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A Sustainable Future: How SunPower is Changing the Way Our World is Powered

Confidential | © 2016 SunPower Corporation

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Sustainability Topics

Corporate Social Responsibility (CSR)

B Corps

Triple Bottom Lines

Environmental Profit & Loss (EP&L) statements

Social Return on Investment (SROI)

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Confidential | © 2016 SunPower Corporation |

CSR- a corporation's initiatives to assess and take responsibility for the company's effects on environmental and social wellbeing. The term generally applies to efforts that go beyond what may be required by regulators or environmental protection groups.

B Corps-  is a private certification issued to for-profit companies by B Lab, a global non-profit organization with offices in the United States,  like getting an organic symbol

EP&L Statement- is a company's monetary valuation and analysis of its environmental impacts including its business operations and its supply chain from cradle-to-gate. An E P&L internalizes externalities and monetizes the cost of business to nature by accounting for the ecosystem services a business depends on to operate in addition to the cost of direct and indirect negative impacts on the environment. The primary purpose of an E P&L is to allow managers and stakeholders to see the magnitude of these impacts and where in the supply chain they occur.

Social Return on Investment-  is a principles-based method for measuring extra-financial value (i.e., environmental and social value not currently reflected in conventional financial accounts) relative to resources invested. It can be used by any entity to evaluate impact on stakeholders, identify ways to improve performance, and enhance the performance of investments.

Assigning Value to Natural Resources (ex: Bee Pollination) things previously thought of as “free”

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Defining Sustainability at SunPower

Sustainability

To meet the needs of today without compromising our future by way of:

Positive social impact

Business and economic growth

Environmental Stewardship

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Confidential | © 2016 SunPower Corporation |

Everyone knows the word sustainability

For many, buzzword

Assume everyone here has deeper understanding

You’ll see this a lot in CSR

Triple Bottom Line: People, planet, and profit

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Environment

People

Business

Our Purpose

We're changing the way our world is powered.

Our Mission

To make solar the most compelling energy choice, to put customers at the heart of all we do, to inspire our people and communities to thrive, and to build a more sustainable future.

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Confidential | © 2016 SunPower Corporation |

Our purpose in itself is environmental---but that’s not enough

So, our mission expressly states the pillars of sustainability---profit (customers), people, and planet

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Our Approach to Sustainability

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A Closed Loop Sustainability Strategy

The circular model of driving sustainable business practices

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Confidential | © 2016 SunPower Corporation |

popular “lifecycle” and “closed-loop circular” models of sustainability.

Used in other companies

These models are largely focused on the environment, but we expand ours to include people at the heart of our strategy. People being customers, communities, and suppliers, and employees

“holistic” sustainability strategy that goes beyond protecting the environment.

Look at each spoke

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Cradle to Cradle Certification

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Confidential | © 2016 SunPower Corporation |

Touching back on materials slide, want to talk more about what Cradle to Cradle means

created by architect William McDonough and chemist Dr. Michael Braungart, rethinking of how we design and define everything---from the smallest car part to the entire idea of transportation

five quality categories — material health, material reutilization, renewable energy and carbon management, water stewardship, and social fairness.

The product contains no substances known or suspected to cause cancer, birth defects, genetic damage, or reproductive harm after at least 95% assessment of the product

For the final manufacturing stage of the product, 5% of purchased electricity is renewably sourced or offset with renewable energy projects, and 5% of direct on-site emissions are offset.

Gold in water stewardship and material reutilization—silver in the others

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Sourcing

Socially equitable and environmentally vigilant suppliers.

Impose supplier environmental standards

Support supplier diversity

Enforce supplier labor standards

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suppliers owned by women, minorities, or veterans, as well as small and local businesses

How? Work with trade associations and databases

requires direct suppliers to ensure that they do not engage in any form of human trafficking and slavery.

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Materials

Support the use of “conflict free” materials

Eliminate materials of concern

Smarter material choices means no hazardous waste handling at end-of-life

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Confidential | © 2016 SunPower Corporation |

Making smarter choices about the materials we use…and don’t use.

Extremely important to SunPower, as a manufacturer with commitment to sustainability

Avoid use of Conflict Minerals which directly or indirectly finance or benefit armed groups in the DRC or adjoining countries. tin, gold and tungsten. cadmium chloride or cadmium chemicals, found in some solar panels.

Along with avoiding conflict materials, designed out heavy metals for health of people and environments. Third-party tests show no significant levels of toxic compounds like lead, silver, and cadmium.

As a result, removal, reuse, or recycling of SunPower panels does not require hazardous waste handling procedures under both US federal and California regulations, reducing end of life panel disposal costs by up to 80%.1

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Manufacturing

Philosophy: design out/reduce waste

Conserve water in manufacturing, installation and operation

Zero Waste to Landfill & LEED certified

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Confidential | © 2016 SunPower Corporation |

Our approach is to see waste as a design challenge.

Conserve water in manufacturing, installation and operation---example of each

The High Efficiency Reverse Osmosis (HERO™) system at both Fab 2 and 3 saves 450 million gallons of fresh water per year. Calculations are correct, that’s about a week of water in San Francisco---which is a lot for one company.

The SunPower Robotic Cleaning System uses 75% less water than traditional cleaning systems.

SunPower’s largest solar panel assembly site in Mexicali, Mexico, is its first to achieve zero waste to landfill. Saving money again-It lowered its waste disposal costs by over 50% in the first year, cut water consumption by over 50% and 44% of its energy comes from renewable sources. Mexicali is a model for the company’s other assembly sites, which are on track to achieve the same result--- such as our France manufacturer

We received Leadership in Energy and Environmental Design (LEED) Certifications for our San Jose headquarters, Fab 2 Cell Manufacturing Plant and our Fab 3 AUO SunPower administration building.

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Distribution

Smart logistics and packaging

Logistics CO2 footprint

Local sourcing of heavy materials

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Confidential | © 2016 SunPower Corporation |

We currently have more than 60 ongoing projects that reduce our CO2 emissions, including smart commuting initiatives in Malaysia and the Philippines, and improved logistics carbon tracking worldwide.

“Local Modco” strategy sources heavy materials like glass from regional suppliers.

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Product Use

Solar is a smart choice for business and a smart choice for the environment.

Energy payback

Light on Land™ installation principles

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Confidential | © 2016 SunPower Corporation |

The Energy Payback Time is another way to measure environmental impact. It’s the amount of time that the solar panel takes before it’s generated all the energy that it took to make that same panel. Only after that amount of energy is “paid back” is the solar panel contributing to a reduction in green-house gasses.

The Energy Payback for the high efficiency SunPower panels is uniquely short – 0.8 years for an Oasis system–twice as fast as conventional times.

Light on Land

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Light on Land™: An Integrated Approach

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© 2015 SunPower Corporation |

we need roughly 30 percent less land to generate the same amount of power as a conventional system.

We have established an effective approach that minimizes our footprint in ground mounted installations, our disturbances to land, natural resources, and communities.

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1 Silicon based technology with 16.9% panel efficiency , 1.0% annual degradation rate

2 Thin-film based on CadTel technology with 13.9% panel efficiency, 0.5% annual degradation rate

100 MWp 170 Hectares

100 MWp 202 Hectares

100 MW 246 Hectares

Oasis C1: Best Energy Density

Sample 100 MW project with similar 1-axis trackers for each panel type, 0.35 GCR

SunPower Conventional1 Thin Film2

13.9 %

20.1%

16,9%

Panel efficiency range

© 2015 SunPower Corporation |

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As often in SunPower, one of the first advantages comes from our superior product

Greatest power density per hectare of land

Require less land, concrete, steel and cabling per megawatt than competing ground systems

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SunPower® Trackers require less concrete, less excavation

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Foundations Special tooling can be used to drive piers into non-rocky soils – no concrete required

© 2015 SunPower Corporation |

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Preference for disturbed lands

Promote stewardship/conserve biodiveristy

Deploy in a minimally invasive manner: minimal grading, install on tilted lands,

Engage constructively with environmental stakeholders through responsible dialogue

Inspire each team member to exceed environmental regulations

Conduct natural resources monitoring before, during and after construction.

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Light on Land™ Siting Strategy

© 2015 SunPower Corporation |

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Photo: RPU Landfill in Riverside

Preference for sites on already disturbed lands – integrate landscape-level conservation planning in siting decisions.

Reduce adverse environmental impacts: avoid protected species habitat and wetlands, promote stewardship of, and conserve the biodiversity at the site and within the region

Deploy in a minimally invasive manner: minimal grading, install on tilted lands,

Engage constructively during the regulatory process as well as with environmental stakeholders through honest, respectful, and responsible dialogue

Meet or exceed applicable environmental laws and instill in every team member the responsibility to do so

Conduct natural resources monitoring before, during and after construction.

4/24/18

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© 2015 SunPower Corporation |

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CVSR was designed to place arrays on remediated gypsum mine and slopes up to 10% areas to avoid critical habitat for endangered species - California

Respect Natural Contours

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© 2015 SunPower Corporation |

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Sheep Grazing in North Carolina

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© 2015 SunPower Corporation |

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Photo: SunPower projects in North Carolina

Sheep grazing is SunPower’s lowest cost form of vegetation management

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Dual Use applications

Sheeps

Cattle, Buffalos

Chickens

Covered Parking Lots

Urban trellis

Canopies

Open fields

Green Houses

Nurseries

Animal Grazing

Farmland

Other

Brownfield

Disturbed Lands

Landfills

Industrial areas

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© 2015 SunPower Corporation |

There’s a lot of creativity to be had with dual use for solar

Animal grazing: doing a case study with a farmer in Pennsylvania STORY talk about cowports

Solar farming increases soil moisture retention and can be used to gather water for irrigation.

Many crops prefer misters from overhead for irrigation, but the infrastructure is cost prohibitive, The eTracker provides the infrastructure

Many specialty and high end crops are dependent on more regulated temperatures provided by shade cloths and other structures

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Respect Native Flora and Wildlife

Project sites retain native vegetation to allow species foraging and nesting

Wildlife Friendly Fencing allows larger openings at ground level for free passage of small mammals

Endangered San Joaquin Kit Fox among wildflowers at the CVSR site.

Photos: SunPower projects in San Luis Obispo, California

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© 2015 SunPower Corporation |

Went to an array out in the middle of farmland and grassland in Yolo county, it was like Snow White, as soon as we got there, there were bunnies, birds, and squirrels bounding away in every direction

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229 precincts avoided

225 giant kangaroo rats successfully relocated

Protected local animal species Each affected precinct was thoroughly inspected to find the occupant or confirm the precinct was empty

© 2015 SunPower Corporation |

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© 2015 SunPower Corporation |

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Protected local animal species San Joaquin Kit Fox pups under the arrays

8 new natal dens detected on the CVSR site in 2015 and in onsite conservation lands

Uses only .25L of water per panel cleaned

1) Note: Based on experience with robotic cleaning at actual SunPower sites, compared to data tracked by subcontracted manual cleaners utilized at a SunPower project.

compared to competitive solutions1

Water Usage

75% less water

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SunPower offers a faster, more resource-efficient robotic cleaning solution

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With a SunPowerTM OasisTM power plant, you have the option to have a dedicated robot fleet to help mitigate the impact of soiling in a way that traditional manual cleaners cannot. For example:

Robots use just .25L of water to clean each panel, saving 75% over traditional manual cleaners and mitigating one of the biggest operational challenges of high-soiling areas (i.e. deserts) – water scarcity.

Robots use far less labor, and as such are far cheaper to operate

We clean FAST – 10x faster than traditional manual cleaners.

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Recycling

Responsibility for our products throughout their lifecycle:

Worldwide recycling program

Founding Member of PV CYCLE

Member of the Circular Economy 100

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Confidential | © 2016 SunPower Corporation |

SunPower wants to ensure our products are returned to SunPower for proper handling, reuse and recycling. Background: SunPower solar panel systems are covered under warranty for 25 years; under normal use, our products are expected to exceed their warranty period and perform for another 15 years, bringing their expected usable life to 40 years in total. Given the high reliability and low degradation rate of our products, we want to reuse our products as much as possible to produce clean energy for our users for as long as possible.

Use a panel---it’s been 30 or 35 years, or a building is being torn down, or you want to upgrade

Offer reuse and recycling options for our products---cover costs for deinstallation, collection, reuse and recycling for all purchased and leased systems under the warranty period.

founder of PV Cycle, the first voluntary solar panel take-back and recycling program in Europe

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PV Cycle

Founding Member of PV Cycle:

Non-profit member based org

Collection and recycling services

PV take-back and recycling systems for all EU markets

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Confidential | © 2016 SunPower Corporation |

A non-profit, member-based organization, PV CYCLE offers collective and tailor-made waste management and legal compliance services for companies and waste holders around the world.

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Removable System

Recyclable Components

Reusable, non-toxic high-efficiency modules for secondary markets

Soils Enhanced

Re-vegetate sites with native plants

End of Life Strategy

© 2015 SunPower Corporation |

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Communities

Empowering through education and providing energy to those in need:

Educating students and teachers about the power of solar

Powering classrooms in Africa

Bringing light and employment in Philippines

Providing solar power to those in need in US

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In the business of social justice in energy

Grid Alternatives

For low income households (less than $20K per year), energy costs as a percentage of income are twice that of more affluent households, 6 percent vs. 3 percent. Because of this, we partner with GRID Alternatives to provide solar energy to those in need, helping to significantly reduce their monthly electivity bill.

VTO

Greenteam- meetings monthly

TIDE

Solar suitcases to Puerto Rico

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SunPower 3S

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Community is not just in the US but also in the phillipines where SunPower 3S program was deloyed

Modular solar station is deployed to an area where access to energy is extremely limited or nonexistent---where even candles are too expensive

Provides low cost solar lantern rentals—during day, lanterns are returned to recharge

Local people, mostly mothers, run the stations---providing employment and job training

Profit pays back the cost of the entire system, eventually turning it over to the community

Smokey Mountain, landfill site in Phillipines, where people earn their livelihood through scavenging

Received a Patents from Humanity Award in 2015

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JOB FAIRS

SOLAR INSTALLATIONS WITH GRID ALTERNATIVES

FOOD DRIVES

SOLIDARITY RUNS

Some examples of our commitment

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Technology as sustainable as the energy it produces

Recognized by leading certifications and institutions for exceptional sustainability efforts

First and only solar company with Cradle to Cradle Certified™ Silver designation Panels manufactured in Mexico and France

Only solar company recognized as one of Green Builder’s 2015 Eco-Leaders

Patents for Humanity — Recognizing the use of patented technology for social good

World’s first and only solar company to be part of the Circular Economy 100 Creating a truly regenerative economy

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Confidential | © 2016 SunPower Corporation |

Coalition of businesses, governments, and educational institutions committed to accelerate the transition to a circular economy--one that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times

167 silver certified

voluntary prize competition for patent owners and licensees run by the US Patent and Trademark Office.  The pilot program encourages businesses of all kinds to apply their patented technology to addressing the world's humanitarian challenges.  As an incentive, winners will receive a certificate for expedited processing of certain matters before the USPTO.

Too often, companies pay lip service to sustainability. Our Eco-Leaders are walking the walk. Green Builder's 2015 Eco-Leaders are confronting environmental challenges and reimagining their products, manufacturing processes and their relationships with suppliers and communities in which they have a presence.

9 winners, among them are LG Electronics and Ford

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Technology as sustainable as the energy it produces

Recognized by leading certifications and institutions for exceptional sustainability efforts

Earned solar’s first and only landfill-free verification from NSF Sustainability Mexicali, Mexico facility

Guardian Award for Sustainable Business Practices Recognizing innovation in sustainable business practices

Earned #1 ranking and highest score ever by Silicon Valley Toxics Coalition’s 2015 Solar Scorecard

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Confidential | © 2016 SunPower Corporation |

Solar scorecard rates the sustainability of solar companies across many categories, and SP scored 97%---leader of 2015, highest ever, and “Sunny” Across 10 categories whereas only 2 categories were “partly cloudy”

Innovation in the net positive category. Net positive category winners were chosen based on beneficial environmental and social impacts made in key areas of operations which go beyond business-as-usual. SunPower shares the net positive category with impact award winner, IKEA 

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© 2016 SunPower Corporation. All Rights Reserved. SUNPOWER and the SUNPOWER logo are registered trademarks of SunPower Corporation in the U.S. and other countries. All other trademarks are properties of their respective owners.

Thank You

Let’s change the way our world is powered.

Confidential | © 2016 SunPower Corporation

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