SRP Residential Solar Program

SRP EARTHWISE SOLAR ENERGY PROGRAM TERMS AND CONDITIONS

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This SRP EarthWise Solar Energy Solar Electric Agreement (“Agreement”) is entered into by and between Customer (“Customer”) and Salt River Project Agricultural Improvement and Power District, an agricultural improvement district organized and existing pursuant to the laws of the State of Arizona (“SRP”), sometimes referred to individually as a “Party” and collectively as the “Parties”. The definitions and information included in the SRP EarthWise Solar Energy Solar Electric Application are also incorporated into this agreement. The Parties agree as follows:

GENERAL REQUIREMENTS

1. Customer is a residential SRP account holder and will install the solar electric system (“Generating Facility”) in SRP service territory. For new construction, the Builder is the Customer until sale of the property.

2. Generating Facilities installed before January 1, 2004 are not eligible.

3. Only SRP customers are eligible. Off-grid Generating Facilities are eligible for properties located inside SRP service territory, but which are outside the range of SRP’s electrical distribution system.

4. Customer may elect to have a separate entity (“Third Party”) design, install, own or operate the Generating Facility and satisfy some or all of the terms of this Agreement via separate contractual agreement with the Third Party.

5. Customer shall sign SRP’s current form of the Distribution Interconnection Agreement (“Interconnection Agreement”) and meet all SRP interconnection requirements (as set forth in SRP’s Rules and Regulations, Electrical Service Specifications and Interconnection Guidelines for Distributed Generators) before interconnecting the Generating Facility.

INSTALLATION AND EQUIPMENT REQUIREMENTS

6. Customer must use a licensed contractor to install the Generating Facility. Eligible license classifications include: C-05, L-05, K-05 for vendors or equipment dealers and C-11, L-11, K-11 for installers. To verify a contractor’s license validity, please visit the Arizona Registrar of Contractors at www.azroc.gov. If the vendor subcontracts installation to another company, both the vendor and installer must be licensed. SRP shall not be held liable for any damages or other problems resulting from the Generating Facility or installation to the Generating Facility.

7. Generating Facilities must be permitted and inspected as required by the Authority Having Jurisdiction (AHJ). If the AHJ has elected to not require a permit or inspection for installation or modification to the Generating Facility then the customer and solar installer will have to sign a Certificate in Lieu of Clearance. It is a customer’s responsibility to ensure that all facilities on the customer’s side of the point of delivery for electric service are built and maintained in a safe operating condition. This responsibility includes ensuring that the customer’s electrical facilities comply with all relevant construction codes and safety standards..

8. Customer shall be responsible for the design, installation, construction, operation and maintenance of the Generating Facility in accordance with all manufacturers’ requirements, all applicable codes and laws, and the SRP EarthWise requirements of all governmental agencies having jurisdiction. SRP does not warrant or guarantee the amount of energy, energy savings, or product reliability.

INCENTIVE

9. The EarthWise Solar Energy Incentive (“Incentive”) will only be provided for one Generating Facility per SRP account, up to the Incentive cap.

10. SRP will pay $2.70/watt (based on the watt-DC-STC rating) up to a cap of $13,500 (5 kW-DC) per Generating Facility. The Incentive will be paid after the Customer signs SRP’s current form of the Interconnection Agreement and the Generating Facility passes SRP inspection.

11. An annual spending cap is set for EarthWise Solar Energy Incentives. After this cap is reached, reservations will be taken for next year’s Incentive budget.

12. SRP reserves the right to adjust the EarthWise Solar Energy Incentive level and spending cap for the next year based on participation. SRP wishes to maximize the number of customers who can participate and might reduce the Incentive per Generating Facility if the Incentive budget is quickly reserved for the entire year. This decision will be made before accepting reservations for future years’ Incentive budget. The declining schedule through April 30, 2015 is as follows:

June 1, 2009 – April 30, 2010 – $2.70/watt

May 1, 2010 – April 30, 2011 – $2.55/watt

May 1, 2011 – April 30, 2012 – $2.40/watt

May 1, 2012 – April 30, 2013 – $2.25/watt

May 1, 2013 – April 30, 2014 – $2.10/watt

May 1, 2014 – April 30, 2015 – $1.95/watt

13. SRP is not responsible for any tax liability imposed on Customer as a result of the Incentives under this program.

14. In exchange for the EarthWise Solar Energy Incentive SRP has reserved for and will pay to Customer, Customer shall sell, transfer and deliver to SRP (using the form of Bill of Sale attached as Exhibit A) all Environmental Attributes and Environmental Attribute Reporting Rights, as such terms are defined below, associated with the generation of energy by the Solar System for a period of 25 years. If the Solar System is owned by a Third Party, Customer shall require Third Party to sell, transfer and deliver to SRP (using the form of Bill of Sale attached as Exhibit A) all Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation of energy by the Solar System for a period of 25 years. This provision shall survive the termination of this Agreement and any subsequent sale(s) of the Solar System. “Environmental Attributes” shall mean any and all fuel, emissions, air quality, or other environmental characteristics, including green energy tags, renewable energy credits, or certificates attributable to the metered output generated by the Solar System during the operating life of the Solar System and in which Customer or Third Party operator has property rights or will have property rights upon such attributes coming into existence. “Environmental Attributes Reporting Rights” shall mean all rights to report ownership of the Environmental Attributes to any person or entity under Section 1605(b) of the Energy Policy Act of 1992, any successor or replacement statutes, or otherwise.

15. The Incentive will be reserved after a completed application is received and approved by SRP. Customer has six (6) months to install the Generating Facility from date the Incentive is reserved. After six (6) months, Customer’s reservation of Incentive expires. If Incentive budget is available, and Customer is still planning to install the Generating Facility, a new reservation will be made at the current Incentive rate.

16. For new home construction with planned installation beyond six (6) months, please estimate installation date. An Incentive will be reserved based on Incentive level at time of installation. Incentive will be reserved for up to three (3) months past estimated installation date.

17. Customer must notify the SRP EarthWise Solar department in writing if they elect to cancel their reservation application.

OTHER TERMS AND CONDITIONS

18. Customer agrees to let SRP monitor output of Customer’s Generating Facility to verify energy generation.

19. Customer agrees to let SRP use data from Customer’s Generating Facility in research activities and to publish the data.

20. SRP reserves the right to reject any application that does not meet the terms or conditions of the EarthWise Solar Energy Program, SRP’s Electrical Service Specifications or Interconnection Guidelines for Distributed Generators.

21. This Agreement shall be interpreted, governed by, and construed in accordance with the substantive and procedural laws of the State of Arizona, without regard to conflicts of law principles. SRP and Customer agree that any action, suit, or proceeding arising out of or relating to this Agreement shall be initiated and prosecuted in state or federal court of competent jurisdiction located in Maricopa County, Arizona, and the Parties irrevocably submit to the jurisdiction and venue of such court. To the fullest extent permitted by law, each Party hereby irrevocably waives any and all rights to a trial by jury and covenants and agrees that it will not request a trial by jury with respect to any legal proceeding arising out of or relating to this Agreement.