Energy Efficiency

Silicon Valley Bank Energy & Resource InnovationApril 2014

Table of Contents

2

Energy Components of the Cleantech Ecosystem Page 3

SVB Observations: Energy Efficiency & Infrastructure Landscape Page 4

VC Investments & Government Funding in Energy Efficiency Page 6

Energy Efficiency: Risk & Challenges Page 10

Energy Efficiency: Landscape Page 11

Energy Efficiency: Key Segments Page 13

Global Trends in Energy Efficiency Investment Page 19

Energy Efficiency Finance Page 20

Energy Components of the Cleantech Ecosystem

3

Appl

icat

ion

Ben

efits

• Consumer devices• Electric transport• Large-scale Storage

•BEM & controls•Lighting•Home automation•Advanced building products

• Smart grid• Smart meters• Transmission

• Agriculture• Air• Water

•More economical energy sources

•Less pressure on non-renewable resources (oil & gas)

•Greater energy security

•Grid/ Off grid flexibility

• Improved power reliability

• Intermittency Management

• Increased power cycles/longer storage

•Savings in energy consumption

•Reduced operating costs

•Lower maintenance costs

•Waste reduction•Power outage frequency / duration reduction

•Distribution loss reduction

•Economic in nature - well-run recycling programs cost less to operate than waste collection and landfilling

•Organic pesticides / fertilizers

•Water purification•Water remediation•Purification•Management

• Solar / thermal• Wind• Hydro • Alternative fuels• Fuel cells

Energy Generation Energy Storage Energy

EfficiencyEnergy

Infrastructure

Recycling & Waste

Management

Agriculture, Air & Water

• Waste to energy• Waste repurposing

Source: SVB Analysis.

Energy Efficiency: SVB Observations

4

Key Takeaways

PRICING: Consumers don’t like to “spend to save”. Consumer adoption is expected to increase as the price of energy efficient products falls (most likely through commoditization, such as LED lighting).

SHORT PAYBACK PERIODS: Corporations recognize the financial benefit of reducing their energy footprint. Efficiency improvements with short payback periods and various incentives improve the bottom line.

LARGE TAM (Total Addressable Market): Large addressable markets, lower capital requirements, and ability to scale quickly, particularly in energy management software plays, continue to drive investor interest in the space.

INNOVATIVE BUSINESS MODELS: The partnership model is viewed as attractive, particularly in the “battle for the home”. Google/Nest, Vivint Solar (home protection/residential solar) etc.

FINANCING: Customer financing options are appealing in both commercial and residential markets; customers avoid upfront cost and third-party financiers monetize tax credits while securitizing annuity streams. However, financing solutions are mostly lacking outside of solar, at least relative to their need.

ADJACENT SECTOR TIES: Energy efficiency ties nicely into other areas of innovation such as “Big Data” and the “Internet of Things”. Utilities and commercial buildings generate a wealth of energy consumption data, while devices in the home help consumers manage energy usage across multiple WiFi-enabled devices.

ALIGNMENT: Broad public awareness coupled with government support is helping drive change.

Home Automation Advanced Building Products, Lighting

Building Energy Management, Controls

Energy Efficiency

Energy Infrastructure

Energy Infrastructure

SVB Observations: Energy Efficiency & Infrastructure Landscape

•Investors like the relatively low capital requirements for combo hardware software plays

•Companies like C3, Hara, hope to become the “Oracle” of commercial/industrial energy management

•Significant interest from established strategic players (e.g., Johnson Controls)

•Cutting data center energy costs could lead to increased interest from the likes of Amazon, Facebook, Google, etc

•Value proposition clear in theory, but yet to be measured in practice (ROI)

•Government could prove to be a major contributor to sector as they make direct purchases

•Home security, remote monitoring of HVAC, eventually appliances

•Intersection of “Internet of Things” and Cleantech

•Companies like Vivint and residential solar leasing companies who are already in the home are exploring other high-value add-ons/up-sell products & services. Converting into “residential services” companies

•Cable companies like Comcast also starting to express interest

• Premium pricing has been an obstacle for products in commodity market

• Decreasing carbon footprint of traditional building materials (cinder blocks, cement, etc.) has driven environmental interest in this segment

• Advances in automatic glass/window shading technologies have been made and vetted by NREL

• “Warmer” and dimmable (multicolor) LED lighting has led to better market reception compared to first generation (CFCL) lights

• Lighting continues to be dominated by large players and is seen as a commodity – particularly as LED costs drop rapidly

• LED consolidation underway• Networked control systems that specifically focus on lighting have started to gain some traction, but slowly (Redwood Systems)

• Regulations restricting or discouraging use of incandescent bulbs could lead to higher adoption

• LED lighting ideal for large commercial/industrial networked systems (e.g., data centers)

•Consumers don’t like to spend money to save

•Need customer financing solutions in enterprise sector, building off of Solar PPA models, incumbent dominance in lighting and channel power

•Path to success through partnering. Consumers are hyper price-sensitive

•Early adopters are wealthy consumers; decisions not made solely based on financial level

Source: SVB Analysis.

5

VC Investments:

• 2013 VC investments in global energy efficiency space was US$1.66 billion, compared to US$1.46 billion for 2012

• For 4Q 2013, VC investments in Energy Efficiency was 21.2% of total VC funding in clean technology

– Energy Efficiency VC funding was up, to US$519.6 million in 4Q 2013, as compared to US$298.1 million in 3Q 2013

Government Participation:

• The U.S. government have passed major national energy legislation including the National Appliance Energy Conservation Act of 1987, the Energy Policy Act of 1992, the Energy Policy Act of 2005, and the Energy Independence and Security Act of 2007

• The U.S. government has provided a host of financial incentives for the renewables & efficiency sector including:

– Energy-Efficient Commercial Buildings Tax Deduction

– Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation (2008-2013)

– Energy-Efficient Appliance Manufacturing Tax Credit

– Residential Energy Efficiency Tax Credit

• In the U.S., 20 states have Energy Efficiency Resource Standardswhile 7 states have goals

Overview Global VC Investment in Energy Efficiency1

Source: 1,2Cleantech Group.

Global Cleantech Cumulative Investments 1Q 2011 to 4Q 20132

US$31.4 billion pumped into Cleantech globally since 1Q 2011, of which US$5.1 billion invested in Energy Efficiency

(US$ millions) # of deals

VC Investments & Government Funding in Energy Efficiency

6

01020304050607080

$0.0$100.0$200.0$300.0$400.0$500.0$600.0$700.0

Investment (US$mn) Number of deals

16.4%

4.8%

12.4%

5.3%

13.2%

12.5%

35.4%Energy Efficiency

Energy Storage

Biofuels, Biomass & Biochemicals

Recycling & Waste

Solar

Transportation

Others

Top VC Investments in Energy Efficiency

7

Company Sector Key Venture Capital Firm(s) VC Rounds Recent Round to Date(US$m)

Total VC Amount Raised (US$m)

View Advanced Building Products KV, Sigma, GE Ventures, DBL 6 Dec 2013, $100.0 (PE) $296.3

GridPoint BEM & Controls Goldman Sachs PE Group, NEA 7 July 2012 $23.0 (PE) $276.1

Bridgelux Lighting Chrysalix, VantagePoint 7 Mar 2012 $40.9 $238.9

Serious Energy Advanced Building Products NEA, Foundation Capital, Rustic Canyon 5 July 2011 $2.97 $144.2

SAGE Electrochromics Advanced Building Products Saint-Gobain, Bregal Energy 5 Nov 2010 $80.0 $133.5

Nest Home Automation Google Ventures, KPCB, Lightspeed 3 Dec 2013 $150.0 $132.5

iControl Networks Home Automation Charles River, Comcast, Intel, KPCB 4 June 2011 $50.0 $93.5

Soraa Lighting KV, NEA, Angeleno 3 Aug, Nov 2013 $41.0 $91.1

Tendril BEM & Controls VantagePoint, GE Ventures, Bregal Energy 8 Feb 2013 $15.29 $83.7

Opower BEM & Controls Accel, KPCB, NEA 3 Nov 2010 $50.0 $65.7

Select Deals Over Last Four Years

VC Firm # Deals First Investment in Energy Efficiency Total Contributed (US$m)*

KPCB (Kleiner Perkins Caufield & Byers) 50 Scintera, 2004 $999.9

DFJ (Draper Fisher Jurvetson) 38 CRT Holdings, 2001 $365.2

Nth Power 36 Semipower Systems, 1999 $199.6

KV (Khosla Ventures) 35 eASIC, 2005 $636.9

RockPort Capital Partners 35 Renaissance Lighting, 2005 $201.6

VantagePoint Capital Partners 34 iWatt, 2003 $828.6

NEA (New Enterprise Associates) 32 Celetronix, 2001 $643.4

Key Investors

Source: CleanTech Group.*Amount represents cumulative Energy Efficiency investments through a consortium of investors, not the particular VC's contributions.

Energy Efficiency: The ability to reduce the amount of energy required to perform a task or produce a good or service

8

2 Fold Value Proposition:

•Greenhouse gas emissions are reduced when energy efficiency improvements result in reduced consumption of fossil fuels

•On an aggregated international level, reduced demand for energy can reduce pressure on energy resources and ultimately reduce energy prices (for net importers)

Environmental

•Employing energy efficiency technology saves kilowatt hours (kWh) which directly translates to monetary savings on energy consumption

Cost Savings

In 2011 began incorporating LED

lights into the parking lots of all new U.S. construction

sites, reducing energy needs by more than 50%, with an

average savings of >125,000kWh a year per site ( the equivalent of the annual energy consumption of 11

U.S. households)

9

Energy Efficiency: Industry Trends

Technology Enhancements,

Energy R&D

Technology Enhancements,

Energy R&D

Consumer Demand

Consumer Demand

Government Policies

Government Policies

Current Trends: • Public-private partnerships and voluntary programs (eg. EPA’s Energy

Star labeling for appliances) amplify the effects of direct government programs

– As of 2012, EPA estimates that Energy Star products prevent more than 150 million metric tons of greenhouse gas emissions annually

– Since the program’s inception, thousands of individuals from more than 2,200 manufacturing companies, 1,600 retailers, 800 energy efficiency programs and the federal government have worked under the Energy Star banner to define, build and create both supply and demand for energy-efficient products

• Integrating Big Data architecture with energy efficiency has the capacity to manage unstructured data, analyzing energy-usage data over-time, across industries, resources, geographies

$11.3bn

$22.4bn

2013E 2020E

Estimated Expenditure on Industrial Energy Management Systems: 2013 – 2020 (US$bn)

Regulation: • More nations and their local governments are indirectly impacting the green

building material space. They are increasing energy efficiency regulations and requirements where property owners start to disclose green building performance

– In the U.S., the 2012 Energy Disclosure Laws require residential and commercial buildings to reveal the energy performance of buildings

– In March 2011, the European Commission adopted the Communication "Energy Efficiency Plan 2011" for saving more energy, with an aim of reducing primary energy consumption by 20%

• Demand for green buildings, and their material inputs, has remained relatively buoyant despite the global recession

• Markets for green building materials will continue to grow due to policy & regulatory support, as well as the increased popularity of sustainability measures in the building sector

13.0%28.0%

60.0%

2008 2013E 2015E

Global Construction Companies’ Inclination Towards Green Building

Source: McGraw-Hill Survey, Energy Star, European Commission, SVB Analysis.

• Long- run return on investment: High purchase price combined with long-term usage-driven payoff is unpalatable to target customers.

• Financing is required for large projects and high costs create accessibility issues for individual consumers.

• Evaluating, measuring and verifying energy savings and then translating that to monetary savings is more difficult than measuring consumption.

• Accompanying need for sophisticated analytical tools to track energy / cost savings.

• Constant changes in technology and in the regulatory space require constant innovation and product offering updates.

• Shortage of capital needed to finance projects, since banks are not lending to energy efficiency projects.

• Competing scalability issues: – Smaller organizations quickly adopt new technology, but implementation becomes more

difficult and expensive with scale.– Larger projects see greater cost savings and more quickly after the implementation,

whereas small projects may only experience limited cost benefits .

• Limited interoperability of the wide array of devices and solutions inhibits adoption.• Protecting IP rights across the supply chain and against smaller new entrants is becoming a

greater challenge to seasoned players.

Energy Efficiency: Risks & Challenges

10

Cost

Difficult to measure benefits

R&D funding

Scale

Fragmented markets

Source: SVB Analysis.

11

Services Products

Energy Efficiency

Energy Efficiency Landscape

Zigtron Enterprises

PowWow Energy

GreenSwitch Capital

IPiXC

Rayvio

Financing

Source: CapitalIQ & SVB.

Energy Efficiency: Key Segments

Building Energy Management (BEM) & Controls

Offerings include hardware, software and services Controls include use of systems and devices to control lights HVAC (Heating, Ventilation & Air-Conditioning) systems control

temperature and air flow in a building

Lighting Manufacture and sale of advanced lighting solutions including LED and incandescent

Space modifications to maximize natural lighting

Home Automation (HA) Security controls, appliance controls and entertainment & integrated controls

Products (Advanced Building Materials – ABM)

Includes green building materials, advanced heating and cooling

12

BEM & Controls: Overview

13

Building Energy Management refers to the integration of various components used inside and outside a building into an intelligent system using a combination of software and hardware technologies

Controls refer to the use of systems and devices in place to ensure correct level of lighting and energy needs at any given place

Low Cost Measures

Building Energy Management

High Cost Measures

Building walls and roofs insulation

Doors and floors that are air-infiltration checked

Windows fitted to reduce glare, draught stripping and sealed gaps

Use of reflective films on windows to reduce solar heat

Use of blinds and door closers

Controls

Occupancy-linked ControlsTime Controls Daylight-linked Controls

Designed to switch off lights at a desired time

Systems can be programmed to reflect everyday patterns

Determines the presence of any movable objects, usually through infra-red or ultrasonic technologies

Controls which are based on the availability of natural light

Source: Reuters GlobalData, Sustainable Energy Ireland, SVB Analysis.

Worldwide spending on Industrial Energy Management Systems is estimated to be a US$22.4 billion Industry by 2020

$11.3bn

$22.4bn

2013E 2020E

Big IT players are entering the markets, including SAP & IBM, given the role and importance of software in the industry

Cloud-based: The future of BEMS is headed towards Cloud-computing which is expected to minimize energy costs, help decrease carbon emissions and allows for the monitoring of consumption patterns of multiple buildings

Data Analytics: Accenture estimates that smart buildings could save businesses US$25 billion a year in energy costs, and this would be possible only through the use of robust data analytics

Drawback of cloud based services include its ineffectiveness for single buildings. Multiple outlets with higher energy needs and monitoring is the best place to implement cloud BEMS

The HVAC market is expected to grow at a CAGR of 5.88% in 2012-2016. One of the key factors contributing to this market growth is the increasing number of construction activities

Lighting: Overview

Though initial prices for LED illumination is high, the life of an LED device is longer. Also, solid-state LED prices are expected to come down

By the year 2030, the U.S. Department of Energy estimates solid-state lighting could save c.190 terawatt-hours of electricity per year, resulting in US$15 billion in savings a year

14

Development of LED: Expected Global Market share

18.0%

56.0%77.0%

82.0%

44.0%23.0%

2011 2016E 2020ELED Others

$0.3bn

$7.3bn

2007 2014E

Industry Sales of LEDs for General Lighting Purposes (US$bn)

Source: PR Newswire, GE, DOE.

Integration of networked solutions: Lighting, controls, building energy management systems and software are being integrated together to provide seamless connectivity to the end-user

According to GTM Research, companies like Adura Technologies, Bridgelux, Enlighted, Digital Lumens and Redwood Systems have started offering such integrated solutions

LED is the path forward

At first, LED & CFL bulbs were slow to gain popularity as they were 10x more expensive than incandescents and had a unappealing hue. Now, the efficient bulbs are only slightly more expensive, emit a softer light, and last 10x as long, consuming 75% less energy, shifting regulations to require their use

Home Automation: Overview

15

Home automation helps to control basic home functions and are automatically or remotely integrated with a computer (or computers)

User Interfaces

Home Automation

Communication Protocols

Home automation improves standard of living and increases energy efficiency

There are numerous home automation standards and protocols existing in the market and the oldest of which date back to 1975

Majority of the companies in the industry tend to have niche focus areas such as power monitoring and energy efficiency, DIY market and some specialize in a specific appliance

One of the key factors contributing to market growth is the need to reduce residential energy consumption

Home automation system is no longer confined to two niche markets: luxury custom-designed & installed high-end systems and 'do it yourself' systems. Home automation systems are becoming more mainstream and managed services are growing

The controllers of the home automation system are getting brighter and more flamboyant every day in order to keep users interested and entertained Gets data to and from

home appliances Components required to

develop a well designed home automation system include:– A computer with

suitable programming– The systems and

devices to be controlled– Wi-Fi connectivity or

interconnecting cables– A high-speed internet

connection– A emergency back-up

connection for computers

Control of data that is received from communication platforms

TechnologyProduct

Hom

e Au

tom

atio

n: B

ased

on

Tech

nolo

gy a

nd P

rodu

ctH

ome

Auto

mat

ion:

Bas

ed o

n Pr

otoc

ols

and

Inte

rfac

es

Wire System

Wireless System

Power-line System

Lighting Security Entertainment Robotics Intercom Others

Source: Businesswire, SVB Analysis.

$2.1$3.8

$1.3

$1.7

2011 2016E

Lighting, Home Entertainment & Security Systems HVAC & Energy Management

U.S. Home Automation Market (US$bn)

The U.S. market for home automation systems and devices is forecast to exceed US$5.5 billion in 2016, a CAGR of 10.5% between 2011 and 2016

Home Automation: Outlook

16

• Dedicated Home Automation Hardware will have its place and dedicated gateway products that specialize on translating automation protocols to and from the home IP network are still needed.

• IP networks will have an increasing role. IP networks have their presence in homes and commercial buildings, and they are now being used to transfer media for user consumption. Undoubtedly, whether it is music, video, photos etc. the distribution happens on an IP network.

• The IT industry uses interoperability, testing and certification to support critical functions in the business enterprise.

• Home automation will also need such features, but it requires establishing new processes that tackles the challenges of quality assurance in testing components.

• Home automation is stuck in a deadlock that prevents growth, due to lack of standardization, proprietary systems, high cost of integration and business models that target the very high-end of luxury market.

Outlook

Increasing need for Interoperability,

Testing and Certification

Re-adjust Business Models

Dedicated Home Automation Hardware

IP Networks

Source: BCC Research & SVB Analysis.

17

Products: Smart Building Retrofits and New Construction Equipment

BEMS & Home

Automation

• Computer-based control systems, with both hardware and software components, to regulate and monitor a building’s energy consumption

Advanced Building

Products

• Green Building Materials: insulation ventilation, roofing

• Lighting • Windows

Global green building materials market (US$bn)

$116.0

$254.0

2013E 2020E

Cloud-based building controls enable easier monitoring of consumption

patterns and consumer adoptability. Watch for new entrants in this space,

apps that monitor single residences and compound consumption/ performance

metrics

1.5 million home automation systems were installed in the U.S. in 2012

The advent of the “smart home” as a component of the Internet of Things has driven demand for intelligence in home technology

Ventilation systems Illumination / LightingSustainable Green Roofing

Source: Advancedbuildingproducts.com, SVB analysis.

Global Trends in Energy Efficiency Investment

18

Source: Cleantech Investor, AusIndustry, Forbes, Energy Collective, European Commission.

Brazil

• Focusing on developing the economies of the less developed states, notably those in the north east

• Companies are developing financing mechanisms to implement energy efficiency projects in conjunction with banks including the World Bank and JBIC (Japan Bank for International Cooperation) as well as BNDES (Ecoluz is the largest ESCO (energy service company) in Brazil)

Australia

• The Clean Technology Investment Program is a merit-based grants program to support Australian manufacturers to maintain competitiveness in a carbon constrained economy. This program provides grants for investments in energy efficient capital equipment and low emission technologies, processes and products

• The Australian Government, as part of the commitment to deliver savings by abolishing the Carbon Tax, announced its intention to discontinue funding for the Clean Technology Program

U.S. & Canada

• U.S. and Canadian energy efficiency programs saved approximately 40,000 GWh of electricity and 363 million therms of gas in 2011. This resulted in 30 million fewer metric tons of CO2 emissions from entering the atmosphere

• Ratepayer-funded energy efficiency programs are saving energy and reducing the amount of greenhouse gases emitted in U.S. and Canada

China & Japan

• Clean energy investments worldwide dropped 11% in 2012, but more money flowed to China, Japan and upstart countries as the cost of clean energy generation dropped

• The Chinese government has launched a program to retrofit homes in colder areas, and in its current five-year plan, aims to retrofit 4 million square meters of nonresidential building space in ten cities, reducing each building’s average energy consumption 20-30 %

• Japan’s Ministry of Economy, Trade and Industry plans to launch an assessment system for energy efficient apartments

• Keen to encourage further energy savings, Japan's government has set new targets for the nation's domestic appliances. Energy efficiency is now required for over 20 different types of electronic equipments

EU

• In 2011, the European Commission released the proposal for a directive on energy efficiency. The directive aims to help member states step up efforts to use energy more efficiently at all stages: from the generation and transformation of energy to its distribution and consumption. The proposed measures aim to save 20% of annual primary energy consumption compared to projections (368 million Mtoe by 2020)

• Sweden has set itself an overall energy efficiency target for 2020 including policy for industries and the tertiary sector which includes mandatory requirements of the environmental code and a voluntary energy-intensive industry focused efficiency program (PFE)

Initial cost

Incentivizing high initial costs for the end-user to effectively allocate capital to more efficient/ expensive upgrades

Achieving scale

Fragmented nature of the energy efficiency market poses challenges to aggregation

Timing issues

Weighing the longer use life of the energy efficiency equipment against the short tenure of property occupancy

Existing asset restrictions

Existing mortgages or debt financed properties

MeasurementsPerformance based payments are subject to establishment of baseline energy usage

Energy Efficiency Finance “provides building owners with a cost-effective alternative to using their own cash on hand for the purchase or installation of energy efficiency improvements” -Innovations and Opportunities in Energy Efficiency Finance paper’ by Wilson Sonsini Goodrich & Rosati

Central Issues in Financing

EE Projects

Financing Models

Energy Savings Performance Contract (ESPC)

Customer owns the energy efficiency improvements and the initial cost of equipment and installation may be self-funded by the host customer

Advantages Disadvantages

Risk reduction through performance guarantees Strong monitoring processes help track projects

Transaction costs are high, non-feasible for small projects

Property Assessed Clean Energy (PACE)

PACE financing is a solution to the first-cost hurdle that allows local governments to use their traditional assessment or improvement district authority to provide property owners within their communities with the up-front capital for energy efficiency projects

Repayment terms transfers to the new buyer in the event of sale or transfer Competitive interest rates

Legal and governmental clearances required

Energy Services Agreement (ESA)

Customer does not front the initial cost of the energy efficiency project, but instead enters into an ESA with an energy services provider

Pay for actual savings only Lower transaction costs if funding from a single investor for multiple projects

New FASB accounting rules could impact ESA’s

Managed Energy Services Agreement (MESA)

Customer does not front the initial cost of the energy efficiency project, but instead enters into a MESA with an energy services provider

Incentives for project developers for maximizing savings Maintenance and operational responsibilities transferred from customers to developers

Utility rate escalation risk

On-bill Financing and On-bill Repayment (OBF/OBR) approaches

Provides yet another method to address the first-cost hurdle for the customer in which the utility or a third party provides a zero- or low-interest loan or tariff to the customer to finance up to 100 percent of the energy efficiency improvement cost

Flexibility in accounting treatment Customer repayment records

High transaction costs

Source: Wilson Sonsini Goodrich & Rosati, May 2012.

Model

19

Endnotes

20

Page 6: Cleantech Group

Page 7: Cleantech Group

Page 9: U.S. Department of Energy ( http://www1.eere.energy.gov/buildings/technologies/ee_buildings_hub.html ) Navigant Research, “Industrial Energy Management Systems: Software and Services Market Issues, Market Drivers and Inhibitors, Regional Trends, and Global Forecasts”, 1Q

2013 (http://www.navigantresearch.com/research/industrial-energy-management-systems) U.S. EPA, “Energy Star Products: 20 Years of Helping America Save Energy, Save Money And Protect The Environment”, March 2012

(http://www.energystar.gov/ia/products/downloads/ES_Anniv_Book_030712_508compliant_v2.pdf )

Page 11: CapitalIQ

Page 14: Sustainable Energy Ireland, “SEI Building Energy Manager’s Resource Guide” (http://www.seai.ie/uploadedfiles/publications/Building%20Energy%20Managers%20Resource%20Guide1.pdf); written by NIFES Consulting Group on behalf of Sustainable Energy Ireland (date of publishing not available)

Page 15: Cree, Inc, “Cree Introduces The Biggest Thing Since the Light Bulb” (http://www.cree.com/news-and-events/cree-news/press-releases/2013/march/bulbs ), March 2013 PR News, “Global Lighting Industry to Reach $78.3 billion in 2016, OLED Displays Market to Reach $25.9 billion by 2018” (http://www.prnewswire.com/news-releases/global-

lighting-industry-to-reach-783-billion-in-2016-oled-displays-market-to-reach-259-billion-by-2018-189728761.html), February 2013 GE, “Industry Sales of LEDs” (http://www.gelightingsolutions.com/lighting-news-release-archives/ges-view-a-transforming-global-lighting-industry ) OSRAM , “The Global Lighting industry: Tradition, Transition & Transformation”, Christian Schraft, May 2012

(http://www.institutebe.com/InstituteBE/media/Library/Resources/Existing%20Building%20Retrofits/LED-Transformation-Presentation.pdf)

Page 16: Businesswire, “My Intelligent Home – What is Home Automation?” (http://www.myintelligent-home.com/?page_id=86 ) Shaun Salzberg, “Background and Current Industry Landscape” (http://shaunsalzberg.com/medialab/homemaestro )

Page 17: BCC Research, “The U.S. Market for Home Automation and Security Technologies”, Slide 16 (http://www.bccresearch.com/market-research/instrumentation-and-sensors/home-automation-technology-products-ias031b.html), August 2011.

Page 18: Advancedbuildingproducts.com; ABI Research, “1.5 Million Home Automation Systems Installed in the US This Year” (https://www.abiresearch.com/press/15-million-home-automation-systems-installed-in-th) -

Web article, the information about ‘1.5 million home automation systems installed in the U.S.’, November 2012

Page 19: Cleantech Group, AusIndustry, “Clean Technology Investment Program” (http://www.ausindustry.gov.au/programs/cleantechnology/cleantechnologyinvestment/Pages/default.aspx) The Energy Collective, “China to Ramp Up Energy Efficiency Retrofits” (http://theenergycollective.com/peterlehner/227836/china-increasing-energy-efficiency-retrofits), Posted by

Peter Lehner, May 2013 Forbes, “China: The Epicenter Of Clean Energy Investments” (http://www.forbes.com/sites/uciliawang/2013/04/17/china-japan-lure-big-clean-energy-investments/), Posted by

Ucilia Wang, April 2013 European Commission EcoSeed, “Japan to launch energy efficiency assessment system for apartments” (http://www.ecoseed.org/low-carbon/energy-efficiency/16954-japan-to-launch-energy-efficiency-

assessment-system-for-apartments), August 2013

Page 20: Wilson Sonsini Goodrich & Rosati, NY, “Innovations and Opportunities in Energy Efficiency Finance”, May 2012 (http://www.wsgr.com/publications/PDFSearch/WSGR-EE-Finance-White-Paper.pdf ). Contributors include Charlotte Kim (Partner), Robert O’Connor (Partner), Kendall Bodden (Associate), Sara Hochman (Senior Advisor, Government Relations), Wendra Liang (Associate), Sheridan Pauker (Associate), Scott Zimmermann (Associate)

This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by SVB Financial Group and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer to acquire or dispose of any investment or transaction.

©2014 SVB Financial Group. All rights reserved. Member Federal Reserve System. SVB>, SVB>Find a way, SVB Financial Group, Silicon Valley Bank or SVB Analytics are registered trademarks. SVB Analytics is a member of SVB Financial Group and a non-bank affiliate of Silicon Valley Bank. Products and services offered by SVB Analytics are not FDIC insured and are not deposits or other obligations of Silicon Valley Bank. SVB Analytics does not provide tax or legal advice. Please consult your tax or legal advisors for such guidance. Rev. 06-17-14