Saving and Generating Energy Dollars

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1 Saving and Generating Energy Dollars Overview of Energy Performance Contracting & Self-Generation through Renewables Presented by John Silverio Director Project Development

2 Who are we? Canadian organization since 1973 Publicly listed on the NYSE since July 2010 Core business focus Energy efficiency measures/performance contracting Facility enhancement / building renewal Renewable asset ownership New construction Emphasis on renewable technology and energy conservation ultimately reducing the energy needs of buildings

3 Our Services

4 Our Services: Retrofits Our roots as an ESCO means our retrofit services is our traditional bread and butter. We work with our clients to provide comprehensive solutions and concepts in lighting, HVAC systems, air handling systems, water systems and facility fittings, amongst others, to: Increase energy efficiency Reduce expenditure and maintenance costs Minimize ongoing maintenance Contribute to a cleaner environment Reduce carbon footprint Improve air quality Establish a pride of place

5 Our Services: Renewable Energy We develop green sustainable renewable energy solutions that allow our clients to capitalize on the most current technologies available including: Solar Wind Geothermal Biomass Co-Generation Waste to Energy Our customers benefit from these clean, reliable sources of power that offer protection from volatile energy markets while reducing their carbon footprint Ameresco owns & operates over 150 MW of renewable energy assets

6 Proud of our accomplishments Industry leader in Public-Sector ESPC Full-Service, Complete In-House Capabilities Deliver over $400 million of Energy infrastructure projects annually Guarantee over $300 million of annual savings Largest independent ESPC Company in North America Unbiased approach: unaffiliated with any product Developed a unique approach that allows us to deliver the most comprehensive solution for our clients at the greatest value Own & operate over 150 MW of renewable energy assets

7 And grateful to our clients London & Middlesex Housing Corporation

8 Canadian Points of Presence Toronto Ottawa Burlington London Windsor Sudbury Montréal Vancouver Edmonton Calgary Regina

9 Saving Energy Dollars Energy Savings Performance Contracting (ESPC)

10 ESPC Mechanism Utilize future energy / utility savings to finance current capital improvements Alternative mechanism for developing, constructing & financing energy and water conservation projects No upfront cost: improvements are paid for over time from on-going guaranteed energy savings Ameresco Canada Inc. is a turnkey facilitator that provides all necessary resources in engineering, construction and financing to implement the ESPC

11 Value Creation through Energy Savings Creation of Funding Pool to address Capital and Facility Renewal Needs yr project Annual Utility Cost $5,000,000 / yr $1,000,000* $M Funding Pool yr project 3 2 * Operating cost savings redirected to renewal / capital projects 1 0 1M 1M 1M 1M 1M 1M 1M YEARS 1M 1M 1M

12 Application of Savings Creation of Funding Pool Annual Utility Cost $5,000,000 / yr $1,000,000* * Operating cost savings redirected to renewal & capital projects Building Solutions Lighting Boilers Building Automation / Controls Health & Comfort High Efficiency Motors Water Conservation Building Envelope Environmental Greening Renewable Energy Benefits Asset Value Improvement Creation of Revenue Options Funding for Building Renewal Greater Tenant Comfort Market Leverage Financial Funding Healthier Buildings Risk Management Environmental Stewardship

13 Conventional Approach Owner Owner Engineer Contractors Feasibility Study Completion BAS Lighting HVAC Water etc

14 Integrated Approach Performance Based Owner Owner Integrator feasibility study / business case completion measures approval implementation project management engineering site supervision commissioning monitoring and verification Benefits performance based vendor neutrality guaranteed results (where applicable)

15 Conventional vs. Integrated ESPC Initial Study/Development Costs Integrated Approach Time from Study to Construction Number of Contracts to Execute Control over Equipment Selection Control over Subcontractor Selection Avoid Change Orders and Disputes Equipment Performance Guaranteed Maintenance and Training Assured Best Value to Client plan/spec/bid +/-$50-$150K No Several years Numerous Limited Limited No No No No ESPC $0* Yes 6 Months Two Yes Yes Yes Yes Yes Yes * Providing Project Proceeds

16 Steps Assess feasibility (Benchmark) Gain support from shareholders Execute Audit Agreement Ameresco performs detailed Energy Audit Client selects final project scope to be implemented Execute Energy Services Agreement and Financing Agreement Construction/Implementation Performance Period

17 Potential Cost Buy Downs Electric and Gas utility conservation programs OPA conservation programs Demand Response programs Other incentive / grant programs

18 saveonenergy OPA Conservation and Demand Management Program Recently launched in March 2011 Leveraged through local LDC s (electric utilities) Energy audit Efficiency; Equipment replacement incentive Incentives for engineered projects are: $400/kW or $0.05/kWh for lighting measures to a maximum of 50% of project costs $800/kW of $0.10/kWh for non-lighting measures up to a maximum of 50% of project costs Building Commissioning Initiative

19 First Canadian Place For the largest single building in Toronto s financial core, Ameresco initiated a building and energy renewal program along with a branding program Back to First to capitalize on both the upgraded facilities and the greatly enhanced occupant conditions First Canadian Place now offers its tenants. A 2 million-square-foot building, operating cost savings of $.80 per sq. ft. achieved Facility upgrade program included elevators, fire safety, lighting, air rebalancing, electronic sub-metering, boiler replacement, water conservation Payback of less than 3 years Successful marketing program enhanced competitive position, increased retention, promoted environmental stewardship 2.5% increase in stock value when the Ameresco building energy and renewal program was announced

20 City of Vancouver Phase 1 City Hall complex energy upgrade reduced gas consumption at City Hall by 34% Phase 2 Energy efficiency and renewal of 30 Parks and Recreation facilities Phase 3 Renewal and energy efficiency at Museum, Work Yards and Library Highlights $15.4 million total contract value to date $940,000 of annual guaranteed savings 27% reduction in greenhouse gas emission Over 4 GWh of annual electricity savings $475,000 of BC Hydro Power Smart incentives Project costs financed using avoided utility costs

21 Toronto Community Housing Second-largest housing provider in North America 58,000 units. Home to 164,000 low- and moderate income tenants including seniors, families, singles, refugees, recent immigrants to Canada and people with social needs. 350 high-rise and low-rise apartment buildings 800 houses and duplexes throughout the city Partnership between Ameresco Canada and Toronto Community Housing implemented Energy and Building Renewal at 10 developments. A detailed feasibility study outlined all opportunities in the developments over a period of five years. Implementation began in fall of Project Highlights Project Value: $60 million Number of Developments: 10 Number of Units: 3,659 Number of High-rise Apartments: 14 Number of Low-rise Apartments: 14 HVAC Air Handlings, boilers, controls Suites Lighting, Kitchens, Bathrooms Envelope Windows, Doors, Concrete, Brick Common Areas Wall, Floor & Ceiling Roofs Repairs / Replacement Grounds Playgrounds, Fencing, Curbs Resident Initiatives - Education, communication, energy training

22 Sisters of Loretto Loretto College Energy Measures New boilers and HVAC systems Conversion from purchased steam to high efficiency natural gas New heat pumps complete with heating and air conditioning New Building Automation System Upgraded ventilation systems New windows and doors High efficiency fluorescent lighting Energy efficient low flush toilets and showers New solar thermal technology Project Highlights Contract Value: $8.9 million Total Square Footage: 89,000 Significant building renewal (elevators, roof, power system, fire alarm / communications systems

23 Summary of Top Level Benefits Funds needed for improvements are generated outside standard capital budget allowing you to do more Pay for project entirely or in part from guaranteed savings Improve overall facility environment enhancing venue environment and potential rent increases Measured reduction in utility consumption and associated Greenhouse Gas emissions Long-term sustainable optimal performance and reduced operating costs

24 Generating Energy Dollars Renewable Energy Opportunities in Buildings

25 Renewable Energy for Buildings Small Wind Geothermal Biomass Solar Thermal Solar PV Immediate Focus / Opportunity = Rooftop Solar PV

26 How Solar PV works DC AC export power inverter meter Power grid

27 Overview of Ontario (OPA) FIT Program What is the Ontario FIT Program? Feed-in-Tariff program for electricity producing renewable energy technologies in Ontario Provides guaranteed 20-year power purchase agreement (PPA) to developers who build / own renewable energy projects Eligible Technologies Solar PV (photovoltaic) Wind Biomass, Biogas, Landfill gas Water (run-of-river)

28 Ontario (OPA) FIT Prices Solar PV Solar PV Size Range Price cents/kwh Roof / Ground* 0-10 kw (micro) 80.2 / 64.2* Roof mounted kw 71.3 Roof mounted kw 63.5 Roof mounted >500 kw 53.9 Ground mounted <=10 MW 44.3

29 Solar PV Example 100 kw AC (Solar PV owned by building owner) Electricity gross revenue = $85,000 - $95,000 per year Approximate capital cost = $700,000 Simple payback = 7 to 8 years

30 Solar PV Example 100 kw AC (roof leased by building owner) Client leases roof to solar developer No capital outlay by building owner Solar developer builds, owns, and operates solar PV Risk bourne by solar developer Lease provides steady stream of revenue for 20 years to building (roof) owner

31 Solar PV Market Factors Roof lease / royalty pricing models: Fixed $/ft2 roof net or gross? Fixed $/kw size DC or AC? Variable $/kwh generation percent of annual revenue Royalty payment amount based on maintaining fixed IRR for owner / developer of solar project

32 Solar PV on rooftops

33 Solar PV on rooftops

34 Summary Saving Dollars opportunity through ESPC Leverage energy / utility (and other operational) savings through integrated approach Option to guarantee savings results Capital can be paid back through savings Generating Dollars opportunity through solar PV Generate electricity revenue through OPA FIT program Solar PV installed on building rooftop Revenue generated by sale of electricity to grid, or Lease revenue paid by solar developer

35 Questions? Thank You