Solar investment case

1. The Investment Case for Solar
Tracking index for: U.S.-based “Invesco Solar ETF” (NYSE ARCA: TAN) and European-based
“Invesco Solar UCITS ETF” (London: ISUN LN & RAYS LN) (Xetra: SOLR GY) (Borsa Italiana: SOLR IM) (Swiss: SOLR SW)
www.MACsolarindex.com

2. Long-term bullish factors for solar sector
• Impressive growth potential -- Solar has impressive growth potential with forecasts for $4.2
trillion of solar spending through 2050 (Source: Bloomberg New Energy Finance). Solar PV
will generate 38% of all electricity globally by 2050, up from 11% today (BNEF).
• Low-cost electricity solution – Solar’s levelized electricity cost has already plunged by 85%
since 2010 (Lazard) due to dramatic technology advances and economies of scale. Solar’s
cost will plunge by another 71% by 2050 (BNEF). New solar plants have already become
significantly cheaper to build than new coal, nuclear, or natural gas plants, and building a new
solar plant is even cheaper than the marginal-cost of running an existing coal plant (Lazard).
• Government support is only icing on the cake -- Solar has become a self-sustaining
industry due to sharply lower solar costs and no longer needs government subsidies, although
the industry still benefits from strong policy support across the globe.
• Solar-plus-storage provides robust 24/7 energy solution -- Solar-plus-storage systems
provide a 24/7 source of electricity and solve solar’s intermittency problem. Solar-plus-storage
systems are already cost competitive and will become even more so as battery costs plunge
by another 50% through 2030 (BNEF). 1

3. Solar – Low-Cost and Sustainable Electricity Solution
Advantages
• Low Cost – Solar has become the cheapest utility-scale electricity generation source (unsubsidized basis) to
build across much of the world due to the technology learning curve and economies of scale. Also, solar has a
near-zero marginal operating cost, unlike coal and natural gas where electricity generation costs depend on
unknown future fuel input costs.
• Energy Security - Solar is a purely domestic energy resource, unlike the risk of being dependent on unstable
foreign sources of natural gas, oil, and coal.
• Climate solution - Solar is the fastest and most economical way to slash global carbon emissions to prevent
catastrophic global warning trends. Solar is a clean & safe electricity solution, unlike nuclear, coal, natural gas.
• Utility Grid Independence with Distributed Generation - Solar insulates electricity users from grid failures and
protects against future utility electricity price increases.
• Scalable - Solar can be large scale (utility) or smaller scale (residential, commercial, community).
Disadvantages
• Day-Use Only – but matches peak electricity usage times and is increasingly paired with battery storage for
24/7 electricity solution.
• Variable solar intensity – but still economical in northern climes. 2

4. Greenhouse gas emissions are clearly driving global
warming
3
Source: Fourth National Climate Assessment (p 79)

5. U.S. Climate Change Indicators
4
Source: Fourth National Climate Assessment (p 38)

6. Current fossil-fuel-based energy system is massively
inefficient with two-thirds of energy wasted by heat loss
• Burning fossil fuels
wastes two-thirds of
potential energy to
heat loss
• Solar and wind, by
contrast, deliver 100%
of electricity
generated with no
heat loss and no
pollution or CO2
emissions, producing
a cleaner and much
more efficient world
energy system
For details, see “Universal Energy” by Benham at
www.dollarsperbbl.com/2018/07/22/universal-energy/
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7. High Growth Industry: 20% Annual Solar Growth Last 5 Years
6
• Global solar installations have
grown sharply by an average annual
20% over the last 5 years
• Pandemic caused only minor
disruptions, with solar growth of
23% in 2020 and +27% in 2021.
• For 2022, BNEF is forecasting 33%
global solar growth to 246 GW

8. Country Leaders: China, U.S., India, Japan
7

9. China leads by far on cumulative solar capacity
8

10. Solar the largest source of electricity by 2032 with long-
term annual growth of 12%
9
• IEA says solar will become
the “king of electricity,” with
the more cumulative capacity
than any other power
generation technology
• IEA forecasts that solar
could become the largest
producer of electricity as
soon as 2026 (Sustainable
Development Scenario)
Source:International Energy Agency (IEA)
World Energy Outlook 2020

11. Solar sees rapid growth as total global electricity demand
doubles by 2040
• Global electricity demand
doubles by 2040 to satisfy
larger global population and
electrification of transportation
• Doubling of electricity demand
drives even stronger solar
growth
(IEA Sustainable
Development Scenario)
Source:International Energy Agency (IEA)
World Energy Outlook 2020
10

12. Climate change can be mitigated if zero-carbon power
generation rises to 78% of total generation by 2040
• IEA says UN sustainable
development goals can be met,
with net-zero emissions by 2070
and maximum 1.65oC temp rise if
renewable and nuclear electricity
rises to 78% of total by 2040
(Sustainable Development
Scenario)
Source:International Energy Agency (IEA)
World Energy Outlook 2020
11
• Energy system changes
(electrification-plus-hydrogen):
▪ Zero-emission electricity
generation
▪ Electrify transportation
▪ Hydrogen for high-temp
industry needs
▪ Phase out fossil fuels

13. Solar shows double-digit annual growth over next 10 years
in all three IEA scenarios
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IEA Forecasts double-digit annual
solar growth in all three of its
forecasts:
• Stated Policies Scenario (STEPS) –
current policy ambitions and targets
are met
• Sustainable Development Scenario
(SDS) – achieves UN sustainable
development goals; net-zero
emissions by 2070; limit temp rise
to 1.65oC
• Net Zero by 2050 Case (NZE2050) –
achieves net zero emissions by
2050; limit temp rise to 1.5oC
Source: International Energy Agency (2020), World Energy
Outlook 2020, IEA, Paris, Figure 4.8, p. 133

14. Solar cell costs have plummeted by 99% since 1970s
Solar costs have
plummeted due to:
• Technology innovation
• Manufacturing
economies of scale
Solar is a high-tech
product that follows a
technology learning curve
-- costs fall sharply as
production rises
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15. Solar is a high-technology product where costs will
continue to fall due to the technology learning curve
Solar cell and module costs
follow a technology learning
curve similar to that of other
technology products such as
semiconductor chips, DRAM
circuits, etc.
Solar PV learning curve is
known as “Swanson’s Law” and
follows the more general
“Wright’s Law”
Swanson’s Law states that solar
module prices fall 20% for every
doubling of cumulative shipped
volume (double log scale)
Chart source:
https://en.wikipedia.org/wiki/Swanson%27s_law#/med
ia/File:Solar-pv-prices-vs-cumulative-capacity.png
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16. Extensive solar scientific research increases
cell efficiency and reduces solar costs
15

17. Solar electricity costs have dropped dramatically
by -85% since 2010
16
▪ Levelized cost of electricity
(LCOE) of utility-scale solar
PV plants has plunged by
85% since 2010 and by an
average of 8% per year over
last 5 years.
▪ Solar PV will continue getting
cheaper in coming years,
making it an even more
formidable competitor
against other electricity
sources.

18. New Utility-Scale Solar PV plants are already
cheaper to build on average than nuclear and fossil fuel plants
17
▪ Utility-Scale Solar PV plants
in the U.S. are now cheaper
to build than any other
technology (unsubsidized
basis)
▪ Solar PV is winning as the
cheapest electricity source,
even aside from being a
climate-change solution
▪ Solar is potentially the most
attractive sub-sector within
the clean energy revolution

19. Utility-Scale Solar LCOE beats fossil fuels and nuclear
U.S. Levelized Cost of Electricity (unsubsidized) – Lazard LCOE 15.0, Nov 2021
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20. Solar Pricing – Polysilicon prices have recently risen
but should fall back as new capacity comes online
19
• Polysilicon prices dropped
sharply through 2019,
reducing the cost of the main
material input for solar cells
• Polysilicon prices increased in
2020-21 due to strong demand
and various supply
disruptions, but prices should
fall back since many new
polysilicon plants are in the
process of being built

21. Solar Pricing – Module prices down -87% since 2010
20
• Solar module prices have
plunged by -87% since 2010
• Solar module prices have
fallen due to technology
learning curve and
manufacturing economies of
scale
• Decline in solar module prices
is likely to resume in coming
years

22. Solar-plus-storage is taking off as a 24/7 solution
• Energy storage expected to
surge in coming years and aid
solar in becoming a 24/7
electricity generation system.
• Storage expected to surge 122-
times and 24% CAGR through
2040 with $662 billion of sales
(BNEF).
• Battery costs expected to drop
by another 50% through 2030,
adding to 85% drop 2010-18.
• BP-backed Lightsource says all
of its utility-solar proposals in
western U.S. now include
battery storage.
• U.S. Solar-plus-storage at 5.8
GW installed now, with 28 GW
pipeline (4-times). 21

23. Renewable energy plus storage is the world’s long-term future;
Technology ultimately wins against burning fossil fuels
• Burning fossil fuels needs to be
phased out to preserve
sustainable human habitation on
earth
• Renewables-plus-storage
provide the long-term solution
• Technology learning curves for
renewables and storage will
continue to drive costs lower to
easily provide the lowest-cost
electricity
• Technology ultimately wins
against burning fossil fuels
• Solar and storage are only in the
second inning, with decades of
strong growth ahead
Technology road-map to
2050 by International
Renewable Energy Agency:
• Renewable share to
increases to 85% from 24%
• Solar PV grows by 32-
times from 2015 to 7,122
GW
• CO2 emissions drop by
85%
• Spending of $24.6 trillion
on power generation and
$18 trillion on storage and
grid
Source: IRENA Global Energy
Transformation: A Roadmap to 2050 22

24. MAC Global Solar Energy Stock Index – Methodology*
Methodology key items:
• Tracks the global solar stock sector. Constituent stocks must be listed on a primary exchange
in one of 26 countries/markets. Rules-based passive index (no stock picking). Quarterly index
review takes effect after the close on the third Friday of March, June, Sep, Dec. Liquidity
minimums to add a stock: $250 million of float-adjusted market cap and $750,000 in 3-month
average daily trading value. Index is calculated in USD. Ticker symbol is SUNIDX. Index has 14-
year history with inception on 31-March-2008.
Index Governance
• S&P Dow Jones Indices (SPDJI) is the benchmark administrator of the MAC Solar Index.* A 5-
Member SPDJI committee governs the MAC Solar Index, making all decisions in its sole
discretion regarding Index constituent selection, weights, corporate actions, methodology, etc.
• *See complete and official Methodology Document on S&P DJI website at:
https://www.spglobal.com/spdji/en/custom-indices/mac-indexing-llc/mac-global-solar-energy-
index-net-total-return/#overview 23
*See disclaimers on last two pages.

25. Methodology – Solar Focus & Environmental Exclusions
Solar Stock focus
• “80% Solar Investment Policy” – At least 80% of the Index weight is required to be in
stocks with over 50% solar revenue (actual amount is higher). Other stock selection
policies apply (see official Methodology document).
• Exposure Score 1.0 for pure-play solar stocks (solar revenue above 2/3); Exposure
Score of 0.5 for medium-play stocks (1/3 to 2/3 solar revenue) reduces stock’s weight in
the index. No stocks below 1/3 solar revenue
• Index constituents are selected each quarter based on an annually-reconstituted Solar
Stock Universe List (see official Methodology document for details).
Environmental exclusions – Stocks are excluded from Index consideration if S&P Trucost
data shows the company has any involvement with: (1) fossil fuel extraction, or (2)
electricity generation with coal, petroleum (oil), or nuclear.
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26. Methodology – Index Weighting
Modified Market Cap Weighting:
• Stock weights are reassigned quarterly at Index rebalance by calculating the regular
float-adjusted market-cap weighting and then using a weighting-gap process to pull
weights together proportionally until stocks with a weight over 4.5% do not exceed a
total of 45%. The result is that weights are as close to regular market-cap weighting as
possible while still meeting various diversification requirements.
• Also, weight is capped at 10% for individual stocks at rebalance, although weight can
drift above 10% post-rebalance due to an individual stock’s relative strength. Other
liquidity and weighting policies apply (see official Methodology document).
• See current MAC Solar Index constituent weights at www.macsolarindex.com/stocks-in-
the-index/
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27. Advantages of Index/ETF Over Individual Solar Stocks
• Diversification – across geography, technology, value chain
• Own the global solar sector in one trade – reduced transaction
costs
• Long track record – 14 year history (launched in April 2008)
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28. Index Diversification Across Geography
By Company Headquarters:
• Asia: 19 companies
• EMEA: 13 companies
• North America: 10 companies
By Stock Listing:
•North America: 16 companies
•Asia: 14 companies
•EMEA: 12 companies
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As of May 2022

29. Index Diversification Across Solar Industry Value Chain
Solar Manufacturing & Integrated
• First Solar Inc (FSLR US)
• Hanwha Solutions (009830 KS)
• Sunpower (SPWR US)
• Canadian Solar (CSIQ US)
• JinkoSolar (JKS US)
• United Renewable Energy (3576 TT)
• Meyer Burger (MBTN SW)
• TSEC Corp (6443 TT)
• Motech Industries (6422 TT)
• Maxeon Solar Technologies (MAXN US)
• Giga Solar Materials (3691 TT)
Solar Polysilicon/Wafer Manufacturers
• Daqo New Energy (DQ US)
• GCL Technology Holdings (3800 HK)
Solar Panel Glass Manufacturers
• Xinyi Solar Holdings (968 HK)
• Flat Glass Group (6865 HK)
• Luoyang Glass (1108 HK)
Solar Power DC-AC Electrical Inverters
• Enphase Energy (ENPH US)
• SolarEdge Technologies (SEDG US)
• SMA Solar Technology (S92 GY)
Solar Panel Support Structures/Trackers
• Array Technologies (ARRY US)
• Shoals Technology (SHLS US)
• Soltec Power Holdings (SOL SM)
Residential Solar Power Installers
• SunRun (RUN US)
• Sunnova Energy Intl (NOVA US)
Solar Project Finance
• Hannon Armstrong Sustainable
Infrastructure (HASI US)
Solar Power Project Developers/Operators
• Scatec Solar (SSO NO)
• Atlantica Sustainable Infrastructure (AY US)
• Encavis (CAP GR)
• Solaria Energia (SLR SM)
• Xinyi Energy (3868 HK)
• Neoen SA (NEOEN FP)
• Enlight Renewable Energy (ENLT IT)
• Renova Inc (9519 JT)
• Azure Power (AZRE US)
• Energix-Renewable Energies (ENRG IT)
• West Holdings (1407 JT)
• Beijing Enterprises Clean Energy (1250 HK)
• Doral Group Renewable Energy (DORL IT)
• O.Y. Nofar Energy (NOFR IT)
• ReneSola (SOL US)
• Grenergy Renovables (GRE SM)
• GCL New Energy Holdings (451 HK)
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As of May 2022

30. For More Information
Download solar sector research reports at:
www.macsolarindex.com/solar-research/
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31. Disclaimer Information
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UCITS ETF (London: ISUN LN & RAYS LN) (Xetra: SOLR GY) (Borsa Italiana: SOLR IM) (Swiss: SOLR SW). Index performance does not reflect transaction costs, fees or expenses of
the ETF. This material is provided solely by MAC Global Solar Energy Index, not by Invesco nor S&P Dow Jones Indices, neither of which bear any responsibility for the content or use
of this material.
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