Management Presentation. September 2009

Transcription

1 Management Presentation September 2009

2 Safe Harbor Statement Statements made in this presentation that are not historical in nature constitute forwardlooking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of Such statements are based on the current expectations and beliefs of the management of Akeena Solar and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a more detailed discussion of factors that affect Akeena Solar s operations, please refer to the company s Securities and Exchange Commission filings. The company undertakes no obligation to update this forward-looking information. 2

3 Investment Highlights Why Solar? Solar power limited only by manufacturing scale U.S. positioned to be the largest solar market Very strong governmental support Why Downstream? Dramatic shift in value chain benefits installers Decreasing panel pricing stimulates demand Surplus of solar manufacturing capacity presents opportunity for differentiated producer Why Akeena? Revolutionary Andalay AC panels provide significant competitive advantages Diversified and scalable operating model (Installation, distribution and retail) Strong management and strategic partnerships Leading pure-play installer and differentiated panel manufacturer 3

4 Leading Installer With Revolutionary Solar Panel Technology History: Established in 2001 Competitive Advantage: Operations: Patented Andalay panels optimized for high efficiency superior aesthetics, fast installation and outstanding reliability. 7 Offices in California. Residential and commercial projects in CA, CO, CT, HI, NJ, NY and PA Experience: Strategic Partnerships: Distribution: Leading residential installer Approximately 4,000 systems installed to date Suntech Kyocera Enphase (leading microinverter manufacturer) Morgan Stanley Solar Solutions Direct installation in CA Sales to Installers outside CA Retail and Europe sales pending 4

5 Next Generation Solar Industry Panel Costs Dropping - Supply and Demand Raw material costs falling, silicon <$50/kg Abundant panel production capacity Excess inventory Installation Costs Dropping - Technology Improvements 80% fewer parts with Andalay frames 50% less installation labor with Andalay AC systems New Distribution Channels Lower Cost Solar Electricians, HVAC, Retail Customer Installed Costs Plummeting

6 Beyond Grid Parity in 2010 Rooftop Solar << Utility Generation Cost 2008 $/DC watt 2010 $/DC watt Panels & Inverter Installation Gross Profit Total Cost $8.00/watt $2.80/watt * 30 Year Cost $0.19/kwh $0.065/kwh * No incentives other than 30% ITC included in Calculations assume 1.43 kwh/w capacity. 30 year analysis assumes discount rate approximates energy escalation rate, zero salvage value.

7 What Does $2.80/watt Mean? Fast paybacks and outstanding ROI 5 year payback (ITC only, no other incentive) Better than many energy conservation measures More accessible financing New retail distribution channels, not limited by net metering Home Depot solar panels in aisle 17, wire and circuit breaker in aisle 18 New DIY channel 10 times cheaper than the grid Easy, safe AC installation, $0.04/kwh versus $0.40 from the utility Barbarians at the utility gates Customers won t pay $0.40/kwh for rate-based renewables when they can purchase their own power for $0.065/kwh Very Rapid Customer Adoption

8 Solar Adoption Cycle Revenue Opportunity Currently <0.4% in CA l l l l $15/watt 2000 $8/watt 2008 $5/watt 2009 $2.80/watt 2010 Plummeting Installed Costs Accelerate Adoption Similar to PC Industry in Early 80s 8

9 Economics Drive Installations in 2009 Customer Ownership PPA/ Lease 2009 DIY Installation Cost $22,500 $1,400 $15,000 CA Rebate ($4,000) ($4,000) Federal ITC ($5,550) ($3,300) Customer Net Cost $12,950 $1,400 $7,700 Savings Current Electric Bill Electric Bill w/ Solar $4,200 $4,200 $ 4,200 $2,400 $3,200 $2,400 Solar Savings $1,800 $1,000 $ 1,800 9

10 Ordinary Solar DC Panel -AC Inverter Installation 39 Hours 1. Design and Engineer System 2. Project Logistics 3. Securely Attach Roof Brackets 4. Install Racking System 5. Mount, Wire and Ground Panels 6. Complete DC Wiring and Install Inverter 10

11 Andalay AC Panel Installation - 20 Hours Ordinary System Installation Andalay System Installation Andalay AC panels have everything built-into the panel itself: racks, wiring, grounding, inverters, monitoring and all DC components. The rest is available at your local Home Depot Andalay systems use 80% fewer parts, 50% less labor and carry higher ASPs

12 Andalay Solar Panel Patent U.S. Patent #7,406,800, filed May 2004, issued August 2008, related patents pending 1. Splices between panels - provides structural rigidity 2. Side electrical connectors - eliminates need for wiring of panels 1. Splices provide electrical grounding path between panels (UL and NEC requirement) 2. Racking built into side of panel frame -- eliminates racking system Andalay is an enabling technology for AC solar panels

13 Andalay AC Panel Advantages Superior aesthetics Panels mount flush to rooftops and look like a skylight No bulky inverters or unsightly wiring Built-in reliability No racks, wires, clips, fuses or DC wiring Flat roof systems are non-penetrating (no roof leaks) Panel-by-panel performance monitoring Designed for safety Integrated panel wiring and grounding No dangerous 600 volt DC wiring Best lifetime performance 5-25% greater efficiency Outstanding installer advantages Lower engineering, logistics and installation costs Safer installations Higher profit potential 13

14 Andalay AC Panels Produce Superior Installer Profits $8.00 $7.00 Panels $6.00 $5.00 $3.38 = $4.50 $4.00 Inverter $4.00 $3.00 $2.00 $1.00 $- $0.58 $0.54 $0.94 $0.94 $1.67 $2.41 $1.91 $0.83 Ordinary Dealer Andalay Dealer Akeena Solar Rack/BOS Labor Net Profit 14

15 Manufacturing & Licensing Partnerships Manufacture 10-14MW 2008 & 2009 delivery Manufacturing Licensing Distribution in Europe, Japan and Australia January 2008 Non-exclusive basis Manufacture 1.6MW 2009 delivery Preferred vendor status for commercial market Enphase Energy Leading Microinverter Morgan Stanley Solar Solution Manufacture 100,000 units Approximately 20 MW 2009 &2010 delivery Andalay is enabling technology for AC panels Exclusive supplier for panels for Low Income Housing market using Andalay AC Supplier for panels for PPA projects at major home builders MSSS has limited U.S. license for Andalay AC panels in these channels 15

16 Akeena Growth Strategy Geographic and Market Segment Expansion ROW Europe 2009 U.S Northeast California New Jersey Los Gatos Residential Small Commercial Andalay Residential Release Andalay Commercial Release AC Panel Manufacturing Distribution Retail New Homes 16

17 Sales Footprint Strong Local Presence in California Markets Los Gatos, CA Headquarters Clovis, CA Lake Forest, CA Palm Springs, CA San Diego, CA Santa Rosa, CA Thousand Oaks, CA Santa Rosa Los Gatos Clovis Thousand Oaks Palm Springs Lake Forest San Diego Partnerships in New Distribution Channels Morgan Stanley Solar Solutions low income housing, new construction National Home Improvement Chains European Integrators/Distributors Akeena Installation Akeena Distribution Existing Markets Andalay Distribution New Markets 17

18 Management Team Barry Cinnamon CEO & President Gary Effren CFO Jeff Kiel EVP Sales & Marketing Gary Mull VP, Marketing Wilson Leong VP, R&D 30+ years experience in renewable energy and technology Recognized Solar Industry Leader, Board Member of SEIA 25+ years at Knight Ridder, from Controller to CFO to VP Finance Experience includes Peat Marwick, CPA 25+ years experience in media advertising, management and finance President and Publisher, San Jose Mercury News; VP Finance Miami Herald 25+ years of experience in consumer & commercial markets Experience at Emptoris, Siebel and Software Publishing Corporation 30+ years of engineering and operations experience in technology Experience at Applied Materials, KLA-Tencor, Silicon Valley Group 18

19 Rapid Revenue Expansion $45.0 $40.0 $35.0 $32.2M $40.8M $3.7M $1.7M $0.1M $5.9M $7.2M $13.4M

20 Financial Summary (US $ in millions) Q Q Net Sales $13.4 $32.2 $40.8 $7.6 $5.9 Gross Margin (excluding inventory revaluation) EBITDAS (EBITDA + Stock Compensation) 22.0% 21.2% 14.6% 29.7% 19.7% $(1.6) $(8.3) $(20.3) $(2.7) $(2.5) Ending Back Log Cash (including Restricted Cash) Total Assets Credit Facility Total Liabilities $6.1 $11.5 $26.3 $8.8 $8.7 Diluted Average Shares Outstanding Paid off credit facility balance with restricted cash and $2m proceeds of February 2009 financings Raised additional $2.7m from warrant exercises associated with February, April and June 2009 financing $1.0 million credit line with Comerica Backlog defined as all jobs under signed contracts with an expected installation date within six months. 20

21 Path to Profitability GAAP Profitability Andalay Contract Manufacturing Andalay AC Panels EBITDA Breakeven Andalay Commercial Scale Distribution Sales Andalay Introduction G&A Reductions 21

22 Investment Highlights Why Solar? Solar power limited only by manufacturing scale U.S. positioned to be the largest solar market Very strong governmental support Why Downstream? Dramatic shift in value chain benefits installers Decreasing panel pricing stimulates demand Surplus of solar manufacturing capacity presents opportunity for differentiated producer Why Akeena? Revolutionary Andalay AC panels provide significant competitive advantages Diversified and scalable operating model (Installation, distribution, retail) Strong management and strategic partnerships Leading pure-play installer and differentiated panel manufacturer 22

23 Final Thoughts Mainframes to PC s Power Plants DC Panels with Racks $8/watt Installed Costs $0.19/kwh Rooftops AC Panels, Plug & Play $2.80/watt Installed Costs $0.065/kwh Andalay Technology Enables These Installed Cost Reductions

24 Our philosophy is simple: We believe that producing clean electricity directly from the sun is the right thing to do for both our environment and economy.