2022 REPORT

Environmental,
Social, &GovernanceABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCORPORATERESPONSIBILITY

Table of Contents

APPENDIXABOUT US ................................................................................................................. 3
ENVIRONMENTAL STEWARDSHIP ........................................................................... 8
SOCIAL COMMITMENT ........................................................................................... 14
CORPORATE RESPONSIBILITY ................................................................................23
APPENDIX ................................................................................................................ 31

ABOUT THIS REPORTWe at Shoals Technologies Group, Inc. (Shoals or the Company) are proud to share our second annual Environmental, Social,and Governance (ESG) report, which describes our ESG approach and performance and the ways in which our products andsolutions contribute to sustainable development. In preparing this report, we have considered the International Financial
Reporting Standards (IFRS) Foundation’s Sustainability Accounting Standards Board (SASB) Standards for Solar Technology
and Project Developers. Additionally, we have identified the United Nations Sustainable Development Goals (UN SDGs) thatare most relevant to our Company and the impacts we make on challenges facing our environment and society. We continue
to seek ways to further align our ESG reporting with industry-leading frameworks and standards and develop transparent
reporting of our ESG progress. Unless otherwise noted, this report addresses our ESG progress and performance fromJanuary 1, 2022 to December 31, 2022.

1400 Shoals Way
Portland, TN 37148

615.451.1400
shoals.com

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCORPORATERESPONSIBILITY

About Us

APPENDIX

We operate with purpose, passion, and creativity to be
the leading provider of electrical balance of systems(EBOS) solutions and components for solar, battery
storage, and electric vehicle (EV) charging applications.

Our Vision
To create a brighter future for ourclients, our team, and the wider world
by pursuing simple ideas with adetermination to make solar, storage,
and EV charging a more affordable
and viable choice for people andcommunities everywhere.

Our Mission
To develop innovative solutions thatmake EBOS installation simpler, faster,safer, and more reliable to reduce theLevelized Cost of Energy (LCOE).1

Our Common Values
Making quality foremost in all we do,
make, and sell.
Maintaining integrity in how we act, makedecisions, and hold ourselves accountable.
Being responsive to change, to each other, andto our business partners, customers, and users.
Being respectful in how we treat all people.
Seeking innovation in the way we approach
challenges and build products.
Being sustainable in our approach to
producing our products and our operations.

We are engineers, solar evangelists, curious minds, collaborators, optimists, and advocates of sunnier days.

2022 HIGHLIGHTS

of27 Years
Manufacturing
Experience

Top 15 Solar Engineering,
14 ofProcurement,~835 Employees
andConstruction Companies(EPCs) Use Shoals’ CombineAs-You-Go System

Located in
5 Plants
Tennessee, Alabama,
and California

35 Cumulative
Issued Patents
15 Patents Issued
Charging
4 EV
Product Families
Introduced

3

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTOur Products
EBOS products are mission critical for every solar, EV charging, and energy storage
project, regardless of size, location, or technology. They encompass all of the components
to carry and convert electrical currents for their intended purpose.

ABOUT USENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCORPORATERESPONSIBILITY
APPENDIX

At Shoals, we design and manufacture innovative and customizable EBOS components
and solutions that are safe, reliable, cost effective, and speed installation. Our in-house,prefabricated manufacturing meets Tier 1 QA/QC standards and certification. Our aboveground designs mean our products are simple to install, significantly reducing the needfor skilled electricians and special tools.
Through our wide range of industry-leading products, we are helping to efficiently
harness the power of the sun, deliver best-in-class battery energy storage, and meet
ambitious EV charging deployment goals.

American Engineering
Shoals is built on a foundation of American ingenuity. With the right teams,
technologies, processes, and procedures, we create high-quality products within
North America. Our principal manufacturing facilities are in Tennessee, Alabama, andCalifornia. Shoals is proud to contribute to domestic manufacturing and support thefederal government’s pursuit of energy independence.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPOur Products

SOCIAL COMMITMENTCORPORATERESPONSIBILITY

Solar

APPENDIX

Big Lead AssemblyInterconnect System®
Combiner Box
Balance on Tracker®
Service & Design

All U.S.-Based Solar
50% ofProjects
Installed Used

Shoals’ Products in 20222

43% Lower Installation Cost3
20% Lower Material Cost4

Energy Storage
Battery Combiner
Fuse Cabinets

Annual Growth+8% Compound
Rate in Addressable Market

for New Projects and Retrofits
of Battery Energy Storage
from 2021-20255

Isolation Cabinets
Reverse Current
Protection Mitigation
Auxiliary Power
Cabinets

AC OR DC

Coupled299-400

Amp Applications

eMobility
Power Center
Raceways
EV-BLA
Quick Connect Bases

States with Shoals’>1/3 U.S.
Charging Units Installed
for eMobility
1-3 days
deployments
Chargers ideal for Fleets, Retail, Officeand Metropolitan Utility Districts

Find out more about our products by visiting our Solar, Energy Storage, and eMobility websites.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCORPORATERESPONSIBILITY

Our ESG Strategy

APPENDIX

Every day, we challenge and support each other todesign, develop, and deliver solutions that have thepotential to change the world and ourselves.

From our mission and vision to our business and operations, we are strategicallyaligned with many global sustainability ambitions. We are committed to continuously
supporting these aims and to being transparent about our practices.
In 2021, we initiated the process by establishing an ESG Working Group comprisedof internal members from our Legal Team and external resources. The ESG Working
Group identified the ESG topics most relevant to Shoals, engaged with team members
from across the Company to understand our programs, policies, and procedures, andultimately produced our inaugural ESG report.
The ESG Working group continues to prioritize and monitor our ESG-relevant activities,
including engagements with stakeholders to solicit feedback on our practices.
The outcomes and progress are reported through our annual disclosures.

Oversight
The execution of our strategy and achievement of our mission relies on everyone
at Shoals.
Board of Directors

Management

ESG Working Group

Our Nominating andCorporate GovernanceCommittee reviews,
monitors, and provides
guidance on thedevelopment andimplementation of our ESG
programs and goals.

Our executive leadershipguides our management
teams and their divisions
on acting responsibly
in ways that protect theenvironment and thesafety and wellbeingof our employees, local
communities, and products.

Our Legal Teamoversees andcoordinates reportingof our ESG efforts incollaboration withteams across theCompany.

See our 2021 ESG Report for the process of identifying our ESG Priorities.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIP

Environmental Stewardship

SOCIAL COMMITMENTCORPORATERESPONSIBILITY
APPENDIX

Ecological ProductImpacts

Operational
Sustainability

Responsible Product
Design and Lifecycle
Management

Social Commitment

Human CapitalManagement

Diversity, Equity,and Inclusion (DEI)

Occupational
Health and Safety(OHS)

Product Safety

Corporate Responsibility

Ethics andIntegrity

Data Privacy
and Security

Corporate
Governance

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SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
ENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENT

Environmental Stewardship

CORPORATERESPONSIBILITY
APPENDIX

As a leader in providing solar energy-focused
products and eMobility solutions, we haveidentified four UN SDGs that align with Shoals’
commitment to environmental stewardshipthrough our ecological product impacts,
operational sustainability, and responsible
product design and lifecycle management.
See the Appendix for an overview of all the UN SDGs Shoals advances.

Environmental Solutions
From the development of new technologies to the benefits of our products ininstallations, we are advancing the global energy transition and accelerating
electrification. These efforts are supporting global, national, local, and corporate
net-zero emissions goals and the Paris Agreement’s aim of maintaining global
average temperatures below 2°C above pre-industrial levels and to limiting
warming to no more than 1.5°C.6
Over the past few years, the growing sentiment to mitigate the impactsof climate change alongside recent U.S. legislative actions, such as theInfrastructure Investment and Jobs Act and the Inflation Reduction Act, arebolstering our contributions.7 As a Tier-1 supplier to the solar, energy storage,
and eMobility sectors, we are providing solutions that overcome some of thepressing challenges of our day.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
ENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENT

Supporting the Clean Energy Transition

CORPORATERESPONSIBILITY
APPENDIX

Solar energy and electrification are key to the transition to a low-carbon future.
The products we manufacture help to reduce reliance on fossil fuels, avoid millions
of tons of greenhouse gas (GHG) emissions, and create more stable, flexible, andreliable energy sources that contribute to cleaner air and healthier communities.

Solar

Energy Storage

EV Chargers

Utility-scale solar energy
installations are powering
renewable opportunities.
Our EBOS solutions are
optimizing the process byinterconnecting with thesolar panels, collecting
the electrical current,
aggregating it to theinverter, and ultimately
bringing the energy to thepower grid.

The utility-scale energy
storage industry is evolving
and off-the-shelf solutions
continue to be a challenge.
Shoals fills the gap by
providing customized andsemi-customized Battery
Energy Storage Solutions(BESS) that cost-effectively
and quickly couple toutility scale solar, EV
charging sites, and theexisting electricity grid.

Charge point operators needto speed deployment while
simultaneously reducing
costs and achieving higher
quality to meet ambitious
federal EV deployment goals.
Our EV EBOS solutions areportable, charger agnostic,
and deployable in days rather
than weeks or months toaccelerate the adoption andexpansion of EV charging
networks.

52%

7.8 GW

54%

Global Solar PV Capacityfrom Utility-Scale Plants8

Utility-Scale Battery Storage
in U.S. as of October 202210

Increase in Global EV Sales
as Compared to 202112~1–4 GtCO2e44-Fold

1.2M

Emissions Reduced per
Year from Solar PV Power
Generation Compared to
Fossil Fuel Combustion9

Projected Growth in Global
Grid-Scale Battery Storage
Capacity to 680 GW By 203011

Estimated Public EV
Chargers Needed By 203013

Explore examples of our utility solar projects on our website.

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SHOAL S TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
ENVIRONMENTAL
STEWARDSHIPReducing Environmental Impacts Through Design
Our products are uniquely designed to have lower environmental and ecologicalimpacts as compared to conventional homerun EBOS systems.

1
2
3
4

SOCIAL COMMITMENTCORPORATERESPONSIBILITY
APPENDIX

Above-ground installation
Our combine-as-you-go system and EV charging solutions require no
excavation. This minimizes soil disturbances on the large areas of land needed
for projects such as utility-scale solar or in parking lots for EV fleets. It also
lessens the system materials, including the water, energy, waste, and emissions
from the product lifecycle, by eliminating underground metal and PVC pipe
conduit systems.

Fewer wires and cables
Our solutions dramatically reduce wire runs and redundant wiring, thereby
minimizing material use. As compared to a 100 MW Conventional Homerun EBOS
System solar project that uses approximately 18,000 individual wires runs and100,000 connections, our BLA has 83% fewer connection points resulting fromthe reduction of 95% inverter runs and 67% string runs. Our EV BLA eliminates
individual homeruns from each dispenser and wire runs by up to 75%.

Lighter materials
By replacing copper with aluminum, our materials weigh less and reduce
the amount of fuel used for their transport. From our estimate, there
are ~48 copper cables per conductor in a Conventional Homerun EBOS
System compared to 2 copper cables in one set of Shoals conductors.

Longer Lasting
Our above-ground cabling is more durable than other commonly used materials,
such as PVC, ensuring a longer life. The XLPE (cross-linked polyethylene)
cables used in our products have not only higher quality electrical and physicalproperties, but also last longer due to higher UV stabilization. This reduces theamount of waste from replacement materials for UV-damaged cables.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
ENVIRONMENTAL
STEWARDSHIP

Sustainable Operations

SOCIAL COMMITMENT

Considerations of our environmental impact have primarily centered around our solutions
and how they support the energy transition through the solar, energy storage, andeMobility industries. As a Tier 1 supplier, we have always upheld responsible business andmanufacturing practices. Now, we are expanding our focus to the impacts from our value
chain and our own operations.

CORPORATERESPONSIBILITY
APPENDIX

Environmental Responsibility
We are committed to operating in anenvironmentally responsible and sustainable
manner to protect our people, ourcommunities, and the planet for future
generations.
Our Environmental Policy outlines thesustainability guiding principles and practices
we expect of everyone at Shoals. It addresses
our overall approach and the areas of energy
conservation, materials consumption, andwaste minimization, including overall waste
and toxic and hazardous waste.
We expect our visitors, contractors, andbusiness partners to honor these standards.
For our suppliers, contractors, consultants andother business partners, we also have a ThirdParty Code of Conduct (Code). Within it, there
is a section on Responsibility to the Earth. This
covers compliance with environmental laws
and the encouragement of impact reducing
activities on the environment, climate, and ourshared natural resources. Each of our business
partners are required to comply with the Code.

Environmental Guiding Principles
and Practices

Comply with applicable environmental
laws and regulations.
Continue to review and minimize
the impacts of our activities.
Conserve energy and other natural
resources.
Reduce, reuse, and recycle materials
to minimize waste.
Minimize the generation of waste.
Adopt green procurement practices.
Receive environmental awareness training.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
ENVIRONMENTAL
STEWARDSHIPOur Practices

6

We have implemented a number of sustainable processes and procedures.
Waste
Our waste management efforts help us minimize and divert refuse fromlandfills through our reduction, reuse, and recycling practices.

Office,Manufacturing,
Warehouse andShipping Locations

SOCIAL COMMITMENTCORPORATERESPONSIBILITY
APPENDIX

Regrinding and reusing plastic scraps in our manufacturing process.
Recycling e-waste and corrugated packaging.
Recycling scrap material, including wires and metals (e.g., steel
and copper) by local recycling companies, when applicable.
Engaging waste-management third parties with sustainable
processes for materials recovery from lithium ion batteries
and waste fluids, including the creation of products such as
antifreeze derived from coolant with ethylene glycol.
Reducing single-use plastics at our plants by reducing theavailability of plastic cutlery and utilizing biodegradable drinkware.

452K

~

Total Location
SquareFootage50%

Locations Owned
by Shoals

This past year, we switched to a higher grade coolant in our computer numerical control
machines, which help us manufacture our products with the highest level of efficiency,
accuracy, and consistency. This upgrade reduced our coolant usage intensity from every 3months to every 6+ months.

Water & Wastewater
Our water management practices include reuse and reduction techniquesthat help us conserve water.
Installing a closed-loop cooling system through which water is reused to coolparts of our injection molding machines (e.g., plastic intake throats and motors).
Eliminating water changeouts in our closed-loop systemfollowing an externally advised chemical efficiency review.
Reducing water withdrawals solely for evaporationin our closed-loop system.
Transferring processes to other facilities.
Processing wastewater, except from sanitation
facilities, into clean water.

10 galAmount of Water Used
per Month by our
Closed-Loop System

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SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
ENVIRONMENTAL
STEWARDSHIP

EnergyOur energy efficiency efforts address end uses of energy - lighting and HVAC
systems -and are increasingly focused on electrifying our operations.

SOCIAL COMMITMENTCORPORATERESPONSIBILITY
APPENDIX

Installing energy-efficient LED lighting and motion sensors at
our production facilities and offices.
Replacing aging HVAC units with Energy Star certified and high seasonal energy
efficiency ratio (SEER) ratings models for the level of needed BTUs.
Deploying and funding EV charging systems at our plants.
Upgrading to and utilizing a majority electric mobile equipment(e.g. forklifts, box lifts) at our facilities.

Greenhouse Gas Emissions
As we continue to monitor and enhance our operational practices, we remain apprisedof climate change regulatory developments and growing interests for greenhouse gas
disclosures. Currently, we are reviewing ways to account for and report on our energy
consumption and sources of energy during our normal course of operation. This will informthe identification of process and practice enhancements and disclosures for future reporting.

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SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCOMMITMENT

Social Commitment

CORPORATERESPONSIBILITY
APPENDIX

As a growing company, we have identified
one UN SDG that aligns with Shoals’
commitment to supporting and developing
our people, culture, and business through afocus on human capital management, DEI,
OHS, and product safety.
See the Appendix for an overview of all the UN SDGs Shoals advances.

Human Capital Management
Our success and operational excellence starts with our people.
They have the knowledge and expertise to design and deliver innovative
EBOS systems and components. They share our passion, purpose,
entrepreneurial spirit, and put our values into action every day.

Our Journey
Since our founding in 1996, we have had at least two pivotal moments - the transition toa solar component supplier from the automotive industry in 2002 and our listing on the
Nasdaq Stock Exchange and continued high-growth since 2021.
In this phase of our journey, we are evolving our people strategy while staying true to ourfamily-business roots. Over the past year, we continued to focus on talent attraction andretention and embarked on a transformation of our HR department with the initiation of our
Total Rewards strategy and expansion of our team, including the appointment of our Chief
Human Resources Officer.
In 2022, we also established baseline HR analytics, which provide us greater insights on our
recruitment, retention, and total rewards practices in addition to our workforce composition.

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SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCOMMITMENT

Our Teams

CORPORATERESPONSIBILITY
APPENDIX

Shoals is a collection of engineers and problem solvers, solar innovators, e-mobility
evangelists, curious minds, and collaborators, optimists, and advocates.

Human Resources (HR)Serves as a resource for our people and supports the growth of our talentand culture as a key differentiator and competitive advantage to attract
and retain the top talent.
Research & Development
Develops reliable, safe, and innovative products for the energy transition andcollaborates with academia, national laboratories, and consultants to improve ourcapabilities and receive independent assessments.
Production & Warehouse
Manufactures our high-quality, reliable, and safe products to fit the unique needs ofevery customer request and maintains our safe and efficient facilities.

Sales & Marketing
Builds product awareness and fosters long-term relationships with our customers
through direct engagements, independent third-party studies, thought-leadership,
marketing campaigns, training seminars, and industry conferences and events.

Project Management & Customer Care
Supports our highly consultative sales approach with installation guidance andcommissioning processes in addition to administrative communication and technicalsupport for the life of the project.

Safety & Maintenance
Delivers our occupational health and safety programs and ensures a proactive safety
culture is maintained throughout all our facilities and operations.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCOMMITMENTCORPORATERESPONSIBILITY
APPENDIX

835

Team Growth~

Our talent attraction and retention practices focus on hiring
key talent within our local communities, being viewed as an
employer of choice, and promoting from within.

Employees as of
Fiscal Year End

Developing strategic recruiting partnerships.
Establishing relationships with local staffing agencies.
Engaging executive search firms for key leadership roles.
Hosting hiring events and career fairs.

150%
Increase to our
HR Team

Promoting our employee referral program.
Transitioning part-time employees to full-time roles.
Encouraging internal recruitment.
Enhancing employee experiences to improve retention.

Employee Engagement
We value open and honest communication and seek toprovide opportunities for our team members to share
their thoughts and perspectives. We hold informal
meetings across our teams to provide company updates
and a space for immediate feedback. In 2022, we also
held our first company-wide town hall meetings forour salaried employees. In 2023, we are expanding
our feedback opportunities with the launch of our first
employee engagement survey.

19%~

Year-OverYear Employee
Growth Rate

200+
HourlyEmployees Hired

50~

Salaried
Employees Hired

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCOMMITMENTCORPORATERESPONSIBILITY

Total Rewards

APPENDIX

Our Total Rewards strategy is a holistic perspective to employee engagement andretention. It encompasses five elements that provide a more structured approach toteam members’ personal and professional growth within Shoals. We launched thestrategy in 2022 and plan to develop each element through 2024 and beyond.

14Career Pathing &Leadership Development

Medical and dental coverage.

Goals development through our
performance management plans.

Life and disability insurance.

Leadership and development training.

Retirement savings plans
through our 401(k) withmatching contribution.

Off-site executive leadership sessions.

Employee Assistance Program.

On-the-job skills training.

Paid-time-off program.

Year-end reviews for all salaried employees.

25

Fair & competitive compensation
Base pay benchmarking.

Sales-based plans forcommissioned employees andbonuses for non-commissioned
and select hourly employees.

Recognition

IPO equity grants to all
employees in 2021.

Moments to appreciate, celebrate,
and reward fellow colleagues.

1.5M

$

Invested in Benefits with More
Choices and Affordability

Incentives
Annual and long-term incentive
plans tied to performance.

Compliance with wage and hourlaws per our Human Rights Policy.

3

Benefits & well-being

75%

of Annual Incentive Plan
Payouts Tied to EBITDA

1.7M

$

Total Financial Investment inHourly Pay Increases in 2022

See our Human Rights Policy for our employment and labor principles and our Proxy Statement
for more on our executive compensation program.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPDiversity, Equity, and Inclusion

SOCIAL COMMITMENTCOMMITMENTCORPORATERESPONSIBILITY

At Shoals, we strive to create a workplace where everyone is welcomed, valued,
treated fairly, and respected. We believe:

APPENDIX

Diversity is the range of our human differences, including but not limited to race, ethnicity,
gender, gender identity, sexual orientation, age, economic status, physical and mental ability,
religious or ethical values system, national origin, and political beliefs.
Equity & Inclusion provide opportunity, access, and impact, which are expressed through ourculture, products, services, and activities.
Currently, our DEI programs are under development. We are focused on partnering withorganizations and developing programs that enhance our outreach, recruitment, hiring, andretention of diverse individuals across all roles and levels. We also look to foster equity in ourleadership development and to listen, learn, and respond to employee feedback, so that wemay prosper as a diverse, equitable, and inclusive workplace today and into the future.

Diversity by the Numbers*
GENDER

18%

20%

19%

28%

82%

80%

81%

72%

2021

2022

2021

2022

Executive Management

Managerial Positions

RACE & ETHNICITY

MALE

42%

39%

58%

61%

2021

2022

Full-time Staff

OTHER R ACE/ETHNICIT Y

9%

10%

10%

17%

91%

90%

90%

86%

2021

2022

2021

2022

Executive Management

FEMALEManagerial Positions

WHITE

48%

45%

52%

55%

2021

2022

Full-time Staff*Diversity data is reflective of EEO-1 Report data as of the fiscal year end for full-time employees. Executives include
members of our leadership team and Managers consist of individuals with management responsibilities. Values in thecharts may not sum up to 100 due to rounding.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIP

Health and Safety

SOCIAL COMMITMENTCOMMITMENT

Protecting our workers, customers, and local communities is a fundamental responsibility at
Shoals. Safety is the key component and a priority in all we do from product development andmanufacturing to performance and post-installation maintenance. For our people, we focus
on having a robust support system and controlled physical environment along with awarenessand preparedness. For our products, we put a strong emphasis on quality control.

CORPORATERESPONSIBILITY
APPENDIX

Occupational Health and Safety
Our OHS program is grounded in proven safety standards and best practices and designed
to maintain a safe workplace that achieves outcomes through proactive intervention,
leadership, and employee participation.

OHS Oversight
We strive to have an interdependent
safety culture where all employees feel
responsible for each other’s safety. It starts
with the tone at the top from our leaders
to our managers and supervisors. At our
locations, we have dedicated Health and
Safety teams to drive our OHS program.
Facilities & Maintenance Manager
Ensures facilities are secure andmaintained to the appropriate health andsafety standards.
Health & Safety Manager
Develops and administers all aspects of
our OHS program, including policies andprocedures, and identifies and investigatesphysical, chemical, and biological hazards
at our facilities.
Senior Safety Coordinator
Ensures compliance with healthand safety regulations, including
maintenance of safety records and training
implementation.

OHS Guiding Principles
Maintain or surpass all pertinent health,safety, and environmental obligations.
Strengthen and encourage strong
principles and responsible workplacepolicies that enhance health, safety, andenvironmental integrity.
Encourage the implementation ofsensible health, safety, and environmental
standards of contractors, vendors, andsuppliers on Shoals properties.
Convey health, safety, and environmental
strategies and systems to Shoals
employees and shareholders.
Operate in a manner that strengthenssafety, promotes energy efficiency, andhelps protect the environment.
Make certain that all employees areconscious of their responsibility andobligation to achieve and maintain
Shoals’ health, safety, and environmental
management systems and policy.

Security & Environmental Clerk
Monitors facilities security andensures recycling and waste, including
environmental waste, are safely andproperly handled and removed.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCOMMITMENTOHS Policies and Practices
We strive to have a zero accident culture. To deliver safe outcomes, we rely on a
range of policies and proactive procedures to identify, assess, and mitigate healthand safety concerns.

Health & Safety Policy
Outlines our OHS responsibilities
and procedures for injury prevention,
record keeping and reporting, andsafety inspections for all employees,
contractors, consultants, and otherbusiness partners.
Other OHS Policies
Provide structured corrective action
processes to improve and prevent
recurring unsafe employee behaviors
or issues through our Safety
Discipline Policy and Employee Safety
Warning Notice.
Framework-based OHS Program
Aligns with the International
Organization for Standardization (ISO)45001 standards through effective
organizational oversight and anemphasis on workplace safety, risk
reduction, and overall employee wellbeing to enhance OHS performance,with future plans for ISO certification.

CORPORATERESPONSIBILITY
APPENDIX

Safety Procedures
Integrate best practices to mitigate
workplace hazards.
Machinery upgrades and routine
maintenance to minimize
operational risks.
Ergonomic workstations to avoid
repetitive stress.
Effective manufacturing floor
communication to avoid preventable
accidents.
Use of personal protective equipment(PPE) and PPE hazard assessments
to meet the requirements of specificprocesses.
Stop Work Authority implemented in
2023 to address any perceived unsafe
condition or behavior that may result inan undesirable event.

Hazard Identification
Proactively assesses hazardous
sources or situations that have thepotential to cause the most harm,
including day-to-day human error
injuries, machine injuries during
operation, and chemical hazards,
through safety walks and site
inspections.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCOMMITMENT

Performance Monitoring
Maintains records, trends, andoversight of our OHS practice.
Preventative maintenance tracker
and injury reporting analysis for
employees who operate machinery.
Regular audits and inspections ofsafety procedures, machines, andequipment, including fire safety
equipment and waste storage areas.
Audits and inspections ofhazard response process andcommunication through ourLearning Management System.
Daily safety concerns andinjury briefings among senior
management and supervisors
initiated in 2023.
Weekly Health and Safety Team
meeting to review current andemerging hazards and action plans.
Monthly Safety Huddles to
identify safety problems, develop
solutions, review incident reports,
provide training, and evaluate theeffectiveness of the safety program.

OHS Training and AwarenessPromotes safety competencies andinsights through routine programs andcommunication.

CORPORATERESPONSIBILITY
APPENDIX

Annual, and upon onboarding,health and safety training on ourpolicies, tools and resources formaintaining safe workplaces,
including evacuations and otheremergency protocols.
Routine role- and topic-specifictrainings, such as high-risk hazard
situations, as necessary.
Special operating licenses and test
preparation.
Safety signage and reminders placed
throughout our facilities.
Individual incentive programs torecognize employees who proactively
raise outstanding hazards that may
have otherwise gone unaddressed.
Safety Mondays with coffee provided
by the Health and Safety Team.

2022 Safety Performance

140+

Safety Trainings Conducted

1.33

Combined Full-Time and Temporary
Employee Total Recordable Incident Rates

21

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIP

Product Safety
We have always maintained an unwavering commitment to our product safety. Our researchand development team works with the objective of developing innovative new products that
reduce the cost and improve the reliability and safety of the energy transition.

SOCIAL COMMITMENTCOMMITMENTCORPORATERESPONSIBILITY
APPENDIX

We believe most of the new EBOS products and installation methods adopted by the U.S.
solar industry over the past five years were developed and commercialized by Shoals. This
uptake is a testament to the safety and reliability of our products.

Product Safety Oversight
Our Quality Assurance department employs a centralized
approach to product testing and compliance. Using aknowledge sharing model, we communicate practices
across our facilities so that we may apply cross-functional
lessons across the Company.

Product Safety Practices and Procedures
Our systems are designed and manufactured to be safer
and more reliable than conventional EBOS systems. Our
factory assembly and pre-terminated connectors reduce
system failures and fires from arc-faults (i.e., flow ofelectrical energy through an air gap), which are caused
by installation errors, mechanical damage, and faulty
components. Our products are also subject to a warranty,
which covers defects in materials and workmanship ofour products under normal use and service conditions.
We prioritize quality assurance and safety at each ofour manufacturing facilities. Our products are tested
against stringent quality requirements to ensure they
can withstand a variety of conditions, such as high winds
and storms.
Our Alabama facility is ISO 9001:2015 certified, which
ensures we maintain certain requirements for aneffective quality management system, including
conformity to applicable regulatory requirements andconsistent delivery of quality products to our customers.
This past year, our Fuel Power Center, Big Lead Assemblyfor DC or AC power, raceways, and quick-connect bases
for chargers received UL Standards certification. This
ensures we meet National Electric Codes and safely
deliver energy from power centers to chargers.

22
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SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENT

Corporate Responsibility

CORPORATERESPONSIBILITYRESPONSIBILITY
APPENDIX

At Shoals, we are inspired tocreate a better future for everyone
through ingenuity and integrity. This
goal guides our daily actions anddrives positive outcomes for our
Company, communities, stockholders,
stakeholders, and planet, both now andwell into the future.

Business Ethics and Integrity
We are committed to acting with the highest degree of ethics and accountability
through an honest, inspired, and principled approach.
Everyone at Shoals - from our Board and our management team to our
temporary and contract employees - is expected to conduct themselves inaccordance with our common values, principles, and policies. We require eachof our employees to annually review and attest to our Code of Ethics, and we are
exploring additional ways to educate them on compliance and ethics throughtraining. Our Board and Committees oversee the management of our policies
and practices and remain updated on current trends through ongoing educationand training. Our legal advisers assure we are operating in compliance with allapplicable laws and regulations.

23

ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENT

Ethics & Integrity Guiding Principles & Policies

CORPORATERESPONSIBILITYRESPONSIBILITY

Common Values
Focuses our attention on the means
through which we will achieve our
Mission and Vision.

Supplier Code of Conduct
Outlines our expectations for suppliers
and business partners to act responsibly
and in compliance with laws regarding:

Code of Ethics
Details the actions, behaviors, andcompliance expectations for acting
honestly, ethically, and fairly in all
interactions and business activities.

Health, Safety, and the Environment.

Human Rights Policy
Reinforces our commitment torespecting human rights as laidout in the Universal Declaration of
Human Rights and the International
Labour Organization’s Declaration on
Fundamental Principles andRights at Work.

APPENDIX

Workplace, Labor, and Human Rights.
Business Conduct and Ethics.

Whistleblower Policy
Our Code of Ethics requires anyone to report asuspected violation of our policies through ourEnglish and Spanish 24/7 hotline, via a dedicatedreporting website, to HR, a direct supervisor, ordesignated executive. Additionally, our Whistleblower
Policy specifically requires reporting suspectedviolations related to accounting and auditing matters,
including fraud, deliberate errors, or noncompliancewith internal accounting controls. Each report isreviewed by an applicable supervisor or executive,
including our Chief Executive Officer, Chief Financial
Officer, or Chief Legal Officer, to determine theappropriate course of action, and escalate asnecessary to our Audit Committee. No matter theincident, we do not tolerate any acts of retaliation.

See our Code of Ethics, Human Rights Policy, and Supplier Code of Conduct for more information.

24
24

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIPEnterprise Risk Management
Our risk management approach is designed to support the achievement of
our organizational objectives, improve long-term performance, and enhanceshareholder value.

SOCIAL COMMITMENTCORPORATERESPONSIBILITYRESPONSIBILITY
APPENDIX

Fundamental to our approach is understanding what our most significant
risks are and taking the necessary steps to appropriately mitigate them. Our
Board oversees an enterprise-wide approach to risk management and isactively involved with monitoring new threats and risks as they emerge. It
has delegated primary oversight of certain risks to its committees (See our
Corporate Governance section).
At regular, periodic meetings, management reports to and seeks guidancefrom our Board and its committees with respect to what we view as the mostsignificant risks that could impact our business, including legal and regulatory,
privacy, reputation, patent, financial, tax, and audit-related risks.

25
25

ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPIntellectual Property

SOCIAL COMMITMENTCORPORATERESPONSIBILITYRESPONSIBILITY

Each of our patents holds a backstory of conception and exploration, trial
and error, toil and teamwork, and ultimately, a modest triumph of ingenuity.
Inventing Simple® is not just a tag line – it is a way of thinking here at Shoals,
and we are constantly innovating to find new ways to make EBOS safer, morereliable, and accessible around the world.

APPENDIX

Many of our patents relate to electrical wiring and power transmission fromsolar panels to power inverters at solar fields. Our ability to maintain andprotect our proprietary technologies, information, processes, and ideas isembedded in our company policies and protocols, including those specific to
our intellectual property. We rely on patents, trademarks, copyrights, and trade
secrets to protect our innovative solutions.

Our patents are much more than intellectual property. They are a testament to the quality ofengineering talent at Shoals and our collective determination to problem solve on our terms.

By 2022 Fiscal Year End

26

19

IssuedPatents

U.S. Trademark
Registrations

Shoal’s Patents

53%

Accessories

16

Issued nonU.S. Patents

18
18%
%

Interconnect
System

Combiner Box

28

Pending Patent
Applications

9%
3%

5

Pending U.S.
TrademarkApplications

Junction Box

Mounting
System26
26

ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIP

Data Privacy and Security

SOCIAL COMMITMENT

To act responsibly, we must protect the information of our customers andemployees as well as our intellectual property. We monitor and implement
effective procedures, policies, and activities to manage our data and maintaina high level of privacy and security within our systems.

CORPORATERESPONSIBILITYRESPONSIBILITY
APPENDIX

Oversight
Our IT Director oversees our data privacy and security program. They can report directly to
our President, CEO, and Audit Committee, as necessary, and lead our dedicated Information
Technology (IT) team. The IT team carries out our data privacy and security programs andpolicies, and is in the process of expanding their analytics to enhance our oversight capabilities.
In the event of a data privacy or security event, the IT Director leads our Cyber Incident
Response Team (IRT). The IRT is comprised of internal members from finance, legal, humanresources, and operations, as well as external cybersecurity vendors and advisors.

Policies and Practices
Our data privacy and security program focuses on striking a balance between databarriers and access - our least privilege security strategy - and promoting vigilanceamong our employees, contractors, and business partners.
Information Security Policy
Defines our information security
system’s configuration and hardening
requirements, including requirementsfor password protection, system
auditing, and information retention.
Cybersecurity Policy
Addresses appropriate preventative
measures to avoid a cybersecurity
incident, including data security
procedures, communication,assessments, and awareness,among others.
Privacy Policies
Detail our practices for the collection,use, storage, and disclosure of
information.

Ongoing Prevention
Control processes based on the National
Institute Standards and Technology (NIST)
guidance guard against any unusual or
suspicious activity.
Service disruption monitors.
Weekly logs of firewalls.
Antivirus software.
Anti-malware and intrusions
protection systems.
Penetration testing to identify potential
security gaps.
Externally stored Personally Identifiable
Information (PII) with robust security layers.
3-layer security approach to our internal
data systems with immutable backup.

27

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIPBusiness Continuity and Disaster Response
Enhance preparedness, coordination, and communication in the effective
management of cybersecurity and data breach incidents through confirmation,
containment, eradication, and communication via our Cybersecurity Incident
Response Plan, with annual exercises conducted by our IRT.

SOCIAL COMMITMENTCORPORATERESPONSIBILITYRESPONSIBILITY
APPENDIX

Awareness and Training
Build knowledge and security oriented mindsets and actions among our
employees.
Monthly online cybersecurity training for employees with network access.
Quarterly supplemental training on current and emerging threats.
Routine phishing exercises and remedial training, as needed.
Periodic awareness campaigns on best practices.
Ongoing improvements, including enhanced communication strategy withdigital boards and newsletters.

28
28

ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPCorporate Governance

SOCIAL COMMITMENT

Behind the culture of ingenuity and integrity that drives our business successis our commitment to good corporate governance.

CORPORATERESPONSIBILITYRESPONSIBILITY
APPENDIX

Standards and Practices
Our Board has the principal responsibility of overseeing management, our business,and its affairs. Our Corporate Governance Guidelines provide the framework for how
those duties are carried out. This is supplemented with our Committee Charters,
which outline the roles and responsibilities of our three standing committees.
We annually review and update our governing documents. In 2022, those documents
were updated to reflect our transition to a non-emerging growth company. Under thisdesignation, we continue to enhance our disclosures to meet our listing requirements
and drive transparency around our practices.

Audit Committee
Reviews risk policies, assessments, andmanagement, including cybersecurity andfinancial exposures; oversees accountingrelated controls, procedures, and audits;monitors compliance with the Company’s
Code of Ethics and advises on complaints
and concern reports

Nominating and Corporate
Governance Committee
Develops Board and committee
membership criteria; reviews and monitors
ESG; advises on corporate governance bestpractices and principles.

Highlights
One Share-One Vote14
No designated directors
Independent Chair
Fully independent committees
No directors serving on more than
3 other public company boards
Annual performance evaluations
Succession Planning
Double trigger change of control

Compensation Committee
Reviews and approves enterprise-widecompensation-related policies andprograms; establishes the overall executive
compensation philosophy and practices.

29

ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPBoard Composition

SOCIAL COMMITMENTCORPORATERESPONSIBILITYRESPONSIBILITY

We believe an effective board is one comprised of people that possess a range ofaccomplishments, professional expertise, cultural backgrounds, and viewpoints. When
identifying candidates, we seek out individuals who are dynamic, accountable, anddemonstrate sound business judgment. We also expect a high degree of knowledge
and exposure to the solar and energy industries.

APPENDIX

Board Transitions
The past few years, we have refreshed our Board as part of our maturity as a publiccompany. We ended our Stockholder Agreement with Oaktree, which led to three
director changes, and our Founder stepped down. We also appointed two new
independent directors. By 2022 year end, our Board was comprised of eight directors.
Though as we headed into 2023, we were addressing another board change due thehealth-related resignation of our CEO.

February 2022

August 2022

March 2023

Dean Solon, Shoals’
founder, steps downPeter Joanna resigns

Jason Whitaker,
Shoals’ former CEO,steps down

Jeannette Mills andRobert Julian appointed

Management Succession
In 2022, our CEO, Jason Whitaker, stepped down for health reasons, which immediately
prompted our CEO succession process. As a whole, the Board, along with the Nominating
and Corporate Governance Committee and an executive search firm, identified potential
candidates, and on June 16, 2023 Shoals announced the appointment of Brandon Moss as
our new CEO, effective July 17, 2023. During this process, Mr. Jeffrey Tolnar, our President,
assumed the Interim CEO position.

DIRECTOR INDEPENDENCE

25%

13%

75%

88%

2021

2022

NOT
INDEPENDENT

100%

2023
INDEPENDENTGENDER DIVERSITY

13%

25%

29%

88%

75%

71%

2021

2022

2023

FEMALE

Values in the charts may not sum up to 100 due to rounding.

MALE

RACE & ETHNICITY

100%

2021

13%

14%

88%

86%

2022

2023

OTHER R ACE/ETHINICIT Y

WHITE

30
30

ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTCORPORATERESPONSIBILITYSASB Index –Solar Technology & Project Developers

APPENDIXAPPENDIX

This index includes Shoals information relevant to the SASB Solar Technology & Project
Developers Standard, which we believe is most relevant to our operations. Data anddescriptions as of December 31, 2022 unless otherwise noted. While we do not currently
disclose all data and descriptions included in the applicable Standard, we will evaluate
expanding our disclosures in future ESG Reports.

TOPIC

ACCOUNTING METRIC

Energy Management in
Manufacturing(1) Total energy consumed, (2) percentage
grid electricity, (3) percentage renewable

Water Management in
Manufacturing

Hazardous Waste Management

Ecological Impacts of Project
Development

Management of Energy
Infrastructure Integration &Related Regulations

SHOALS ALIGNMENT(1) Total water withdrawn, (2) total water
consumed, percentage of each in regionswith High or Extremely High Baseline Water
StressRefer to Sustainable
Operations Section.

Description of water management risks anddiscussion of strategies and practices tomitigate those risks

Expansion of disclosures
to be evaluated in futurereports.

Amount of hazardous waste generated,
percentage recycled
Number and aggregate quantity ofreportable spills, quantity recovered
Number and duration of project delays
related to ecological impacts

Refer to Reducing
Description of efforts in solar energy system Environmental Impacts
project development to address community Through Design Section.
and ecological impacts
Description of risks associated withintegration of solar energy into existingenergy infrastructure and discussion ofefforts to manage those risks
Description of risks and opportunities
associated with energy policy and its impact
on the integration of solar energy into
existing energy infrastructure

Refer to Environmental
Solutions Section.

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ABOUT US

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENTSASB Index –Solar Technology & Project Developers

TOPIC

ACCOUNTING METRICCORPORATERESPONSIBILITY
APPENDIXAPPENDIXSHOALS ALIGNMENT

Percentage of products sold that arerecyclable or reusable
Weight of end-of-life material recovered,percentage recycled
Product End-of-life
Management

Percentage of products by revenue that
contain IEC 62474 declarable substances,arsenic compounds, antimony compounds,
or beryllium compounds

Refer to Reducing
Environmental Impacts
Through Design Section.
Expansion of disclosures
to be evaluated in futurereports.

Description of the management ofenvironmental risks associated with thepolysilicon supply chain

Materials Sourcing

Description of the management of risks
associated with the use of critical materials

Refer to Sustainable
Operations Section.

Description of the management ofenvironmental risks associated with thepolysilicon supply chain

Our manufacturing does
not involve the productionof solar cells or modules.

ACTIVITY METRICSHOALS ALIGNMENT

Total capacity of photovoltaic (PV) solar modules
produced

Not Applicable.

Total capacity of completed solar energy systems

Not Applicable.

Total project development assets

Not Applicable.

32

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENT

United Nations
Sustainable Development Goals Index

TOPIC

CORPORATERESPONSIBILITY
APPENDIXAPPENDIXSHOALS ALIGNMENT
Affordable andClean Energy: Ensure
access to affordable,
Refer to Supporting the Clean Energy Transition Section.
reliable, sustainable andmodern energy for all.
Decent Work andEconomic Growth:
Promote sustained,
inclusive andRefer to Human Capital Management and Occupational Healthand Safety Sections.
sustainable economic
growth, full andproductive employment
and decent work for all.
Industry, Innovation
and Infrastructure:
Build resilient
infrastructure,promote inclusive
and sustainableindustrialization andfoster innovation.

Refer to the Environmental Solutions, Sustainable Operations,Intellectual Property, and Data Privacy and Security Sections.

Sustainable Cities
and Communities:
Make cities and humansettlements inclusive,
safe, resilient, andsustainable.

Refer to the Environmental Solutions sections.

Climate Action:
Take urgent action tocombat climate change
and its impacts.

Refer to the Environmental Solutions and Sustainable
Operations Sections.

33

SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENT

Endnotes1

Levelized Cost of Energy (LCOE) is a calculation of the lifetime cost of building and operating a particular power source
system. National Renewable Energy Laboratory. (n.d.). Simple Levelized Cost of Energy Calculator Documentation. https://www.nrel.gov/analysis/tech-lcoe-documentation.html

2

Estimated based 16.4GWs of total utility scale solar installations in the United States in 2022 per IHS Markit PV Installations
Tracker Q4-2022, December 2022.

3

Cost savings and customer feedback based on GRAPH survey of 120 solar industry participants. Figures represent medianof responses.

4

See endnote 3.

5

Lawrence Berkeley National Laboratory. (August 2022). Hybrid Power Plants: Status of Operating and Proposed Plants, 2022
Edition. https://emp.lbl.gov/webinar/hybrid-power-plants-status-operating-and Assumes EBOS for solar + storage requires
an additional 3¢ per watt of solar capacity. Includes 2025 solar + storage projects which have interconnection agreements
executed or in progress.

6

IEA. (2023). Global Energy Transitions Stocktake: Tracking progress toward the Paris Agreement. https://www.iea.org/topics/
global-energy-transitions-stocktake; United Nations Climate Change. (n.d.). The Paris Agreement. UNFCCC. https://unfccc.int/
process-and-meetings/the-paris-agreement

7

White House. (February 15, 2023). FACT SHEET: Biden-⁠Harris Administration Announces New Standards and Major
Progress for a Made-in-America National Network of Electric Vehicle Chargers. https://www.whitehouse.gov/briefing-room/
statements-releases/2023/02/15/fact-sheet-biden-harris-administration-announces-new-standards-and-major-progressfor-a-made-in-america-national-network-of-electric-vehicle-chargers/;

CORPORATERESPONSIBILITY
APPENDIXAPPENDIX

Ernst and Young (November 15, 2022). 3 Key Attributes of the US Renewable Landscape. https://www.ey.com/en_us/energy-resources/3-key-attributes-of-the-us-renewables-landscape?WT.
mc_id=10821197&AA.tsrc=paidsearch&s_kwcid=AL!10073!3!648300728123!p!!g!!energy%20
storage&gad=1&gclid=CjwKCAjwvdajBhBEEiwAeMh1U0j5xsDy69r4LthEu28O2QrPzmDSG7H6zZNLLCxw8rDzMRZ55UG6TRoC7IYQAvD_BwE;
McGuireWoods. (February 6, 2023). Inflation Reduction Act Extends and Modifies Tax Credits for Solar Projects. https://www.
mcguirewoods.com/client-resources/Alerts/2022/12/inflation-reduction-act-creates-new-tax-credit-opportunities-forenergy-storage-projects
8

IEA. (2023). Solar PV: Technology Deep Dive. https://www.iea.org/reports/solar-pv

9Wang, M., Mao, X., Xing, Y., Lu, J., Song, P., Liu, Z., Guo, Z., Tu, K., & Zusman, E. (2021). Breaking down barriers on PV trade will
facilitate global carbon mitigation. Nature Communications, 12(1), 6820. https://doi.org/10.1038/s41467-021-26547-7

10 U.S. Energy Information Administration (December 8, 2022). U.S. Battery Storage Capacity Will Increase Significantly by 2025.

EIA. https://www.eia.gov/todayinenergy/detail.php?id=54939

11

IEA. (2023). Grid-Scale Storage: Infrastructure Deep Dive. https://www.iea.org/reports/grid-scale-storage

12 International Council on Clean Transportation. (June 2023). Annual update on the global transition to electric vehicles: 2022.

https://protect-us.mimecast.com/s/VpQnC82oMRFnOwOqT1__l6?domain=theicct.org

13 Kampshoff, P., Kumar, A., Peloquin, S., & Sahdev, S. (April 18, 2022). Building the Electric-Vehicle charging infrastructure

America needs. McKinsey & Company. https://www.mckinsey.com/industries/public-and-social-sector/our-insights/buildingthe-electric-vehicle-charging-infrastructure-america-needs

14 Shoals has both Class A and Class B common stock. In March 2023, all of our Class B common stock were converted to Class A.

Currently, there are no outstanding Class B common stock. See the Shoals Parent LLC Agreement section in our March 2023
Proxy Statement.

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SHOALS TECHNOLOGIES GROUP 2022 ESG REPORTABOUT USENVIRONMENTAL
STEWARDSHIPSOCIAL COMMITMENT

Disclaimer

CORPORATERESPONSIBILITY
APPENDIXAPPENDIX

Reporting year: Except where specifically noted otherwise, the reporting period for this ESG report focuses primarily on fiscal year
2022 activities. All references to a year throughout the ESG report refer to Shoal’s fiscal years, unless another period is specified.
This ESG report was published in July 2023.
Data assurance: Data in this ESG report reflects estimates using methodologies and assumptions believed to be reasonable
and accurate. Those estimates, methodologies and assumptions may change in the future as a result of new information orsubsequent developments.
Forward-looking statements: The inclusion of information in this ESG report should not be construed as a characterization
regarding the materiality or financial impact of that information. This ESG report contains forward-looking statements that are
based on our management’s beliefs and assumptions and on information currently available to our management. Forwardlooking statements include statements that are not historical facts and can be identified by terms such as “anticipate,”“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,”“would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these
uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent
our management’s beliefs and assumptions only as of the date of this ESG report. You should read this ESG report with theunderstanding that our actual future results may be materially different from what we expect. More information on risks,
uncertainties, and other potential factors that could affect our business and performance is included in our filings with the SEC,
including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
sections of Shoals’ most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. Except as requiredby law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Additionally, terms such as “ESG,” “impact” and “sustainability” can be subjective in nature, and there is no representation
or guarantee that these terms will reflect the beliefs or values, policies, principles, frameworks or preferred practices of any
particular investor or other third-party or reflect market trends. Any ESG, climate or impact goals, commitments, incentives andinitiatives outlined in this ESG report are, unless explicitly stated otherwise in this ESG report, purely voluntary, are not binding
on our business and/or management and do not constitute a guarantee, promise or commitment regarding actual or potential
positive impacts or outcomes. Investors should read this ESG Report in conjunction with our reports we file with the SEC and
our financial statements. Statistics and metrics relating to ESG matters are estimates and may be based on assumptions ordeveloping standards.

35