Q1 | 2014 Powered by data from Q2 | 2014 i3 QUARTERLY INNOVATION MONITOR Solar Q3 | 2014 Q4 | 2014 i3connect.com SPONSORED BY i3 QUARTERLY INNOVatiON MONITOR | SOLAR Q1 | 2014 Solar Corporate & institutional equity investment in solar DEALS: $172mm invested across 19 equity deals technology and business model innovation totaled in 1Q14; start-ups in PV downstream services and balance-of-systems form commercial partnerships. $172mm across 19 deals in the first quarter, with 2 deals having undisclosed values. That total was 30% lower than COMPARISON: Compared to four-quarter Q2 | 2014 the $245mm solar companies raised in the final quarter of running average for 2013, equity dollars were 2013, and 8% lower than the four-quarter running average 8% lower and deal volume down 26%. of $187mm. Deal volume, at 19, also followed a downward THEME: Innovation in PV downstream service trend in Q1, falling 17% from 23 in 4Q13 and 26% relative to business models and balance-of-systems the four-quarter running average. Unlike recent quarters, components seek to lower “soft-costs”. there were no debt or growth stage PIPE deals reported. GLOBAL CORPORATE & VENTURE INVESTMENT IN SOLAR Powered by data from $1,000 45 Q3 | 2014 1 $22 $900 40 41 1 1 1 1 $800 36 1 37 37 35 35 36 35 36 2 $700 33 2 32 30 31 4 $600 3 29 3 28 $8 25 2 26 1 olume $500 25 $908 23 23 23 Millions 20 $745 $2 21 $400 20 $7 19 Deal V Q4 | 2014 $589 15 $300 $527 $4 $121 $391 $391 $356 $5 $348 10 $320 $18 $22 $200 $289 $278 $29 $245 $204 $172 $183 $183 $166 $25 $168 $141 $3 $132 $100 5 $8 8 $0 0 1Q09 2Q09 3Q09 4Q091Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2009 2010 2011 2012 2013 2014 Venture Equity - - - $ PIPE + Venture Debt - - - $ Venture Equity - - - Deal Volume PIPE + Venture Debt - - - Deal Volume DEALS The solar sector has entered a new era for innovation. that aim to drive down so-called “soft costs” of installa- The 2011-2013 silicon photovoltaic (Si-PV) panel-supply tion, where consensus holds that there is still plenty of glut caused the failure of many established Si-PV manu- room for improved margins. In the first quarter, corporate facturers as well as next-generation, thin-film PV start- bets on downstream service models included SolarCity’s ups, and drove investors to the exit. But investors are now investment in Off Grid Electric, and Trepp’s participation cautiously creeping back in, in support of downstream in Mercatus’ Series A round. business models and PV balance-of-systems components 1 i3 QUARTERLY INNOVatiON MONITOR | SOLAR Q1 | 2014 This segment also saw several corporate partnerships during the quarter, with Mosaic and RGS Energy working i3 subscribers have access to real-time on home solar loans, and Sunrun and Sungevity teaming investment activity. Take i3 for a up to take on SolarCity. free test drive at i3connect.com Q2 | 2014 GLOBAL CORPORATE & VENTURE EQUITY INVESTMENT IN SOLAR Powered by data from 100% Downstream 90% Services 80% 2 Si-PV Mamufacturing 70% 1 olume Thin Films 60% 9 Solar Thermal 50% 1Q14 Q3 | 2014 e of Deal V 40% Balance of Systems Shar 30% 2 CPV 20% 2 PV Consumer Products 10% Other 0% 2011 2012 2013 In balance-of-systems, Clal Industries and Investments Further up the value chain, the manufacturing segment Q4 | 2014 joined Tigo Energy’s latest equity funding, which the should not be ignored. Both the Si-PV and thin film spaces start-up closed shortly after announcing a partnership contain new early-stage innovators and survivors of the with Lightway Solar to integrate its power optimizers shake-out that require growth capital. In the first quarter, into Lightway’s modules. Meanwhile, Constellation Redlen Technologies (Cadmium-Telluride thin films) Technology Ventures invested in micro-inverter and Qcept Technologies (wafer inspection technology) company SolarBridge Technologies’ growth round. raised growth funding, while Columbus Photovoltaics (wide band-gap Si-PV cells) was seeded. COMMENTS While the solar sector is unlikely to return to the high yield any deals in the space, innovation in solar thermal levels of investment it experienced during 2008-2011, energy is getting serious looks from corporate investors we still see plenty of innovation in all segments of the who are ready to take technology through to commer- PV value chain. Further, though the first quarter did not cialization. 2013 saw deals like eSolar+General Electric, 2 i3 QUARTERLY INNOVatiON MONITOR | SOLAR Q1 | 2014 Terrajoule+Air Liquide, Sopogy+Mitsui, and Skyfuel+Leaf Clean Energy. It is due to these trends, and the overwhelming fact that PV deployment Access to real-time deal- worldwide is skyrocketing, that we expect corporate and institutional level data is available investors to continue to return to the solar sector. to i3 subscribers. — Troy Ault, Co-Manager of Research Q2 | 2014 About The i3 market intelligence platform is the definitive source for insight into innovation: it connects Take i3 for a free test drive corporate, utility, government, and venture at capital teams with companies creating sustainable Add your profile to i3 to get in front technologies and business models. Subscribers use i3 to of top corporates and investors. discover and vet companies, and explore trends across Q3 | 2014 18 technology sectors using proprietary data. 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