Sustainable Energy Technologies Ltd.
TSX VENTURE : STG

Sustainable Energy Technologies Ltd.

August 30, 2007 09:00 ET

Sustainable Energy Technologies: June 30- Nine Month Results- Corporate Update

CALGARY, ALBERTA--(Marketwire - Aug. 30, 2007) - Sustainable Energy Technologies Ltd. (TSX VENTURE:STG), www.sustainableenergy.com today reported its financial and operating results for the nine month period ending June 30, 2007.

The Financial Statements, Management Discussion and Analysis and Corporate update containing a more fulsome discussion can be found with the Company's public documents on SEDAR (www.sedar.com) and at the Company's website (www.sustainableenergy.com) under Investor/Financials/Fiscal 2007.

Overview

- Revenues for the nine months ending June 30, 2007 were $1,596,257 up tenfold from $148,016 for the same period last year. Quarterly sales revenues were $627,948 up slightly from $625,660 for the previous quarter.

- Product margins on current sales to our major project customer are still marginal due to pricing concessions granted as part of our market entry strategy as well as amortization higher cost components. This will improve. Margins on other smaller volume sales and margins on potential projects in the pipeline are significantly higher. In addition manufacturing and transportation costs will be materially lower due to higher volume purchasing.

- The operating loss for the quarter ending June 30 2007 was $555,702 ($361,200 before interest taxes and amortization) by comparison to $956,184 ($530,377 before interest and amortization for the previous quarter. The reduced quarter to quarter operating loss was due mainly to lower operating costs ($403,052 down from $587,346) and reduced general and administrative expenses ($143,161 down from $381,229).

- Production is well underway and level at 200 per month. By the end of June, 847 units had been built tested and shipped to Spain.

- Production quality is very good. More than 300 units have been commissioned by the project developer without incident, and are operating successfully in the field. Commissioning of the entire project is expected to be complete by early October 2007.

- Product field performance is also excellent. In a head to head comparison conducted in February by the project developer, the SUNERGY demonstrated higher overall power output than a comparable product from a leading competitor.

- In May 2007 the Company raised $6.5 million from a syndicate of leading institutional investors issuing 32,500,000 Units consisting of one common share and 1/2 a common share purchase warrant exercisable at $0.30 per share until November 16, 2008. The proceeds will be used to build out finished product inventory reduce long term debt and fund sales and marketing activities.

- Liquidity, as measured by working capital, was $6,832,702 at June 30, 2007 versus $1,385,829 at June 30, 2006. Cash and short term investments totaled $5,647,442 at June 30, 2007 compared to $733,542 at June 30, 2006. Component and finished product inventory was $1,507,891 at June 30, 2007 by comparison to $677,458 at the same time last year.

- During the period, the Company completed testing of a "battery-less" inverter for Zephyr's Air Dolphin wind turbine and the company. We are currently in discussions with Zephyr to resolve certain system integration issues and this has delayed market introduction of the bundle.

- The Company continues to build its intellectual property base, completing development of new proprietary (patents pending) switching technology, which will lead to a more efficient and quieter platform as well as a reduced component count and lower input costs.

Outlook:

The Company is executing on its strategy, focusing most of its resources expanding its position and generating product sales revenues in Southern Europe, principally Spain and Greece. Spain is still the fastest growing grid tie market in the world and larger than North America. It is estimated that more than 100 MW of grid tie solar PV projects were installed or contracted in 2006, making it larger than the entire North American market. By 2010, Spain could be second only to Germany in new installations. With the success of the Solaer project, and other emerging relationships, Sustainable is well positioned in this market.

Greece is a significant new market with excellent potential. Effective February 1, 2007, Greece enacted a combination of capital grants with a view to encouraging the installation of 700 MW of solar power by 2010. Market conditions are similar to Spain, and we are well advanced on our plan to build a series of national and regional sales partnerships.

The additional working capital raised in May is very significant for the Company:

- With the assurance of product supply we are able to bid much more aggressively on projects and attract sales partners, and we have significantly stepped up marketing and sales efforts.

- In Spain and Greece, we are focusing on two main market segments: solar trackers and industrial rooftop installations.

i) In the solar tracker application, the SUNERGY's advantages are (i) the ability to run at full power all day in very high ambient temperatures; (ii) the superior performance of smaller inverters over large central inverters in optimizing power output and (iii) the superior performance, and reduced maintenance that comes with a parallel array.

ii) In the industrial rooftop application, the SUNERGY is the only inverter which enables the solar panels to be arranged in "parallel," providing better immunity to shading from local power poles, chimneys, telecommunications towers and other buildings and better more reliable total system performance. The superior thermal performance of the SUNERGY also enables the inverter to be located outside and closer to the array, thereby reducing line losses from the array to an air-cooled inverter enclosure.

- We are now also able to devote resources to positioning the SUNERGY inverter as "the parallel alternative" to the "series" configuration needed by conventional inverter technologies, especially in building integrated applications.

Although there is universal agreement, among knowledgeable solar PV experts, that a "parallel" array of solar panels offer much greater architectural design flexibility, better, more reliable overall system performance, and reduced maintenance, the SUNERGY is the only inverter in its class to offer this alternative and to achieve the high electrical conversion efficiencies that the industry needs.

Our goal is to ensure that this information is available to building architects, project developers, building owners and other decision makers for the choice of system.

A subset of the BIPV market are the emerging thin film technologies where the low voltage/high current input capabilities of the SUNERGY offer superior total system performance for these technologies. The current SUNERGY platform is a very close match to the needs of several of the leading thin film modules in the market for a "parallel" alignment

- We continue to have considerable interest in the grid-tie wind inverter (including the Zephyr) due to our higher conversion efficiencies and faster response times to changes in the wind especially in start-up mode. Our challenge with small wind turbines is that each turbine requires a level of customization, and the market for grid-tie small wind turbines remains comparatively small and not well defined. With our limited resources, we are responsive only to those situations where the development effort on our part is minimal, the distribution channels are clear and there is the prospect of an immediate and sizable market for the particular turbine and inverter.

Similarly, we continue to have interest in our fuel cell inverter from leading fuel cell developers in Japan, India, Europe and the United States. In this application our advantages are (i) the high current low voltage input which enables developers to reduce manufactured costs by designing for significantly higher current outputs per cell without sacrificing conversion efficiencies (ii) the patented power slope tracking control which simplifies the balance of plant; and (iii) much superior bi-directional control over the power flow.

As with small wind turbines, the fuel cell application requires a certain level of customization and the market for stationary fuel cells remains problematic. We are therefore responsive to development proposals only where the customization effort is minimal, we can satisfy ourselves that the developer has a clear path to commercialization; possess the resources to bring the product to market; and where we are in a position to recover our costs of the customization effort.

About Sustainable Energy

Based in Calgary Alberta, Sustainable Energy (www.sustainableenergy.com) designs, manufactures and markets power inverters for distributed renewable and alternative energy applications. Power inverters convert and control the raw power output of renewable power generators (such as solar and small wind power systems) and energy storage systems (such as batteries and stationary fuel cells) to grid-quality power.

Sustainable's power inverter platform differs from other products in the market in its ability to directly connect high current (low voltage) generation and storage systems to the power grid at very high electrical conversion efficiencies. This enables the same power electronics and software control to support a wide range of product applications including solar power, small wind power systems fuel cell power modules and any grid connected energy storage system.

Marketed in Europe under the SUNERGY™ brand name the inverter also provides immediate performance advantages for the grid connected solar power systems that are not otherwise available with conventional inverter technologies.

Certain statements contained in this press release may be considered as forward-looking. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from estimated or implied results.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information