Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Industry News Solar Large Scale Project Funding Garnered $13.6 Billion in 2013 http://bit.ly/MercomQ4S

Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and mergers and acquisition (M&A) activity for the solar sector in 2013. Global venture capital (VC) investments dropped 40 percent to $600 million in 97 deals in 2013 compared to $992 million in 106 deals in 2012.

Click here to obtain a copy of Solar Funding and M&A 2013 Fourth Quarter and Annual Report Total corporate funding into the solar sector encompassing VC, debt and public market financings was up 25 percent in 2013 with almost $10B, compared to about $8B in 2012. “While venture funding levels were down, overall fundraising was up and public market financings were really strong in 2013,” said Raj Prabhu, CEO of Mercom Capital Group. “Higher valuations among public solar companies have opened up the capital markets again as an avenue for fundraising at attractive terms. IPO’s are back.” Large-scale project funding deals announced in 2013 amounted to $13.6 billion in 152 deals. That compares to $8.7 billion in 84 deals in 2012. With continued growth in solar installations yearover-year, announced large- scale project funding deals have grown as well. Funding was secured for almost 7 GW of large scale solar projects in 2013, with the participation of 146 investors. Samsung Renewable Energy, a renewable energy project developer, secured $498 million for its 100 MW Grand Renewable Solar PV project in Haldimand County, Ontario, with funding from RBC, Natixis, CIBC, BTMU, Desjardins, Nord/LB, Rabobank, National Bank Financial, and Key Bank. Moroccan Agency, a joint stock company implementing a program for the development of solar projects, secured a $454 million loan from German state owned bank KfW to partially finance its 200 MW Noor II CSP project and approximately $446 million to partially finance its 100 MW Noor III CSP project. Sempra Energy, an energy services holding company, received debt financing of $400 million for its 250 MW Copper Mountain 3 PV project from BTMU and SMBC. Google, which invests in clean energy projects, and Kohlberg Kravis Roberts (KKR), a private equity firm, invested $400 million in six solar PV projects in California and Arizona with a combined production capacity of approximately 106 MW, which are being developed and managed by Recurrent Energy, a solar project developer. Source: Mercom Capital Group, llc, Jan 2014

Industry News Germany's PV Installations Total 3.3 GW in 2013 http://bit.ly/Mercomgfna

According to the latest numbers announced by The Federal Network Agency (Bundesnetzagentur), Germany's PV installations in December of 2013 totaled 166 MW, which is 164 MW less compared to 330 MW installed in December of last year. The monthly decrease in feed-in tariff (FiT) rate has slowed down PV installations and only 3.3 GW have been installed in 2013 compared to 7.6 GW in 2012. Germany installed a total of 7.4 GW in 2010, 7.5 GW in 2011 and 7.6 GW in 2012. Total cumulative installations in Germany is at 35.7 GW as of December 2013. In December a total of 6,940 systems were installed in Germany with the average system size of about 23.92 kW. 24% of the installations in December came from large projects of 1-10 MW, 40% of installations came from projects of 40 kW-1 MW, 17% of installations came from projects of 10-40 kW and 19% of projects came from small projects of upto 10 kW.

The Federal Network Agency has announced new degression rate of 1.00% in response to recent installations. The tariffs for the period from 1 February to 1 April 2014 will fall the first of each month. Source: Bundesnetzagentur, Mercom Capital Group, Jan 2014

Click here to obtain a copy of Mercom Solar Funding and M&A Q4 & Annual 2013 Report - http://bit.ly/MercomSOLAR

Page 1 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Solar Middle East Event http://bit.ly/mercomsmes 11-13 February 2014 in Dubai International Exhibition Center, UAE Solar Middle East is the most comprehensive gathering of solar technology suppliers in the Middle East region. The exhibition provides the opportunity for technology manufacturers and system integrators to build relationships with industry influencers and key decision makers within the solar market in the GCC and wider MENA region. Co-located Sponsored with and running alongside Middle East Electricity, Solar Middle East provides a platform for industry innovators to Event debate the economic viability and investment required in Solar and the opportunity for visitors to learn about integrating solar energy into their energy supply. Click here for more information: http://bit.ly/mercomsmes

Industry News UK Preliminary Numbers Indicate About 1 GW of Small Scale PV Installations in 2013 http://bit.ly/mercomukgov

UK installed 1 GW of solar PV in 2013, according to statistics released by Department of Energy and Climate Change (DECC). Overall solar PV capacity at the end of 2013 Q4 stood at 2,706 MW, an increase of 6.4 percent (164 MW) at the end of 2013 Q3. This represented 507,587 installations in 2013 Q4, an increase of 6.4 percent at the end of 2013 Q3. Capacity commissioned and accredited under the Renewables Obligation stood at 336 MW, which represents a 13 percent (39 MW) increase from 2013 Q3. Capacity commissioned and accredited under the GB Feed in Tariff (FiT) stood at 1,939 MW, an increase of 6 percent (116 MW) at the end of 2013 Q3. Overall solar PV capacity at the end of 2013 stood at 2,706 MW, an increase of 59 percent (1,000 MW) at the end of 2012. This represented 507,587 installations in 2013, which is an increase of 26 percent (105,301 installations) at the end of 2012.

Capacity commissioned and accredited under the Renewables Obligation stood at 336 MW, an increase of 3,073 percent (326 MW) at the end of 2012. Capacity commissioned and accredited under the GB Feed in Tariff stood at 1,939 MW, an increase of 25 percent (385 MW) at the end of 2012. Source: DECC, Jan 2014

Industry News 2,936 MW of Large Scale Solar Projects Were Installed in the US Last Year http://bit.ly/MercomFERC

A total of 79 MW from 35 large scale plants were connected to the grid in the US in December 2013. Cumulative installations up to December of this year totals 2,936 MW from 266 large scale solar power plants, compared to 2,056 MW connected in the same period last year. Among new generation connected form large scale energy projects so far this year in the US, solar is only behind Natural Gas 7,270 MW and is ahead of coal 1,543 MW and Wind 1,129 MW. Solar Generation Highlights: • Sol Orchard’s 20 MW Sol Orchard Imperial Solution Solar Project in Imperial County, California is online. The power generated is sold to Imperial Irrigation District under long-term contract • The following eight solar projects in San Bernardino County, California are online: 1) Southern California Edison's 5.5 MW Solar project; 2) Belectric 1.5 MW Solar Power Generating Station 1,1.5 MW Navajo solar Power Generating Station 1,1.5 MW Otoe Solar Power Generating Station, and 1.7 MW Powhatan Solar Power Generating Station; 3) Exelon's 1 MW solar project at Champagne and 1.5 MW at Jurupa; and 4) Capital Dynamic’s 1 MW • Public Service corporation of New Mexico’s 7.5 MW Tularosa Solar Energy Center in Otero County, New Mexico is online • Dominion Resources's 7.7 MW Azalea Solar Facility in Washington County, Georgia is online. The power generated is sold to Cobb Electric Membership under long-term contract • Integrys Energy Group's 3 MW Integrys Massachusetts Solar in Worcester County, Massachusetts is online Source: FERC, Jan 2014

Company News China's Plans US Bankruptcy Filing http://bit.ly/mercomstpb

Suntech Power, a Chinese manufacturer of solar panels, plans to file for bankruptcy protection in US court as its leaders negotiate with the holders of more than $500 million in US convertible bonds, according to people familiar with the matter. Suntech Power, defaulted on its US debt in March, and financial professionals in the Cayman Islands where the holding company is incorporated have been trying to negotiate a repayment plan with bondholders. Suntech plans to file for protection under Chapter 15, the section of the Bankruptcy Code that deals with international insolvencies. If recognized by a US judge, the maker will receive the benefits of US bankruptcy law, including the so-called automatic stay that halts lawsuits and prevents creditors from seizing assets. The filing is expected by Feb. 21. Source: WSJ, Jan 31

Company News Daqo New Energy Successfully Complete Debottlenecking Project for Its Xinjiang Polysilicon Facilities http://bit.ly/mercomdnep

Daqo New Energy, a Chinese polysilicon manufacturer, announced that the company has successfully completed the debottlenecking project for its Xinjiang polysilicon facilities. The Company has already started ramping up production for the newly added facilities and expects to increase the annual capacity to 6,150 MT and lower the total production cost to the level of $14/kg. Source: Daqo New Energy, Jan 31

Industry News China/Taiwan PV-Spot Price Trends Price Trends

Notes: • Multi-wafer price is up while mono wafer price remains stable due to stronger demand for multi- wafers • Inability of wafer manufacturers to increase output is resulting in wafer shortage and pushing up wafer prices • Polysilicon price uptrend is another reason for wafer price increase • Overall cell price also improved reflecting upstream solar component price uptick • Module price has been flat • Polysilicon suppliers are raising prices while spot trading becomes less active Source: Mercom Capital Group, Energy Trend, PVinsights, Feb 2014

Page 2 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

PPG Industries Awarded $2.1 Million by US Department of Energy to Help Industry News http://bit.ly/mercompprf Automate PV Module Manufacturing PPG Industries (PPG), an American supplier of paints, coatings, optical products, specialty materials, chemicals, glass, and fiberglass, announced that it has received a $2.1 million award from the US Department of Energy (DOE) to help design and pilot a rapid PV module assembly process that uses automation to eliminate time and labor from the current assembly process. PPG will use the funding, delivered through the DOE’s SunShot Initiative, to develop liquid encapsulants that will enable PV modules to be manufactured without the need for capital-intensive laminators. PPG will match each dollar committed by the DOE, resulting in a total public-private investment of approximately $4.3 million in the project. Source: PPG Industries, Jan 31

M&A News Solar3D Completes Acquisition of Solar United Networks http://bit.ly/mercomsasn

Solar3D, a developer of 3-dimensional technology to maximize the conversion of sunlight into electricity, announced that it has acquired 100% of Solar United Network, a company focused on design, installation and management of solar systems for commercial customers. Source: Solar3D, Jan 31

Funding News Gothaer Versicherungsbank Invests $205 Million In juwi renewable IPP http://bit.ly/mercomgbij

Gothaer Versicherungsbank, an insurance company, made an investment of €150 million (~$204.87 million) in juwi renewable IPP, a renewable energy company. juwi renewable IPP intends to use the investment proceeds to increase its wind and solar generation capacity in Germany from 450 MW to 1.15 GW in the coming three years. Source: juwi renewable IPP, Jan 30

Company News Tokyo Electron Announces Withdrawal from the PV Panel Production Equipment Business http://bit.ly/mercomtewpb

Board of Directors of Tokyo Electron, a Japanese electronics and semiconductor company, on January 30, 2014, passed a resolution to withdraw from the PV panel production equipment (PVE) business. The company said business environment remained weak due to an oversupply of production equipment. Amid uncertainties of a recovery in the market environment, the company decided to scale down business structure - halt development, production, and sales activities for PV panel production equipment and limit operations to support for equipment already delivered - given continually weak revenues. Source: Tokyo Electron, Jan 30

Company News SolarCity and Home Builder Taylor Morrison to Offer Solar Power Option to New Home Builds in Phoenix http://bit.ly/mercomscpt

Taylor Morrison, a North America based home building company, announced that it will offer a solar power option on every new home in its Phoenix-area communities through a partnership with SolarCity, a provider of solar power system design, financing, installation and monitoring services for homeowners, businesses and government organizations. Taylor Morrison and SolarCity, will deliver the benefits of solar power to homebuyers for little to no upfront cost. The partnership will make it possible for home buyers to save up to thousands on their utility bills, and will also enable them to lock in their solar electricity costs for decades into the future. Homebuyers can equip their new homes with a 5.5 kW solar array for which SolarCity will provide solar installation, insurance, monitoring service and repairs for the duration of the 20 year contract. Source: SolarCity, Jan 30

Company News OneRoof Energy Launches Application Programing Interface Library http://bit.ly/mercomoapi

OneRoof Energy, a home energy services provider, announced the launch of the first comprehensive residential solar API (application programing interface) library, enabling partners to easily and quickly collaborate on innovative solar, home energy management (HEM) and home automation solutions. Besides customer relationship management (CRM)-related APIs, which have been the main focus for the solar industry to date, OneRoof Energy’s library is the first to offer a wide range of APIs that allow service providers to integrate residential solar into their business models. Through the library, service providers can interface with SunOpps, OneRoof Energy’s web-based platform that allows dealers, affiliates and sales people to design, sell and manage a solar electric system. At the heart of SunOpps is SunOpps Intelligence, which constitutes a series of calculation engines and estimation tools that provide accurate savings and pricing information, taking into account factors such as shading, products and sun zones. The SunOpps API allows third party systems to communicate with OneRoof Energy’s tools without needing to access the company’s web portal. Source: OneRoof Energy, Jan 29

Industry News South Africa - an Attractive Emerging Country for Solar Energy

South Africa’s target of building 8.4 GW of solar PV capacity by 2030, combined Emerging PV Markets Attractiveness Rankings, Q4 2013 with the success of its large-scale tendering process in attracting investment to (Out of a Possible 100 Score) fulfill that goal, positions the country as the most attractive emerging PV market globally, according to IHS. South Africa scored 66 out of 100 in the IHS Emerging PV Markets Attractiveness Index for the fourth quarter of 2013, 17 points ahead of the second-most attractive market, Thailand. Among the top five countries in the index, South Africa ranked highest in potential market size, project profitability and pipeline maturity. South Africa has consolidated its position as a growth market for PV by cultivating a policy environment stable enough to attract financing from commercial banks. Thailand’s position as the second-most attractive emerging market for PV reflects investors’ enthusiasm for the country’s adder scheme, under which the government paid feed-in premiums to solar power producers. Source: IHS But as that program has now been discontinued, replaced with a rooftop feed-in tariff, Thailand is potentially in jeopardy of becoming less attractive to PV investors. Turkey rounds out the top three emerging markets, the result of conditions conducive to the development of PV including soaring power demand and prices, relatively low country risk and established PV incentives. An obstacle to Turkey’s growth, however, is the relative immaturity of its PV pipeline - with projects larger than 1 MW currently at a standstill awaiting the tender of 600 MW of licenses. While it is estimated that the potential for the installation of 1 GW of PV capacity in Turkey by 2017, it forecasts a build-out of only 150 MW this year in the country. Source: IHS, Jan 29

Click here to obtain a copy of Mercom Solar Funding and M&A Q4 & Annual 2013 Report - http://bit.ly/MercomSOLAR

Page 3 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Industry News Naked Energy Secures $1.8 Million of Grant Funding http://bit.ly/mercomnesg

The Department of Energy & Climate Change (DECC) has awarded Naked Energy, a design and innovation company specialising in solar technology and energy conservation, €1 million (~$1.8 million) through it’s Energy Entrepreneurs Fund to assist in the development of its innovative solar technology. The focus of the funding will be on optimizing production processes accelerating Virtu toward commercial launch. Virtu is a breakthrough hybrid solar technology providing combined heat and power. The technology has gained significant interest from around the world and the Naked Energy team is eager to bring this exciting product to market. In addition the company has secured a further €300,000 (~$409,935) grant from The Climate-KIC, which is Europe’s largest public-private innovation partnership, working to address the challenge of climate change. The company is an affiliate partner and continues to be a part of their ‘acceleration program’ to drive the business towards commercial success. Source: Naked Energy, Jan 29

M&A News Soventix Sells Marghesolar Solar Project in Italy http://bit.ly/mercomssmp

Soventix, a company engaged in designing, building and operating solar systems, completed the sale of Marghesolar Srl, a special purpose vehicle which holds Marghesolar PV rooftop solar project situated in Pesaro, Italy. Under the terms, Soventix sold all the shares of project company. The total installed capacity of the solar power plant is 1.7 MW. Investor is a Luxembourg fund. The solar power project consists of two grid-tied roof systems of 975 kW and 729 kW, which were built in 2011 and connected to the network. In both systems, Soventix was responsible for the entire implementation - from project development through technical plant design through to construction. Source: Soventix, Jan 29

Funding News Milk the Sun Secures Investments for Growth http://bit.ly/mercommsrf

Milk the Sun, a German based online marketplace for PV projects, announced it has received investments from Howaldt Energies and Grunderfonds Munster, the strategic investors which are administered by eCapital, a venture capital firm which supports innovative entrepreneurs in forward-looking industries, for a confidential amount. Milk the Sun will be using this additional investment to expand its platform further, and to achieve deeper penetration into the global PV market. Source: Milk the Sun, Jan 29

Industry News Oahu Solar PV Permits Drop 30% in January http://bit.ly/mercomopvr

Oahu’s solar PV industry is seeing a decrease of nearly 30 percent in the total number of residential permits issued so far this year, when compared with the same time period in 2013, according to the state Department of Business, Economic Development and Tourism. There were 502 PV permits issued in Honolulu during the first four weeks of 2014. The year-to-date value of these permits was $12.8 million, a 41 percent dip from the previous year. So far this year, there were a total of 13 commercial PV permits issued, a 32 percent uptick from the previous year. So far this year, Honolulu’s total value of commercial permits was $5.6 million, a 19.6 percent decrease from the previous year. Source: Pacific Business News, Jan 28

Industry News Taiwan Solar Cell Industry in Trade War Analyst Report

Taiwan solar cell/module industry enters preliminary phase of US antidumping & countervailing duty investigation; affirmative preliminary determination likely to be made by International Trade Commission (ITC) on February 14, 2014. Limited operational and financial impact before early June: Assuming the investigation proceeds, the Department of Commerce (DOC) will make a preliminary determination on countervailing duty (CVD) investigation on March 26, and a preliminary determination on antidumping investigation on June 9. If the preliminary determination is affirmative, DOC will then make a final determination on CVD investigation on June 9 and final determination on antidumping investigation on July 24. The ITC normally makes its final determination 45 days after DOC’s final determination. As CVD investigation is not a major concern for Taiwan solar industry, we expect the investigation will have a limited operational and financial impact on Taiwan solar industry until the DOC makes its preliminary determination in early June. Direct and indirect shipments to US approximately 10% & 15% of Taiwan exports in 2013: Our survey reveals that in 2013 Taiwan solar cell industry shipped around 10% of total production directly to US market, or around 1 GW. Including indirect shipment to US through China, Taiwan solar cell industry has around 25% exposure to the US market. In response to the antidumping investigation, Taiwan argues that its prices are above global average and that it is not as aggressive as China’s trade practices. Taiwan solar industry is now directly under the investigation of US ITC on exports to US, and we understand that a petition has also been filed against Chinese module makers that source solar cells from Taiwan. Taiwan solar cell industry - Lack of near-term catalysts: Taiwan’s solar cell industry has a sustained competitive advantage in product quality and provides a value proposition for module makers comparable to China’s solar cell industry. The production capacity of tier one solar cell manufacturers in Taiwan (1.5-2.1 GW per maker) is not much different from tier one solar cell manufacturers in China (2-3.5 GW per maker), rendering a 10-20% cost difference for Taiwan solar cell industry to manage through premium product offerings. Ruling out the potential impact of a trade war, we currently forecast Taiwan solar cell industry to achieve solid sales growth on capacity expansion and shipment growth, to sustain double digit gross margin, and to achieve substantial earnings growth of over 100% in 2014 due to a low 1H13 base. Nevertheless, the antidumping investigation is a major swing factor to the business outlook of Taiwan solar industry in 2014. Furthermore, we estimate that the gross margin of Taiwan solar cell industry peaked in 2H13, given the recent solar wafer price hike. Source: KGI, Jan 2014 Project First Wind Plans to Build Three Large Solar Projects in Central Oahu http://bit.ly/mercomfwdp Announcement First Wind, a solar and wind project developer, announced that it plans to build three separate solar projects totaling 82 MW in Central Oahu. They include the 20 MW Mililani South Solar I, the 15 MW Mililani South Solar II and the 47 MW Waiawa Solar projects. The three solar projects are expected to save Oahu residents about $200 million on electricity over 20 years through federal tax credits if the projects are completed by 2016. Source: Pacific Business News, Jan 28

Funding News FLS Energy Gets $30 Million Investment http://bit.ly/mercomferf

FLS Energy, a solar project developer, announced it has received a $30M infusion by a group of private investors. FLS Energy will close on a deal reached after nine months of negotiation with Capricorn Investment Group, New Energy Capital, Novus Energy Partners and Vision Ridge Partners. The partners will initially invest $18M, allowing FLS to build more solar PV projects, buy existing solar projects and acquire other businesses in the field. The second round of funding will be available next year. Source: Citizen-Times, Jan 28

Click here to obtain a copy of Mercom Solar Funding and M&A Q4 & Annual 2013 Report - http://bit.ly/MercomSOLAR

Page 4 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Project Upower Announces Execution of Two Power Purchase Agreements Totaling http://bit.ly/mercomupisp Announcement 100 MW of Solar Power in Honduras Upower (UPI), an independent power provider, announced that two of its subsidiaries, Produccion de Energia Solar y Demas Renovables, (PRODERSSA) and Pacific Solar Energy (PSE), have each executed a 20-year power purchase agreement (PPA) with Empresa Nacional de Energia Electrica (ENEE), the national energy company of Honduras, to build, and operate on a long term basis, a two solar PV projects totaling 100 MW of power production. UPI plans for such projects, each for 50 MW of power generation, to be built and installed by Wind Turbine and Energy Cables (WTEC) on a 420 acre parcel which UPI has already leased on a long term basis, located in Nacaome, Honduras. Pursuant to the PPAs, ENEE has agreed to purchase from PSE and PRODERSSA a total of 100 MW (50 MW each) of electricity at a cost per kWh which may be subject to increase due to certain incentives. Source: Upower, Jan 28 Project Good Energy Group Announces Final Approval for Its 49.9 MW Solar Project in Norfolk http://bit.ly/mercomgegfa Announcement Good Energy Group, a UK based vertically integrated utility, announced that the full planning consent has been granted for its 49.9 MW solar project in West Raynham, near Fakenham, Norfolk, UK. Source: Good Energy Group, Jan 28

Funding News Lightsource Renewable Energy Closes Financing for 45 MW Solar Power Projects http://bit.ly/mercomlrcp

Lightsource Renewable Energy, a UK based solar project developer, announced that it has closed project financing of a portfolio totalling 45 MW of solar power projects with funding from The Royal Bank of Scotland Corporate & Institutional Banking (RBS CIB). The agreement covers eight projects at different locations across the South and South West of England that have been built under the Renewables Obligation (RO) subsidy regime. The refinanced projects include Lovedean (4.5 MW), Ninnis (3.9 MW), Rudge Manor (6.4 MW), Hatchlands (5.2 MW), Parkhouse (6.6 MW), Shipton Bellinger (5.4 MW), Tregassow (5.9 MW) and Chittering 2 (6.3 MW). Source: EBR, Jan 28

M&A News Conergy Acquires Wirsol Solar UK Including a 100 MW Solar Project Pipeline http://bit.ly/mercomcawa

Conergy, a vertically integrated manufacturer of solar cells and modules, announced that it has acquired Wirsol Solar UK, a solar project developer, for an undisclosed sum. The deal includes a solar project portfolio totaling around 100 MW in the UK as well as all employees. 50 MW of the portfolio are ready to be built and the first projects are already under construction. Solar projects with another 50 MW are in the development phase. These are expected to be ready to be built in the course of the year. Source: Conergy, Jan 28

Funding News Mercatus Closes Series A Funding with Investment from Trepp http://bit.ly/mercommcsa

Mercatus, an enterprise level investment analysis and decision making platform provider serving as the core 'operating system' for solar energy investors, announced that it has closed its Series A round of financing led by Trepp, the provider of information, analytics and technology to the commercial real estate and banking markets. Trepp rounds out other Mercatus Series A investors, including Vision Ridge Partners, Augment Ventures and Shah Capital. Source: Mercatus, Trepp, Jan 28

Company News Elkem Solar Resumes Production of Solar Grade Silicon http://bit.ly/mercomesrp

Because of increased demand and a positive price trend on silicon grade silicon, Elkem Solar, a manufacturer of solar grade silicon, has decided to resume production at its plant in Kristiansand, Norway. During the production halt, the company has reduced costs and increased the value of its product. The decision to resume production was made on 28 January, and the ramp up to full capacity will begin immediately. Reduced costs and increased value: The Elkem Solar plant has not been running at full capacity since late 2011. During the period of production stoppages the organization has carried out important improvement projects to reduce cost and increase the value of the product. Costs have been reduced through many small improvements implemented by the organization during the period of production halt. In the same way the value of the product is increased through further adaption to the customer’s process and field studies on how to capture the inherent advantages of Elkem Solar Silicon. Source: Elkem Solar, Jan 28 SunPower Announces Program with Bank of America Merrill Lynch to Finance $220 Million in Residential Funding News http://bit.ly/mercomspfr Solar Lease Projects SunPower, a manufacturer of high-efficiency PV cells, roof tiles and solar panels, announced a new program with Bank of America Merrill Lynch (BofA Merrill) that will provide financing to support approximately $220 million of residential solar lease projects. The program will assist thousands of homeowners in financing solar power systems through SunPower solar leases, joining approximately 20,000 Americans currently enrolled in the program. "The SunPower Lease program allows customers to have best-in-class, high efficiency solar on their rooftops with highly competitive terms. This, coupled with our unprecedented level of energy assurance, results in more value to the homeowner and increased retained value to SunPower," said the company's CFO, Chuck Boynton. Source: SunPower, Jan 28

Industry News Brazilian Authorities Receive Further PV Project Proposals Totaling 272 MW http://bit.ly/mercombnpp

The Brazilian Electricity Regulatory Agency (ANEEL) has received nine new proposals for the construction of large-scale PV power plants in Brazil. The projects would have a combined capacity of 271.9 MW and would all be located in eastern Brazil. Local developer CPGL Energias Renovaveis submitted proposals to build eight PV power plants of 30.42 MW each in the state of Bahia, while Sowitec Operation Brasil, a subsidiary of subsidiary of German renewable energy company Sowitec, has requested permission to build a 30 MW PV plant in Pernambuco. Most of these projects were likely also submitted under the pre-selection phases of the country’s latest A-3 and A-5 energy auctions, which were held in November and December 2013, respectively. Source: Photon, Jan 28

Funding News TerniEnergia to Issue Up to $34.2 Million Bond to Fund Green Business http://bit.ly/mercomteib

TerniEnergia, a company into the renewable energy sectors, energy efficiency and waste management, announced the issuance of a bond for a maximum aggregate nominal amount of €25M (~$34.2M), for a period of five years with a gross fixed rate equal to 6.875% and an annual coupon, in order to raise funds to develop its renewable operations. The bonds will be issued and placed by a Sole Lead Manager, JCI Capital Investment & Asset Management, at a subscription price equal to 100 % of nominal value, net of a discount rate of 0.5%, and the issue will not constitute a public offer of securities. Date of issue of the bonds is by February 2014 and expiration date is at the end of February 2019. Source: TerniEnergia, Jan 27

Page 5 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Industry News China Polysilicon Makers Plan to Increase Spot Prices in February

Spot market prices for polysilicon have risen to $20/kg currently and some China-based makers, in view of strong demand in the China market, plan to further hike quotes by 10% to $22/kg after the January 31. Strong demand in the China market is mainly because the total capacity of 8 GW for PV systems installed in China in 2013 was short of the target of 10 GW and therefore the China government is likely to extend the effective time for applying for feed-in tariffs until the end of February. Thus, strong demand has occurred and will continue in February. However, it is still uncertain whether spot market prices for polysilicon can be increased to $22/kg because solar-grade crystalline silicon wafer, solar cell and PV module makers may not be able to bear the burden. In addition, the US Department of Commerce has decided to launch anti-dumping and anti- subsidization investigation of China-based makers of PV products and anti-dumping investigation of Taiwan-based solar cell makers. The negative impact is expected to be an excuse for China-based PV makers and Taiwan-based solar cell makers to fight hikes in spot market prices. Source: Digitimes, Jan 27

Company News Hanergy Solar Group to Install 600 MW of CIGS Module Production Capacity in China by Year's End http://bit.ly/mercomhensc

Hanergy Solar Group, a manufacturer of equipment and turnkey production lines for the manufacture of amorphous silicon based thin-film solar PV modules, announced that the Group has entered into two equipment sales contracts and two service contracts of 300 MW CIGS thin-film solar PV lines for its subsidiary Hebei Caofeidian Hanergy Photovoltaic. (i) an equipment sales contract and a service contract (MiaSole Caofeidian Contracts) to apply the MiaSole CIGS technology for a CIGS turnkey line with capacity of 300 MW (ii) an equipment sales contract and a service contract (Solibro Caofeidian Contracts) to apply the Solibro CIGS technology for another CIGS turnkey line with capacity of 300 MW. The total consideration receivable by the Group under the Caofeidian Contracts amounts to HK$6,084,000,000 (~$780,000,000), of which (i) HK$3,042,000,000 (~$390,000,000) will be receivable by the Group under the MiaSole Caofeidian Contracts; and (ii) HK$3,042,000,000 (~$390,000,000) will be receivable by the Group under the Solibro Caofeidian Contracts Pursuant to the terms and conditions of Caofeidian Contracts, the Group will deliver two turnkey production lines with provision of related services to Hanergy Caofeidian, one with a capacity of 300 MW using the advanced MaiSole’s CIGS technologies, and the other 300 MW using the advanced Solibro’s CIGS technologies of the Group. Hanergy Caofeidian will utilize the production lines to produce CIGS solar modules. The Caofeidian project is expected to commence the factory construction work in March 2014, and it is expected that the turnkey lines will be moved into the factory before end of the financial year ending 31 December 2014. Source: Hong Kong Stock Exchange, Jan 27

Industry News National Solar Jobs Census 2013 in US http://bit.ly/mercomnjcf

On January 27 th , 2014, The Solar Foundation released its highly anticipated National Solar Jobs Census 2013 ( http://bit.ly/mercomsfjcr ) which found that the US solar industry employed 142,698 Americans as of November 2013. This figure includes the addition of 23,682 solar workers over the previous year, representing 19.9 percent growth in employment since September 2012. During the period covered by the Census, solar employment grew 10 times faster than the national average employment rate of 1.9 percent. This growth rate is also significant in that it shows - for the first time ever - the solar industry exceeded the growth projections made in the previous year’s report. Other noteworthy findings from Census 2013 include: • Seventy-seven percent of the nearly 24,000 new solar workers since September 2012 are new jobs, rather than existing positions that have added solar responsibilities, representing 18,211 new jobs created • This comparison indicates that since data were collected for Census 2012, one in every 142 new jobs in the US was created by the solar industry, and many more were saved by creating additional work opportunities for existing employees • Installers added the most solar workers over the past year, growing by 22%, an increase of 12,500 workers • Solar employment is expected to grow by 15.6% over the next 12 months, representing the addition of approximately 22,240 new solar workers. Forty-five percent of all solar establishments expect to add solar employees during this period • Employers from each of the solar industry sectors examined in this study expect significant employment growth over the next 12 months, with nearly all of them projecting percentage job growth in the double-digits Source: The Solar Foundation • Approximately 91% of those who meet our definition of a “solar worker” (those workers who spend at least 50% of their time supporting solar-related activities) spent 100% of their time working on solar • Wages paid by solar firms are competitive, with the average solar installer earning between $20 (median) and $23.63 (mean) per hour, which is comparable to wages paid to skilled electricians and plumbers and higher than average rates for roofers and construction workers. Production and assembly workers earn slightly less, averaging $15 (median) to $18.23 (mean) per hour, slightly more than the national average for electronic equipment assemblers • The solar industry is a strong employer of veterans of the US Armed Services, who constitute 9.24% of all solar workers - compared with 7.57% in the national economy. Solar employs a slightly larger proportion of Latino/Hispanic and Asian/Pacific Islander workers than the overall economy Source: The Solar Foundation, Jan 27

M&A News Advanced Energy Industries Acquires AEG Power Solutions's Control Modules Product Line http://bit.ly/mercomaiaae

Advanced Energy Industries, a provider of reliable power conversion solutions used in thin-film plasma manufacturing processes and solar energy generation, announced it has acquired the line of Power Control Modules assets of AEG Power Solutions Germany, a German based subsidiary of AEG Power Solutions, a provider of power electronics systems and solutions for industrial power supplies and renewable energy applications. AEG Power Solutions's advanced Power Control Modules provide precision power control through advanced communication and control algorithms. The Thyro- Family product line offers clean and controlled power combined with extensive technical and applications support. Under the agreement, Advanced Energy Industries has acquired the Power Control Module product line for €22M (~$30.1M) in cash plus a one year earn-out of up to €1M (~$1.4M), payable in cash, if the EBITDA target for the product line is met in the first 12 months after closing. Source: Advanced Energy Industries, Jan 27

Page 6 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Canadian Solar Announces the Sale of a 10 MW Utility Scale Solar Project in Ontario M&A News http://bit.ly/mercomcssbr to a Fund Managed by BlackRock Canadian Solar, a vertically integrated manufacturer of silicon ingots, wafers, PV cells and modules, announced that its subsidiary, Canadian Solar Solutions, entered into an agreement with a fund managed by BlackRock, a provider of investment management, risk management and advisory services for institutional and retail clients worldwide, whereby BlackRock will acquire from Canadian Solar the Westbrook 10 MW utility-scale solar project in Kingston, Ontario at a valuation comparable to other recent project sales completed by Canadian Solar on a per MW basis in the Ontario market. This follows BlackRock's acquisition on September 30, 2013 of the Demorestville and Taylor Kidd utility-scale solar projects, totaling 20 MW, and located in Demorestville and Odessa, Ontario, Canada, respectively. The construction of the Westbrook solar project is already underway, with commercial operation expected in the second quarter of 2014. Canadian Solar is providing turnkey engineering, procurement and construction services to complete the project and will provide operations and maintenance services after completion. Source: Canadian Solar, Jan 27

Funding News Announces Initial Investment by Oaktree Capital Management’s GFI Energy Group http://bit.ly/mercomtkrf

tenKsolar, a provider of commercial rooftop solar solutions, announced that it has received an initial investment from funds managed by Oaktree Capital Management’s GFI Energy Group, a company which invests in the electric, natural gas, renewable energy sectors. This investment will support tenKsolar's rapid growth by expanding production capacity and sales and marketing efforts to increase its customer base and accelerate market penetration. Terms of the investment were not disclosed. Source: tenKsolar, Jan 27 Technology Conversion from a Layer of Closely Packed Nanorods to a Thin Film Solar Cell Absorber http://bit.ly/mercomcnrsc Highlight within a Few Seconds Research teams at the Helmholtz-Zentrum Berlin (HZB) and at the University of Limerick, Ireland, have discovered a Transformation from a Layer of Closely Packed novel solid state reaction which lets kesterite grains grow within a few seconds and at relatively low temperatures. Nanorods to a Polycrystalline Semiconductor For this reaction they exploit a transition from a metastable wurtzite compound in the form of nanorods to the more Thin Film stable kesterite compound. The scientists could observe this process in real-time when heating the sample: in a few seconds Kesterite grains formed. The size of the grains was found to depend on the heating rate. With fast heating they succeeded in producing a Kesterite thin film with near micrometer-sized crystal grains, which could be used in thin film solar cells.

The work points towards a new pathway for the fabrication of thin microcrystalline semiconductor films without the

need of expensive vacuum technology. Cu 2ZnSnS 4-based kesterite semiconductors have gained increasing attention

in the past, since they are a promising alternative for the Cu(In,Ga)Se 2 chalcopyrite solar cells which already

achieved efficiencies above 20%. The transformation from a layer of closely packed nanorods (top left) to a polycrystalline semiconductor thin film (top Kesterite has similar physical properties as the chalcopyrite semiconductors, but consist only of elements which are right) can be observed in by in-situ X-ray diffraction in real abundantly present in the earth crust. The new procedure could also be interesting for the fabrication of micro- and time. The intensities of the diffraction signals are color coded nanostructured photoelectric devices as well as for semiconductor layers consisting of other materials. in the image at the bottom. A detailed analysis of the signals reveals that the transformation of the nanorods into kesterite Source: HZB, Jan 2014 crystals takes only 9 to 18 seconds. Source: HZB

Funding News Partners Group and Equis Funds Group to Develop Japanese Solar Platform http://bit.ly/mercompgepi

Partners Group, a private markets investment management firm and Equis Funds Group, an independent energy and infrastructure private equity fund manager, announced the successful closing of a $250 million investment to develop a dedicated Japanese solar platform (Japan Solar). The investment consortium, co-led by Partners Group and Equis Funds Group on behalf of their clients and including investors such as Babson Capital, LGsuper and Qantas Superannuation, will fund the construction of utility-scale solar projects across Japan, with the first project expected to start generating electricity in the second half of 2014. Japan Solar will partner with Nippon Renewable Energy KK (NRE). NRE is headed by an experienced Tokyo-based management team, which owns and will develop a pipeline of over 300 MW of Japanese solar projects over the next two years. NRE has contracted 4 projects totalling 47.5 MW which will commence construction having completed financing and construction documentation. These projects are expected to be followed by projects totalling 110 MW during 2014. The projects will benefit from 20-year power purchase agreements as well as from Japan’s feed-in tariff, which is expected to provide renewable energy producers with stable cash flows and was introduced by the government to encourage investment in the sector. Source: Partners Group, Jan 27

Funding News Garanti Bank Finances Smart Energy Group’s 5 MW PV Project in Romania http://bit.ly/mercombbpf

Smart Energy Group, a renewable energy investment and EPC company, announced that Garanti Bank, a Romanian bank owned by Turkiye Garanti Bankasi, granted financing to SC Natural Energy Prod for the construction of a 5 MW PV project in Romania. Smart Energy Group is an investor in the PV project through its Romanian subsidiary, SC Natural Energy Prod. Source: Romanian Photovoltaic Industry Association, Jan 2014 Project Sharp to Construct 52 MW Large-Scale Solar Project in Thailand http://bit.ly/mercomsbst Announcement Sharp, a Japanese multinational corporation that designs and manufactures electronic products, announced that it has signed an agreement with Serm Sang Palang Ngan (SSP), a Thailand based company which plans, invests in, and operates power generation businesses, to construct a 52 MW large-scale solar project in that country. Construction will begin in January, with operations scheduled to start by the end of 2014. The plant will be operated by power producer SSP, which earlier placed a construction order for the project with Sharp. Sharp will collaborate on the design and construction of the plant and will also supply the solar modules and balance of plant (BOP) for it. The project will employ thin-film solar modules that offer superior performance characteristics under high temperatures. Sharp will supply approximately 400,000 of these modules - along with the requisite BOP. Maintenance and operational control will be provided by Sharp Solar Maintenance Asia, a Sharp subsidiary established in March 2011. Source: Sharp, Jan 27

M&A News WHEB Infrastructure and Northleaf Capital Partners Announce Rooftop Solar Joint Venture http://bit.ly/mercomwnjv

WHEB Infrastructure, an investment manager, announced that it has reached a definitive agreement with Northleaf Capital Partners, an independent private equity and infrastructure manager, to jointly pursue the continued expansion of a rooftop solar portfolio in the UK. Under the agreement, Northleaf Capital Partners has acquired a 50% stake in WHEB Infrastructure’s operating rooftop solar portfolio, as well as a pipeline of additional installations that will be operational in early 2014. Source: Northleaf Capital Partners, Jan 2014

Page 7 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Project Breaks Ground on 102 MW Nyngan Solar Project http://bit.ly/mercomfsscs Announcement First Solar, a vertically integrated solar PV manufacturer and provider of construction, operation and maintenance services, announced that it has commenced construction on Australia's largest utility-scale solar project, a 250 hectare solar project in Nyngan, New South Wales (NSW). Less than six months after AGL Energy achieved financial close for project, First Solar breaks ground on the installation of approximately 1,350,000 advanced thin-film PV modules. Once installed, First Solar's modules will generate clean, renewable energy with no emissions, waste or water consumption during operation. In addition to construction, First Solar is also providing engineering and procurement services for the project and will provide maintenance services for a period of five years post commissioning. Expected to be completed in mid-2015, the project will produce 102 MW. The Nyngan solar project is the first of two utility- scale solar projects to have received funding by the Commonwealth Government through the Australian Renewable Energy Agency (ARENA) and the NSW Government. Source: First Solar, Jan 27 Comparison of the Cost of Electricity Production from Renewable Energy Study News http://bit.ly/mercomfccre Part - 1 A study ( http://bit.ly/mercomflcoe ) from the Fraunhofer Institute for Solar Energy Systems ISE compares the present costs for conversion of different energy forms into electricity and gives a prognosis for the further cost development up to 2030. The scientists in Freiburg analyzed both the levelized cost of electricity (LCOE) from renewables as well as from conventional energy technologies. Learning-curve Based Predictions of the LCOE of Renewable Energy Technologies and Conventional They present comparative figures for new power plants Power Plants in Germany by 2030 constructed in Germany, which are based on solar, wind energy and biogas as well as brown coal, hard coal and gas.

The study shows that the LCOE from renewables has decreased rapidly over the last years and has even caught up with the generation costs from conventional power plants. Forecasts for Germany indicate that the costs to produce electricity from PV and wind will be less than fossil fuel plants by 2030. A Comparison of Renewable and Conventional Power Plants: The scientists analyzed PV systems in Germany at locations with a global horizontal irradiance between 1000 and 1200 kWh/(m²a). Their conclusion is that cost-efficient open field PV projects, installed during 2013 in southern Germany, can achieve LCOE of about €0.08 (~$0.1)/kWh. Even small roof-installed PV systems in northern Germany produce electricity today for less than €0.14 (~$0.19)/kWh and therefore lie well below the average electricity price of €0.29 (~$0.4)/kWh for households. The cost of electricity generation is not the only decisive factor in determining the competiveness of renewable and conventional energy sources. The upstream and downstream costs also play a major role. Source: Fraunhofer ISE The ambient conditions such as the solar radiation and the wind availability as well as the financing costs and the risk premium for new power projects all influence the results substantially. Only by including these factors in the study, scientists were able to realistically compare the levelized cost of electricity from the different technologies and thus convincingly present the cost-competitiveness of renewables. PV and Wind: Outlook and Forecast 2030: After evaluating and comparing all of the data, the scientists present the following outlook: “By 2030 the electricity generation costs from PV will decline down to €0.06 - 0.09 (~$0.08 - 0.12)/kWh. At this value, even small roof-installed PV systems will be able to compete with onshore wind and also with the higher generation costs in the future from brown coal, hard coal and combined cycle gas power plants,” says Prof. Eicke R. Weber, director of Fraunhofer ISE. Upon comparing the different renewable technologies, the results of the study LCOE of Renewable Energy Technologies and Conventional Power Plants at show that, in the future, the costs of PV and onshore wind will lie well below €0.10 Locations in Germany in 2013 (~$0.14)/kWh. Both technologies will clearly win the race towards cost leadership. Although offshore wind has higher costs, it also has more hours at full load operation. In the comparison of technologies carried out here, the LCOE of renewable energy technologies is determined for PV, biogas and wind power at locations in Germany based on market data on specific investments, operating costs and additional technical and financial parameters.

The LCOE of small PV systems at locations with Global Horizontal Irradiance/Irradiation (GHI) of 1200 kWh/ (m²a) in Southern Germany lies between €0.098 - 0.121 (~$0.13 - 0.17)/kWh and at locations in Northern Germany with an irradiation of 1000 kWh/(m²a) LCOE between €0.115 - 0.142 (~$0.16 - 0.19)/kWh are reached. The results depend on the amount of the specific investments, which is assumed to range from €1,300 (~$1,777)/kWp to €1800 (~$2,461)/kWp.

Today, ground-mounted utility-scale PV power projects are already reaching LCOE values between €0.079 - 0.098 (~$0.11 - 0.13)/kWh in Southern Germany and €0.093 - 0.116 (~$0.13 - 0.16)/kWh in Northern Germany, since the more favorable power plants have already achieved specific investments of €1,000 (~$1,367)/kWp or €1 (~$1.4)/Wp. Source: Fraunhofer ISE, Jan 27 Source: Fraunhofer ISE

Click here to obtain a copy of Mercom Solar Funding and M&A Q4 & Annual 2013 Report - http://bit.ly/MercomSOLAR

Page 8 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Funding News Huadian Fuxin Energy Corporation Announces Private Placement of Shares Worth $151.7 Million http://bit.ly/mercomhapp

Huadian Fuxin Energy Corporation, a diversified power generation company, agreed to issue 356,975,520 H shares in a private placement. On the assumption that all Placing Shares are fully placed, the aggregate gross proceeds from the Placing are expected to be approximately HK$3.3 (~$0.425). The proceeds from the issuance of the H Shares, after deduction of the expenses relating to the issuance, will be used for general working capital for the Group. The Placing Shares represent approximately 20% and 4.68%, respectively, of the existing total issued H Shares and the total issued share capital of the Company as at the date of this announcement and approximately 16.67% and 4.47%, respectively, of the total issued H Shares and the total issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares. On the assumption that all Placing Shares are fully placed, the aggregate gross proceeds from the Placing are expected to be approximately HK$1,178,019,216 (~$151.7 Million). Source: Huadian Fuxin Energy Corporation, Jan 26

Industry News Solar Industry Bouncing Back on Mainland China After Prolonged Downturn http://bit.ly/mercomsibb

Beijing's decision in July to more than quadruple solar generating capacity by 2015 has helped revitalize the solar industry. The mainland's solar panel industry is showing signs of booming again after a prolonged downturn - raising fears of another bust when the splurge of public money that is driving a spike in demand dries up. Lured by generous power tariffs and financing support to promote renewable energy, mainland firms are racing to develop multibillion-dollar solar generating projects in the Gobi desert and barren hills of China's vast north and northwest. The sweeteners have not only lured traditional energy investors like China Power Investment Corp, but also a host of solar panel makers and even companies such as toll road operator Huabei Express and Jiangsu Kuangda Auto Textile Group. Some solar panel manufacturers, encouraged by a recovery in sales in the last two quarters - largely on surging demand from China and Japan - are expanding production capacity, even though the overall sector remains mired in a severe glut. But industry officials worry fast-growing generation capacity will increase fiscal pressures on China and Japan and force them to cut subsidies, which will then hit demand, just as happened with previous big solar users Germany, Spain and Italy. China already boasts solar manufacturing capacity of about 45 GW, enough to meet global demand this year. Trina Solar, JinkoSolar, Green Energy and Canadian Solar - among the world's largest solar manufacturers - are adding 3 GW of capacity, according to industry specialists and Chinese media. Beijing is trying to consolidate the sector and force out the legion of small "zombie plants" currently sitting idle, but analysts say it faces stiff resistance from indebted regional and city governments that have backed local solar champions. Beijing's decision in July to more than quadruple solar generating capacity to 35 GW by 2015, and Japan's push to find alternatives to lost nuclear power following the 2011 Fukushima disaster, have revitalized the moribund Chinese panel industry. China installed 8 GW last year, turning it into the world's largest solar market. That included 6 GW of solar projects - utility-scale, ground-mounted facilities - and 2 GW of distributed solar energy such as rooftop installations. This year, it is talking about adding 14 GW. Installing 35 GW of solar capacity would cost around $50 billion, plus subsidies granted to solar power producers under long-term purchase agreements. But it is uncertain how long the current strong Chinese and Japanese demand, expected to account for 40-45 percent of global installations forecast for this year, will last. While the potential would seem to be large, the rapid build-up of solar and wind projects in western China has already created a problem. State Grid Corp of China has been struggling to transmit power from there to population hubs in the south and east owing to a lack of a comprehensive high-voltage and smart grid to harness the intermittent renewable power. Source: South China Morning Post, Jan 25

Funding News KfW to Provide $136.9 Million to Eletrobras for Wind and Solar Projects http://bit.ly/mercomkfwe

Kreditanstalt fur Wiederaufbau (KfW), a German state-owned bank has agreed to provide Eletrobras, a Brazilian state-run electric utility with a €100 million (~$136.9 million) loan to finance the construction of wind and PV projects in Brazil. The funds will come from the program (Programa Aberto), an initiative included in the German-Brazilian cooperation agreement for investments in the renewable energy sector. The funding will be transferred to Eletrosul Centrais Eletricas, a solar PV project developer and a subsidiary of Eletrobras through Eletrobras. Source: Reuters, Jan 24

Industry News Ontario Power Authority Receives PV Project Proposals Totaling 463 MW http://bit.ly/mercomofit

Ontario Power Authority (OPA) said during the most recent feed-in-tariff (FiT) 3 application window from November 4 to December 13, 2013, the Ontario Power Authority (OPA) received 1,982 applications representing a total of 493.71 MW of generation capacity. These applications are for renewable energy projects (solar, wind, waterpower and bioenergy) with a proposed capacity of more than 10 kW and up to 500 kW. The OPA received applications with Aboriginal community participation (30.8 percent of net applications), municipal and public sector participation (26.9 percent), and community participation (11.7 percent). More than 75 percent of applications are for rooftop solar projects. Nearly 77% of FiT 3 applications were for rooftop PV projects - 1,499 applications for projects totaling 311.42 MW. A total of 383 applications - or 18% - were for ground-mounted PV projects. These proposed projects would have a combined capacity of 151.85 MW. The OPA also accepted applications for the new Unbuilt Rooftop Solar Pilot program, which has a separate procurement target of 15 MW. The OPA received 184 applications for this program, representing a total of 45 MW. In addition, the OPA continues to receive applications to the microFiT Program for renewable energy projects up to 10 kW on a continuous basis. Version 3 of the microFiT Program was launched in August 2013. The OPA will procure up to 65.3 MW of microFiT projects in 2014. To date, 18,265 microFiT projects totalling 159 MW have been connected and are contributing power to Ontario’s electricity grid. Source: OPA, Jan 24

M&A News Solutronic Energy Acquires Insolvent Solutronic http://bit.ly/mercomsais

The operational business of the insolvent Solutronic, a German manufacturer of solar PV inverter, has been acquired and hence force will be managed by Solutronic Energy, a manufacturer of solar PV inverter and a subsidiary of Chinese Shanghai Churui Energy Technology (ATFSS). As part of the acquisition, the Solutronic Energy has acquired all necessary rights and investment objects. Solutronic Energy has also retained and will draw on the knowledge and expertise of a large part of the former key employees of Solutronic. Source: Solutronic Energy, Jan 2014

Funding News Goldpoly New Energy Holdings to Raise $106 Million Through Share Offering http://bit.ly/mercomgirf

Goldpoly New Energy Holdings, a Chinese solar project developer, announced that it intends to raise HKD825.6 million (~$106.3 million) through a new share offering. The company aims to sell 480,000,000 shares at a price of HKD1.72 (~$0.221) per share. The shares will represent around 12.16% of the company’s share capital once the share issuance is completed. The Company intends to use the net proceeds from the Placing to finance any possible acquisitions of solar power projects as and when opportunities arise. Source: Goldpoly New Energy Holdings, Jan 24

Page 9 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Industry News Tier 1 Solar PV Module Margin Recovery

During the past few years, the upstream (or manufacturing) segment of the PV industry value-chain took a big hit in terms of revenues and profitability. Due to component over-supply, solar PV prices fell by double digits during 2012, with c-Si modules seeing an annual decline of over 40%, according to Solarbuzz. During 2013, the industry situation began to improve as uncompetitive capacity was shuttered and Tier 1 manufacturers focused on cost reduction, supply- chain flexibility, and shipment growth. Assisted by the stabilization in module ASPs, at the end of 2013 there was a Tier 1 c-Si Production Margins and Shipment Share rebound in both margins and market-share for Tier 1 c-Si manufacturers.

Production margins (including inputs such as materials, labor, utilities, and depreciation) saw a significant increase during 2H’13, ending the year at almost 20%. This has led to a noticeable recovery in financial results, with many Tier 1 suppliers reporting positive gross margins for the first time in several quarters.

With the PV industry now poised for strong demand growth in 2014, most Tier 1 module manufacturers are anticipating continued improvements. However, risk remains: Tier 1 (and even Tier 2) manufacturers may react to the improved situation with somewhat irrational exuberance. 'This could upset the stabilization process that has occurred during the past year, once again creating an overcapacity situation. Therefore, the PV industry is once more at a pivotal stage.

There are strong indicators suggesting that the industry will reach new heights in 2014, but there is also significant risk, possibly coming more from industry participants themselves than from end-market factors. Source: Solarbuzz

US Large-scale Commercial PV Segment to Show Strongest Growth in 2014

While ground-mount utility projects dominated the US market in 2013 and will still 2014 US Annual Growth Rates by Application Segment make up the majority of market demand in 2014, commercial building-mount applications are projected to see much stronger growth rates. Small-scale commercial applications less than 100 kW are projected to grow by approximately 40% Y/Y, while large-scale commercial projects will see almost 70% annual growth; approximately double and triple the growth rate, respectively, compared to ground-mount PV systems. The shift to distributed generation building-mount commercial applications is being driven by a number of factors, including the favorable economics for these systems in the Northeast and West of the US, as well as changing incentive policies in a number of US states. These projects also often benefit from shorter lead times compared to large-scale centralized projects, an important factor especially when looking at the longer term 2-3 year forecast and the planned ITC reduction in the US.

Given the rapid growth rates from the large-scale commercial building-mount segment and the overall scale of the ground-mount segment, the US market will

continue to be driven by large-scale PV applications. Source: Solarbuzz This trend has implications for component supply as well as project development, as discussed in more detail in recent NPD Solarbuzz postings analyzing small-scale and large-scale markets.

Top 10 US States Offer More than 40 GW of Solar PV Pipeline Capacity

At the end of 2013, based on annual market demand, the top 10 states for solar PV in the US had an aggregate project pipeline of approximately 2,000 non- residential projects. This represents almost 40 GW of potential PV capacity. Project pipelines provide significant insight into individual projects, but also help understand market structures, business models, and future demand levels. California dominates the 40 GW pipeline, with over 60% of capacity, firmly Top-10 US State Solar PV Project Pipeline, Total: approx. 40 GW cementing its place as the leading US market. In fact, if California alone was compared on a global level, it would have ranked as the fourth largest global PV market in 2013. By examining where states are ranked - in terms of pipeline capacity - long-term demand trends can be established. States with smaller pipeline levels may be in danger of declining Y/Y, as project development activity slows down and current pipeline activity gets depleted. Conversely, states that rank higher, in terms of project pipelines, may see strong demand growth in the coming years as projects start to be completed.

However, it is worth pointing out that the pipeline relates only to non-residential (commercial/utility) solar PV installations. Therefore, states that have strong residential segments, such as Hawaii, may have smaller non-residential pipeline capacity but retain strong PV ranking status by virtue of residential activity. Source: Solarbuzz Regardless of where individual states rank, in terms of market or pipeline size, the US market offers tremendous long-term growth opportunities. Any PV company (manufacturer, installer or developer) that wants to participate on a global level clearly needs to have a strategy for the US market; within this, it is essential to understand the size of state markets today and also the strength of the project pipelines driving PV demand going forward.

Page 10 of 11 Market Intelligence Report SOLAR February 3, 2014

Category Title Link

Continued Tier 1 Solar PV Module Margin Recovery

New Solar PV Capital Expenditure Cycle to Start in 2015 Capital expenditures for equipment suppliers serving the solar PV manufacturing sector are forecast to enter a new upturn phase beginning in 2015, according to Solarbuzz and the PV equipment spending could potentially reach $10 billion in revenues in 2017. During 2012 and 2013, solar PV equipment suppliers were confronted by the sharpest downturn ever to hit the sector. The decline was caused by strong over-capacity that reshaped the entire PV industry in 2012, which resulted in manufacturers' capital expenditure budgets being put on hold during 2013. For 2013, PV equipment spending - covering tool revenues from crystalline silicon (c-Si) makers of ingots, wafers, cells, modules, and thin-film panels - declined to an eight-year low of $1.73 billion. This drop contrasts sharply with the previous cyclical peak of approximately $13 billion in 2011. With capital expenditures largely frozen in 2013, PV equipment suppliers recorded Solar PV Capital Equipment Spending Cycles between 2005 and 2016 less than $1 billion of net bookings last year, keeping the PV book-to-bill ratio well below parity. In the absence of new PV orders, many equipment suppliers were forced to restructure internal PV business units and focus on other technology sectors. Over the next six months, however, end-market solar PV demand will catch up with the 45 GW of effective capacity within the industry, and this will mark the official end of the two-year downturn in capital expenditure. Thereafter, plans will quickly emerge from PV manufacturers for new capacity additions, which will ultimately drive a strong rebound in revenues available to the equipment supply chain. The first peak in PV capital expenditures, covering the period from 2008 to 2011, provided $38 billion of equipment revenues; however, these revenues were spread across several hundred PV manufacturers and a range of different PV technologies. The next major growth phase for PV equipment suppliers, beginning in 2015, will be driven mainly by leading tier-one PV manufacturers across each stage of the PV value chain. Source: Solarbuzz Furthermore, future PV manufacturing capacity additions are expected to occur in increments of 1 GW or more. Initially, these additions will be motivated by economy-of-scale benefits in cost reduction and productivity. Thereafter, technology-driven spending, historically of minimal upside revenue potential to PV equipment suppliers, will gradually be phased in, as PV cell efficiencies approaching 20 percent become the industry standard. With c-Si based solar PV modules retaining a market share above 90 percent, new capacity expansions from c-Si PV manufacturers will dominate the PV equipment spending upturn beginning in 2015; however, the competing thin-film segment will continue to offer revenue potential for the equipment supply chain. Source: Solarbuzz, Jan 2014

Click here to obtain a copy of Mercom Solar Funding and M&A Q4 & Annual 2013 Report - http://bit.ly/MercomSOLAR

Submit news to: [email protected]

Copyright © 2009-2014 Mercom Capital Group, llc, All rights reserved. Strictly no redistribution allowed without prior written permission of Mercom Capital Group. When quoting, please cite “Mercom Capital Group, llc”. Although information in this report has been obtained from sources that we believe to be reliable, Mercom Capital Group does not guarantee its accuracy. Published by Mercom Capital Group, llc, 4611 Bee Cave Rd, Suite 303, Austin, TX 78746 USA.

Page 11 of 11