Today there was a Solar Investment Tax Credit (ITC) Teleconference involving
business executives from Morgan Stanley, HSH Nordbank, and Lazard Capital
Markets. Taking the opportunity to voice their support for Solar energy and
the ITC, they strongly encouraged Congress to pass this critical tax credit
to ensure the Solar industry’s future growth. This teleconference was in
preparation for the Senate’s upcoming vote on the ITC in the next couple of
days.

In addition to the support of Wall Street and investment executives, a group
of over 240 signatory companies have composed a letter in support of an
extension of the ITC. These include Best Buy, GE, Home Depot, Edison
Electric Institute, John Deere, JP Morgan Chase, Target, Whirlpool and
others. The letter itself can be found at -
http://www.seia.org/ITC_Letter_4-3-08.pdf. More information can be found by
simply browsing seia.org.

Passing the Word,

Brian Willis
703.302.8386

———NEWS RELEASE———

For Immediate Release
Tuesday, April 8, 2008
Contacts: Monique Hanis, 202-682-0556, ext. 4, (JavaScript must be enabled to view this email address)
          Mark Sokolove, 703-302-8382, (JavaScript must be enabled to view this email address)

Financial Executives Call on Congress to
Extend Pending Solar Tax Credits

Wall Street and Venture Capital firms report on growth of solar market and
stress importance of Tax Credit for Investor Confidence and Industry Growth

WASHINGTON, DC - Today, a group of bankers and analysts from Wall Street
investment firms and venture capitalist firms called on Congress to pass an
eight-year extension of the solar Investment Tax Credit (ITC), that is set
to expire at the end of 2008, stressing its importance in building investor
confidence and stimulating industry growth.

The U.S. Senate is expected to vote on legislation to provide for a
long-term extension of the ITC (S. 2821, the Clean Energy Stimulus Act of
2008) as early as this week.

Since the solar ITC was established as part of the 2005 energy bill, the
solar energy industry has grown at a rate of more than 40 percent per year.
Utilities and solar energy companies have announced plans for numerous
projects to provide utility-scale solar power to states from Florida to
Nevada. On the commercial and residential side, energy users from military
bases, retail stores and homeowners have added solar energy generation to
their land and buildings. But investors are worried that if the ITC is
allowed to expire at the end of 2008, rapid progress made within the
industry could slow to a halt.

“We believe solar projects will become cost effective in the future without
the federal tax credits,” said Edward Levin, vice president of global
structure products at Morgan Stanley, “But the current federal tax
incentives are still vital for industry growth and continued investor
confidence.  The tax incentives need to be extended to avoid a market
interruption that could significantly set back U.S. solar development.”

“The ITC is serving as an important building block for solar energy’s
migration into mainstream electricity markets,” said Sanjay Shrestha,
managing director of equity research in alternative energy at Lazard Capital
Markets. “If extended, the ITC will accelerate project activity, helping the
U.S. evolve into one of the most pivotal solar markets in the world.”

The solar ITC has been scored to cost approximately $700 million over the
course of ten years. This amounts to less than 1 percent of the $40 billion
in subsidies that fossil fuels energy companies receive every year. On March
25, CNN reported that with the proper investment incentives, renewable
energy could stimulate as many as three million new jobs over the next two
decades.

Ed Sproull, senior vice president of energy at HSH Nordbank, predicted that
“with an extension of the solar ITC, solar development will continue to
accelerate because it makes economic sense to investors.”

“Without [the ITC], we risk seeing the steady progression of investment
grind to a halt, threatening job growth, tax revenue generation, and energy
independence in the process,” said Nancy Pfund, managing partner, DBL
Investors. “Most importantly, we need ... to continue backing those that
invest in solar improvements so that costs come down and financing products
can be developed to make solar accessible to all.”

That Independent story on the UK VC scene is a little overblown - 3i’s been doing next to nowt in the early-stage space for years, so their recent announcement just confirmed what everyone knew. Established firms move up-market - it’s always happened, and will continue to do so. Anyway, 3i’s not symptomatic of the UK market - they’re adamant they’re a global player, so the move should say as much about the global market as the domestic.

The figures show an increase in seed and early-stage deals, at least up till 2006, for the UK and Europe. It’s not as active a market as in the US, but it’s still in relatively good shape. Interestingly, a fair few low-end investors I’ve spoken to say that the problem isn’t in VC supply, but in demand - there’s barely enough quality early-stage businesses to take the money that’s currently in the market. Maybe that says something about the appetite for risk, or quality of entrepreneurship, but I don’t think lack of VCs is the problem.