PV Power Plant LCOE Matt Campbell

Director, Utility Power Plant Products

December 1, 2010

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Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities

Litigation Reform Act of 1995. Forward-looking statements are statements that do not represent historical

facts and may be based on underlying assumptions. The company uses words and phrases such as

"expects," “believes,” “plans,” “anticipates,” "continue," "growing," "will," to identify forward-looking

statements in this presentation, including forward-looking statements regarding: (a) our plans and

expectations regarding our cost reduction roadmap, (b) cell manufacturing ramp plan, (c) financial

forecasts, (d) Levelized Cost of Energy (LCOE) reduction, (e) future solar and traditional electricity rates,

and (f) future percentage allocation of SunPower solar panels within our systems business. Such forward-

looking statements are based on information available to the company as of the date of this release and

involve a number of risks and uncertainties, some beyond the company's control, that could cause actual

results to differ materially from those anticipated by these forward-looking statements, including risks and

uncertainties such as: (i) the company's ability to obtain and maintain an adequate supply of raw materials

and components, as well as the price it pays for such; (ii) general business and economic conditions,

including seasonality of the industry; (iii) growth trends in the solar power industry; (iv) the continuation of

governmental and related economic incentives promoting the use of solar power; (v) the improved

availability of third-party financing arrangements for the company's customers; (vi) construction difficulties

or potential delays, including permitting and transmission access and upgrades; (vii) the company's ability

to ramp new production lines and realize expected manufacturing efficiencies; (viii) manufacturing

difficulties that could arise; (ix) the success of the company's ongoing research and development efforts to

compete with other companies and competing technologies; and (x) other risks described in the

company's Annual Report on Form 10-K for the year ended January 3rd, 2010, and other filings with the

Securities and Exchange Commission. These forward-looking statements should not be relied upon as

representing the company's views as of any subsequent date, and the company is under no obligation to,

and expressly disclaims any responsibility to, update or alter its forward-looking statements, whether as a

result of new information, future events or otherwise.

SunPower 2010 – 25th Anniversary

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Commercial Power Plants Residential

2010: Revenue $2.15-$2.25B

5,500+ Employees

World-leading solar conversion efficiency

1,500 dealer partners, #1 R&C USA

Diversified portfolio: roofs to power plants

550+ MW 2010 production

>1.5 GW solar PV deployed 5 GW power plant pipeline

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PV Technology Vertical Integration

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Operation Solar module Systems

Integration EPC

Your Full-Service Utility-Scale PV Technology Partner

Solar cell

Module materials

Manufacturing

Systems

engineering Trackers

Roof mounting

Module reliability

Performance

modeling

Plant

optimization Automated

design software SCADA

Commercial

monitoring

Advanced grid

integration

Long-term

system reliability

SunPower R&D

5 5

PORTUGAL 11 MW Serpa 10 MW Ferreira

GERMANY 10 MW Bavaria I 3.0 MW Bavaria II 1.6 MW Pfenninghof

KOREA 6.0 MW Samsung 2.2 MW Mungyeong 2.0 MW JeonJu 1.4 MW Hampyeong 1.0 MW Gwangju

HAWAII 1.5 MW Lanai

CALIFORNIA 1.7 MW Lake County 1.2 MW Peninsula Packaging 1.2 MW Napa Valley College 1.1 MW Rancho Water 1.1 MW Grundfos Pump 1.1 MW North Bay Reg. Water 1.1 MW Inland Empire Utility 1.1 MW Chico Water Recycling 1.1 MW Agilent Technologies 1.1 MW Skinner Water Facility 1.1 MW Gap Pacific Distr. Ctr. 1.1 MW Marine Corp AGCC 1.0 MW Sonoma County Water 1.0 MW Applied Materials

NEVADA 15 MW Nellis AFB 3.1 MW Las Vegas WD

SunPower 300MW+ Global Power Plants Installations

SPAIN 29 MW Naturener 23 MW Trujillo 23 MW Jumilla 18 MW Olivenza 14 MW Lorca 12 MW Almodovar 11 MW Magasquilla 11 MW Ciudad Real 9.9 MW Zaragoza 8.4 MW Isla Mayor 8.3 MW Guadarranque 6.9 MW Caceres 6.0 MW Atersa 4.8 MW Llerena 3.8 MW Lebrija

PG&E Contract 250 MW AC CA Valley Solar Ranch

EAST COAST – U.S. 25 MW AC FPL–Desoto 10 MW AC FPL–SpaceCoast 1.6 MW Merck 1.0 MW FPL–NASA 1.0 MW J & J 1.0 MW QVC Network 1.0 MW SAS Institute

ITALY 45MW Montalto 24 MW Montalto 2.3 MW Toletino 1.0 MW Ferentino 1.0 MW Siron/Soleto

Xcel / PSCo in Construction 17 MW AC Greater Sandhill

Australia 1.0 MW Marble Bar

Modesto Irrigation District 25 MW AC McHenry Solar Farm

Ontario Hydro 20 MW AC ASF

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T0 Tracker FPL Desoto – 25MW

Levelized Cost of Energy (LCOE)

The LCOE equation is one analytical tool that can be used to compare the cost of energy from alternative technologies when different scales

of operation, investment or operating time periods exist

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Why Costs Must be Levelized

Low carbon energy sources such as solar, wind, nuclear, and hydro share the properties of higher up-front capital costs and lower annual operating costs

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$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

2011 2016 2021 2026 2031 2036 2041 2046

Simplified Annual Cash Costs for a 10MW PV Power Plant

Why Costs Must be Levelized

Fossil fuel based energy sources have lower capital costs and higher annual costs which are highly sensitive to fuel inflation

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Simplified Annual Cash Costs for a 10MW Fossil Fuel Plant

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

2011 2016 2021 2026 2031 2036 2041 2046

4% Inflation

2% Inflation

Using LCOE to Evaluate Solar Power Plant Technologies

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Silicon PV

Thin Film PV

CPV Dish Sterling CSP Parabolic Trough CSP

CLFR CSP Heliostat / Tower CSP

The PV Power Plant LCOE

LCOE

Cost of Capital

Capital Cost

Capacity Factor

Capital cost, capacity factor, and cost of capital equally affect the levelized cost of energy (LCOE)

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Detailing the LCOE

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Initial investment Area related costs

Grid interconnection costs

Project related costs

Is the present value of the

benefit over the financed

life of the project asset.

Annual Costs Annual system operating and

maintenance costs ( inverter

maintenance, panel cleaning,

monitoring..)

Depreciation Tax/

other Public Benefit System Residual Value Present value of the end of life

asset value is deducted from

the total life cycle cost in the

LCOE calculation.

System energy production

First year energy generating

(kWh/kwp) then degrading

output over the system life

based on an annual

performance degradation rate

n = the system’s financing term

(which will determine the

duration of cash flows)

The PV Power Plant LCOE

LCOE

Cost of Capital

Capital Cost

Capacity Factor

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Capital Cost = PV + BOS + Land +

Development costs

Capital Cost Levers for PV Power Plants

Panel cost

– Increase manufacturing scale

– Improve conversion efficiency

– Reduce material consumption

– Simplify manufacturing processes

BOS cost

– Reduce materials through design

– Reduce materials through panel efficiency

– Reduce labor through design

– Reduce labor through panel efficiency

– Reduce skill required for construction

– Optimize supply chain

– Accelerate construction timelines

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SunPower cell efficiency history

2005 2006 2007 2008

Cell

Eff

icie

ncy (

%)

2004 2003

20%

21%

22%

23%

24%

25%

20.6%

22.0%

23.4%

20.6%

22.4%

Laboratory Prototyping Results

Production median

2009 2010

24.2%

Gen 1

Gen 2

Gen 3

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© 2010 SunPower Corp.

Note Gen 2 distribution is

tighter than Gen 1 distribution

SunPower Efficiency/BOS Case Study: CVSR

Most power plants are constrained

SunPower maximizes MW/m2

More MW/m2 lowers BOS/kWh

– Land

– Permitting/development

– Transmission/substation

– Foundations/structures

– Cabling/trenching

– Shipping

– Roads

– Fencing/security

– Construction management

– O&M

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SPWR 14% x-Si 11% TF

250 MW 186 MW 146 MW

Solar Array Open Space

•Illustrative layout as of May 2010, subject to change

•Final project design may include std efficiency panels

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1.4GW - Fab 3: Production Begins Q4 2010

Oasis Evolution: Standard systems, lower cost, more features

2007

12 MW Nellis

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2010

19 MW Xcel

2011

25+ MW

Feature T20 Gen 1 T20 Gen 2 Oasis 2011

Panel 225 W 400 W 425 W

Capacity per tracker 2.5 kWp 3.6 kWp 17.0 kWp

Pre-fabricated structure Yes Yes Yes

Advanced inverter functionality Yes Yes

Pre-fabricated electrical Yes

Turn-key AC power block Yes

Oasis Power Blocks Drive Standardization, Enable Whole System Component Sales

Oasis blocks rotate to fit land boundaries

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1 MW Power Block = SKU

Tracker blocks = standard units

- Configure to fit land boundary

- Smallest block = 300 kWdc

Inverter/power electronics standard blocks

9%

8%

8%

0%

20%

40%

60%

80%

100%

2010 BOS Cost Standardization /Volume Savings

Materials /Design Savings

InstallationEfficiencySavings

2011 Oasis BOSCost

Inverter, Cabling

Tracker

Components

Oasis Modular Power Plant Savings

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Oasis 25% Balance-of-System Savings by Category

Electrical &

Structural

System

Optimization

Design,

Overhead,

Installation

Commissioning

The PV Power Plant LCOE

LCOE

Cost of Capital

Capital Cost

Capacity Factor

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Capacity Factor =

Net Actual Generation

Period Hours x

Net Maximum Capacity

PV Power Plant Output vs. Utility Demand Curve

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0%

20%

40%

60%

80%

100%

120%

12

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PM

Fixed Tilt CF - Mojave

T0 Tracker - Mojave

Cal ISO Load 7/15/08

Peak CA Summer

Load

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Energy Performance & Capacity Factor

Independent tests show that SunPower panels deliver the highest capacity factors at sites around the world

Dept. of Energy

(DOE) ASU*

Independent Sites

SunPower Sites

CREST

University of

Cypress / Stuttgart

5% higher than HIT

9% higher than Poly-Si

7% higher than Poly-Si

7% Higher than CdTe

Capacity Factor over Time – Impact of Degradation

Simplified, illustrative annual PV power plant capacity factor over time: fixed vs. tracking at 2 degradation rates

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15.00%

17.00%

19.00%

21.00%

23.00%

25.00%

27.00%

29.00%

31.00%

33.00%

1 6 11 16 21 26 31 36

Tracker @ 0.5% Degradation

Fixed @ 0.8% Degradation

25%

40%

The PV Power Plant LCOE

LCOE

Cost of Capital

Capital Cost

Capacity Factor

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Cost of Capital Drivers:

- Risk of energy production

- Risk of energy purchase

Silicon PV Panels - 25 Years and Counting

C-Si PV Panel After 20 years of Outdoor Exposure

Total Degradation 4%

E. Duniop, D.Halton, H.Ossenbrick, « 20 Years of Life and More: Where is the End of Life of a PV Module » IEEE Proeceedings, 2005, p.1595

A. Kimber, “Long Term Performance of 60MW of Installed Systems in the US, Europe, and Asia”, Proceedings of the 22nd Annual Photovoltaic

Solar Energy Conference, Sept. 2007

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Extended Financing Term Yields Lower LCOE

SunPower Bankability: Module Reliability

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Incoming inspection

of 3rd party panel

showing micro cracks

SunPower v. 3th Party Power vs.

Damp Heat Cycle Tests

SunPower tests modules to standards far exceeding industry norms

Many “top tier” bankable PV suppliers do not pass SunPower’s rigorous qualification test program

0%

20%

40%

60%

80%

100%

1000 2000 3000 4000 5000 6000 7000

SunPower Third Party 25 Yr Warranty

SunPower Bankability: Reliable System Energy Delivery

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SunPower has delivered >1 TWh solar energy: consistently exceeding performance predictions

SunPower received the first investment grade rating for a PV Power Plant bond

Focus on bankability yields lower cost of money, 100bps = ~$0.30/Wp of ASP

2005 2006 2007 2008 2009

Expected Energy Production Actual Energy Production

Actual vs. Expected Annual Production: 106.2% SPWR Operations Center

The PV Power Plant LCOE

LCOE

Cost of Capital

Capital Cost

Capacity Factor

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LCOE Model

Sensitivities

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Total Life Cycle Cost

NPV Energy Output LCOE =

Panel Cost + BOS Costs + NPV (O&M Costs)

NPV (kW x kWh/kW) =

LCOE Sensitivity: $/Wp and Capacity Factor

$4.00 / Wp

SPWR Oasis

$3.38 / Wp

11% Fixed Tilt

$3.00 / Wp

SPWR Oasis

$2.55 / Wp

11% Fixed Tilt

Sacramento

8.5% IRR

$0.170

$0.170

$0.130

$0.130

Note: Includes ITC, IRR is unlevered

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Total Life Cycle Cost

NPV Energy Output LCOE =

Panel Cost + BOS Costs + NPV (O&M Costs)

NPV (kW x kWh/kW) =

LCOE Sensitivity: Location and Cost of Capital

$4.00 / Wp

SPWR Oasis

$3.38 / Wp

11% Fixed Tilt

$3.00 / Wp

SPWR Oasis

$2.55 / Wp

11% Fixed Tilt

Sacramento

8.5% IRR

$0.170

$0.170

$0.130

$0.130

Mojave

7.5% IRR

$0.128

$0.131

$0.097

$0.100

Note: Includes ITC, IRR is unlevered

SunPower LCOE Advantages ― 100GWh Plant*

Note: Illustrative 100 GWh / year power plant, Phoenix, AZ

SunPower LCOE Advantages

SunPower 11% TF Fixed

GWh/yr 100 100

MW 37 46

Acres 191 351

Inverters 74 92

SunPower delivers the same GWh using far fewer acres and less BOS leading to

lower O&M costs

SunPower Thin Film

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SunPower LCOE Advantages ― 100GWh Plant* SunPower LCOE Advantages

SunPower 11% TF Fixed

GWh/yr 100 100

Total $ $200 MM $200 MM

$/Wp DC $4.37 $3.50

SunPower Thin Film

Economically equivalent LCOE to

customer

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Note: Illustrative 100 GWh / year power plant, Phoenix, AZ

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Alamosa 19 MW: Xcel

Alamosa County, CO

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Amherstburg Solar Farm, 20 MW

Ontario, Canada

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Montalto 72 MW: Lazio, Italy

Largest Solar Power Plant (GWh)

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9 MW in Progress

Alange, Spain

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First Systems in Greece

Crete

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First T0 Tracker in India

Hyderabad

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…and we’re putting power plants

on rooftops too…

6MW T5 Installation for

Southen California Edison

PV Power Plant LCOE Conclusions

LCOE drivers: capital cost, cost of capital, system capacity factor

Capital cost dominated by PV, BOS, and land development

– PV costs driven down per experience curve + technology

– BOS costs reduced by larger plant sizes, experience curve, and higher panel efficiencies

– Land development costs lowered by panel efficiency and scale

Capacity factor reduced with tracking systems

– Tracking also delivers more energy during peak demand periods

Cost of capital is a function of the perceived risk by investors

– Proven technologies and performance lower cost of capital

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