturing had the largest
level of M&A activity ($9.4 billion)
Deals targeting developers saw the largest
increase ($7.3 billion in 2008 and increase
of 156% over 2007)

M&A activity is likely to increase as well-capitalized players take advantage of lower energy
company valuations and some distressed opportunities
Factors the will drive M&A are increasing valuations, an improving economy (demand
for energy) and a the continuation of favorable renewable energy policies


Venture Capital & Private Equity
Global VC/PE new investment by stage, 2002 -
2008, $ billions
VC/PE invested $19.3 billion in renewable
energy and energy efficiency companies in
2008, an increase of 43% compared with 2007

The majority of global transactions in the
renewable sector were PE expansion capital
investments

Globally, more than 500 funding rounds too
place during 2008
VCs were more active in the second and
third quarters of 2008 with a sharp decline
in Q4 2008
AVA Solar $104m Series B round led by
DCM Venture Capital
Early-stage investment in biofuels was Note: Buy-outs are not included as new investment. Total
focused on firms exploring ground- values include estimates for undisclosed deals.
breaking technologies Source: New Energy Finance, UNEP, SEFI.


Financial new investment by technology, 2008, and growth on
Leading sustainable energy sectors 2007, $ billions
Wind attracted the highest amount of
new investment $52 billion
The most mature and best –
established sustainable energy
generation technology
Solar received $34 billion of new
investment, up 49% over 2007
Biofuels received $17 billion of new
investment, down 9% from 2007

Note: New investment volume adjusts for re-invested equity. Total values include
estimates for undisclosed deals

Source: New Energy Finance, UNEP SEFI


Total Transaction Value
New Investment in Sustainable Energy, 2002-2008
$ billion
In 2008, total global transaction value in the
renewable energy sector was $155 billion,
representing a 5% increase over 2007,
according to NEF and UNEP
The increase in total transaction value
of 5% was well below the 59% increase
in 2007 over 2006

UNEP Source: www.unepfi.org

S/RP = small/residential projects. New investment volume adjusts for re-
invested equity. Total values include estimates for undisclosed deals

NEF Source: www.newenergyfinance.com Source: New Energy Finance


U.S. Green Tech M&A Trends


2008 M&A Activity
Greentech transaction volume was 2008 Greentech M&A Transaction Volume (#) and Value ($mil)
resilient in first half of 2008 amidst a
credit crisis and economic downturn Segment Transactions Value
Solar 89 $3,461
Drop off after Sep 2008 Biofuel 69 2,016
Biomass 8 255
In 2008, Solar and Biofuel were the
Hydro, Ocean Tidal 4 1,915
two largest segments Geothermal 8 167
More than half of total combined Wind 21 777
Diversified Renewables 13 164
deal volume in the sector (55%)
Smart Distribution 11 274
Solar power and biofuel producers Energy Storage 16 291
require more capital to build Energy Efficiency 43 507
Carbon Capture and Sequestration 4 27
production facilities
Hydrogen and Fuel Cell 6 78
These two segments secured Total 292 $9,932
twelve raises exceeding $100
Source: Peachtree Media Advisors, Inc.
million in 2008

GREEN TECHNOLOGY TYPES OF ALTERNATIVE ENERGY PEACHTREE GREEN ADVISORS 46

2009 M&A Activity
In the first seven months of 2009, 101 transactions were completed for a reported
$2.29 billon in deal value versus 171 transactions and $4.90 billion for the same
period in 2008
Deal volume declined 40.9% and deal value declined 53.3% in the 1st seven
months of 2009 vs 2008
Average deal size decreased as well in this same period comparison
Transaction Volume by Segment in First Seven Months Transaction Value by Segment in First Seven Months ($mil)
1st 7 mo. 1st 7 mo.
Segment 2009 2008 Segment 2009 2008
Solar 29 51 Solar $877 $1,909
Biofuel 19 48 Biofuel 644 1,598
Biomass 5 5 Biomass 57 33
Hydro, Ocean Tidal 2 1 Hydro, Ocean Tidal 22 3
Geothermal 0 3 Geothermal 0 94
Wind 7 14 Wind 41 655
Diversified Renewables 2 5 Diversified Renewables 7 43
Smart Distribution 6 6 Smart Distribution 94 73
Energy Storage 7 8 Energy Storage 252 124
Energy Efficiency 21 25 Energy Efficiency 223 330
Carbon Capture and Sequestration 1 2 Carbon Capture and Sequestration 50 14
Hydrogen and Fuel Cell 2 3 Hydrogen and Fuel Cell 21 27
Total 101 171 Total $2,288 $4,904

Source: Peachtree Media Advisors, Inc. Source: Peachtree Media Advisors, Inc.

GREEN TECHNOLOGY TYPES OF ALTERNATIVE ENERGY PEACHTREE GREEN ADVISORS 47


VCs less willing to take risks on early-stage pre-profitable businesses
Significantly longer time to get to commercialization, if at all
The impact of the Recession ‘08 on clean tech – people less receptive to new
technologies during a downturn
VCs (and nearly everyone else) retrenched to positions where they felt more
comfortable

VCs moved down the value chain to later-stage investment opportunities
Lower valuations and a down M&A market limited exit opportunities
Without a clear exit strategy (healthy buyers), VCs are hesitant to fund start ups
Large UK investors APAX and 3i recently announced that they were abandoning
early-stage investments

GREEN TECHNOLOGY MERGERS AND ACQUISITIONS PEACHTREE GREEN ADVISORS 48

Public Market Company Valuations


Greentech Public Market Values
Comparable Public Company Multiples ($ millions, except multiples)
LTM LTM Rev EBITDA
Company Market Cap Total Debt Cash EV Revenue EBITDA Mulitple Multiple
SOLAR
Akeena Solar, Inc. 38 1 3 36 36 (22) 1.0x n/a
EMCORE Corporation 107 16 15 108 246 (42) 0.4x n/a
Energy Conversion Devices, Inc. 730 316 423 624 351 77 1.8x 8.1x
Evergreen Solar Inc. 381 314 57 639 145 (39) 4.4x n/a
First Solar, Inc. 16,355 228 625 15,958 1,468 626 10.9x 25.5x
GT Solar International, Inc. 1,039 0 94 945 535 170 1.8x 5.6x
Premier Power Renewable Energy, Inc. 98 0 3 95 44 (0) 2.1x n/a
SunPower Corporation 2,672 468 149 2,990 1,375 242 2.2x 12.3x
Suntech Power Holdings Co. Ltd. 2,561 1,717 508 3,770 1,924 224 2.0x 16.8x
MEAN 3.0x 13.7x

BIOFUEL
Bluefire Ethanol Fuels, Inc. 39 0 2 38 1 (13) 33.3x n/a
Green Plains Renewable Energy, Inc. 110 337 54 393 473 4 0.8x 99.5x
Verenium Corporation 59 126 16 169 69 (65) 2.5x n/a
MEAN 12.2x 99.5x

WIND
Broadwind Energy, Inc. 883 41 6 918 235 (1) 3.9x n/a
MEAN 3.9x -

Sources: CapitalIQ; Company SEC Filings. Stock Price 7-29-09.

GREEN TECHNOLOGY PUBLIC MARKET VALUES PEACHTREE GREEN ADVISORS 50

LTM LTM Rev EBITDA
BIOMASS
Covanta Holding Corporation 2,371 1,982 159 4,193 1,634 504 2.6x 8.3x
MEAN 2.6x 8.3x

GEOTHERMAL
LSB Industries Inc. 331 102 52 381 739 69 0.5x 5.5x
Ormat Technologies Inc. 1,737 465 43 2,159 375 132 5.8x 16.3x
WaterFurnace Renewable Energy, Inc. 255 0 6 249 138 24 1.8x 10.4x
MEAN 2.7x 10.7x

EFFICIENCY
AeroVironment, Inc. 595 0 102 494 236 38 2.1x 13.1x
Composite Technology Corporation 76 8 3 81 62 (35) 1.3x n/a
Comverge, Inc. 225 30 28 227 78 (12) 2.9x n/a
Echelon Corporation 298 26 29 296 117 (24) 2.5x n/a
EnerNOC, Inc. 487 5 54 437 106 (29) 4.1x n/a
Lime Energy Co. 52 8 9 51 69 (7) 0.7x n/a
Orion Energy Systems, Inc 79 4 36 47 73 2 0.6x 27.1x
PowerSecure International, Inc. 78 6 23 61 122 10 0.5x 6.2x
MEAN 1.9x 15.5x

HYDRO, OCEAN & TIDAL
Ocean Power Technologies, Inc 71 0 8 63 5 (20) 14.0x n/a
MEAN 14.0x -


LTM LTM Rev EBITDA
ENERGY STORAGE
Advanced Battery Technologies Inc. 215 0 34 182 46 19 4.0x 9.6x
Axion Power International Inc. 38 0 3 34 1 (8) 43.4x n/a
Ener1, Inc. 758 27 4 781 15 (35) 52.2x n/a
EnerSys 929 436 105 1,260 2,162 215 0.6x 5.8x
Kinder Morgan Management LLC 3,674 0 - 3,674 NA NA n/a n/a
Polypore International Inc. 466 793 96 1,163 574 148 2.0x 7.8x
Ultralife Corp. 123 22 1 144 245 19 0.6x 7.5x
Valence Technology Inc. 268 54 8 313 29 (15) 10.7x n/a
MEAN 16.2x 7.7x

WASTE MANAGEMENT
American Ecology Corp. 349 0 24 325 165 41 2.0x 8.0x
Casella Waste Systems Inc. 64 582 3 643 576 121 1.1x 5.3x
Waste Management, Inc. 13,574 8,789 947 21,416 12,932 3,390 1.7x 6.3x
MEAN 1.6x 6.5x

DIVERSIFIED RENEWABLE
Energy Composites Corporation 189 7 3 194 10 (1) 19.6x n/a
GreenHunter Energy, Inc. 20 71 1 90 8 (31) 11.3x n/a
Satcon Technology Corporation 107 6 7 106 66 (13) 1.6x n/a
MEAN 10.8x -

OVERALL RENEWABLE MEAN 6.6x 15.3x
OVERALL RENEWABLE MEDIAN 2.1x 8.2x


LTM LTM Rev EBITDA
DIVERSIFIED ENERGY
Avista Corp. 859 1,166 36 1,990 1,668 286 1.2x 7.0x
Calpine Corp. 5,467 10,475 1,626 14,316 9,663 1,804 1.5x 7.9x
Chevron Corp. 131,927 12,194 9,150 134,971 225,440 43,543 0.6x 3.1x
ConocoPhillips 67,574 29,379 802 96,151 202,079 35,355 0.5x 2.7x
Exelon Corp. 31,548 13,164 2,149 42,563 19,064 7,043 2.2x 6.0x
IdaCorp, Inc. 1,086 1,512 89 2,508 976 305 2.6x 8.2x
Integrys Energy Group, Inc. 2,075 2,941 332 4,684 13,259 473 0.4x 9.9x
PNM Resources Inc. 804 1,715 70 2,448 1,981 248 1.2x 9.9x
Progress Energy Inc. 9,847 12,365 632 21,580 9,543 2,797 2.3x 7.7x
Rentech, Inc. 100 106 63 143 202 (16) 0.7x n/a
Sunoco Inc. 3,557 2,513 206 5,864 45,230 2,155 0.1x 2.7x
The AES Corporation 6,340 17,957 1,267 23,030 15,367 4,169 1.5x 5.5x
Valero Energy Corp. 11,552 7,576 1,715 17,413 104,167 5,411 0.2x 3.2x
Wisconsin Energy Corp. 4,428 4,887 17 9,297 4,396 1,078 2.1x 8.6x
Xcel Energy Inc. 7,810 8,564 301 16,072 10,870 2,385 1.5x 6.7x
Syntroleum Corp. 168 0 17 151 24 5 6.4x 33.2x
MEAN 1.6x 8.2x

OVERALL MEAN 5.1x 12.2x
Sources: CapitalIQ; Company SEC Filings. Stock Price 7-29-09. OVERALL MEDIAN 2.0x 7.9x


The WilderHill New Energy Global Innovation Index (NEX)

NEX is a benchmark index of 88 clean energy stocks
In late 2008, the index dropped 291 points or 68.8% in the six month period between Jul
2008 and Dec 2008
The index has since recovered and appears to have an upward trajectory

WHY
PEACHTREE?


Why Peachtree Media Advisors?

A small investment bank with a global network

Extensive knowledgebase of companies in the clean energy sector
More than 20 closed transactions
Specialization in the rapidly growing clean tech and Interactive media sectors
Personal relationships with digital media, tech and green tech investors
A growing global network of investor contacts (U.S., Brazil, China, Australia and the UK)
Extensive tracking of all strategic buyers, investors and transactions in clean tech sector
Combining investment banking expertise with Department of Energy Grant writing
Substantially better service and lower fees than competition
Expert M&A Advisory practice for smaller and mid-size technology companies
Financial advisory services for green tech – project finance, debt, lease financing,
partnerships, venture capital and Department of Energy grant writing
Competition is unwilling to navigate outside of comfort zone
A growing team with a solid reputation in new media, technology and now green tech


THE PEACHTREE
M&A SALE PROCESS


Peachtree Transaction Process

Five primary phases
(4 to 6 month process)

Information memorandum
Marketing/expressions of interest
Management presentations
Due diligence/letter of intent
Final negotiations/close


Information memorandum – Month 1
Initial information request
Develop strategic positioning
Most compelling investment merits
Highlight buyer interests
Create information memorandum
Exec Summary
Investment Merits
Market Served
Products & Services
Operations
Growth Opportunities
Finance
Management & Organization
Buyer target list


Marketing/expressions of interest – Months 2 and 3
Initial contact with senior level decision
makers
Non-disclosure agreement
Dissemination of information memorandum
Process letter requesting non-binding
expression of interest
Terms
Initial valuation
Preliminary deal structure
Source of capital
Review bids


Management presentations – Month 4
Select/invite prospects to go to the next round
Management presentation
An informative presentation given by
management to select bidders
Q&A session
Discussion of process and next steps
Second round process letter sent to
management presentation attendees
Request for Letter of Intent (LOI)
Terms of deal structure
Indicate initial terms of purchase and sale
agreement
Bidder proposed capital structure


Due Diligence – Month 5
Due diligence
Continued discussion with
management via conference call
Extensive review of data room, legal
documents, agreements and
operating contracts


Letter of Intent/Final Negotiation/Closing – Month 6
Review of LOIs
Comparison of final bids
Final negotiations with top bidders
Choosing the final bidder
Confirmatory due diligence
Closing


About John Doyle
Established by John Doyle, Peachtree Media Advisors, Inc. serves the interactive
marketing, digital and out-of-home sectors of media. Mr. Doyle has more than twelve
years of media investment banking experience, having worked as a senior level
investment banker at Veronis Suhler Stevenson and JEGI.
After graduating from Dartmouth College In 1995 with a double major of Engineering
and Economics, Mr. Doyle specialized in the business information services and
specialty media and marketing services at Veronis Suhler Stevenson (VSS). While at
VSS, Mr. Doyle performed M&A advisory services to sell-side and buy-side clients, in
addition to developing platform acquisition strategies, performing leveraged buy out
analysis and conducting due diligence for the VSS private equity funds.
In 2000, Mr. Doyle successfully launched a digital production company in Los Angeles, CA,
developing both online and offline digital content. In 2001, the company transitioned to focusing
solely on raising money for offline film and television projects. Mr. Doyle has worked with Conde
Nast, Fox Cable Networks, 20th Century Fox, Writers & Artists Agency and Revolution Studios.
In 2004, Mr. Doyle returned to media investment banking with The Jordan, Edmiston Group, Inc. His
primary responsibilities included developing qualitative and quantitative analytical materials at each
phase of the M&A transaction process. Highly experienced in valuing, analyzing and positioning
media businesses, Mr. Doyle was responsible for closing more than ten media M&A transactions.
Peachtree Media Advisors, Inc. was established to serve the merger and acquisition advisory needs
of the interactive marketing, digital consumer and out-of-home sectors of media. With a substantial
amount of media operations and investment banking experience, Mr. Doyle is able to deliver expert
advice in valuing new media assets, positioning companies during the sale process, developing
information memoranda to send to potential buyers or investors, coaching management through
presentations, developing bids/deal structure analysis and managing the due diligence process to
closing.


Peachtree Green Advisors
A Division of Peachtree Media Advisors, Inc.

August 2009

50 Vanderbilt Ave., #30
New York, NY 10017
T: (212) 570-1009
F: (646) 607-1786

www.PeachtreeGreenAdvisors.com

▪
JohnD@PeachtreeGreenAdvisors.com


About Peachtree Green Advisors2009

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