The document summarizes the results of the Grid Parity Monitor, which analyzes the proximity of grid parity for residential PV systems in various countries. Key findings include: - Grid parity has been reached in several European and Latin American markets like Germany, Italy, Chile, and for some customer segments in Mexico. Low electricity prices still prevent grid parity in France. - Supportive policies like net metering and net billing regulations are important to foster PV self-consumption markets where grid parity has been achieved. - While grid parity is closest in locations with high solar irradiation, factors like installation costs, electricity prices, and financing conditions also significantly influence the analysis.

1. PV Grid Parity Monitor for residential
consumers
Financial AdvisoryStrategy Consulting Market IntelligencePolicy Consulting
Leonardo ENERGY Webinar Series/ Madrid (Spain)
05 March 2015 at 17h30 CET
María Jesús Báez, Manager
mjb@creara.es
Rocío Moya, Analyst
rmm@creara.es
GPM 3rd Issue Residential Segment

2. • ECLAREON - CREARA
• Grid Parity Monitor (GPM)
- Introduction
- Definitions and Methodology
- Results
- Conclusions
Agenda
2

3. 3
• Founded in Madrid in 2003
• Specialist in energy efficiency
and energy savings
• CREARA’s services:
- Consulting
- Engineering
- Management
- Training
Creara and Eclareon (Spain) merged their business to form Creara Energy
Experts and consolidate their leadership in sustainable energy services
• Opened in Madrid in 2005
• Management consultants in
smarter energy
• ECLAREON’s services:
- Policy consulting
- Strategy consulting
- Financial advisory
- Market intelligence
RECENT CORPORATE EVENTS COMPANY OVERVIEW

4. • ECLAREON-CREARA
• Grid Parity Monitor (GPM)
- Introduction
- Definitions and Methodology
- Results (Europe and Asia)
- Conclusions
Agenda
4

5. PV “grid parity” is the moment when the cost of generating PV
electricity is equal to the price paid for grid electricity
For the sake of simplicity
this report compares PV
LCOE with retail electricity
prices
In reality, depending on the
local self-consumption
regulation, a part of the PV
generation might be lost or
valued at a lower rate (100%
self-consumption ratios are
not attainable)
Note: * Levelized Cost of Electricity
Source: CREARA analysis
INTRODUCTION
Grid electricity price
PV electricity cost (LCOE*)
EUR ct /
kWh
Grid Parity
Years
Simplistic Illustration of PV Grid Parity
• Grid electricity is cheaper than
PV-generated electricity
- PV needs support
mechanisms (FiT, tax credit,
etc.)
• PV-generated electricity is
cheaper than grid electricity
- It is more convenient to self-
consume PV electricity than
to buy electricity from the
utility
5

6. The PV Grid Parity Monitor may well be one of the most
comprehensive analyses of PV grid parity to date
INTRODUCTION
Overview of PV Grid Parity Monitor
Objective
• To analyze the proximity of grid parity from the viewpoint of a residential consumer
- Total final costs of generating PV electricity with a 3kW/3.3kWp PV system are compared with
residential retail electricity prices
Methodology
• It is based on a rigorous and transparent methodology
- This presentation includes a summary of the main assumptions and considerations
Geographical
Focus
• 5 potential markets in Europe: France, Germany, Italy, UK, and Spain
• 7 promising markets outside Europe: Australia, Brazil, California, Chile, Japan, Israel, and
Mexico
Frequency • It is recurrent: it will be updated every year to show the evolution of PV grid parity proximity
Inputs
• It uses real and up-dated data as inputs, not estimates
- Includes turnkey quotations of local PV installers from each of the countries under study
• It includes specific and detailed information per country (and city, when applicable)
- For example, the discount rate, retail electricity prices, and inflation
Source: CREARA
6

7. The PV Grid Parity Monitor is sponsored by renowned international
companies
Gold Sponsor
INTRODUCTIONSPONSORS
7

8. The PV Grid Parity Monitor is supported by relevant partners
Partner Associations
Technical PartnersSupported by
INTRODUCTIONPARTNERS
8

9. LCOE of a PV system refers to the constant and theoretical
cost of generating PV electricity over the PV system lifetime
DEFINITIONS & METHODOLOGY
0
200
400
600
800
1.000
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
0
10
20
30
40
50
60
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
EUR ct /
kWh
EUR
8,800
9,000
Indicative Total Cost of a Small-Scale PV System
PV LCOE of the PV System
Source: CREARA analysis
• PV Levelized Cost of Energy (LCOE)
accounts for all costs associated with a PV
system over its life
- These may include initial investment, O&M,
taxes, debt service, among others
• It assumes a constant value per year and is
expressed as cost per kWh
- It incorporates total PV electricity generated
over the system’s lifespan
• It considers the return required from the
investment, to discount future costs (and
production) to present
Initial Investment
Operating Expenses
Key:
9

10. For a specific PV system, PV LCOE is fixed as soon as the PV
system is built, but grid electricity prices are likely to increase
LCOE of PV Technology vs. Grid Electricity Price
0
5
10
15
20
25
30
2009S1 2009S2 2010S1 2010S2 2011S1 2011S2 2012S1
Years
EUR ct/
kWh
LCOE of PV technology
Grid electricity price
0
10
20
30
40
50
60
70
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
EUR ct/
kWh
Years of operation of the PV system
Grid electricity price
LCOE of a specific PV system
installed in S1 2012
LCOE of A SPECIFIC PV System Installed S1 2012 vs. Grid Electricity Price
Source: CREARA analysis
DEFINITIONS & METHODOLOGY
10

11. 11
RESULTS
Grid Parity proximity and regulatory support (mainly via net
metering or net billing) vary significantly from country to country
Positioning Matrix of the countries analyzed
0,0
0,2
0,3
0,5
0,6
0,8
- +Regulatory support to PV self-consumption
-
+
GridParityProximity
Australia
Brazil
Chile
France
Germany
Italy Mexico
Spain
UK
California
Israel
Japan
Note: Data of 1st semester 2014
Source: CREARA Analysis

12. RESULTSBRAZIL
In Brazil, the reduction of electricity tariffs has pushed PV grid
parity further away
Note: * Compound Annual Growth Rate
Source: CREARA analysis
BRL ct/
kWh
Standard Tariff
Grid tariffs
PV LCOE (avg.) -14.8%
-8.4%
BRL ct/
kWh
Standard Tariff
Grid tariffs
PV LCOE (avg.) -14.8%
-6.2%
Past evolution of grid electricity price and PV LCOE
(SAO PAULO)
Past evolution of grid electricity price and PV LCOE
(ITACARAMBI)
• While in São Paulo PV
technology is still far from being
competitive against grid
electricity, in Itacarambi grid
parity could be reached sooner
- High installation prices and a
high discount rate still prevent
PV technology from being
competitive against grid
electricity
• The recently approved net-
metering regulation seems an
excellent instrument to foster the
PV self-consumption market
Assessment of Brazilian regulatory framework
for PV self-consumption
12
CAGR*
S1'09-S1'14
CAGR*
S1'09-S1'14
0
50
100
150
200
250
300
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
0
50
100
150
200
250
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1

13. RESULTSCHILE
PV Grid Parity has already been reached in the residential
segment, albeit to different extents in different locations of Chile
CLP/
kWh
Standard Tariff
Surcharge tariff (Winter)
Grid tariffs
PV LCOE (avg.) -19.3%
-9.3%
-8.1%
CLP/
kWh
Standard Tariff
Surcharge tariff (Winter)
Grid tariffs
PV LCOE (avg.) -19.3%
-6.7%
-5.5%
Past evolution of grid electricity price and PV LCOE
(SANTIAGO)
Past evolution of grid electricity price and PV LCOE
(COPIAPÓ)
• Full Grid Parity has been reached
in Northern Chile, whilst in other
locations with lower irradiation
only partial grid parity has been
reached
- In Santiago, Grid Parity is only
partial since PV LCOE is only
competitive with the rate
applicable to excess
consumption in winter
• The net billing regulation, which
has recently been implemented
is, on a first evaluation, a proper
incentive to generate a PV self-
consumption market
Assessment of Chilean regulatory framework
for PV self-consumption
Note: * Compound Annual Growth Rate
Source: CREARA analysis
13
CAGR*
S1'09-S1'14
CAGR*
S1'09-S1'14
0
50
100
150
200
250
300
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
0
50
100
150
200
250
300
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1

14. RESULTSFRANCE
Low electricity prices still prevent Full Grid Parity from being
reached in France
EUR ct/
kWh
Standard Tariff
Grid tariffs
PV LCOE (avg.) -13.2%
7.7%
4.9%
EUR/
kWh
Grid tariffs
PV LCOE (avg.) -13.2%
Past evolution of grid electricity price and PV LCOE
(PARIS)
Past evolution of grid electricity price and PV LCOE
(MARSEILLE)
• Low electricity prices still
prevent Full Grid Parity for being
reached in France
• Currently, FiTs in France do not
incentivize the PV self-
consumption market
- BIPV systems are being
fostered over BAPV
- Self-consumption will gain
relevance provided that FiTs
are being reduced and
electricity becomes more
expensive
Assessment of French regulatory framework
for PV self-consumption
Note: * Compound Annual Growth Rate
Source: CREARA analysis
14
CAGR*
S1'09-S1'14
CAGR*
S1'09-S1'14
0
10
20
30
40
50
60
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
Peak Tariff
Off-Peak Tariff 9.4%
0
5
10
15
20
25
30
35
40
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
Standard Tariff
7.7%
4.9%
Peak Tariff
Off-Peak Tariff 9.4%

15. RESULTSGERMANY
Despite the low irradiation levels in Germany, full grid parity has
been reached throughout the country
EUR ct/
kWh Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -12.5%
7.7%
9.1%
EUR ct/
kWh Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -12.5%
9.4%
10.4%
12.5%
Past evolution of grid electricity price and PV LCOE
(BERLIN)
Past evolution of grid electricity price and PV LCOE
(MUNICH)
• Low PV installation prices, a low
discount rate and high retail
electricity prices compensate low
irradiation levels for Germany to
reach full Grid Parity in the
residential segment
• The EEG FiT scheme fosters the
self-consumption market in an
efficient way, as FiTs for small-
scale systems are currently lower
than the retail electricity price
Assessment of German regulatory framework
for PV self-consumption
Note: * Compound Annual Growth Rate
Source: CREARA analysis
15
CAGR*
S1'09-S1'14
CAGR*
S1'09-S1'14
0
10
20
30
40
50
60
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
0
5
10
15
20
25
30
35
40
45
50
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1

16. RESULTSITALY
In Italy, full grid parity has been reached and the market is driven
by a regulation that fosters self-consumption
EUR ct/
kWh
Grid tariffs
PV LCOE (avg.) -16.7%
EUR ct/
kWh
Grid tariffs
PV LCOE (avg.) -16.7%
Past evolution of grid electricity price and PV LCOE
(ROME)
Past evolution of grid electricity price and PV LCOE
(PALERMO)
• Thanks to competitive PV system
installation costs, high irradiation
levels and expensive grid
electricity prices, PV Grid Parity
has already been reached in the
residential segment in Italy
• The Scambio Sul Posto (SSP) net-
metering mechanism allows users
with PV systems under 200 kW to
obtain credits
- It is expected that the
methodology used to calculate
the credit amount will be
modified soon
Assessment of Italian regulatory framework for
PV self-consumption
Note: * Tiers correspond to different consumption levels **Compound Annual Growth Rate
Source: CREARA analysis
16
CAGR**
S1'09-S1'14
CAGR**
S1'09-S1'14
0
5
10
15
20
25
30
35
40
45
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
Standard Tariff (tier 2)*
Standard Tariff (tier 3)*
Standard Tariff (tier 4)* 2.0%
3.2%
1.7%
Standard Tariff (tier 1)* -3.5%
0
5
10
15
20
25
30
35
40
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
Standard Tariff (tier 2)*
Standard Tariff (tier 3)*
Standard Tariff (tier 4)* 2.0%
3.2%
1.7%
Standard Tariff (tier 1)* -3.5%

17. RESULTSMEXICO
In Mexico, PV is already competitive against grid electricity for
DAC consumers
MXN/
kWh
Standard Tariff
DAC Tariff
Grid tariffs
PV LCOE (avg.) -18.4%
8.9%
7.8%
MXN/
kWh
Standard Tariff
DAC Tariff
Grid tariffs
PV LCOE (avg.) -18.4%
8.9%
5.7%
Past evolution of grid electricity price and PV LCOE
(MEXICO CITY)
Past evolution of grid electricity price and PV LCOE
(HERMOSILLO)
• An excellent opportunity exists for
PV technology among DAC
consumers
- DAC consumers are
households with high electricity
consumption (about 500,000
potential clients in Mexico)
• Mexico´s Government introduced
at the end of 2013 an in-depth
energy reform
- The market is now open to the
private sector for both energy
generation and energy retailers,
an opportunity for the expansion
of the PV market
Assessment of Mexican regulatory framework
for PV self-consumption
Note: * Compound Annual Growth Rate
Source: CREARA analysis
17
CAGR*
S1'09-S1'14
CAGR*
S1'09-S1'14
0
1
2
3
4
5
6
7
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
0
1
2
3
4
5
6
7
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1

18. RESULTSSPAIN
Grid parity has been reached in Spain, but regulatory support is
still needed to develop the market
EUR ct/
kWh
Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -5.3%
7.9%
7.8%
4.4%
EUR ct/
kWh
Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -5.7%
4.4%
4.4%
1.1%
Past evolution of grid electricity price and PV LCOE
(MADRID)
Past evolution of grid electricity price and PV LCOE
(LAS PALMAS)
• Grid parity has been reached both
in Continental Spain and in the
Canary Islands
- PV is already competitive
against the standard (no TOU)
retail electricity price
- The perception on regulatory
risks has negatively impacted
grid parity proximity
• It is essential that the Spanish
Government publishes a regulation
to enable PV self-consumers to
feed their excess generation into
the grid in exchange for a
compensation
Assessment of Spanish regulatory framework
for PV self-consumption
Note: * Compound Annual Growth Rate
Source: CREARA analysis
18
CAGR*
S1'09-S1'14
CAGR*
S1'09-S1'14
0
5
10
15
20
25
30
35
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
0
5
10
15
20
25
30
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1

19. RESULTSUK
PV technology is still far from being competitive against grid
electricity prices in the residential segment in the UK
GBP ct/
kWh
Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -12.5%
1.4%
0.5%
2.1%
GBP ct/
kWh
Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -12.5%
-0.6%
-0.7%
0.8%
Past evolution of grid electricity price and PV LCOE
(LONDON)
Past evolution of grid electricity price and PV LCOE
(PLYMOUTH)
• In the UK, PV Grid Parity is still far
from being reached
- PV LCOE has experienced a
considerable decrease since
2009 but system prices have
stagnated in the last two years
• The FIT scheme for small-scale PV
systems fosters the PV self-
consumption market in an efficient
way
Assessment of UK’s regulatory framework for
PV self-consumption
Note: * Compound Annual Growth Rate
Source: CREARA analysis
19
CAGR*
S1'09-S1'14
CAGR*
S1'09-S1'14
0
10
20
30
40
50
60
70
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
0
10
20
30
40
50
60
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1

20. RESULTSUSA
In California, Partial Grid Parity has been reached in the residential
segment
USD ct/
kWh
BaseTariff
Standard Tariff
High Peak Tariff
Grid tariffs
PV LCOE (avg.) -6.3%
3.1%
3.7%
4.4%
USDct/
kWh
Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -6.3%
1.4%
4.4%
5.1%
Past evolution of grid electricity price and PV LCOE
(LOS ANGELES)
Past evolution of grid electricity price and PV LCOE
(SAN FRANCISCO)
• Both in Los Angeles and San
Francisco, PV LCOE of the most
competitive quotations is already
lower than the highest TOU
electricity rates
- PV self-consumption is an
attractive alternative for
consumers with a relatively high
proportion of electricity demand
during peak hours
• The Californian net-metering
system is a trendsetting policy on
how to promote PV self-
consumption in a cost-effective
way
Assessment of Californian regulatory
framework for PV self-consumption
Note: * Compound Annual Growth Rate
Source: CREARA analysis
20
CAGR*
S1'09-S1'14
CAGR*
S1'09-S1'14
0
5
10
15
20
25
30
35
40
45
50
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1
0
10
20
30
40
50
60
2009S1 2010S1 2011S1 2012S1 2013S1 2014S1

21. CONCLUSIONS
Main conclusions
• According to the study, in the first semester of 2014, the cost of PV generation as expressed by the
LCOE (Levelized Cost of Electricity) in the residential segment decreased in all of the cities
analyzed
- From a 28% annual decline in Australia to 5% in Spain, mainly as a result of the decreasing trend of
the cost of PV systems, driven by lower equipment prices (across the board) and increased
competition in emerging markets
• Results show that full grid parity has been reached in several countries
- This is the case of Chile (Copiapó), Germany, Italy, and Mexico for DAC consumers
• Even if Grid Parity (defined as the moment when PV LCOE equals retail electricity prices) has been
reached, regulatory cover is still necessary to foster the PV self-consumption market
- The Spanish case illustrates this rule very well: grid parity has been reached but with no
governmental support the market has failed to develop
• As 100% self-consumption is not likely to happen for a residential consumer, a proper valuation of
the excess of energy has to be performed to properly understand the business case of a specific
consumer
Source: CREARA
21

22. 22
The GPM is a Series of analyses that show the evolution of PV
competitiveness in different consumer segments: residential,
commercial, and utility-scale
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OVERVIEW of GPM reports
October‘12 May‘13 Feb’ 2015
March’14 May’15
Aug ’14 July’15
1ST ISSUE 2ND ISSUE 3RD ISSUE
RESIDENTIAL
COMMERCIAL
UTILITY SCALE
March’15CHILE
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