Wind Industry Market Scan

1. Wind IndustryMarket Scan November 6, 2008 Mike Alpert Scott Caldwell Andrew Carlstrom Chris Wade

2. Agenda • Introduction • Large-Scale Wind Industry Overview • Global and US Stats • Strengths & Weaknesses • Players • Small-Scale Wind Industry Overview • Industry Stats • Investments • Incentives • Players • Technology • SWOT • Conclusion

3. Large-Scale WindGlobal • >200,000 Employees • >$30 Billion Market Size • 20,000 MW Installed in 2007 • >28% growth rate over last decade • >100,000 turbines installed • Over 70 countries • >93,000 MW capacity • 65% concentration in Europe • 145% Growth in China, 26% in Canada, 25% in India (2007) Sources: Global Wind Energy Council (www.gwec.net), Clean Edge Clean Energy Report 2008 (www.cleanedge.com)

4. Large-Scale WindUS in 2007 • Over 17,000 MW Installed Capacity • Over 5,200 MW Installed in 2007 • Largest Installer for third consecutive year • 45% Growth Rate • 7,500 MW Installed Projected in 2008 • Texas >4300 MW Installed • California >2400 MW Installed • Turbine and component manufacturers operating in more than 10 states Source: American Wind Energy Association (www.awea.org)

5. Large-Scale WindStrengths • Advancement in technology • 2000 avg turbine capacity .76 MW • 2007 avg turbine capacity 1.6 MW • “Free” Energy Source • Federal Production Tax Credits • State Renewable Portfolios • External Investment • Advances in cost-competitiveness • Fixed rate offerings through select utilities Source: American Wind Energy Association (www.awea.org)

6. Large-Scale WindWeaknesses • Irregularity of PTC renewals • One-year renewal in 2008 • Out-dated infrastructure • Component supply shortages • Possible demand shortages • Oct 08 - Gamesa halts production to avoid excess • Current Economic Environment • Credit Crunch • Lack of demand for PTC pass-throughs • Reduced CapEx Plans for 2009 • Oct 28 - FPL plans to reduce 400 MW installation in 2009 Source: American Wind Energy Association (www.awea.org), recent news

7. Small-Scale WindOverview • Defined as <100kw by AWEA • Sold in 50 states and exported to over 120 countries • “Serious” markets exist in states with tax incentives and accommodating zoning • Ex. Oregon - $4500 tax credit per installed kw, $35,000 residential cap. $4000 per installed kw, $60,000 commercial cap. • Ex. Federal credit of up to $4000 ($1000 per kw of capacity) for residential and up to 30% uncapped for commercial • Expected 18-20% growth through 2010

8. Small-Scale WindManufacturing Statistics

9. Small-Scale WindManufacturing Statistics

10. Small-Scale WindRemote, Residential, Commercial

11. Small-Scale WindInvestments • 2007 global investments in small wind: $28.2M • 2008 showed 6% increase to $30M (table shows a sample of deals) Source: http://www.gamesa.es/en/gamesa

12. Small-Scale WindIncentives • Pre-incentives, wind is cost competitive with solar • Solar incentives are well established • New White House will likely change the incentive landscape • Aside from tax credits, incentives can also include: • Zoning & permitting • Low interest loans • Net metering Source: Wind Power Outlook 2008. American Wind Energy Association (www.awea.og)

13. Small-Scale WindRooftop Small Wind • In 2007, less than 100 small wind units were sold in the U.S. for rooftop installation for a total of less than 50kW • Wind in densely built environments make turbine height a critical factor • Zoning height restrictions can limit tower height however…

14. Small-Scale WindRooftop Small Wind • Green buildings can/will incorporate wind power into design • States are beginning to mandate low/zero carbon buildings—Oregon’s goal by 2030 • New turbine designs can capture turbulent air better and produce more energy

15. Small-Scale WindPlayers • Bergey BWC XL.1 • 8’ rotor • 1kW • ~$6,000 • Helix Wind S322 • 9’ tall • 2kW • ~$12,000 • Swift • 7’ rotor • 1.5kW • ~$12,000 • SW Windpower Skystream 3.7 • 12’ rotor • 2.4kW • ~$18,000

16. Small-Scale WindTechnology • Innovation continues to bring costs down while increasing efficiency • Blade pitch control for varying wind speeds • Material progression: woodmetalfiberglasscarbon fibernanomaterials • Advanced vibration dampening makes for less disturbing units • Low/zero friction bearing units allow lower cut-in speeds

17. Small-Scale WindSWOT Strengths • Distributed • Long-term cost competitive • Simple design, easy to hook up • Low maintence • Cool look to some Opportunities • Steep technology curve • Incentives keep getting better • New geographies to site Weaknesses • High immediate term costs • Eyesore to some • Professional installation usually necessary for incentives • Relatively low power output Threats • Incentives can expire • Solar options can be competitive alternative • The NIMBYs

18. Small-Scale WindConclusions • People love ‘tech’ products, and small wind can fit that category • Environmental movement that brought small wind to the mass market has given way to the current desire to reduce dependence on fossil fuels and make energy bills smaller • 20% annual growth keeps investments flowing into industry despite tough economic times • With America’s new leadership, this industry is primed for new innovations and job growth