Chester Group Solar Farm Panel Purchase and License Quote

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1 June 26, 2015 Dear Ann: Chester Group Solar Farm Panel Purchase and License Quote Thanks for your interest in going solar through one of our off-site group solar farms. To cover a solar savings objective of $50 per month on average over a year, you would need 9 panels at one of our farms. Our charge to you for this would be $9,000, and assuming you pay federal taxes, at the next time you pay those taxes, you could take a $2,700 dollar-for-dollar tax credit. Your panels would be placed at our Chester group solar farm this July. Details of the economics of the arrangement follow on the second and third pages of this document. Should you be interested in financing your purchase, I can forward details on that separately. Our arrangement with you is that the land, racking structure, inverters, wiring, maintenance, taxes and insurance is all included in the one-time buy-in price. Pay once & get 30 years of savings. We also offer a buy out option should you move or your plans change. All of these details are discussed in the attached document. Your next step would be to confirm the scale of your purchase, your address, the names you d want on your contract, your GMP account number or numbers and any particular constraints you may have regarding availability and timing of your payment. Generally, we would like 50% on signing of our contract and license agreement and the remaining 50% when we activate the solar farm. At Chester construction is underway and we plan to activate the farm some time during the week of July 6th. Sincerely, Bruce Genereaux, Norwich GMCS principal and customer #2 in our Groton solar farm

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5 Page 5 of 12 Our Locations Chester 306 Eddy Road 780 Panel Farm, permit issued March 18, Construction underway. Completion expected week of July 13, Groton Chester Detailed locations can be found on our website. Groton Solar Farm #1 picture taken May Scott Hwy Groton Community Solar Farm, 140 kw, commissioned December One solar farm s panels are generally sold to 15 residences, one or two larger commercial companies, one municipality and one non-profit. A farm usually has about 700 panels. Our company, Green Mountain Community Solar LLC (GMCS) is headed by Jamie O Connor and Bruce and Steve Genereaux. Steve and Jamie, both healthcare professionals, live with their family on a solar-powered hillside farm in Ryegate. Bruce, a small business owner and financial consultant, lives in Norwich. We all own panels in our first Groton project.

6 Page 6 of 12 Why Community Solar versus at Your Residence or Business? According to industry research, up to 70% of homes either cannot have panels placed on or nearby. Even if they can, placement is less than ideal i.e., shading or wrong orientation of the panels. Some folks don't want to cut trees, don't want holes in their roofs, or don't want to worry about what happens when they move. Community solar sites such as ours are selected for optimal sun exposure to get you the best possible solar production each year. Our sites are built in bulk, where economies of scale allow us to keep per-panel costs down for you. Another benefit we at Green Mountain Community Solar offer is our buyout program up to twice a year you can have your panels repurchased by us or you can buy more panels. How you fit in your arrangement 1. You purchase solar panels and get a 30-year license from GMCS to join one of our farm s net metering group. By joining a group your panels electricity net metering credit is allocated to your GMP account. By example, if your annual GMP bill is $900 and you bought 13 panels, you d get 100% solar coverage and over a one year period your GMP bill would accumulate $900 in credits. Over the total 30 years of your license, you would save $28, Your cost: Take your average annual electric utility bill divide it by $70 and this gives you the number of panels needed to pay for that bill. We charge $1,000 per panel. If you expect to pay federal income taxes, you can take a dollar-for-dollar tax credit (IRS Form 5695) for 30% of your purchase. Your net cost would be $700 per panel. 3. Financing: It is possible for a household or business to borrow the money and pay the same or less in loan payments than they currently pay for electricity. Financing can be arranged through the bank of your choice, or through Green Mountain Credit Union (Matt Wilson at ) or Vermont Employees Credit Union s VGreen program ( ). Both have specific programs for this type of project. 4. Your Savings: Come in the form of a monthly credit to your GMP. A typical $75 per month ($900/yr) GMP customer would buy 13 panels for $13,000, get a $3,900 tax credit for a net out-of-pocket cost of $9,100 and receive an estimated average of $900 worth each year of credits on their GMP account for 30 years for a total savings of $28,000. This is a 3x return on investment comparable to a 10% life of project return on your money and pays back in approximately 10 years. We make available to you both a summary and yearly cash flow projections of these estimates.

7 Page 7 of GMP Credit Elements: For the first ten years the amount of your credit is calculated by taking the kwhs produced by your panels times the GMP Rate #1 ( cents/kwh as of June 2015) plus the VT Solar Adder solar incentive (4.3 cents/kwh) plus the efficiency charge of 1.17 cents per kwh. Ten years after the farm is connected to GMPs grid, the Solar Adder ceases and the credit value is equal to the kwhs produced times only the then GMP Rate #1 plus the efficiency charge for each monthly bill. This Rate #1 is proposed by GMP and authorized by the VT Public Service Board. The risk that the GMP Rate #1 would go down is unlikely as that would strand GMP assets and contracts. The likelihood of the GMP Rate #1 increasing depends on the markets for electricity in New England and costs of future generation capacity of GMP. 6. Future GMP Rates: Our research indicates that the GMP Rate #1 at which your credit value is dependent, will likely rise at 2.5% per year. Our basis is that GMP s rate increases have averaged 2.5% per year over the last ten years. If one assumes that GMP rates do not increase, then your life of project return declines by approximately 2% and payback increases by one year. 7. All solar farm fields have annual decreases in kwh output this is industry standard. Our panel manufacturers warrant theirs at 82.5% of rated capacity after 25-years, a.6% decline per year. Since the GMP rate is expected to climb faster than the panels output degradation rate, your savings increase each year. Our 30 year cash flow estimate disclosure shows these elements. 8. During a particular year, your credit will be greater in summer and lower in winter, averaging out over the year. This is what is called net metering. 9. Our business model: We sell electric credits from panels we own in the farm to pay for maintenance of the field. We purchase and own a minimum of 20% of the panels. Additionally, up front, additional money is set aside in an interest bearing account ear-marked to pay for projected costs of inverter replacements required in year 15. You pay only once. These aspects and commitments that we make create an incentive for us to be sure that the field operates as expected and that funds are prudently invested. 10. After 30 years. Your initial lease expires, at which time you can choose to take your panels back we ll take them off of the racks for you to pick up, or, since our lease holders have granted us two 15 year extension options, you may elect to join in any lease extension.

8 Page 8 of 12 Should we extend the lease (we plan on doing this as the project will be all set up and the panels still working), we expect that your cost to re-up in 2045 will be your share of the cost to replace the inverters a second time plus some to-be-understood cost of operations that factors in any new realities GMP pay rate, land costs, state fees/taxes and panel & inverter technology. 11. No changes happen at your home or business: Your physical connection to your electric utility s grid is not touched. Electricity produced at the field passes through a meter at the solar farm, and your percent of the field s electricity is allocated to your GMP account. While you may or may not use your panels actual solar-produced electrons as they are mixed into the grid, you will get your share of the credits earned by those electrons on your account. 12. Chester buy-in terms: 50% on contract execution and remainder on first connection to grid. Construction is underway with completion scheduled for this summer. 13. We offer a buyout option at a sliding scale reflecting fair market value twice a year. You will see an estimate of this value on any quote you request. Alternatively to a buy-out, you may transfer or sell your panels and license to anyone else in the GMP service territory at any time during the 30-year term. We make no representation as to the availability of buyers of your panels other than us. Common questions 1 What does it cost? For every $1,000 panel you buy, you get about $70/year of credits against your GMP electric utility bill for 30 years. Buying panels through Green Mountain Community Solar costs about the same as if you placed panels on your house or in your backyard and eliminates the permits, possible shading/aesthetics issues, and maintenance. Let us know your average monthly bill and we ll give you a custom quote that shows year by year your savings and the actual costs. Are we competitive? Yes, our prices appear to be near the lowest on a $/watt basis. Industry quotes prices on a dollar for each watt installed after your investment tax credit (ITC) is taken. Our price is $2.64/watt (DC). Our research into our Community Solar competitors rates shows they range from $4.00/watt (DC) to $2.22/watt (DC) after ITC. Be sure to fully understand the relationship you d be entering and request a detailed cash flow forecast to accurately compare prices. Does the competitive quote offer a buy out? And, if you are looking at placing panels at your home or business, know that every home installation price will vary depending on your roof, your yard and

9 Page 9 of 12 the productivity of your particular site may vary from the closer-to-ideal siting allowed by our offsite solar farms. 2 Do I own the panels? Do I get a state rebate? Does my purchase qualify for the federal investment tax credit? What about Renewable Energy Credits? Yes. You own the panels and receive a license to place the panels in the community field. Your share of the electricity produced is credited to your GMP account. You are solely entitled to any federal, state and local tax credits. There are no state rebates available for solar projects in Vermont anymore. We retain the renewable energy credits (RECs) associated with our solar farms unless directed by you to have them retired, in which case we must charge you a 20% premium on your panel price. 3 Does solar make financial sense? At current pricing, the value of the credits you earn from your panels and license would return the same as if an institution similar to a bank paid you 10% each year on your panel purchase price. This equates to our initial cost being repaid after 10 years. If energy prices increase faster than the 2.5% per year we ve assumed (after 2017), your returns may be higher and payback shorter. 4 What if I move? Your monthly credit is associated with your GMP account number. Move to a new house, get a new GMP account number and we ll direct GMP to credit your new account. Or, if you move out of GMP territory we ll buy you out at fair market value in either May or December, you can sell to another GMP account holder or you can donate your share to a non-profit located in GMP s service area. 5. Can I sell my panels and license and assign credits to someone else? Yes, we can make arrangements for the shift of credits to another GMP customer. Some customers choose to donate to non profits and churches. 6. What type of panels and inverters will you use? Panels at Chester are HanwhaQ 265 watt modules. Made by a South Korean company and sourced from Germany. The inverters at Chester will be Fronius. 7. I live in an apartment/condo, will Green Mountain Community Solar work for me? Yes, our approach works well for any home owner or tenant and is especially attractive for people who, due to their living situation, have been prevented from owning solar in the past.

10 Page 10 of What happens if I die? Your panels are like any other asset and can be willed to your heirs or assigned to a relative's GMP account or you can donate them to any other GMP customer s account including charities. If you are not a GMP customer, then your monthly check will be sent where you designate. 9. What happens if I no longer want to be part of Green Mountain Community Solar? One of the benefits of our approach is we agree to buy back your panels at fair market value anytime. 10. What happens to my panels, license and credits if you go out of business? The project is insured and will continue to produce electricity and credits for your account. Credits from our ownership of a minimum 20% of the farm s panels is sold to fund maintenance and an inverter replacement reserve fund is established that has sufficient funds to cover scheduled inverter replacements at year 15 (on the expiration of their warrantee). You and your fellow panel owners have the right to appoint a new manager who will have access to the funds from sale of excess capacity and inverter replacement fund should we not do the job you want. In short, we ve arranged for the project to make enough extra electric credits to pay for operations and we ve put funds aside for major, scheduled repairs. We ll manage it or if we go away, you ll have right to assign a new manager and the funds set aside will compensate that manager. 11. How can I see how much electricity my share is producing each month? The farm s production is shown on our website.

11 Page 11 of Results of Groton #1 Farm through June 14, 2015 Red (lighter colored) lines indicate predicted kwhs for the geographic location of the Scott Hwy solar array and its particular characteristics 22.5 degree, pointing south, fixed solar panel array. Data source is NREL in Golden Colorado. NREL uses 10 year historical weather data, and in our case, that of Knapp Airport in Montpelier, approximately 20 miles west of this site. The blue (darker lines) are actual results of the project year to date (through June 14). Utility rates have not changed and weather changes from predicted norms, so the fact that the project is ahead of estimate now does not mean that it will stay that way.

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