September 20, 2006

SOLAR LENS COMPARISON

Thin-film PV systems appear to have many advantages over traditional PV systems. However, even if it does ever become perfected, thin-film PV still has many limiting factors consistently inherent to solar power. IAUSís new breakthrough solar technology has potential beyond these limitations. As per request, we have listed out many significant advantages that IAUSís solar power technology has over thin-film PV systems:

Price
Thin-film PV companies have estimated that after they are in production they expect to eventually one day reach an installed price of $3/Watt and hope to possibly one day get to $2/Watt. Keep in mind, however, that they have not yet been able to mass produce these panels at anywhere near these prices, due to obstacles not yet overcome.

What is IAUSís price? As previously announced, IAUS signed a $150 million contract to build a 100 MW solar power plant- an installed price of $1.50/Watt for a large-scale project. Once completed, this first big commercial project will be 50 cents cheaper per Watt than the price experts say is necessary ($2/Watt) for solar to compete with fossil fuels.

Thin-film PV is made up of a copper indium gallium selenide metal compound. While such metals are not quite as rare as gold or silver, they are still vulnerable to price increases from high-volume demand. There are limitations in finding, mining and refining them. As the demand for a less abundant metal goes up, the price tends to go up. While there are arguments from both sides of the fence on this issue, how it will ultimately play out- relative to thin-filmís projected price in high volume- is anybodyís guess at this point. IAUSís technology is made up of abundantly common materials- the higher the volume, the cheaper it gets.

Another cost that needs to be factored in is PV panel replacement. IAUSís lenses have a lifespan of well over 20+ years. Thin-film PV products boast of a similar lifespan. However, how much does it cost to replace the PV system vs. IAUSís lenses? The cost to replace the PV system after 20+ years is virtually 100% of the original cost ($3/Watt), which is literally repurchasing the entire plant all over again. The cost of lens replacement for IAUS is approximately only 10%-15% of the original cost (about only 15 Cents/Watt).

Heat Byproduct
Most importantly, IAUSís technology is a solar thermal product. PV systems are not. Much of the energy from the sun comes in the form of heat. This energy is entirely wasted on thin-film PV systems. The heat byproduct from IAUSís system can be utilized for a list of important uses- various manufacturing processes, methanol production (a gasoline replacement), making drinking water from the air (extremely useful in the southwestern desert states), heat storage or chemical regeneration process for 24/7 solar power electricity, etc. When this heat is put to use, IAUSís solar energy efficiency is improved to more than three times the efficiency of PV systems.

24/7 Operation
PV systems run exclusively on light not heat. Therefore, the only kind of backup system a PV solar setup can have is a battery. Batteries are more expensive than the actual PV system per Watt-hours needed for 24/7 and have a much shorter life-span- approximately 5 years. Because of this, it is not reasonably feasible for any type of PV to economically run 24/7.

IAUSís system runs exclusively on heat. It can come from any source- the sun, biomass (wood, crop waste, garbage, animal waste, etc.), natural gas, coal, etc. Therefore, IAUSís solar power system can be supplemented at night with another heat source at a relatively inexpensive additional cost and have a stable 24/7 power plant.

In the future, the excess heat from IAUSís solar power plant will either be stored in a heat storage device for 24/7 operation, or be used in a chemical regeneration process whereby the chemical used produces heat for electricity production at night and once spent, can be regenerated by the excess heat of the solar plant during the day. So it can be continuously recycled by the wasted heat from the sun. Feasibility tests have already been successfully conducted by IAUS with this chemical. It will not be put into use in this coming year; however, it is a component that can be added to any existing IAUS solar power plant in the future. Any of these add-ons for continuous 24/7 solar power are a fraction of the cost of batteries.

Summary

While there are other advantages to IAUSís solar technology not listed here (e.g. no need for expensive DC to AC inverters), one important differentiator is that IAUS is on track to be in full production with a 200 MW annual production capacity and have a small commercial plant in operation before the end of 2006. In addition, the company expects to ramp up its annual capacity to over 1,000 MW within the first 6-8 months of production. Thin-film PV companies hope to have a prototype production process ready for testing by the end of 2007. Their eventual estimated production line costs are still more expensive ($100s of millions of dollars) for a fraction of the annual capacity of IAUSís.

Disclaimer
Note: Statements contained in this update that are not strictly histori cal are forward-looking within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are made based upon information available to the company at the time, and the company assumes no obligation to update or revise such forward-looking statements. Editors and investors are cautioned that such forward-looking statements invoke risk and uncertainties that may cause the company's actual results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to, demand for the company's product both domestically and abroad, the company's ability to continue to develop its market, general economic conditions, and other factors that may be more fully described in the company's literature and periodic filings with the Securities and Exchange Commission.

Sincerely,
--The Team at International Automated Systems.