Welcome 1

CONFIDENTIAL

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

Chapter 1 – Introduction and Overview 9

been deployed at commercial scale to date. In the older parabolic trough design, mirrors focus solar radiation on a pipe through which a fl uid such as oil or a molten salt is pumped. The heated fl uid is then used to produce steam that drives a turbine connected to a generator. In the power-tower design, a fi eld of mirrors focuses solar radiation on the top of a tower through which a fl uid is pumped. Power-tower plants can operate at a higher fl uid temperature than parabolic trough plants, which increases overall effi ciency. In either design, the output of the generator at any point in time depends on the temperature of the fl uid, which is relatively insensitive to short-term changes in solar irradiance.

As a practical matter, these two CSP technologies can only be used at large scale. In addition, because CSP systems can only use direct sun-light, not sunlight diffused by haze or cloud cover, their performance is more sensitive to cloudiness and haze than the performance of PV systems. On the other hand, CSP facilities can economically provide hours of (thermal) energy storage, thereby producing power in hours with little or no sunlight, and they can be economically designed to use natural gas to

supplement solar energy in a fully dispatchable hybrid confi guration. Research on CSP is exploring ways to increase effi ciency by attaining higher temperatures and by converting more of the incident solar energy into thermal energy.

BUSINESS MODELS & ECONOMICS

Chapters 4 and 5 of this study consider the factors that determine the cost and value of solar electricity. Chapter 4 discusses the determinants of capital costs for PV generating facilities and describes the business models being used to support PV installations in the United States, while Chapter 5 explores how facility capital costs, insolation, and other factors affect the cost of electricity generated by PV and CSP systems. We then go on to consider the value of solar electricity and its determinants.

PV modules are commodity products; current production is concentrated in China and Taiwan but is supported by a global supply chain.34,35 Inverters are also a commodity product, traded internationally. PV system prices at all scales have declined considerably in recent years mainly because of reductions in module and inverter prices. As Chapter 4 notes, there is

Parabolic Trough Concentrating Solar Collector at Kramer Junction, CaliforniaSource: NREL 2012a

Gemasolar Solar Thermal Plant, owned by Torresol Energy©SENER

Figure 1.4 Solar CSP

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RJ Energy

1. Market Overview 2. Solar Segment 3. Company

Contents 2

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3

CONFIDENTIAL

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

Chapter 1 – Introduction and Overview 9

been deployed at commercial scale to date. In the older parabolic trough design, mirrors focus solar radiation on a pipe through which a fl uid such as oil or a molten salt is pumped. The heated fl uid is then used to produce steam that drives a turbine connected to a generator. In the power-tower design, a fi eld of mirrors focuses solar radiation on the top of a tower through which a fl uid is pumped. Power-tower plants can operate at a higher fl uid temperature than parabolic trough plants, which increases overall effi ciency. In either design, the output of the generator at any point in time depends on the temperature of the fl uid, which is relatively insensitive to short-term changes in solar irradiance.

As a practical matter, these two CSP technologies can only be used at large scale. In addition, because CSP systems can only use direct sun-light, not sunlight diffused by haze or cloud cover, their performance is more sensitive to cloudiness and haze than the performance of PV systems. On the other hand, CSP facilities can economically provide hours of (thermal) energy storage, thereby producing power in hours with little or no sunlight, and they can be economically designed to use natural gas to

supplement solar energy in a fully dispatchable hybrid confi guration. Research on CSP is exploring ways to increase effi ciency by attaining higher temperatures and by converting more of the incident solar energy into thermal energy.

BUSINESS MODELS & ECONOMICS

Chapters 4 and 5 of this study consider the factors that determine the cost and value of solar electricity. Chapter 4 discusses the determinants of capital costs for PV generating facilities and describes the business models being used to support PV installations in the United States, while Chapter 5 explores how facility capital costs, insolation, and other factors affect the cost of electricity generated by PV and CSP systems. We then go on to consider the value of solar electricity and its determinants.

PV modules are commodity products; current production is concentrated in China and Taiwan but is supported by a global supply chain.34,35 Inverters are also a commodity product, traded internationally. PV system prices at all scales have declined considerably in recent years mainly because of reductions in module and inverter prices. As Chapter 4 notes, there is

Parabolic Trough Concentrating Solar Collector at Kramer Junction, CaliforniaSource: NREL 2012a

Gemasolar Solar Thermal Plant, owned by Torresol Energy©SENER

Figure 1.4 Solar CSP

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Market

GDP of USD 3.1 Billion (Annual Growth 5.7%) Population: 250 M (50% Under 30 Years Old) Vast Natural Resources (Wind, Solar, Bio-Products) Solid Government Support (Clean Energy Solutions)

Overview 4

Laos  

Thailand  

Vietnam  

Cambodia  

Myanmar  

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Funding Requirements 5

Greenfield Existing Farms

PPA’s – No Funds

Landfill / Bio Project Dev.

Existing Plants

$32B $25B

Development Existing Farms

New PPA’s/LOA’s

$42B

Investment Requirements (USD): 2015-2030

Energy Efficiency Private Sector

$23B

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6

CONFIDENTIAL

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

Chapter 1 – Introduction and Overview 9

been deployed at commercial scale to date. In the older parabolic trough design, mirrors focus solar radiation on a pipe through which a fl uid such as oil or a molten salt is pumped. The heated fl uid is then used to produce steam that drives a turbine connected to a generator. In the power-tower design, a fi eld of mirrors focuses solar radiation on the top of a tower through which a fl uid is pumped. Power-tower plants can operate at a higher fl uid temperature than parabolic trough plants, which increases overall effi ciency. In either design, the output of the generator at any point in time depends on the temperature of the fl uid, which is relatively insensitive to short-term changes in solar irradiance.

As a practical matter, these two CSP technologies can only be used at large scale. In addition, because CSP systems can only use direct sun-light, not sunlight diffused by haze or cloud cover, their performance is more sensitive to cloudiness and haze than the performance of PV systems. On the other hand, CSP facilities can economically provide hours of (thermal) energy storage, thereby producing power in hours with little or no sunlight, and they can be economically designed to use natural gas to

supplement solar energy in a fully dispatchable hybrid confi guration. Research on CSP is exploring ways to increase effi ciency by attaining higher temperatures and by converting more of the incident solar energy into thermal energy.

BUSINESS MODELS & ECONOMICS

Chapters 4 and 5 of this study consider the factors that determine the cost and value of solar electricity. Chapter 4 discusses the determinants of capital costs for PV generating facilities and describes the business models being used to support PV installations in the United States, while Chapter 5 explores how facility capital costs, insolation, and other factors affect the cost of electricity generated by PV and CSP systems. We then go on to consider the value of solar electricity and its determinants.

PV modules are commodity products; current production is concentrated in China and Taiwan but is supported by a global supply chain.34,35 Inverters are also a commodity product, traded internationally. PV system prices at all scales have declined considerably in recent years mainly because of reductions in module and inverter prices. As Chapter 4 notes, there is

Parabolic Trough Concentrating Solar Collector at Kramer Junction, CaliforniaSource: NREL 2012a

Gemasolar Solar Thermal Plant, owned by Torresol Energy©SENER

Figure 1.4 Solar CSP

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Solar

Addressable Market - Solar 7

84 Billion

Total Spend ASEAN 2014-2035

22 B

Thailand Serviceable Available

Market

2.2 B

Target Share 10% of Market

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14,325

Solar Thailand 8

1,121 Thailand’s Solar Target

by 2020 (MW) Currently Deployed (Thailand) – (MW)

“Room For Growth”

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Feed In Tariff

Business Model 9

100m Kw

MW Generated (Per Annum)

.17-.18 Cents

FIT – Govt. (Average)

500m

Revenue Per Annum

(20% Market Share)

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Sample: Solar Farm 10 Solar PV – Ground Based System Location: Thailand Grid Connected PPA Agreement: 25 Years Off-Taker: PEA or EGAT (Govt.) COD Period: 1 Year from PPA Land: Rent or Purchase Options Feed In Tariff: THB 5.66 (US 18 cents) IRR: Above 15% Average Size Projects: 20 MW’s Total Pipeline: 374 MW’s (Shovel Ready within 2015)

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Sample: Solar Roof Top 11

Solar PV – Residential & Commercial Roof Top Location: Thailand Preferred: Grid Connected (Off-Grid Small %) PPA Agreement: 25 Years Off-Taker: PEA COD Period: 1 Year from PPA (with add 1 yr. add) Roof Top: Rental over 25 years ($30 USD Per Month) Feed In Tariff: THB 6.86 (US 21 cents) IRR: Above 17% Average Size Projects: 10 kW’s (Hundred’s of PPA’s) Total Pipeline: 30 MW’s (Ready within 2015) J

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Sample: ESCO 12

Energy Efficiency Projects for Private Sector Location: Thailand/Indonesia Energy Savings for Private Sector & Solar Returns Generated From Actual Savings Commercial Agreement: Building Owner Payback Period: 2-2.5 years Contract Period: 5 Years IRR: Above 22% Average Investment Per Project: USD 750 K Total Pipeline: 35 M USD (200+ Contracts) by end ‘16

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13

CONFIDENTIAL

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

Chapter 1 – Introduction and Overview 9

been deployed at commercial scale to date. In the older parabolic trough design, mirrors focus solar radiation on a pipe through which a fl uid such as oil or a molten salt is pumped. The heated fl uid is then used to produce steam that drives a turbine connected to a generator. In the power-tower design, a fi eld of mirrors focuses solar radiation on the top of a tower through which a fl uid is pumped. Power-tower plants can operate at a higher fl uid temperature than parabolic trough plants, which increases overall effi ciency. In either design, the output of the generator at any point in time depends on the temperature of the fl uid, which is relatively insensitive to short-term changes in solar irradiance.

As a practical matter, these two CSP technologies can only be used at large scale. In addition, because CSP systems can only use direct sun-light, not sunlight diffused by haze or cloud cover, their performance is more sensitive to cloudiness and haze than the performance of PV systems. On the other hand, CSP facilities can economically provide hours of (thermal) energy storage, thereby producing power in hours with little or no sunlight, and they can be economically designed to use natural gas to

supplement solar energy in a fully dispatchable hybrid confi guration. Research on CSP is exploring ways to increase effi ciency by attaining higher temperatures and by converting more of the incident solar energy into thermal energy.

BUSINESS MODELS & ECONOMICS

Chapters 4 and 5 of this study consider the factors that determine the cost and value of solar electricity. Chapter 4 discusses the determinants of capital costs for PV generating facilities and describes the business models being used to support PV installations in the United States, while Chapter 5 explores how facility capital costs, insolation, and other factors affect the cost of electricity generated by PV and CSP systems. We then go on to consider the value of solar electricity and its determinants.

PV modules are commodity products; current production is concentrated in China and Taiwan but is supported by a global supply chain.34,35 Inverters are also a commodity product, traded internationally. PV system prices at all scales have declined considerably in recent years mainly because of reductions in module and inverter prices. As Chapter 4 notes, there is

Parabolic Trough Concentrating Solar Collector at Kramer Junction, CaliforniaSource: NREL 2012a

Gemasolar Solar Thermal Plant, owned by Torresol Energy©SENER

Figure 1.4 Solar CSP

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Company

Well Positioned

Growing Demand for Clean Energy Population Expansion, Economic Growth Profitable Investment Structure Attractive Returns, Sector Demand Extremely Solid Team Finance, Operations, Delivery Sector Focus Verified Pipeline within Targeted Segments

14

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Dr. Ronnachit Mahattanapreut Executive Chairman With more than 30+ years building successful businesses, specifically as CFO of one of the largest Publically Listed Companies in Thailand.

Team 15

John Garabadian Chief Executive Officer Has achieved significant quality results over the last two decades in Asia, experienced in operations, management and start-ups.

Mesrop Nerkanian Chief Marketing Officer An experienced finance and marketing executive with over 15 years of experience in marketing and business development

Philip Butterworth Chief Operating Officer A successful operations executive with over 25 years of experience in international business management and operations.

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1) Significant Internal DD of Projects 2) Self Development Preferred 3) Clear Project Ownership (“RJ”) 4) Strong Partners: Technical, Finance 5) Dedicated Deliver Teams 6) Build Long Term Value, Strong P/E 7) Mitigate Risk

Operating Mantra 16

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17

CONFIDENTIAL

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

8 MIT STUDY ON THE FUTURE OF SOLAR ENERGY

PV technology is discussed in detail in Chapter 2. The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite. Those early cells relied on the silicon-wafer-based approach that continues to dominate the industry today. Manufacturing techniques have progressed enormously since then, and the price of solar cells and modules (which consist of multiple connected solar cells) has fallen dramatically. As Figure 1.3 suggests, PV genera-tors have no moving parts: when sunlight strikes a solar cell connected to an external circuit, a direct electric current (dc) fl ows. PV generating facilities include solar modules and inverters that convert direct current into grid-compatible alternating current (ac), as well as other electrical and structural components, such as wires and brackets. One key advantage of solar PV over conventional fossil-fueled or nuclear generation is its modularity: solar-to-electric power conversion effi ciency is unaffected by scale, though cost per unit of

generating capacity is signifi cantly lower for utility-scale installations (which generally have capacities measured in megawatts) than for residential systems (which typically have capacities measured in kilowatts).

While most PV cells made today are based on crystalline silicon, active research is underway to explore alternative designs and materials capable of reaching cost targets that are much more favorable than those anticipated for existing commercial technologies.xxii In Chapter 2, we provide a classifi cation scheme for new and existing PV technologies based on the complexity of their primary light-absorbing material. We further identify three characteristics that will almost certainly be shared by successful future PV technologies: higher effi ciency, lower materials use, and improved manufacturability.

CSP technology, discussed in detail in Chapter 3, is much less widely deployed, even though the fi rst CSP power station was built in Egypt in 1912–13 to run an irrigation system. Figure 1.4 shows the two CSP designs that have

The fi rst modern solar cells were produced in 1954 and deployed in 1958 on a U.S. satellite.

Figure 1.3 Solar PV

xxiiIn addition to silicon-based solar cells, cells based on thin-fi lm technologies are now commercially deployed. However, as we discuss below, it is unlikely that these commercial thin-fi lm technologies can make a signifi cant contribution to global electricity generation in the future because of materials scaling considerations.

Chapter 1 – Introduction and Overview 9

been deployed at commercial scale to date. In the older parabolic trough design, mirrors focus solar radiation on a pipe through which a fl uid such as oil or a molten salt is pumped. The heated fl uid is then used to produce steam that drives a turbine connected to a generator. In the power-tower design, a fi eld of mirrors focuses solar radiation on the top of a tower through which a fl uid is pumped. Power-tower plants can operate at a higher fl uid temperature than parabolic trough plants, which increases overall effi ciency. In either design, the output of the generator at any point in time depends on the temperature of the fl uid, which is relatively insensitive to short-term changes in solar irradiance.

As a practical matter, these two CSP technologies can only be used at large scale. In addition, because CSP systems can only use direct sun-light, not sunlight diffused by haze or cloud cover, their performance is more sensitive to cloudiness and haze than the performance of PV systems. On the other hand, CSP facilities can economically provide hours of (thermal) energy storage, thereby producing power in hours with little or no sunlight, and they can be economically designed to use natural gas to

supplement solar energy in a fully dispatchable hybrid confi guration. Research on CSP is exploring ways to increase effi ciency by attaining higher temperatures and by converting more of the incident solar energy into thermal energy.

BUSINESS MODELS & ECONOMICS

Chapters 4 and 5 of this study consider the factors that determine the cost and value of solar electricity. Chapter 4 discusses the determinants of capital costs for PV generating facilities and describes the business models being used to support PV installations in the United States, while Chapter 5 explores how facility capital costs, insolation, and other factors affect the cost of electricity generated by PV and CSP systems. We then go on to consider the value of solar electricity and its determinants.

PV modules are commodity products; current production is concentrated in China and Taiwan but is supported by a global supply chain.34,35 Inverters are also a commodity product, traded internationally. PV system prices at all scales have declined considerably in recent years mainly because of reductions in module and inverter prices. As Chapter 4 notes, there is

Parabolic Trough Concentrating Solar Collector at Kramer Junction, CaliforniaSource: NREL 2012a

Gemasolar Solar Thermal Plant, owned by Torresol Energy©SENER

Figure 1.4 Solar CSP

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Pipeline

Pipeline Summary 18

Type MW $  M IRR Status Solar  Farm 374 $  800 15% Pre-­‐Project  Management Solar  Roof  Top  22 $  50 17% Preparing  ApplicaBons ESCO -­‐  $35 21% Signing  Contracts Sub-­‐Totals 396 $885 17.6%

2015-2016

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Thank You!

19 Deutsche Bank Markets Research

Industry

Solar

Date

27 February 2015 North America

United States

Industrials

Clean Technology

F.I.T.T. for investors

Crossing the Chasm

Solar Grid Parity in a Low Oil Price Era Despite the recent drop in oil price, we expect solar electricity to become competitive with retail electricity in an increasing number of markets globally due to declining solar panel costs as well as improving financing and customer acquisition costs. Unsubsidized rooftop solar electricity costs between $0.08-$0.13/kWh, 30-40% below retail price of electricity in many markets globally. In markets heavily dependent on coal for electricity generation, the ratio of coal based wholesale electricity to solar electricity cost was 7:1 four years ago. This ratio is now less than 2:1 and could likely approach 1:1 over the next 12-18 months.

Vishal Shah

Research Analyst

(+1) 212 250-0028

vish.shah@db.com

Jerimiah Booream-Phelps

Research Associate

(+1) 212 250-3037

jerimiah.booream-phelps@db.com

________________________________________________________________________________________________________________

Deutsche Bank Securities Inc.

Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 148/04/2014.

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