Initial Public Offerings in the PV Sector

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1 Jefferies & Company, Inc. Member, SIPC Initial Public Offerings in the PV Sector Robert K. Jaworski Senior Vice President CleanTech Investment Banking Jefferies & Company, Inc.

2 Solar Financing Environment Solar companies as a Percentage of CleanTech YTD % (48) 45% 46% (132) (60) (46) 55% 54% (164) (151) 78% Solar = $2.3B Solar = $2.5B Solar = $4.9B Solar Other # of deals in brackets Types of Solar Transactions 16% 5% % 9% 32% 7% 16% 6% 7% 7% YTD % 5% 2% 40% 62% 66% PIPE IPO Venture Follow-On Convertible Secondary Source: Jefferies, Bloomberg and Capital IQ. 1

3 Solar Financing Statistics Solar Financing Breakdown 17% 8% 2% YTD % 37% 12% 1% 19% 50% 0% Solar = $2.3B Solar = $2.5B Solar = $4.9B Cells / Modules Integrators Thin Film Other 4% 77% Number of Solar IPO's YTD YTD Median Size (mm) $16 $176 $133 $225 Source: Jefferies, Bloomberg and Capital IQ. 2

4 Why do companies go public? Raise new money at more efficient cost of capital Business expansion Reduction of debt / increase debt capacity Create liquidity for incumbent shareholders Expand funding options, e.g. equity linked financing Increase strategic agility through liquid acquisition currency Create benchmark for market based management incentives Becoming a public company is not just a fundraising exercise. It is a strategic decision. 3

5 Pros and Cons of Going Public Pros Liquidity and higher share price Motivation of management and employees Improved company image Access to alternative sources of capital Cons Disclosure requirements Cost Potential loss of control Separation of ownership and control Pressure of short-term investor expectations 4

6 A Successful IPO Success Factors Level of product revenue Management quality Product differentiation Diversified customer base Growth track-record and gross margins Insider ownership Indicators Subscription levels Investor distribution (marquee institutions etc.) Moderate first day premium Strong 6 to 12 month stock trading performance Depth of trading 5

7 Key Listing Parameters - A Virtuous Circle Optimal Exchange Liquidity Access to Capital Offer Size Investor Mix Valuation 6

8 Liquidity and Market Capitalization Market Cap Liquid Offering 120mm Small Offering 40mm Free Float 10mm Liquidity (% of Free Float) 0.30% 5mm Typical Investment Size for European Institutional Investors Time required to trade the entire position 42 Days 167 Days 7

9 Solar Companies Listing Locations (1) USA (Primary Markets) Germany UK USA (OTC) France Total # of public solar companies 1 # of which foreign issuers 2 (1) Source: Capital IQ, as of August

10 European Solar IPO Performance Solar IPOs Present Offering ( mm) Post IPO Performance Current Mkt. Cap Performance ( mm) T+1 T+7 T+30 T+360 Current 75 th Percentile , % 23% 29% 106% 152% Median % 12% 13% 68% 62% 25 th Percentile % 4% 2% 20% (2%) 9

11 North American Solar IPO Performance Solar IPOs Present Offering ($ mm) Post IPO Performance Current Mkt. Cap Performance ($ mm) T+1 T+7 T+30 T+360 Current 75 th Percentile , % 32% 45% 110% 120% Median , % 16% 15% 103% 79% 25 th Percentile (1%) 1% 7% 97% (8%) 10

12 Is This Time Really Different? ($ Millions) North American Fuel Cell Sector (1) North American Solar Sector (2) $150 $100 $ $2,000 $1,843.9 $97.8 $68.3 $66.0 $69.6 $1,500 $0 $1,000 ($50) ($100) ($150) ($200) ($250) ($46.2) ($104.2) ($165.1) ($208.0) $500 $0 -$500 $106.1 ($95.1) $310.7 $597.5 $25.2 $35.0 $274.2 Revenue EBITDA Revenue EBITDA (1) Fuel Cell Sector comprised of Ballard Power Systems Inc., Fuel Cell Energy Inc., Hydrogenics Corp., Mechanical Technology Inc., Medis Technologies Ltd., Millennium Cell Inc. and Plug Power Inc. (2) Solar Sector comprised of Canadian Solar, Carmanah Technology Corp., China Sunergy Co.,, Energy Conversion Devices Inc., Evergreen Solar inc., First Solar Inc., JA Solar Holdings, LDK Solar Co., Solarfun Power Holdings,Sunpower Corp., Suntech Power Holdings, and Trina Solar, Ltd. 11

13 European Solar Operating Statistics Projected Median EBITDA Margin Projected Median Net Income Margin Silicon Cells / Modules Integrators Silicon Cells / Modules Integrators 30% 25% 20% 15% 10% 5% 0% Median TEV / EBITDA 26% 26% 24% 25% 2007E 8% 8% 2008E 15% 10% 5% 0% 11% 11% 9% 2007E 11% 3% 3% Median 8.6x 14.0x 12.0x 9.5x 8.2x 8.8x P/E 20.5x 30.1x 34.2x 18.5x 17.4x 17.0x Multiple 2008E Silicon: Motech Industries, Renewable Energy Corporation, Tokuyama and Wacker Chemie. Cells / Modules: Aleo Solar AG, ErSol Solar Energy, PowerFilm, PV Crystalox, Q-Cells, Solaria Energía Y Medio Ambiente, Solar-Fabrik, SolarWorld Solon and Sunways. Integrators: Centrosolar, Conergy, Phoenix Solar AG, SAG Solarstrom and Solar Integrated Technologies. 12

14 North American Solar Operating Statistics Projected Median EBITDA Margin Projected Median Net Income Margin Silicon Thin Film Cells / Modules Silicon Thin Film Cells / Modules 60% 50% 40% 30% 20% 10% 48% 49% 23% 25% 14% 19% 50% 40% 30% 20% 10% 39% 39% 18% 14% 14% 15% 0% Median TEV / EBITDA 2007E 2008E 0% 2007E 2008E Median 11.7x 84.4x 14.0x 9.5x 19.6x 20.5x P/E 16.1x 166x 39.7x 13.1x 58.3x 24.8x Multiple Silicon: MEMC Electronic Materials. Thin Film: Energy Conversion Devices and First Solar. Cells / Modules: Canadian Solar, Evergreen Solar, JA Solar, LDK Solar, Solarfun, SunPower, Suntech Power, Trina Solar and Yingli Green Technology. 13

15 Solar Sector Stock Price Performance August 31, 2006 August 31, % +78.0% +66.9% +47.2% +34.8% +24.1% 40 08/31/06 10/31/06 12/31/06 02/28/07 04/30/07 06/30/07 08/31/07 Thin Film Cells / Modules Integrators Silicon / Wafers NASDAQ 100 Jefferies CleanTech Index Thin Film: Energy Conversion Devices and First Solar. Cells / Modules: Aleo Solar AG, ErSol Solar Energy, PowerFilm, PV Crystalox, Q-Cells, Solaria Energía Y Medio Ambiente, Solar-Fabrik, SolarWorld Solon, Sunways, Canadian Solar, Evergreen Solar, JA Solar, LDK Solar, Solarfun, SunPower, Suntech Power, Trina Solar and Yingli Green Technology. Integrators: Centrosolar, Conergy, Phoenix Solar AG, SAG Solarstrom and Solar Integrated Technologies. Silicon/Wafers: Motech Industries, Renewable Energy Corporation, Tokuyama, Wacker Chemie and MEMC Electronic Materials. 14

16 Jefferies. The Power behind CleanTech companies. June 2007 June 2007 June 2007 June 2007 June 2007 June 2007 June 2007 June 2007 Has merged with Has merged with To form To form $154,650,000 $154,650,000 Advisory Sole Advisor Advisory to Celunol Sole Advisor to Celunol $109,800,000 $109,800,000 Follow-On Offering Sole Follow-On Bookrunner Offering Sole Bookrunner $77,500,000 $77,500,000 Convertible Notes Offering Sole Convertible Placement Notes Agent Offering Sole Placement Agent $440,000,000 $440,000,000 Initial Public Offering Initial Co-Lead Public Offering Co-Lead May 2007 May 2007 May 2007 May 2007 December 2006 December 2006 November 2006 November 2006 Investment Banking Sales & Trading Research Asset Management $107,525,000 $107,525,000 Initial Public Offering Initial Co-Manager Public Offering Co-Manager $93,750,000 $93,750,000 Initial Public Offering Initial Co-Manager Public Offering Co-Manager $47,092,000 $47,092,000 Equity Financing Sole Equity Bookrunner Financing Sole Bookrunner $109,480,000 $109,480,000 Initial Public Offering Initial Co-Manager Public Offering Co-Manager Jefferies & Company, Inc. Member SIPC 9/ Jefferies & Company, Inc. Select transactions by Jefferies & Company, Inc. and its affiliates. All Jefferies logos, trademarks, and service marks appearing herein are property of Jefferies & Company, Inc. 15

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