American Council On Renewable EnergyThe Economic Impact of RenewableEnergy in the Border StatesMarch 24, 2011ACORE’s Mission and Strategy501(c)(3) tax-exempt nonprofit organization foundedin 2001 to:“...bring renewable energy into the mainstream of the U.S. economy“...assume responsibility for the success of renewableenergy in America”“...be for renewable energy and against nothing”ACORE encompasses all renewable and inexhaustible energy options:-Solar energy and power - Biomass energy and fuels- Wind power - Geothermal energy and power- Hydro & ocean power - Waste-to-energy...in all forms of energy:-Electricity - End use thermal energy- Fuels - Hydrogen2ACORE’s Organizational MembersStrategy to Assemble All the Players Necessary toMake Renewable Energy Successful in the U.S.3Renewable Energy in America: Markets, EconomicDevelopment and Policy in the 50 StatesTwo-Page Executive Summaries for Each State:Market activitiesResource potentialsInstalled capacity for each technologyEconomic developmentPolicies4www.acore.org/publications/50statesU.S. Renewable Energy Finance02,0004,0006,0008,00010,00012,00014,00016,000

Millions (USD)U.S. Renewable Project Financing InvestmentsWindSolarGrand TotalMarket activity increased following the Q12009 slowdown•Boost from 1603 Treasury Cash GrantProgramNew build project loans: 54.6%, or $25.8billionDebt refinancing: 18.2%, or $8.6 billion0Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q42010The following types of investments are considered:project construction debt, project term or refinancingdebt, and tax equity investments. Figures adjustedfor the average size of deals where no value wasdisclosed.Source: Bloomberg New Energy FinanceVenture funds still cautious after recessionIn Q4 2010, 8/10 investments was a U.S.based companySolar was top clean technology sector forinvestment in 2010Large deals in 2010•Solyndra $175 m (CA)•BrightSource Energy $150 m (CA)5Figures adjusted for the average size of deals where no value was disclosed.0500100015002000Q1 08Q2 08Q3 08Q4 08Q1 09Q2 09Q3 09Q4 09Q1 10Q2 10Q3 10Q4 10

Millions (USD)VC/PE New Investment in Renewable EnergyCompaniesSource: Bloomberg New Energy FinanceSource: Bloomberg New Energy FinanceU.S. Investment in Renewable Energy Assets, 2020(Billions of $)Pew Charitable Trusts: Global Clean Power: A $2.3 Trillion Opportunity (2010)6Chart: Pew Charitable TrustsGlobal Clean Energy Projected Growth 2010-2020($U.S. Billions)Clean Edge: Clean Energy Trends, 2011Chart: CleanEdge7Renewable Energy in the Border StatesIn 2010, projects in the four border states representedover 35% of the nation’s renewable electric capacityCalifornia led the nation in the number and value ofasset finance transactions and in the number ofventure capital/private equity dealsCalifornia had the most renewable energy-relatedbusinesses and jobsTexas received the most funding from 1603 & 48Ccompetitive tax credit and grant programs through6,0008,00010,00012,000

MegawattsRenewable Energy in the Border Statescompetitive tax credit and grant programs throughthe Federal government8Texas CaliforniaNewMexicoArizonaU.S. StateAverageSmall Hydro6 24 0 0 25Geothermal0 2,566 0 0 61Biomass82705037103Solar CSP0 364 0 4 10Solar PV25 798 34 47 30Wind10,0853,17770012878802,0004,00005001,0001,5002,0002,5003,000CaliforniaTexasArizonaNew Mexico

Millions (USD)Venture Capital/Private Equity in theBorder States 2009-2010200820092010Sources: American Wind Energy Association, Solar Energy IndustriesAssociation, Interstate Renewable Energy Council,Bloomberg New EnergyFinance, Geothermal Energy AssociationSource: Bloomberg New Energy FinanceThe Border States Host a Rich, DiverseSupply of Renewable Energy Resources9Solar ResourceMarket HighlightsLargest PV, CSP and geothermal power markets in thenation,third largest wind power marketPG&E and SCE programs to install 500 MW of solar PVoncommercial and industrial rooftopsOver 10 GW of CSP under development, over 2.7 GW ofwhichreceived permittingOver80% ofU.S. geothermalpower capacity is in CA,CaliforniaOverviewGeothermal ResourceOver80% ofU.S. geothermalpower capacity is in CA,representing ~10% of in-state commercial electricitygeneration10California Solar Initiative:Rebates & Performance Based Incentives. More than $3.2 billionover ten years in onsite, grid-connected solar energy. For every dollar spent on incentives bythe state, there has been another $2.62 invested insolar technology in California from othersources (CEC).Renewable Portfolio Standard:20% by 2010, TRECs authorized (SBX1-2 for 33% by 2020)Renewable Auction Mechanism (RAM):Requires California’s three IOUs to purchaseelectricity from renewable energy systems up to 20 MWin size within their serviceterritories. For the initial part of the program, each utility is authorized to acquire up to 1 GW,CaliforniaFeatured Policieswith each utility allocated a portion of the 1 GW cap.Competitive auctions are to be heldtwice a year for two years.AB 32 - Global Warming Solutions Act of 2006:Requires CA to develop regulations andmarket mechanisms to reduce the state’s GHG emissions to 1990 levels by 2020,representing a 25% reduction statewide, with mandatorycaps beginning in 2012 forsignificant emissions sources.Public Benefit Fund:Funds for renewable energy ($540 million), energy efficiency ($872million), and research, development & demonstration(RD&D) ($62.5 million). Managedthrough three programs: the Existing Renewable Facilities Program, the EmergingRenewable Program, and the Customer Education Program.11Project Details392 MW tower and heliostat STEG plant under construction in San Bernardino CountyThree separate plants to be built in phases between2010 and 2013To power more than 140,000 homes13.5m tons of CO2 avoided over its 30-year life cycleFirst large-scale solar thermal project to be builtin CA in two decadesProject sited near existing roads and transmissionlinesFinancial DetailsCaliforniaBrightSource Ivanpah STEG ProjectTotal investment cost disclosed as $300mPPAs: 259 MW with PG&E, 133 MW with SCE (25 years)Lead investor NRG Energy will invest up to $300m inthe project over the next three yearsBechtel Enterprises is an equity investor in all phases of the projectReceived a conditional $1.4 bn loan guarantee from the U.S. DOEEconomic Impact1,000 jobs at peak of construction; average 650 jobs annually over three year period86 operations and maintenance jobs$250 million in total construction wages$650 million in total employee earnings over the plant lifecyclePartnering with state and regional trade councils to provide qualified, skilled craft workers$300 million in state and local tax revenuesImage: BrightSource12Market HighlightsLargest wind market in the nation – over 10 GW –responsible for over 7.8% of electricity generationin 2010Home to wind energy companies, manufacturersDeveloped $5 bn Competitive Renewable Energy Zones planto build out transmission lines to connect to areaswithstrong wind resourcesWind ResourceTexasOverviewSolar Resource13Renewable Portfolio Standard:10,000 MW by 2020 (already met, 97% fromwind), goal of 500 MW from non-wind renewable sources (not met)Franchise Tax Exemption:Companies that manufacture, sell, or install solardevices qualifyFranchise Tax Deduction:10% of the amortized cost of a solar energydevice from a company’s apportioned marginTexasFeatured PoliciesProperty Tax Exemption:For the amount of the appraised property valuethat arises from the installation or construction of a solar or wind energydeviceLegislation:SB 330: Mandate for utilities to purchase up to 1,500 MW of power from non-wind,renewable sources by 2021, about 2% of the state’selectricity usageHB 774: Clarification that existing RPS requires 500 MW from renewable sourcesother than wind (companion to SB 330)SB 492: Incentive for rooftop and utility scale solar14Project Details781.5 MW project owned and operated by E.ON Climate &Renewables in rural TexasWorld’s largest wind farm, with 627 wind turbines manufacturedby Mitsubishi, General Electric and SiemensPowers 265,000 homesSpans parts of 4 Texas counties and covers nearly 100,000 acresBegan as a rural initiative: A local farmer organized 400 land owners to seek investorsConstruction began in May 2007 and ended in October2009, built in 4 phasesFinancial DetailsTexasRoscoe Wind FarmMore than $1bn to buildEquity Investors: GE Energy Financial Services, E.On Climate & RenewablesPPA: 5-year contract with TXU Wholesale to purchasepower from Phase I (209 MW)Economic ImpactAround 400 landowners share royalties, earning between $5,000 and $15,000/yearCreated 500 temporary construction jobs and 70 full-time positionsLed to a wind energy service center in the region that employs 120 techniciansHelping to revive local economy in remote areas ofWest Texas and the TexasPanhandle, traditionally based in dry-cotton farmingImage: ChadWright.tv15Market HighlightsServes as headquarters for leading solar energy companies like First Solar(~200 jobs at HQ, building manufacturing facility to employ 600), KyoceraSolar (~60 jobs) and Stirling Energy Systems (~75 jobs)Over 2.2 GW of solar PV and CSP in development•$967 million DOE Loan Guarantee for First Solar’s 290 MW AguaCaliente project (PPA with CA-utility PG&E)•Conditional $1.45 bn Loan Guarantee for Abengoa Solar’s 250 MWsolar trough plant (PPA with APS to purchase all power output fornext 30 years, for a total revenue of around $4bn)Solar ResourceArizonaOverviewWind Resource16Renewable Portfolio Standard:15% by 2025 for IOUs, with 30% of target fromdistributed generation technologiesBroad array of utility incentives to meet distributed generation targetRenewable Energy Production Tax Credit:For wind and biomass, $0.01/kWh for thefirst 200,000 MWh produced in a calendar year; for solar $0.04/kWh in year-1,decreasing to $0.01/kWh in year-10Arizona Renewable Energy Tax Incentive:ArizonaFeatured Policies1.Refundable corporate income tax credit up to 10% ofthe total capital investmentof the project2.Real and personal property tax reclassification, effectively constituting a 77%reduction, for projects with a minimum of $25M in capital investmentRequirements:51% of new jobs must pay a wage that is equal to orexceeds 125% of the state's median wage asdetermined by the Arizona Department of Commerce.Firm must offer health coverage for which the firmpays 80% or more of the premium for theemployee or equivalent for alternative modelsSince January 2010, at least eight companies have made the commitment to cometo the Phoenix Metro area, with many more anticipated for the future.17Project DetailsWorld’s largest producer of solar panels built itsfirst North Americanmanufacturing plant in Goodyear, ArizonaFirst Chinese renewable leader to bring manufacturing jobs to the U.S.Opened in 2010 with a 30 MW/year production capacity, planning toexpand to 50 MW/year in early 2011. End goal of 120MW/year.Chose Goodyear, AZ due to costs, logistics, clear and consistent statewideenergy policies, the Greater Phoenix Area’s supportive business climate, andthe availability of local manufacturing-ready facilitiesArizonaSuntech Solar PV Manufacturing FacilityFinancial DetailsSuntech invested $10m in initial 30 MW/year phaseAwarded $2.1m in tax credits from the U.S. governmentEconomic ImpactEmploys 75 people, plans to employ more than 150 bythe end of 2011Suntech to directly spend $24.6m on construction, equipment, leasing andpayroll within three years, and $275m within six yearsUnder an agreement with Goodyear, Suntech must operate the facility forthree years, maintain 50 employees, pay an averagesalary of $30,000 andcover 80% of health insurance benefitsGoodyear will waive permit fees, pay $6,494 for each employee hired,among other benefitsImage: Suntech18Market HighlightsNew Mexico is home to major solar energy manufacturersSchott Solar’s 85 MW/yr PV module production plantEMCORE’s 50 MW/yr CPV plantHome to 700 MW of wind energy capacity, with nearly300MW under constructionLargest solar project: Cimarron Solar PV project, a30 MW,$100m project - among the nation’s largestSolar ResourceNew MexicoOverviewWind Resource19Renewable Portfolio Standard:20% by 2020, including carve-outs for wind and solar (4% each),and for distributed generation (0.6%)Tax Incentives:Advanced Energy Tax Credits:6% credit for solar electric and geothermal systemsover 1MW against personal or corporate income taxesAlternative Energy Product Manufacturers Tax Credit:5% credit for manufacturers ofrenewable energy systems for their capital expensesNew MexicoFeatured PoliciesSolar Energy Systems Gross Receipts Tax Exemption:Power produced from solar electricand solar thermal energy systems is exempt from gross receipts tax (sales tax) when thegenerated power is used on-siteAdvanced Energy Gross Receipts Tax Deduction:Revenue generated by the sale andinstallation of solar electric, geothermal electric, and recycled energy systems over 1 MW isexempt from gross receipts taxRenewable Energy Production Tax Credit:Tax credits against the corporate income tax of2.7 cents (on average) per kWh for the first 400,000 MWh of electricity produced for tenconsecutive years by renewable energy systems over1 MW, fully refundableBiodiesel Blending Facility Tax Credit:A 30% credit against gross receipts tax andcompensating tax for businesses that install biodiesel blending equipment for a biodieselblending facility20Project DetailsThree 100-acre facilities to be built in phases near Columbus, Luna CountyPlans to reach commercial demonstration scale by 2012 (1 mGy)If successful, will develop commercial-scale facility in 2015 (150 mGy)New Mexico’s resources ideal for algae-based biofuel: non-arable land, highlevel of sunlight, non-potable water, energy and agricultural infrastructureFinancial DetailsUp to $135m for the demonstration facilityNew MexicoSapphire Energy Algae FacilityReceived a $50m cost-share grant from the U.S. DOEand a $54.5m loanguarantee from the USDA’s Biorefinery Assistance ProgramHigh-powered investors back the company’s NM operations– more than $100mfrom the Wellcome Trust, Cascade, Venrock, and ARCHVenture PartnersSapphire also owns an $8m algae research facility in Las Cruces, NMEconomic Impact750 direct and indirect jobs for construction, administration and operation ofthe facility, with 30 permanent jobsValue added to the state’s economy for a 100 mGy algae facility estimated to beabout $28m, with $8m in state tax revenuesSource: “Economic Impacts of an Algal Industry on New Mexico” National Alliance for AdvancedBiofuels and Bioproducts; New Mexico State University21Image: Sapphire Energy