OAP AssessmentThursday, March 6, 2008

Team: Giant SlayersTeam Members: Drew Bennett, Christopher Hain, Nick

Liao, Jeffrey Spehar, Eric Wan

The Opportunity

Opportunity Lever: Time of Use ratesProduct: Energy storage to manage your time of use

The Target MarketRequirements:

A utility bill with a “Time of use” rate optionSmall energy consumption

Target CustomerResidential single-family homesFocus first on Northern CA

5.2 Million PG&E Residential CustomersGrowth

Annual Energy demand growth: 1.25%Annual Peak Energy demand growth: 1.35%

Source: California Energy Commission Energy Report 2007

Future Markets: NJ, CO (favorable regulatory environments)

Business AnalysisCustomer Analysis (Best Case):

$2480/yr $1730/yr

Peak demand (storage req.): 12 kWh

The Battery: Lead-Acid Technology

Volum. density: 70 Wh/LEfficiency: ~80%# of cycles: 500-800 Cost of energy: 10 Wh/$

Load shift with storage

Savings: $750/yr

To meet peak demand, we make a product that…- is the size of a small refrigerator - costs $1200 to make - lasts at least 5 years.

Business ModelCost per unit:

$1,200 + $300 overhead, delivery, and services = $1,500Revenue per unit:

3-year payback at $750/yr = $2,250Add value of surge protector and backup power

“generator”: $250

Profit projections:$1000/unit in best case customers, $100/unit in worst

case Size is customizable depending on kWh need of customer Energy savings has close relationship with kWh need

5M PG&E customers at 10% penetration rate = 500,000 customers

~$60M market in Northern California alone

Challenges and RisksTechnicalStandard risks with taking a product to market

R&D, Manufacturing and Production, Sales and Marketing IP risk: anyone can copy our product

Lead-acid technology is relatively matureDistribution and Installation infrastructureSafety concerns

MarketRate disparity drives our opportunityRates are not under our control

Rates are set by California Energy Commission and Utilities Possibly Mitigate by Political Lobbying or Partnering with

Utilities

Competition and ProxiesGridPoint Technologies

Raised $88.5 million investment. Named top 100 technology pioneers

by Davos World Economic Forum 2008 Key Differentiations:

Market: Commercial vs. Residential Control given to utilities vs. residents

The Utilities: “Load-Leveling” Store and use old EV batteries in a

leveling bank Store off-peak energy and release on-

peak Potential conflict: who has the control?

Utilities or Households? Potential Distribution Partnership Also Potential Competition

Growth OpportunitiesExpansion after pilot in Northern CA

Almost all American utilities have Time-of-Use rates

“Plug and Play” Energy Platform Integrate third-party energy efficiency and distributed

generation systems Open Source software to designers of:

Photovoltaics Cogeneration products

Smart use and energy distribution Generate and report user statistics

ConclusionThis is a bona fide opportunity.The market is growing and so is consumer

awareness.The technology is simple, flexible, and gives

the consumer control.Long-term market risks exist, but development

of platform standard will mitigate these risks.

Questions?