NASDAQ: IPWR

December 2015

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Forward Looking Statements

All statements in this presentation that are not based on historical fact are "forward looking statements." While management has based any forward looking statements included in this presentation on its current expectations, the information on which such expectations were based may change. These forward looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, whether the patents for our technology provide adequate protection and whether we can be successful in maintaining, enforcing and defending our patents, whether demand for our products, which we believe are disruptive, will develop and whether we can compete successfully with other manufacturers and suppliers of energy conversion products, both now and in the future, as new products are developed and marketed. Furthermore, we operate in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward looking statements.

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Reinventing Power Conversion

Disruptive Technology Platform for Power Conversion - Current technology provides long-term competitive advantages, supported

by extensive patent portfolio of 40+ patents - Next generation of technology has potential to further expand competitive

advantages - Technology brings innovation to large and rapidly growing markets

Enable Storage Markets & Scale into Mature Markets - Sales in commercial storage market growing, orders ramping - New micro-grid solutions for integrating storage w/ PV, wind & diesel - Cost reductions and new power switches to enter mature markets

Capital-Efficient Business Model - Driven by enabling technology and strong IP protection - Leverage licensing to penetrate global markets

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PPSA™ Delivers Transformerless Isolation

Bulk Capacitors

Power Switches

PWM Filter

Isolation Transformer

DC AC

Patented Power Packet Switching Architecture™ (PPSA) • 100% indirect power flow; all power temporarily stored in AC link • Eliminates a majority of passive components (transformer, inductors, capacitors)

Power Switches

Power Switches

DC or AC

DC or AC

AC Link Gateway

Conventional Power Inverter • Power flows continuously from input to output • High number of passive components (relative to PPSA) increase costs and

lower efficiency

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The Ideal Converter

Key Advantages

Transformerless with isolation

Higher efficiency

Multi-port capabilities

Compact and light

Low cost to power density

Higher reliability

Software enabled

Compatible with all battery types

We believe we have the only transformerless inverter that provides essential

isolation, a critical component to enable the battery connected grid

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Efficiency, Size & Weight Comparison

Ideal Power Princeton Power Ideal Power Princeton Power Model IBC-30 GTIB-30 IBC-125 GTIB-100 Power 30 kW 30 kW 125 kW 100 kW CEC Efficiency 96.50% 92.50% 96.50% ~94%* Weight in lbs 97 650 375 ~1250* Transformer Not required Built in Not required Required

*Requires external transformer Source: Company websites, Product datasheets

Princeton Power Princeton Power

Ideal Power’s patented PPSA technology delivers increased efficiency while reducing the size and weight of power conversion systems, resulting in lower installed cost/watt.

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Performance/Cost & Margin

Conventional Power

Converters

Current

With planned bi-directional transistors

-

R

ou

nd

tri

p E

ffic

ien

cy

+

- Power Density +

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Ideal Power Provides the Critical Link

PPSA enables the integration of storage, renewable power, distributed generation and the grid

Users, Consumers &

Businesses x

Bi-directional conversion enables energy from any port to any port

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Rapidly Declining Storage Costs Enable New Markets

Three large, rapidly growing markets are enabled by low cost storage: Stand Alone Energy Storage Integration of Solar and Storage Micro-grids

Source Data: Navigant Research and Zpryme Research & Consulting

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2015 2016 2017 2018 2019 2020

Storage Related Market

Microgrid PV + Storage Standalone Storage PCS Market

PCS for Storage $B

Storage Systems $B

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Commercial Storage Reduces Demand Charges

Peak Demand Reduction »Storage reduces

demand charges (kW)

»Solar reduces energy charges (kWh)

Source: Company website

US Commercial building electric utility costs can include both an energy ($/kWh) and a demand ($/kW) charge • Demand charges can run between 30-70% of the electricity bill1

1. Source: US Forest Service, “Saving Money by Understanding Demand Charges on Your Electricity Bill

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Commercial and Industrial Storage Scaling Today

Commercial & Industrial Storage:

• Peak shaving is just the tip of the iceberg - storage market driven by:

• Declining battery cost

• Increasing adoption of solar and wind

• Improving IRRs are enabling greater financing options

• Leading commercial storage solution providers using Ideal Power technology today - more to be announced

Commercial storage solution providers using Ideal Power technology today

Note: Gexpro is both distributing Ideal Power products to integrators and selling turnkey solutions to rapidly growing markets. KACO signed an agreement to resell Ideal Power products under its own label and will also integrate these products into its energy storage system.

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Utility Level Storage to Stabilize Grid

Utility Storage Market Drivers: • Wind and Solar Integration

• Energy Arbitrage

• Frequency Regulation & Ancillary Services

• Infrastructure Upgrade Deferral

• Locational Capacity

Different battery technologies will supply this market and Ideal Power battery converters are compatible with all.

120kW – 500kW Bonneville Power Authority, WA

Ideal Power is forming alliances with leading battery suppliers

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Microgrids, PV + Storage & Distributed Generation

• > 1.3 billion people live without reliable access to electricity2

• Ideal Power’s products are a key enabler in pairing solar PV with battery storage to replace diesel generators

• Multi-port solutions can accept batteries, renewable generation and backup gen set

• Reduction in diesel fuel use has the potential to drive compelling payback periods

• Behind-the-Meter Solar + Storage will be a $1 Billion market in the US alone by 20183

1. Energy Storage: Game Changer for Utilities, Tech & Commodities, Citigroup 2. Worldbank 3. US Solar-Plus-Storage Market to Surpass $1 Billion by 2018 Greentech Media, December 2014

“Return on investment from solar + battery storage by 2020 Will beat payback from solar now” – Citigroup1

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New Power Switch Opens Multi-$B Markets

Key Points

• Doubles power density (2X power from same size box) • Reduces size, weight and cost

• Opens mature power conversion markets for PPSA

• Expands competitive advantages

• $2.5M DOE grant for bi- directional switch development

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

Losses

Conventional Technology

IPWR Today

IPWR Next Gen Efficiency

100%

98%

96%

94%

99%

97%

95%

93%

Source: California Energy Commission (CEC), Company websites, Product data sheets

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Bi-directional Switches + Scale Opens Mature Markets

2020 Power Converter Market = $70B

Battery & Microgrid $2B CAGR 40%

VFD Motor Drives $34B CAGR 6%

EV Traction $8B CAGR 11%

UPS $10B CAGR 0%

Photovoltaic $8B CAGR 3%

Wind $6B CAGR 0%

Rail $2B CAGR 0%

Source: Inverter market trends for 2013 – 2020 and major technology changes report, February 2013, Yole Development

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Capital Efficient Business Model

• No manufacturing plants - Contract manufacturing - Receivable collection = payment terms

• Enabling partners – create sales leverage

• Licensing model to expand PPSA adoption

• Breakthrough design + robust software drive premium margins

• Few employees, light capital cost = premium ROI

• Highly scalable model

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Capital Structure

Ideal Power: NASDAQ IPWR Based in Austin, TX Capital Structure at September 30, 2015

• Market Capitalization: $77.7 M • Public Float: 6.0 M shares • Basic + Fully Diluted Shares: 9.4 M and 12.2 M shares • Cash Balance: $17.3 M • Debt Balance: $0.0 M

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Team with Vision

Key Management

R. Daniel Brdar Bill Alexander Tim Burns Ryan O’Keefe

CEO and Chairman CTO and Founder CFO SVP Bus Dev

• 25 years of experience in power industry

• CEO of Fuel Cell Energy, NASDAQ listed with $250M+ market cap

• Former GE executive

• Founder, Ideal Power • Principal Engineer, BAE

Systems • Prolific inventor with

45+ granted U.S. Patents

• CFO / Interim CEO, Rainmaker Systems

• Small & large cap public company experience

• Began career at Deloitte

• Experienced energy industry executive

• SVP Bus Dev, Younicos/Xtreme Power

• Former NextEra Energy and GE Executive

Independent Directors

Lon Bell, PhD David Eisenhaure Mark Baum

• Founder and former CEO of Amerigon Inc & Technar Inc

• Drove five inventions into mass production

• Principal, Eisenhaure Consulting • Founder and former CEO

/Chairman, Satcon Technology Corporation

• CEO of Imprimis Pharmaceuticals • Former fund manager with

transactional expertise

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Recent Highlights

Customer Engagement

• YTD 9/30 product revenue of $3.3 million vs. $842k in comparable prior year period

• Order backlog of $6.1 million as of November 9, 2015

• Received largest order in history; 14.5MWs spanning the entire product family

• Received first commercial orders for Asia for project installations in China and Japan

• Received first major order for the rapidly growing microgrid market

• Significantly expanded base of customers, alliance partners, and channels to market inclusive of Gexpro, Sonnenbatterie, KACO new energy, LG Chem, EOS, and Aquion

New Products

• Received certification for UL1741 conformance for Grid-Resilient 30kW 2-Port and Multi-Port PCS and 125kW 2-Port PCS, expanding product family

• Grid-Resilient PCS supports 50Hz + 60Hz allowing an expedited global roll-out

Technology

• Announced new B-TRAN semiconductor power switch technology

• Granted 11 patents for B-TRAN technology; 41 total patents issued

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2016 Milestones

• Customer Engagement

- Scaling order volumes, backlog and revenues

- Expand customer base with new strategic alliances & market channels

- Expand to markets of outside of North America

• New Products

- Complete certification for 125kW 3-Port product

- Announce new products utilizing PPSA technology

• Technology

- Complete and test initial B-TRAN devices; demonstrate switch performance

- Layout bi-directional switch commercialization roadmap

- Demonstrate PPSA technology in Variable Frequency Drive (VFD) application

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Investor Contact

MZ Group Matthew Hayden

949-259-4986 matt.hayden@mzgroup.us

www.mzgroup.us

www.idealpower.com