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Federal Energy Bill Provides Significant Economic Benefits to Users of Microturbines
Monday August 8, 9:03 am ET
Is Expected to Boost Capstone Microturbine Sales, CEO Says


CHATSWORTH, Calif.--(BUSINESS WIRE)--Aug. 8, 2005--The national energy bill passed by the U.S. Congress July 29 provides significant economic benefits for businesses that invest in clean distributed generation technologies -- including microturbines -- according to John R. Tucker, Chief Executive Officer of Capstone Turbine Corporation® (www.microturbine.com; Nasdaq:CPST - News), the world's leading manufacturer of microturbine energy systems.
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"The bill contains a 10% tax incentive for businesses to buy and conserve energy with microturbine generators," Tucker said. "It also offers users of advanced microturbine energy systems direct payments from the U.S. Department of Energy for every kilowatt-hour they generate. This policy, and others in the energy bill, will create significant additional economic advantages for customers who invest in microturbines, beyond the every day savings and energy reliability inherent in microturbine technology."

Today at Sandia Laboratories in New Mexico, President Bush is expected to sign the bill into law in a room near the offices of the research center's Distributed Energy Technology Laboratory (DETL) where a Capstone C30 microturbine has been operating since 2002.

The company estimates that the return on investment of a typical Southern California installation of its microturbines would be as little as two years, net of applicable state and the new federal incentives. Payback would be about three years without the federal incentives. For microturbine installations in New York, the company estimates that the return on investment of a typical installation would be reduced from 3 years to 28 months, an improvement of 8 months.

"We are very pleased that the federal energy bill specifically recognizes microturbines as an important part of the nation's proposed policy to create cleaner, more fuel efficient energy," Tucker said. "Of all the alternate energy systems addressed by this bill, Capstone MicroTurbines, with nearly 10,000,000 total fleet runtime operating hours, are the lowest cost, most commercially viable technology available to the growing DG market. We expect the many provisions of the new energy policy to have a very positive impact on Capstone MicroTurbine® sales."

"The new energy bill also recognizes that on-site generation with microturbines is highly energy efficient, utilizing up to 80% of the total energy in natural gas, propane, and other fuels, with the added benefit of being able to utilize fuels that otherwise would simply go to waste and increase air pollution, such as landfill biogas and oilfield flare gases," Tucker said. "The environmental advantage is important because our C60 microturbines produce each kilowatt of energy with far fewer pollutants than competing technologies, including utility power plants, when comparing US EPA test reports."

Other aspects of the bill deemed favorable to the sale of microturbines include a 1.5 cent per kilowatt-hour renewable energy production credit for biogas fueled installations, a requirement that electric utilities offer grid interconnection based on a nationwide standard, as well as other incentive programs to accelerate distributed generation and combined heat and power (CHP).

About Capstone Turbine

Capstone Turbine Corporation (www.microturbine.com) (Nasdaq:CPST - News) is the world's leading producer of low-emission microturbine systems. In 1998, Capstone was the first to offer commercial energy products utilizing microturbine technology, the result of more than ten years of focused research. Capstone Turbine has shipped more than 3,000 Capstone MicroTurbine systems to customers worldwide. These award-winning systems have logged more than 9.3 million runtime hours of documented operation. An ISO 9001:2000 certified company, Capstone Turbine is headquartered in the Los Angeles area with sales and/or service centers in New York, Milan and Tokyo.

"Capstone Turbine Corporation" and "Capstone MicroTurbine" are registered trademarks of Capstone Turbine Corporation. All other trademarks mentioned are the property of their respective owners.

This press release contains "forward-looking statements," as that term is used in the federal securities laws, about Capstone's business, with regard to, among other items, expectations of increased business based on proposed legislation. Forward-looking statements may be identified by words such as "expect," "believe" and similar phrases. These statements are subject to numerous assumptions, risks and uncertainties that may cause Capstone's actual results to be materially different. These statements speak only as of the date of this release. Capstone disclaims any obligation to revise these statements hereafter.