Cooling Significance

1. Cooling Significance Source: CEC Hourly Electric Load Model SOLID Energy, Inc.

2. Advantages of Solar Cooling • Large potential for savings – electric production & peak • Conventional, electrically powered cooling technology is replaced by a thermal method • Savings in running costs for heating and cooling (substitution of electric and fossil energy - 20 to 70% of energy used by electric compressors) • Reduces peaks load • Located on-site (T&B Benefits) • Reduction of the local emissions (CO2 etc.) • Easier operation and maintenance • Less vibration and noise SOLID Energy, Inc.

3. EU Solar Cooling • To date, about 100 solar cooling and air-conditioning (A/C) systems have been installed in Europe. (5-10 in the U.S.) • Their specific collector area is ~3 m2/kW for water chillers, or 10m2 per 1000 m3/h of air volume flow in desiccant systems. • Their primary energy savings potential is between 20-70% of on-site electric compressor consumption. • Pay-back period of 6 years to over 20 years at today’s energy prices. • Most of the systems so far have been installed in Germany, Spain and Greece. Source: European Renewable Energy Council (EREC), 2005 SOLID Energy, Inc.

4. AST ECONOMICS Large Solar Domestic Hot Water (DHW) Federal Energy Management Program (FEMP) Economic Analysis of Solar Thermal Domestic Hot Water Systems Installed at the Federal Correction Institution, Phoenix, AZ replacing electric domestic hot water (DHW) production: • Life Cycle Energy Production: 28,640,000 kWh • Cost of Production: 4 Cents per kWh • Equivalent Cost of Production Assuming Natural Gas • Displacement: $9.55 per MMBTU if system were displacing natural gas which is less than recent average price of natural gas. • Solar Space and Process Heating has Similar Economics to DHW with Paybacks Ranging from Seven to Twenty Years Depending on Fuel Displaced • Recent Study by Salt River Project in Arizona Showed Paybacks from 17 to 23 Years for Solar Space Cooling/Heating Systems SOLID Energy, Inc.

5. Pools and Municipal Projects Replacement of Oil Payback of 5 Years Melegnano Italy 202 m² 145 kW SOLID Energy, Inc.

6. Apartments Replacement of Oil Payback of 5 Years Hans Riehl Gasse, Austria, 321 m², 225 kW, GRS/ESCo SOLID Energy, Inc.

7. Hotels, Dormitories Replacement of Propane Gas Payback of 4 Years Hotel, Burgas, Bulgaria 101 m², 71 kW SOLID Energy, Inc.

8. Hospitals Replacement Natural Gas Payback of 9 Years Dusseldorf, Germany 190 m²/133 kW, GRS SOLID Energy, Inc.

9. U.S. Cost Savings Example Graph is based on study for City of Scottsdale, Arizona. Graph does not reflect the additional O&M savings that would be provided, a somewhat minor savings. SOLID Energy, Inc.

10. EU CO2 Reductions from Renewables Projected CO2 emissions reductions (Million tonnes) (20% Renewables by 2020) • Wind 236 • Photovoltaic 24 • Solar Thermal 92 • Biomass 326 • Hydro 35 • Geothermal 15 TOTAL 728 [17.3% of total EU 15 GHG (Greenhouse Gases) emissions in 1990] • Cumulative investment 443 (in Billion Euros) • Cumulative avoided costs (External+fuels) 242.5 - 439.7 Source: EREC, 2006 SOLID Energy, Inc.

11. NREL Study* California – Solar Hot Water in Residential and Commercial Buildings (Trillion BTU/Billion kWh) • Fuel Used for Heating Water Natural Gas Oil + LPG Electricity Res. Comm. Res. Comm. Res. Comm. 180 78 6 2 14 / 4 6 / 2 • Estimated Savings from SHW Natural Gas Oil + LPG Electricity 105 3 8 / 2.3 • Technical CO2 Emissions Reduction (MMTCO2e) Natural Gas Oil + LPG Electricity 5.9 0.2 1.1 / 2.5 7.3 / 8.6 *Technical Report NREL/TP-640-41157 March 2007 SOLID Energy, Inc.

12. Additional CO2 Reductions Estimates Range from 10-30 additional MMTCO2e (Industry is in the process of better quantifying this number.) SOLID Energy, Inc.

13. AST Barriers • AST Technology = “On the shelf technology” - EU & Asia no barriers as AST is not “rocket science” - US limited chiller models due to miniscule market - In the past technology was not attractive - BTU meters (95 to 98% accurate) • Financial - Standard renewable fuel- Purchase fuel up-front - Interest in financial community - Focus is on new state of art technology not commercially available technology • Thermal brand issues due to program design - Unattractive and bad actors in early 80’s SOLID Energy, Inc.

14. CA Regulatory Barriers for AST • Program Design - Faulty Program Design in early 1980’s resulted in significant thermal brand issues • CA’s policy focus has been on electricity not natural gas • Legislative: - Emphasis on electricity (SB 1) - Ratepayer class (should residential pay?) • Regulatory: - “2 For Issue” saves both electricity and natural gas - AST not on radar screen - CA RPS renewable eligibility / electricity focus SOLID Energy, Inc.

15. Solutions for CA - AST • CSI Non-PV Draft Handbook - Includes Solar Thermal AC, limited to electric displacement (heating applications not allowed) • Self-Generation Incentive Program (SGIP) - PUC CSI Decision directed gas saving DG to apply to SGIP program - Advantage of combining ratepayer incentives with private customer investment - PUC has authority to include DG technologies that displace both natural gas and electricity • Tax treatment - State property tax exemption - Federal tax incentives SOLID Energy, Inc.

16. Proper Program Design Essential • Proposed SGIP Program Design - Ten-year declining incentive program for gas & electric displacement - Performance Based Incentives (PBI) based on metered output (x cents per kWh for cooling and x cents per kWh equivalent for heating) • Transparent program & utility system data for reasoned analysis and program adjustment • Do not support building mandates for AST SOLID Energy, Inc.

17. Questions? Lori A. Glover, co-CEO SOLID Energy, Inc. 10645 N. Tatum Blvd. Phoenix, Arizona 85028 (602) 677-5741 lglover@solidsolar.com Jan McFarland, Consultant SOLID Energy, Inc. janmcfar@sonic.net (916) 346-7578 SOLID Energy, Inc.