Sustainable Energy Technologies Ltd.

Sustainable Energy Technologies Ltd.

January 29, 2008 10:59 ET

Sustainable Energy Technologies: September 30, 2007- Year End Results- Corporate Update

CALGARY, ALBERTA--(Marketwire - Jan. 29, 2008) - Sustainable Energy Technologies Ltd. (TSX VENTURE:STG), yesterday reported its financial and operating results for the year ending September 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 ( and at the Company's website ( under Investor/Financials/Fiscal 2007.


- 2007 revenues of $2,004,263 up from $157,869 in 2006

- Successful product launch in Spain results in new marketing partnerships in Spain and Greece

- Production capacity for 400 units per month established with reduced manufacturing costs

- Continued growth in solar PV as new production capacity and new technologies bring down PV module costs

- Markets changing in Sustainable's favor as European policy changes favor industrial rooftop solar and building integrated PV

- European "SELV" designation eliminates need for high voltage protection devices and specialized technicians

- Parallel array delivers design flexibility and up to 10% better performance for building integrated PV

- Technology offers solutions for solar concentrator performance issues; trials planned with major Spanish industrial company

- 2008 will see expanded product line and partnerships for complete product solutions

Financial Overview

Revenues for the year were $2,004,263 up from $157,869 for the same period last year.

Product sales of $1,912,900 were primarily to a large 5+MW solar tracker project and reflect aggressive pricing as well as selling concessions granted to secure the project as a reference for future sales. A rising Canadian dollar also contributed to a lower sales value. The Company realized a small loss on the product launch of $223,209, due mainly to the amortization of higher cost components acquired in smaller volumes, and a write down of inventory costs due to changes in the European regulatory environment. The Company's current landed cost in Europe will support very respectable industry margins.

Notwithstanding the loss, the product launch was successful. The project developer is pleased with the performance of the inverters and the Company has since signed a memorandum of understanding with them to collaborate on other opportunities in Spain. Effective October 1, 2007, the Company also entered into a marketing partnership with one of Greece's largest project developers. Although the Greek market has been delayed due to an imbalance of applications for capital grants from the government, this is expected to be resolved in the coming weeks.

The project also enabled the Company to establish a continuous flow of production and to bring down its manufactured costs. With new equity raised in May, Sustainable increased its commitment to 200 units per month with total production capacity of 400 units per month. The additional working capital also enabled Sustainable to increase resources devoted to distribution and marketing in Europe.

Overall the Company sustained an operating loss (before interest and depreciation) of $3,193,782 up $1,099,673 from $2,094,109 in 2006. The increased loss reflects the loss sustained on the Sunergy product launch of $223,209, an increase in marketing costs of $411,603, and an increase in general and administrative expense of $277,819.

Working capital as of September 30 2007 was $5,809,342, at September 30, 2007 vs. $1,579,669 at September 30, 2006. Cash and short term investments totaled $4,724,487 at September 30, 2007 compared to $752,417 September 30, 2006. Component and finished product inventory was $1,500,000 at September 30, 2007, by comparison to $1,156,558 at September 30 2006. The monthly burn rate (excluding costs to build and deliver product inventory) is currently approximately $200,000 per month.

Market Outlook

The outlook for Sustainable is very positive.

Every indication is that growth in demand for solar PV will continue at very rapid pace. Declining module prices (modules are about 80% of the cost of the system) will mean more demand and more growth in installations. Many of the new technologies are very well suited to the Company's low voltage inverter and offer it an opportunity to differentiate its product from the competition.

Although there are new competitors, most new inverter products continue to use the same open domain technology with comparatively high operating voltages. In the current large project environment larger "central" inverters are very competitive in terms of lower nominal costs per watt of installed capacity and the Company must compete on "softer" performance issues. To address this, the Company has been marketing to large project owners and one of Spain's largest industrial companies will begin testing the SUNERGY inverter for its tracker and solar concentrator projects. It has also acquired distribution rights to line of central inverters.

The market is changing in Sustainable's favour as governments begin to bias feed-in tariffs towards building based systems. In Spain, the government will reduce the feed in tariff for large projects by 25% effective September 30, 2008, while at the same time maintaining the higher prices for building integrated systems. Germany already biases its incentives towards building based systems and France, a latecomer to solar PV, has recently legislated premium pricing for building integrated PV but none for land based projects. Most believe that this will significantly accelerate the development of an industrial rooftop market.

In this application, Sustainable's patented technology offers distinct alternatives to conventional solar inverters:

- Unlike conventional solar inverters, the Company's technology brings solar arrays under the European SELV (for "safety; extra low voltage") regulatory threshold, eliminating the need for high voltage protection devices, and allowing anyone to install and maintain the system. SELV leads to prepackaged solutions for distribution through conventional building supply channels.

- The lower operating voltage of the Company's inverter enables solar modules to be arranged in parallel without compromising efficiencies where there is the potential for partial shading during the day or where the PV modules cannot be arranged with precisely the same angle or orientation to the sun. The Company believes that the performance advantage ranges from 3% to 10% depending on the application.

The emergence of solar concentrator ("CPV") technologies may offer a special opportunity for the Company. Many believe that solar concentrators ("CPV") are potentially disruptive technologies because they radically reduce the use of expensive silicon giving them a fundamentally different cost structure than conventional silicon based solar PV cells. But CPV systems have performance issues which are best addressed with a parallel alignment of CPV modules. The Company's technology also has the very fast control response time needed to track sudden changes in power output experienced by CPV systems while maintaining the gird interconnection.

Sustainable has several trials planned for the next few months to demonstrate and quantify the value of these advantages.

2008 Priorities

Sustainable's priorities over the next 12 months are:

- To expand the SUNERGY product line with a wider range of power ratings focusing on the outdoor solar project markets.

- To increase product sales revenues in Southern European markets though expansion of distribution relationships and through private labeling relationships.

- To position the Company's technology in the industrial rooftop market and for the emerging building integrated market

- To demonstrate the value of the Company's technologies for the emerging thin film, especially for building integrated applications and for emerging CPV technologies.

About Sustainable Energy: Based in Calgary Alberta, Canada, Sustainable Energy ( designs, manufactures and distributes 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. We have successfully developed products for stationary fuel cells, small wind turbines and solar photovoltaic ("solar PV") systems. Our inverters are based on patented and proprietary technologies which have unique value for alternative and renewable energy systems.

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.

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