Solar — Investor Presentation 2013

Feb 25, 2014

FOURTH QUARTER 2013

25 February 2014

Disclaimer

This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for REC Solar ASA and REC Solar ASA's (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects, "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for REC Solar ASA's businesses, energy prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although REC Solar ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. REC Solar ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither REC Solar ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

The presentation was prepared for fourth quarter 2013 result presentation on February 25, 2014. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation.

The REC Solar ASA shares have not been registered under the U.S. Securities Act of 1933, as amended (the "Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act.

Q4 2013 Highlights Market and Operations Update Financials Q&A Session Appendix

• Successful listing on Oslo Stock Exchange on 25 October 2013
• Improved financial performance¹
• Revenues of USD 182.4m
• Module EBITDA of USD 21.1m
  • Total EBITDA, incl. System of USD 18.2m
• REC exiting European System business
• Continued debottlenecking, general efficiency gains and cost improvements
• 228 MW of module production
• Solar panel cash costs down 10% over the last 12 months
• Strong markets in Japan, US and China contributed to stabilized pricing

Revenues¹ (USD m)

EBITDA¹ (USD m)

(1) The re-presented figures have been adjusted to exclude certain accounting impacts that arise in connection with the recent split from REC Silicon and have therefore not been prepared in compliance with IAS 34 Interim Financial Reporting ("IAS 34") and are unaudited.

REC is an integrated solar panel manufacturer

REC leverages high-quality solar panel manufacturing, R&D and trusted brand to develop leading market positions in Europe, Asia and the US

*As of 31.12.2013

5 © 2013 REC All rights reserved.

Q4 2013 Highlights

Market and Operations Update

Financials

Q&A Session

Appendix

Annual Module Installations (GW)

Solar Panel Spot Prices (USD/W)

• Supply continues to increase but at a slower rate than demand

• Industry still has excess capacity

• Solar panel spot prices have stabilized in 2013

• REC's high quality solar panels continue to enjoy a price premium

Solar reaching grid parity in several markets

Note: LCOE based on 6% weighted average cost of capital, 0.7%/year module degradation, 1% of capex as O&M annually; Bubble size determines electricity demand

Source: Eurostat, grid operators, Bloomberg New Energy Finance; REC analysis

Geographical shipment split (MW)

• Europe represents 48% of shipment volume for REC in 2013
• Japan represents 29 % of shipment volume in 2013 for REC
• REC is evaluating entry in selected growth markets in Asia

Source: IHS-iSuppli. * industry figures based on revenue split

REC cell efficiency and module power continue to improve

Annual Module Production (MW)

• Module debottlenecking expected to increase capacity to 1.0 GW and to be completed by Q3 2014
• Required investment of USD 25 30m to further increase the module capacity up to 1.3 GW by 2015. Decision to be taken in Q2 2014

Solar panel cash cost (USD cents/W)

Note: REC depreciation of 2 cents per watt in 4Q 13

• Q4 solar panel cash cost down to 64 USD cents/W (including SG&A)
• Main drivers of future cost reductions are:
• Higher solar panel efficiency and increased manufacturing volume
• Improved efficiency of ingot & wafer processing
• REC targets 8 12% reduction in solar panel cash costs through 2014, but there are risks related to pricing of raw materials

• Total silicon requirement for 2014 was secured during Q4 2013

• Current status:

• Accrued restructuring cost of USD 1.2m in Q4 with no further charges expected
• Portfolio consists of 4 projects in US, UK, Italy and Romania and one fund participation in Italy
• UK project sold in Q1 2014
• Remaining projects in Italy and Romania expected to be sold later this year
• Proceeds from already sold projects expected to return around USD15m in 2014 and USD 6m in 2015

Project overview	Size	Status
US project	80 MWp	Sold in Q1 2013. Received 30% of proceeds
UK project	18 MWp	Sold in Q1 2014. Received 75% of proceeds
Italy project 1	4.5 MWp	Sales process ongoing
Romania project	8.3 MWp	Sales process ongoing, delayed due to regulatory issues
Italy project 2	20% in 13.6MWp Funds	Initial discussions

A subsidiary of REC Solar ASA acquired 20% of Mainstream's equity in 2007 Mainstream is one of the largest Engineering Procurement and Construction companies in the US Mainstream operates under the "REC Solar" trademark with businesses addressing the Residential and Commercial segments Background Transaction Implications On 31 January 2014, Sunrun Inc. closed an all-share merger with Mainstream's Residential business Sunrun Inc. is a leading residential, solar financing company in the US REC Solar ASA will receive a shareholding in Sunrun Inc. and will retain a minority shareholding in REC Solar Inc. (Mainstream's Commercial business) REC Solar ASA and REC Solar Inc. trademarks will continue to coexist in the US market

Q4 2013 Highlights Market and Operations Update Financials Q&A Session Appendix

Key figures	1Q12	2Q12	3Q12	4Q12	1Q13	2Q13	3Q13	4Q13	2012	2013
EBITDA (USDm)	-16	1	-29	-18	-7	15	10	21	-62	40
EBITDA margin (%)	-8.9%	0.5%	-23.6%	-13.0%	-5.7%	9.4%	6.5%	11.6%	-9.8%	6.5%
Module production (MW)	157	179	220	191	170	199	223	228	747	820
Cash costs/watt (US\$)	1.02	0.93	0.82	0.71	0.69	0.68	0.65	0.64	0.86	0.66
- 10%				-	24%

CONSOLIDATED STATEMENT OF INCOME

(USD m)	Q4 2013	Q3 2013
Total revenue	182.4	156.0
Module Business revenue System Business revenue	181.0 1.4	153.4 2.6
Cost of materials	-106.0	-89.4
Operating expenses	-58.3	-57.7
EBITDA	18.2	9.0
Module Business EBITDA	21.1	10.4
System Business EBITDA	-2.9	-1.4
Depr/amort./impairment	-4.5	-3.5
EBIT	13.7	5.5
Share of profit/loss of equity acc.	-0.2	2.2
Net financial items	-2.6	-4.3
Profit/loss before tax	10.9	3.3
Income tax expense/benefit	-0.1	-0.1
Profit/loss	10.8	3.2

• Revenue improvement compared to Q3 2013 due to 14% increase in sales volume and 1.4% increase in average selling price (ASP).
• EBITDA improved due to cost reduction, sales volume growth and increased ASP.

*The re-presented figures have been adjusted to exclude certain accounting impacts that arise in connection with the recent split from REC Silicon and have therefore not been prepared in compliance with IAS 34 Interim Financial Reporting ("IAS 34") and are unaudited.

(USD million)	31-Dec-13
ASSETS
Fixed Assets	78.1
Intangible Assets	19.7
Other Non-Current Asset	31.4
Cash	67.2
Other Current Asset	253.3
TOTAL ASSETS	449.7

EQUITY AND LIABILITIES

Paid-in capital	127.6
Other equity and retained earnings	6.1
Profit and loss for the period	106.9
Sum shareholders equity	240.6
Provisions Non-Current	95.0
Trade Payables and Other Liabilities	109.9
Other Current Liabilities	4.2
Sum liabilities	209.1

TOTAL EQUITY AND LIABILITIES 449.7

• Net cash position of USD 67m
• No interest bearing debt and no requirement for credit lines from banks
• Net working capital of USD 139m

• Capex and growth opportunities financed through operating cash flows

• Market demand for REC panels is expected to remain strong

• Annual global module demand is expected to increase from 39 GW in 2013 to between 43 and 49 GW in 2014
• Solar module prices expected to be stable in Q1 2014

Capex and manufacturing outlook

• REC targets 8-12% reduction in solar panel cash costs through 2014
• Module production of ~215 MW in Q1 2014 and ~940 MW in 2014
• USD 40m capex program to increase module capacity to 1.0 GW by Q3 2014 and wafer capacity to 840 MW by 1H 2015
• Required investment of USD 25 30m to further increase the module capacity up to 1.3 GW by 2015

Margins for REC Solar to be improved by lower costs rather than higher prices

Cost reductions for solar systems must continue to come down to make solar energy even more competitive

Q4 2013 Highlights Market and Operations Update Financials Q&A Session Appendix

Q4 2013 Highlights

Market and Operations Update

Financials

Q&A Session

Appendix

CONSOLIDATED STATEMENT OF INCOME

(USDm)	Q4 2013	15.07.13 - 31.12.2013
Revenues	123.1	123.1
Cost of materials	-72.0	-72.0
Operating expenses	-37.6	-38.2
Other income from negative goodwill	98.9	98.9
EBITDA	112.5	111.8
Total depreciation, amortization and impairment	-3.7	-3.7
EBIT	108.8	108.1
Share of profit/loss of equity accounted investments	-0.3	-0.3
Net financial items	-1.4	-1.4
Profit/loss before tax	107.0	106.4
Income tax expense/benefit	-0.1	-0.1
Profit/loss	106.9	106.2