REC’S SOLAR MARKET INSIGHT

June 6, 2016

Q1 2016

Q1 2016 Regional Performance Highlights

Table of contents

1

2

3

4

REC Highlights Q1 2015

Q1 2016 Performance Highlights

REC Market Study: Climate Change - Closing the COP21 Gap

REC Highlights Q1 2015

1 2 3 4

Major REC Q1 2016 Highlights

• Significant increase in Q1 sales over Q1 2015 – module shipments +37%

• Almost 60% of module shipments in Q1 2016 were to the US – steady sales in all other regions

• REC scores best among PV manufacturers in regards to financial health and bankability according to third-party analysis

• REC moves from 3rd place to 2nd place amongst the leading residential solar PV module manufacturers the US market

• REC’s TwinPeak solar PV module is one of four named to “best of the best” list of high-efficiency solar PV modules

• Start of transition to 100% half-cut PERC cell production at REC’s Singapore facility

• Start of expansion of the award-winning REC TwinPeak Series

• Debut of REC panels under full warranty on floating PV installation in Central Florida

• REC joining Global Solar Council as a founding Corporate Member – leading corporations around the world joining forces to accelerate the deployment of clean, reliable, emissions-free solar energy

REC scores best in proven Altman-Z score

SAFETY ZONE (ABOVE 2.6)

GREY ZONE (1.1 – 2.6)

DISTRESS ZONE (BELOW 1.1)

Altman-Z scores of PV manufacturers (as of March 9 & 10, 2016)

What is the Altman-Z score? Developed by Edward Altman in 1968, the Altman-Z score is a measure used to predict the probability that a business will go into bankruptcy. It is a function of tangible assets, working capital, retained earnings, EBIT, market value of equity, total liabilities, and historical revenue. The score is widely accepted by auditors, accountants, courts, and database systems used to evaluate loans.

Source: Sinovoltaics "The Solar Energy Technology Hub in Asia" (www.sinovoltaics.com)

REC Expands its TwinPeak Module Success Story

Introduction Production Start

Intersolar Award

Twin Peak Black debut

Floating PV Ready

TwinPeak 72 launch

Up to 275 Wp targeted

Up to 280 Wp achieved

International recognition

Black frame introduced

for aesthetic options

Qualified for floating

installations

Up to 340 Wp targeted

September 2014

January 2015

April 2015 June 2015 May 2016 June 2016

Singapore Minister Event

• March 2016: At its manufacturing facility in Singapore and in the presence of Minister for Trade and Industry, S Iswaran, REC unveiled plans to invest S$200 million (approx. US$145 million) in the next 3 years to further increase its productivity and efficiency

• Furthermore, REC will invest S$50 million (approx. US$36 million) in R&D efforts to maintain REC panels at the leading edge over the next 5 years

Q1 2016 Performance Highlights

1 2 3 4

Increased module shipments in Q1 2016

• Increased quarterly module shipments of 314 MW in Q1 2016

• Q1 Module shipments represent a 37% increase over Q1 2015 shipments

Module Shipments MW

229 262

361

307 314

Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015

+37%

Continued strong sales in the US

• Almost 60% of module shipments in Q1 2016 were to the US

• More than doubling module shipments into US compared to Q1 2015

• Steady sales in all other markets 1 excl. China

Module Shipments MW

90 129

207 190 185 89

53

81 74 78

32 33

29 28 29

46

44 15

Q1 2015 Q1 2016

314 22

Q4 2015

307

Q2 2015 Q3 2015

361

261 229

18

USA EMEA

Japan APAC1

Q1 2016 Regional Performance Highlights

1 2 3 4

Regional Highlights – USA

• Market Development Highlights o Extension of the Federal Investment Tax

Credit has led to a more sustainable demand growth in 2016 with many projects now able to run into 2017

o Supreme Court stay of the Clean Power Plan is not expected to affect solar PV demand over the short term

o City of Palo Alto negotiate a solar PV PPA at $37/MWh – though to be a record low for a solar PV PPA

• REC Performance Highlights o Continued strong sales into the utility

and residential markets o REC currently ranks as second largest

module supplier into the US residential market and #1 in CA

o Debut of REC panels on a floating solar PV installation in Central Florida

Q1 2016 Module Shipments1

MW

1 REC and US market segment splits are best estimates

23%

12% 66%

Residential Commerical Utility

38%

3% 59%

REC Q1 2016 Total US Market

Regional Highlights – Europe

• Market Development Highlights o Tariffs bid in the 4. German power

auction continue downward trajectory – between 6.94 and 7.68 Euro Cents per kWh

o Nevertheless and despite stable FiT since Sep 2015, with 193.5 MW installed capacity in Q1 2016, demand in Germany is still behind plan of annual installations of 2,400 - 2,600 MW

o French authorities green light proposal to triple solar PV capacity by 2023 to 20 GW

o UK solar PV installation in large scale segment show a slight peak in Q1. A number of projects on ROC grace period will be build later in 2016.

Q1 2016 Module Shipments1

MW

1 REC and EMEA market segment splits are best estimates

21%

39%

39% 23%

21% 56%

Commerical Residential

Utility

REC Q1 2016 Total EMEA Market

Regional Highlights – EMEA: The UK and German markets continue to account for the bulk of sales

• REC Performance Highlights o Steady sales in the

UK

o Slight decline in sales into Germany offset by increased sales into France

o Strong increase in sales into other EMEA markets

59

15

42 44 40

15

26

23 22 17

8

5

9

6

5

2 10 4

Q2 2015

51

2 2

Q1 2015

86

1

3

78

Q1 2016 Q4 2015

72

3 1

Q3 2015

79

3

Source: REC

REC Sale Volumes

MW UK Germany Netherlands

France Rest of EMEA

Regional Highlights – Africa: Focus on Ghana

• Market Development Highlights o Electricity tariff hikes of 59% in Ghana

result in highest net tariff in the country approaching US$0.54/ kWh for a non-residential consumer with an annual demand of 600 kWh or more

o Development makes home or commercial installation of solar PV systems for self-consumption an increasingly attractive proposition

• REC Performance Highlights o REC panels to provide solar power to 4

villages across Ghana o The four systems total 189 kW and

provide clean electricity to 573 households as well as street lighting

o Designed as micro grids for rural areas with no traditional grid connection

o A World Bank project, realized with REC’s partner Trama Tecno Ambiental in Spain

Population 26 m GDP US$ 48 bn Electricity Capacity 2.1 GW Access to Electricity 72% Annual TWh 14

Regional Highlights – APAC

• Market Development Highlights o Indonesia expected to launch FiT

imminently with a current quota of 1.5 GW in place

o Weighted average FiT expected to be approx. US$0.10/kWh but certain regions will enjoy higher tariffs

o Indonesia’s transmission network needs significant upgrades for new connections

1 REC and APAC market segment splits are best estimates

14%

44%

42%

Residential Commerical Utility

27%

54%

19%

REC Q1 2016 Total APAC Market

Q1 2016 Module Shipments1

MW

Regional Highlights – APAC: India was top sales region in Q1

• REC Performance Highlights o REC announces a S$50

million R&D agreement with the Solar Energy Research Institute of Singapore

o Increasing sales into India including securing REC’s largest order to date in that market – a 7 MW supply agreement

o As an emerging region, APAC is dominated by high growth rates but also strong fluctuations

Source: REC

REC Sale Volumes

MW

35 33

10

3 4

7 6

4

4

3

13

4

2 3

1

1

17

Q1 2015

2 45

Q2 2015

2 2

45

Q3 2015

2

0

15

Q4 2015 Q1 2016

1

0

2 22

1

All Others India Singapore Australia

Thailand

Regional Highlights – Japan

• Market Development Highlights o Japan’s Ministry of Economy, Trade

and Industry targets that by 2030, solar PV will account for 7% of total power production under their draft plan

o The support mechanism for utility-scale solar expected to switch from FiT to an auction system likely starting in April 2017

o Solar PV installations are expected to peak in 2016 – new FiT applications have already peaked

• REC Performance Highlights o Solid sales to Commercial and Utility

segments o Good exposure to residential

customers at PV Expo 2016.

Module Shipments1

MW

1 REC market segment module shipment volume splits are best estimates

31%

66%

3%

Commerical Residential

Utility

REC Q1 2016 Total Japan Market

12%

78%

9%

REC Market Study: Climate Change - Closing the COP21 Gap

1 2 3 4

30

40

50

60

2016 2018 2020 2022 2024 2026

• To limit temperature increases to 1.5ºC and to prevent sharply increased emission requirements in later years, emissions need to be reduced by an additional 144 Gt of CO2eq by 2025.

• If solar PV is to meet 25% of the required emissions, the cumulative solar PV installed capacity needs to increase by 4,800 GW by 2025

• Individual country contributions to the global target can be calculated based on country level contributions to CO2 emissions as well as existing policy actions in place to mitigate emissions

• The 4,800 GW of new solar PV required can be dis-aggregated to the country-level contributions required to help develop effective solar PV policy for every country

The COP 21 Challenge: Time for Action

REC has presented estimates of global solar PV deployment required to meet COP 21 goals

And REC has also started to do this work at the country-level as well

Cumulative gap of 144 Gt

of CO2eq

Year 80

182

586 USA

Germany

Japan

Required for 1.5C rise Current Policies

Source: Climate Action Tracker; REC analysis

Global CO2eq emissions, Gt New Solar PV Additions required, GW

REC Market Study – What does it mean for the US?

13.50 10.40 12.60 15.60 17.78 20.27 23.11 26.35 30.04 34.24 2.57 2.97 4.80 11.88

27.08 46.30

70.38

100.29

137.20

182.47

0

50

100

150

200

250

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GW Current forecast annual solar PV additions in US

Proposed solar rampup above current forecast in US (practical solution)

Source: IHS 2015 (incl. PV outlook until 2020); REC internal analysis

Cumulative solar PV installations of 790 GW required by 2025 – 4 times the current forecast

REC Market Study – What does it mean for Germany?

• Substituted coal and nuclear power generation capacities will be replaced ~30% by solar and ~70% by wind

• This ramp up will require each year, on average 8.31 GW of solar capacity in addition to the current forecast cumulated total capacities by 2025 represent a 4.6-times ramp up of the current forecast

• Furthermore, this ramp up will require each year, on average 9.71 GW of wind capacity in addition to the current forecast cumulated total capacities by 2025 represent a 5.5-times ramp up of the current forecast

1.17 1.51 1.83 2.03 2.11 2.28 2.48 2.69 2.92 3.17 0.89 1.92

2.54 4.55

6.69 8.03

9.37 10.70 10.70 10.70

0.30 0.43

0.33

0.30

0.91

1.83

4.11

5.48

0.00 0.00

0

2

4

6

8

10

12

14

16

18

20

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GW

Proposed Rampup Solar to Substitute Coal and Nuclear

Solar annual additions current forecast

Required annual solar additions above current forecast to substitute coal Required annual solar additions above current forecast to substitute nuclear

1.27 1.27 1.27 1.27 1.27 2.85 2.85 2.85 2.85 2.85 0.00 0.60 2.07

8.88 7.81

9.37 10.93

12.49 12.49 12.49

0.00 0.24 0.75

0.61 1.06

2.13

4.79

6.39

0.00 0.00

0

5

10

15

20

25

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GW

Proposed Rampup Wind to Substitute Coal and Nuclear

Wind annual additions current forecast GW Required annual wind additions above current forecast to substitute coal Required annual wind additions above current forecast to substitute nuclear

Source: IHS 2015 (incl. PV outlook until 2020); REC internal analysis Source: EWEA Wind Energy Scenarios 2030; REC internal analysis

22

REC Market Study – What does it mean for Germany?

• The proposed ramp ups will bring solar and wind alone (without biomass and hydro electricity) to a total share of ~75% in the German electricity consumption mix

• The set target for renewable energy to represent 40-45% in the German electricity consumption mix by 2025 is far too low to close the cumulated emissions gap by 2025 and fully exit nuclear power generation by the end of 2022

Source: BMWi, AGEB (Energiedaten Jan 2016); REC internal analysis * Assuming constant electricity consumption

-8.34% -0.87% -2.91%

37.09%

11.26% 0.43%

9.49%

8.61%

6.58%

15.23%

0.00%

0.00%

17.47%

17.47%

17.47%

14.64%

42.53%

52.15%

6.40% 20.12% 23.37%

-20%

0%

20%

40%

60%

80%

100%

2015 2025 Theoretical Rampup 2025 Proposed Rampup

Electricity Generation Mix*

Solar

Wind

Other

Nuclear

NG

Coal

Net Exports

Con

sum

ptio

n N

et E

xpor

ts

(Coal) (Coal) (NG+Coal)

23

Proposed Solar Ramp up in The Netherlands

0.65 0.64 0.63 0.59 0.66 0.73 0.81 0.89

0.99 1.10

0.30

0.59 0.59 0.59 0.59

0.73 0.73

0.73 0.74

0.74

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GW

Solar annual additions current forecast

Solar annual additions proposed rampup above current forecast (2016-2025)

Cumulative additional solar capacity of 14 GW required by 2025 – less than double of the current forecast

24

REC Market Study – What does it mean for Japan?

9.40 8.70 7.80 7.20 7.20 7.20 7.20 7.20 7.20 7.20

11.31 11.36 10.98 13.06 18.93

24.79 30.66

36.52 42.38

48.25

0

10

20

30

40

50

60

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

GW

Current forecast annual solar PV additions in Japan

Proposed solar ramp up above current forecast for Japan (practical solution)

Cumulative additional solar capacity of 250 GW required by 2025 – more than 3 times the current forecast

Source: IHS 2015 (incl. PV outlook until 2020); REC internal analysis

25

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