Sustainable Energy Technologies Ltd.

Sustainable Energy Technologies Ltd.

February 27, 2009 18:59 ET

Sustainable Energy Technologies Ltd.: December 31, 2008 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - Feb. 27, 2009) - Sustainable Energy Technologies Ltd (TSX VENTURE:STG) ("Sustainable" or the "Company") reported its operating and financial results for the three month period ending December 31, 2008.

The Consolidated Financial Statements and Management's Discussion and Analysis thereof can be found with the Company's public documents on SEDAR ( and at the Company's website ( under Investor/Financials/Fiscal 2008.


- During Q1, the Company negotiated a private labeling agreement with Salicru S.A. for the distribution of its products under Salicru brand name. A private company, Salicru is recognized as one of Europe's top power electronics companies, and is, indisputably, the market leader in Spain and Portugal. The agreement signed in January 2009 was accompanied by an initial purchase order valued at $6.2 million.

- During this period, the Company invested in building market awareness of the value of its "parallel" architecture for emerging thin film solar and developing relationships with the world's leading thin film module manufacturers. The combination of thin film's lower cost structure and its superior performance above 250C delivers much higher returns on investment than conventional crystalline modules. The Company has already secured supplies with three leading thin film module manufacturers.

- The loss for the Quarter was $1,098,465. After adjusting for non cash items the operating loss for the Quarter was $746,098 (an average of $248,696/mo). Liquidity as measured by working capital at the end of the Quarter was $3,783,026 by comparison to 5,521,987 at the end of Q 1 2007. Cash and cash equivalents at the end of the Quarter totaled $1,854,545.

- The Spanish market was closed to product sales during Q1 due to a restructuring of the incentive structure and the Company achieved only nominal product sales ($45,908) during this period. On February 20 the Spanish government approved the first projects under the new tariff structure. It is targeting 267 MW for rooftop systems in 2009; 296 MW in 2010 and 328 MW in 2011. The feed in tariffs for all systems have been reduced with rooftop systems being entitled to a range of EUR 0.32/watt - EUR 0.34 /watt.

- Module prices dropped dramatically during Q1, to the point that leading crystalline companies are reporting no gross margins and some are closing production. The Company's modeling indicates that under current conditions a 1000 sq meter project in central Spain using thin film PV (6% efficiency) will generate a 16.3% internal rate of return even with reduced feed in tariffs. By comparison the same system using crystalline (15% efficiency modules would only yield 10.2%.

- The Company expanded its distribution infrastructure in Greece, the other major market where its Gen I units are also qualified for sale. Greece ended an almost 2 yr moratorium on solar sales in January. The Company has a pipeline of permitted projects where its inverters are specified representing approximately 15MW.

- The Company has completed prototyping of its Gen II inverter platform and expects to roll out products targeting 90% of the thin film rooftop and BIPV market by the end of Q3. The Company believes that its manufactured cost/watt will be among the lowest in the industry.


"These are difficult times, even for the high growth solar power industry, and it is often hard difficult to look past short term quarterly results. But, we have created a company which I believe has the potential to deliver annual earnings in excess of $100 million by 2012," said Michael Carten, President & CEO of the Company. Here are the reasons why:

- "There is general agreement that the solar industry will continue to see 30% - 40% annual growth for the foreseeable future driven by dramatically lower panel prices and continued public support for clean energy."

- "According to prestigious Prometheus Institute (Thin Film PV 2.0, Market Outlook Through 2012, September 2008) lower cost thin film solar technologies will become the cost leader in rooftop and building integrated solar PV markets and will take 40% or more of this market over the next three years. This represents a C$1.2 - C$1.7 billion per year addressable market for our solar inverters products by 2012."

- "There is virtually universal agreement that a "parallel" architecture for rooftop and building integrated solar PV systems is superior in terms of performance and coverage of the available space to the "series" architecture driven by conventional inverter designs. There is no product and no technology visible to us which can deliver a parallel architecture for thin film PV at a cost that is acceptable to the industry."

- "Our technologies are patented and proven. Our "private label" business model enables us to overcome our small size disadvantages. We are able to use this model because our manufactured cost/watt is among the lowest in the industry.

- "Our value proposition is being validated. In the past 6 months, we have created the strategic distribution and supply relationships that will enable us to execute a very successful product launch in Spain and France that will be the template for other European markets and the United States.

About Sustainable Energy: Based in Calgary, Canada, Sustainable ( designs, manufactures and distributes power inverters for grid-connected solar PV systems. Advanced power inverters are a critical enabler of all modern solar PV power systems converting the direct current ("DC") power output of the solar PV modules into the high quality alternating current ("AC") power required by the power grid. Advanced power inverters also optimize the performance of the solar PV modules and maintain the integrity and safety of the interconnection with the power grid.

Sustainable has developed and patented an inverter platform that is the first to enable a high efficiency "parallel" architecture for grid-connected solar PV systems at a cost per watt that the industry is looking for. A parallel architecture increases system yields by reducing the impact of partial shading on total system performance and eliminating mismatch losses from variances in orientation of the PV panels and from normal variances in manufacturing tolerances.

A parallel architecture eliminates the need for complex string calculations and enables much higher penetration of the available rooftop area, thereby expanding the range of sites where solar PV is economic.

Sustainable's inverter technologies are a breakthrough in inverter design and the subject of 9 patents issued by the US Patent Office with further patents pending.

Forward Looking Information

The reader is advised that some of the information herein may constitute forward-looking statements within the meaning assigned by National Instruments 51-102 and other relevant securities legislation. In particular, we include: statements concerning the impact of our technology on solar PV system performance; statements concerning the introduction of next generation products, statements concerning the potential for sales in the markets we have entered and statements concerning the potential for growth of the solar PV market. Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties. Many factors could cause the Company's actual results, performance or achievements, or future events or developments, to differ materially from those expressed or implied by the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to forward-looking information contained herein to reflect events or circumstances that occur after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

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

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