Westinghouse Solar Management Presentation September 2010 NASDAQ: WEST
Safe Harbor Statement Statements made in this presentation that are not historical in nature constitute forward looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations and beliefs of the management of Akeena Solar, Inc. dba Westinghouse 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 Westinghouse 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 9/14/2010
Westinghouse Solar Manufactures and Distributes Rooftop Solar Power Systems 25+ pending or issued patents related to solar panel installation technology Rapidly growing distribution network 100+ dealers Lowe s Home Improvement stores Lennox HVAC contractors Exclusive worldwide rights for Westinghouse Solar brand, accelerate adoption throughout distribution network Award winning Westinghouse Solar panels provide the best combination of safety, performance and reliability, while backed by the proven quality of the Westinghouse name. 3
Investment Highlights U.S. solar market projected to increase tenfold by 2014 Residential increased 40% in 2009 (SolarBuzz) Award winning products with strong IP protection AC System recognized as a 2009 Breakthrough Product by Popular Mechanics. Fully Integrated Solar System Moving Industry Toward True Plug and Play Solar Power Highly recognized and valued Westinghouse brand name Company transitioning to pure distribution model without installation infrastructure and overhead CEO is well regarded solar industry veteran and thought leader 4
Strategic Partnerships Largest manufacture of crystalline silicon solar panels Manufacture and supply Westinghouse Solar panels Leading microinverter manufacturer Shipped over 300,000 units Selling AC panels in 50+ stores as part of Energy Center Lowe s Energy Centers will continue to expand in U.S. Westinghouse Solar provides installation services for Lowe s stores in California OEM Supplier for Lennox s SunSource line of HVAC systems 5
Beyond Grid Parity in 2011 Rooftop Solar Costs Are Less Than Retail Electricity Costs Ordinary Westinghouse Solar Panel Solar Panel (Amounts in $/DC Watt) 2008 2011 Panels & Inverter $5.00 $2.80 Installation 1.25 0.50 Gross Profit 1.75 1.00 30% ITC - (1.29) Total Cost $8.00 $3.01 30 Year Cost ($/kwh) (1) $0.19 $0.07 (1) Based on 1.43kWh/W capacity; Assumes discount rate approximates energy escalation rate; zero salvage value. 6
Rapid Growth As Rooftop Solar Goes Mainstream Currently <1% in CA l l l l $15/watt 2000 $8/watt 2008 $5/watt 2009 $3/watt 2011 Plummeting Installed Costs Reach Tipping Point Similar to PC Industry in Early 80s Installation Costs Present the Biggest Cost Reduction Opportunity 7
Westinghouse Solar s Integrated AC Panel Technology Ordinary Installation Westinghouse Solar Installation 80% Fewer Parts, 50% Less Labor, Higher ASP s 8
Westinghouse Solar AC Panel Advantages Superior aesthetics Panels mount flush to rooftops and look like a skylight No bulky inverters or unsightly wiring Designed for safety Integrated panel wiring and grounding No dangerous 600 volt DC wiring or arcing 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 Best lifetime performance 5 25% greater real world efficiency due to superior handling of individual panel shading and performance mismatch Outstanding installer advantages Lower engineering, logistics and installation costs Safer installations Higher profit potential 9
Ordinary Solar 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
Westinghouse Solar Installation 20 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 11
Westinghouse Intellectual Property Over 25 patents issued or pending related to solar installation technology Company awarded first patent for plug and play solar panel U.S. Patent # 7,406,800 Filed May 2004, issued August 2008 Covers Splices between panels provides structural rigidity Side electrical connectors eliminates need for wiring of panels Splices provide electrical grounding path between panels (UL and NEC requirement) Racking built into side of panel frame panels attach directly to roof Strong IP for Reducing Solar Installation Costs 12
Westinghouse Solar Growth Strategy Accelerating expansion of distribution business Non California and Canada business grew ten fold from Q2 2009 to Q2 2010 California represents over 50% of U.S. solar market now open to distribution sales Leveraging Lowe s retail store footprint and existing installation contracts to quickly establish dealer channel in California Lower operational expenses for distribution sales than installation sales Lower infrastructure and customer acquisition costs improve profitability Operational expenses reduction of over $3 million per quarter Expect EBITDAS Cash Flow break even in mid 2011 with quarterly distribution revenue of approximately $9 million 13
Management Team Barry Cinnamon Chief Executive Officer Gary Effren President Margaret Randazzo Chief Financial Officer Jeff Kiel EVP Sales & Marketing Gary Mull VP, Marketing Benjamin Markham VP, Operations Robert F. Kennedy Jr. Board of Advisor Member 30+ years experience in renewable energy and technology Recognized Solar Industry Leader 25+ years at Knight Ridder, CFO and VP Finance Experience includes Peat Marwick, CPA 20+ years of financial experience, VP/Controller Knight Ridder, CPA CFO Ft Worth Star Telegram; President & Publisher Modesto Bee; Arthur Andersen 25+ years experience in media advertising, management and finance President and Publisher, San Jose Mercury News; VP Finance Miami Herald 30 years of marketing & sales experience in consumer & commercial markets Experience at Emptoris, Siebel and Software Publishing Corporation 30 years of engineering & construction of high technology, commercial facilities Experience at NASA, Amgen, Baxter, Mobil Specialty Chemicals Mr. Kennedy is an influential policymaker and passionate environmentalist President of Waterkeeper Alliance, Pace University Environmental Litigator, Vantage Point venture partner 14
Financial Summary (US $ in millions) 2007 2008 2009 Q1 2010 Q2 2010 Net Sales $32.2 $40.8 $28.2 $6.5 $9.9 Gross Margin (excluding inventory revaluation) EBITDAS (EBITDA + Stock Compensation) 21.2% 14.6% 23.3% 23.0% 21.0% $(8.2) $(17.7) $(10.4) $(2.6) $(2.8) Ending Installation Backlog 9.8 9.4 11.4 8.9 Cash (including Restricted Cash) 22.3 17.6 5.8 2.7 4.9 Total Assets 46.3 42.1 18.6 15.9 17.6 Credit Facility 18.8 Total Liabilities $11.5 $26.3 $10.5 $8.8 $9.3 Diluted Average Shares Outstanding 21.1 28.1 32.2 36.1 38.2 Raised $2.5m from through Securities Purchase Agreement in May 2010 $1.0 million credit line with Comerica; No outstanding borrowings as of June 30, 2010 Backlog defined as all installation jobs under signed contracts with an expected installation date within six months. 15
Rooftop Solar Can Grow Like the PC Industry As Solar Costs Drop and Fossil Fuels Become More Expensive Fossil Fuel Power Plants DC Panels with Racks Hazardous & Complex $8/watt Installed Costs $0.19/kWh Solar on Rooftops AC Panels, Plug & Play Safe & DIY $3/watt Installed Costs $0.07/kWh Westinghouse Solar has the Best Combination of Technology, Distribution and Branding for the Rooftop Solar Market 16
Contact Information: Westinghouse Solar 16005 Los Gatos Blvd. Los Gatos, CA 95032 408 402 9400 www.westinghousesolar.com Barry Cinnamon CEO, bcinnamon@westinghousesolar.com Gary Effren President, geffren@westinghousesolar.com Margaret Randazzo CFO, mrandazzo@westinghousesolar.com