Roof top solar in the South African market

1. Roof top solar in the South African market • Solar Energy accounts for less than 1% of the energy we consume! •       The Solar Energy reaching the Earth's surface every hour is greater than our total energy •       consumption for a whole year! •      The energy stored in the Earth's fossil fuel reserves is equal to just 20 days of Solar Energy!

2. Content of presentation Overview of SolarTotal and SolarTotal RSA SolarTotal partners Residential application Commercial application Off grid application SolarTotal vision for the solar market in RSA Ideas to fast track the RSA roof top market

3. One of Europe's largest rooftop installation companies Elst (Headquarters) Group overview Cardiff • SolarTotal is a European market leader in residential solar installations and the primary provider of rooftop solar solutions to businesses & governments • SolarTotal offers a “Total Solution” concept to its customers – from tailored photovoltaic (PV) system design, installation & monitoring through to the financing of the project including a complete management and maintenance service • The company has operations in Belgium, Netherlands, France, Spain, Germany, Italy, UK, China ( sourcing), India and South Africa Würzburg Paal Bolzano Lyon Barcelona Beijing(Sourcing) Johannesburg

4. One of Europe's largest rooftop installation companies Group overview • SolarTotal Holding B.V. was incorporated in 2006 . The company is headquartered in Elst, Netherlands and has a headcount of 480 people • To date SolarTotal has installed over 200 MW of photovoltaic installations across 9 countries in more than 15 000 different locations • Sales for 2011 estimated to be at Eur300m • SolarTotal’s mission is to be the market leader in solar installations across customer segments by creating an enhanced customer experience for the supply and consumption of clean, sustainable solar energy

5. SolarTotal RSA Overview • SolarTotal RSA started its operations in Feb 2011 • Offices in Rivonia Road JHB with a satellite office in CT • Currently 12 staff members • 4 installation teams • All and engineering is done in house • Main focus is as a front of house sales office for residential and commercial installation • Current pipeline to date of almost 70 residential houses, 3 commercial installations and close to 40 off grid installation

6. SolarTotal has developed relationships with key partners

7. So why roof top solar? Lets look at 3 roof top markets which SolarTotal actively operates in: Residential – Freehold properties Commercial – Businesses, Warehouses, Shopping centres 3. Off grid – Areas that have no power availability

8. Residential market • Two mechanisms: • Net metering • Net metering with hybrid or backup – PV, batteries, Grid • 10 top reasons for a home owner to invest in PV. • Energy is free • Capital asset with a 25 to 30 year revenue stream • Systems last for up to 30 years • Minimal maintenance • You cap your energy prices • 14% saving on VAT that you would have paid to the utility co. for grid power • Hedge yourself against future power hikes • Systems are scalable • Systems can be configured to provide back up power during load shedding or black outs • Decrease in the environmental levy payable

9. Commercial • Four mechanisms: • Under dimension and total off take • Net metering • Hybrid – PV, batteries, grid, Generator • Energy retailing via private PPA • Why should companies invest in a photovoltaic solution? • Technology is tried, tested and proven • Marketing purposes? • Accelerated depreciation allowance from SARS = 50%, 30%, 20% • Capital asset • Long term savings • Good IRR’s and ROI = between 15% - 23% ( factor dependant) • Low risk investment • Power security • Scale up as business grows • Reduction in grid power and exposure to tariff increases • Retail possibilities? • Decrease in the environmental levy payable • Hedge against future carbon taxes

10. Off Grid solutions • Providing power to remote villages or area’s that lack electrical infrastructure via Solar Power and energy storage. • How do we do this? PV generator, Deep Cycle batteries, Smalls scale wind turbines and other green technologies. • Benefits: • Short lead times in setup and the power availability is immediate • No more diesel generators – running costs are really high and do not make financial sense to run 24 hrs a day • Reduction inParaffin lamps – The cost to the South African economy from paraffin lamp related injuries is approx R200 million p.a

11. SolarTotal vision for RSA and future of PV • 1st round of REFIT will develop critical mass in the market • Costs in crystalline technologies will drop further and further = $1/Wp by end of 1st quarter 2012 • Technology is becoming more efficient • Financing mechanisms will be fine tuned – solar bonds, solar loans • There will be a shift from large ground mounted installations to small, medium and large rooftop PV installation- Why? • The price of grid power will be more expensive than PV power in 3-5 years time • It does’t make sense for Eskom to pay a premium for solar power from large solar fields when the cost benefit can be immediate to the business or homeowner • No investment is needed into massive distribution lanes and substation upgrades for solar fields in the North West province in order to route power to our economic hubs • No subsidies or incentives are needed to prove a business case, it’s more of a case of a change in the mindset of South Africans eg: Germany

12. How can we fast track the roof top PV market today? • National drive for Net metering mechanism for households and businesses • Power produced during the day from your system, if not consumed by the owner it passes back through the electrical meter reversing the counter and providing an energy credit. • Provide a rebate for every 1KWp installed for Residential • A similar rebate mechanism to Solar thermal should be implemented for PV. eg: R5 000 – R8 000 rebate once off, but capped at 5Kwp. ( rebate can come from environmental levy charged) • Education and Awareness • People need to understand that solar power is a real possibility and in actual fact does work. • Mandatory for new builds • All new build houses should have a PV generator built it the build of quantities eg: Japan • If large scale REFIT, then allow for rooftop systems. • Refit currently doesn’t allow for rooftop PV generators

13. Case Study • Residential: • Home owner uses 1000 Kwh’s/month • Wants to save 50% of his monthly bill • Estimated size of a PV generator = 3.3Kwp • Estimated cost R100 000 • Power produced from the system over 30 years = 155 000Kwh • Average cost per Kwhover 30 yrs = 64c • Average cost per Kwhover 20 years = 92.5c • Average cost per Kwhover 15 years = 109c • Cost of grid power for Residential home owners from Eskom 2011: • 350-600Kwh/month = 107.22 c ( incl Vat) • 600 plus Kwh/month = 117.82c ( incl Vat) • Environmental levy of 2.28c/Kwh • Payback on the Investment = 8 years

14. Case Study Residential:

15. Case study • Commercial • 500 KWp installation • System is under dimensioned and therefore 100% of power is off taken • Power generation on is mostly consumed. Excess power is Net metered or re-sold • CAPEX = R12 500 000 • Energy generated over 20 years = 18 000 000 KWh • Cost per KWh over 20 yrs = 69c • Cost for large scale power today from Eskom = 52c • IRR = 16% (post tax equity) • Alternatively – use a B-grade modules with 10 year Factory Warranty on output • Capex = R9 000 000 • Cost for power over 20 years = 66c • IRR = 19.8% ( post tax equity) • The underlying idea is to switch the B-grade module for A grade modules in 10 years time.

16. Thank you Following the light of the sun, we left the old World. Christopher Columbus Contact details: office 011 234 7342; www.solartotal.com/co.za; email: r.watson@solartotal.cominfo@solartotal.co.za