Shayle Kann, Senior Vice President, GTM Research

1. Solar the Disruptor
Shayle Kann
Senior Vice President, Research
Greentech Media
GTM Solar Summit
April 2014
Phoenix, AZ

2. Disruptive Innovation:
Ten Things to Stop and Think About
-Citi, April 2013
Disruptive Challenges:
Financial Implications and Strategic Responses to a Changing Retail Electric
Business
-Edison Electric Institute, January 2013
The Disruptive Potential of Solar Power
-Mckinsey, April 2014

3. Solar is Not a Disruptive Technology

4. Wholesale Disruption

5. 84 178 366 882 1,622 2,788 4,723
9,497
15,211
29,940
50,599
67,628
84,656
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
CumulativePVInstallations(MW)
Cumulative EU PV Installations, 2001-2013
Europe Subtotal Rest of Europe UK Spain Italy
Germany Alone: 39 GW
Step 1: Install a Lot of Solar
Source: EnBW

6. Step 2: Drive Down Wholesale Electricity Prices
Source: EnBW
Forward Spot Price for Baseload Electricity (€/MWh)

7. Step 3: Strand Other Generators
Source: EnBW
Gross Margin – Gas Plant (€/MWh)
Negative Margins=Trouble
-13%
-24%
-15%
-28%
-42%-45%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
EDF GDF
Suez
ENEL E.ON RWE
SharePriceChange,3/09-3/14
Five-Year EU Utility Share Price Change
“How to lose half a trillion euros”
10/13/13
Step 4: Power Producers Lose

8. In the U.S., It’s All About the Duck Chart
Source: CAISO

9. In the U.S., It’s All About the Duck Chart
Source: CAISO

10. In the U.S., It’s All About the Duck Chart
Source: CAISO

11. And California is Already Looking Pretty Duckish
Source: CAISO
16,000
18,000
20,000
22,000
24,000
26,000
28,000
30,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
MW
Hour
CAISO Load, 3/18/2014
Net Load Total Load

12. Retail Disruption

13. Step 1: Install a Lot(?) of Distributed Solar
Source: GTM Research/SEIA U.S. Solar Market Insight 2013
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
DistributedPVInstallations(MW)
U.S. Distributed Solar PV Growth
Residential Non-Residential
2013: 1.9 GW
Expected Production: 2.7 million MWh
=0.04% of National Electricity Demand

14. But What About Top States?
Source: GTM Research/SEIA U.S. Solar Market Insight 2013
134
703
227
204
69
131
56
2.1%
0.4% 0.4%
0.4%
0.1%
0.3%
0.2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
0
100
200
300
400
500
600
700
800
DGInstallations,PortionofTotalElectricitySales(%)
2013Distributed(Customer-Sited)PVInstallations
(MW)
Top Seven Distributed PV Markets
2013 DG Installations 2013 DG Installations - Portion of Total Sales
Still not a big impact on
overall load

15. How About Demand Growth?
Source: EIA Annual Energy Outlook 2013
Next 30 Years:
1% Annual Demand Growth

16. Top Solar States: Mostly Average Load Growth
Source: EIA Annual Energy Outlook 2013
0.2%
0.9% 0.9%
1.0%
0.6%
1.6%
2.3%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
15-YearElectricitySalesGrowthRate(%)
15-Year Average Electricity Sales Growth Rate
National Average: 1.1%

17. Distributed Solar Is Already Having An Impact On Growth
-1098% -47% -42% -47% -16% -19% -7%
-100%
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
DistributedPVImpacton2013LoadGrowth(%)
Distributed PV Impact on Electricity Demand Growth, 2013
Source: GTM Research

18. How Much Distributed Solar Will Be Installed in 2016?
Source: GTM Research
7%
32% 32%
20%
60%
33%
44%
0%
10%
20%
30%
40%
50%
60%
70%
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
CompoundAnnualGrowthRate
AnnualDistributedPVInstallations(MW)
Distributed PV Installations, 2013 vs. 2016
2013 2016E Annual Growth Rate (%)

19. 2016 is Even More Stark
-1326% -106% -93% -78% -63% -43% -19%
-100%
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Hawaii California New Jersey Massachusetts New York Arizona Colorado
DistributedPVImpacton2016LoadGrowth(%)
Distributed PV Impact on Electricity Demand Growth, 2016E
Source: GTM Research

20. Watch it Play Out in California
Source: GTM Research
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2012 2013 2014 2015 2016
LoadGrowthRelativeto2012
California Retail Electricity Sales, With and Without Distributed Solar
History-based Electricity Sales Growth Sales including DG - History Based
Lost Sales

21. Final Thoughts
Shayle Kann
Senior Vice President, Research
Greentech Media
kann@gtmresearch.com
@shaylekann