BEACON EQUITY RESEARCH

Analyst: Victor Sula, Ph.D.

Initial Report
June 23rd, 2008

WNEA daily 6/19/2008

1.5

1.4

1.3

1.2

1.1

1.0
Wind Energy America Inc.
12100 Singletree Lane 0.9
Eden Prairie, MN 55344
volume
400
Phone: (952) 746-1313

Thousands
300
Fax: (952) 746-1201
Web site: www.windenergyamerica.com 200

100

0
April May June

Market Data Company Introduction

Wind Energy America Inc. (OTCBB: WNEA) develops and operates wind en-
Symbol WNEA ergy projects in the Great Plains and the Midwest, regions known for their
Exchanges OTC BB
high quality wind energy resources. The Company owns interests in three
Current Price $1.23
Price Target $2.98 wind farms: Shaokatan Hills LLC, Lakota Ridge LLC and CHI Energy. At
Rating Speculative Buy present, WNEA owns a developer’s stake and a minimal interest producing
Outstanding Shares 49.51 Million negligible cash flow in these wind farms. Over the next two years the devel-
Market Cap. $60.89 Million oper’s stake will begin producing significant cash flow from these projects.
Average 3-m Volume 2,200 The three wind farms together contain 79 modern wind turbines and have a
total rated capacity of 53.5 megawatts (MW). They are collectively generat-
ing approximately 160 million kilowatt hours (kWh) of electricity annually. In
Source: Yahoo Finance, Analyst estimates
addition to these properties, the Company owns a 3 percent equity interest
in Averill Wind LLC, a 10 MW wind farm being developed near Fargo, N.D.,
another region favorable for wind power energy.

During 2008, WNEA acquired wind power assets owned by Boreal Energy
Inc. which include property and development rights to numerous wind farm
projects in the upper Midwest and Great Plains, including Iowa, Minnesota,
North and South Dakota, Montana, Wisconsin and southern Ontario, Cana-
da. Through this acquisition, WNEA gained ownership interests in develop-
ment stage wind energy projects representing approximately 1,200 MW of
additional generating capacity. These projects are located in areas of North
America well-suited for wind turbine installations.
 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Investment Highlights

Robust demand for wind energy 1

The U.S. Department of Energy predicts 71 percent growth in world energy consumption between 2005 and
2030. High oil prices and concerns regarding greenhouse gas emissions have created strong interest in clean
energy. Wind power is one of the least expensive, most easily deployed energy sources. According to the Global
Wind Energy Council, cumulative capacity of wind energy installations will reach 149.5 GW by the end of this
decade, more than double present installed capacity. According to Clean Edge research, the wind energy market
will grow from $11.8 billion in 2005 to $51.1 billion by 2015.

Tax incentives encourage wind energy deployment

Federal authorities are encouraging new wind energy installations through a 2 cent per kWh Production Tax
Credit (PTC) on electricity generated from renewable energy resources, including wind, biomass, geothermal
and hydropower.2 The PTC system was renewed in 2007 and again in April 2008 when the U.S. Senate over-
whelmingly approved an amendment to the Clean Energy Stimulus Act providing for a one-year extension of
the Production Tax Credit. The credit can be claimed for 10 years.

Business model based on promising wind energy projects

WNEA is building a large portfolio of wind farm assets in areas known to have favorable wind conditions,
demand for renewable energy generation capacity, the political will to support wind energy development, and
existing or anticipated attractive pricing for wind energy. The Company is concentrating its wind energy asset
acquisition and development efforts in North America’s upper Great Plains and Midwest and has projects in
Minnesota, Iowa and the Dakotas.

Installed wind energy capacity exceeding 120 MW

The Company’s wind farms, Shaokatan Hills, Lakota Ridge and CHI Energy, in Buffalo Ridge, Minn., contain
79 modern Vestas and Micon wind turbines representing a rated capacity of 53.5 MW. These farms collectively
produce 165 million kWh of electricity annually. In 2010, WNEA’s ownership interest in Lakota Ridge and Shao-
katan increases to 80 percent; its interest in CHI Energy rises to 30 percent for five years before increasing to 49
percent.

The Company is also developing the 10 MW Averill project, scheduled for completion and generation of electric-
ity in the first half of 2008. This project is located in Minnesota near Fargo/Moorhead, N.D.

In February 2008, the Company acquired significant wind energy assets from Boreal Energy, including approxi-
mately 40MW of wind energy projects in various pre-construction stages of development.

Boreal Energy acquisition provides WNEA with 1,200 MW project pipeline

1 http://www.cleanedge.com/reports-trends2006.php
2 www.bbwindpartners.com/bbw-industry-overview/bbw-regulatory-overview.aspx

Wind Energy America Inc. (OTCBB: WNEA) 2

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

As a result of the Boreal Energy acquisition, WNEA’s asset base has expanded to include:

1) Development rights to numerous wind farm projects in the upper Midwest and Great Plains regions,
including Iowa, Minnesota, North and South Dakota, Montana, Wisconsin and southern Ontario, Canada;

2) rights to an extensive 1,200 MW pipeline of wind energy projects in development; and

3) 15 percent economic interest in Navitas Energy Inc., a Minneapolis-based wind farm developer that is
majority-owned by Gamesa SA, one of the world’s largest manufacturers of wind turbines.

Near-term revenues result from capacity expansion program

The Company plans to expand generating capacity of its acquired Boreal Energy assets by an additional 280
MW and achieve a total installed capacity of 400 MW over the next four years. Based on current wind energy
prices, this should allow the Company to reach $80 million in sales by fiscal year-end 2012. On $80 million in
sales, annual income could exceed $40 million to $45 million. To achieve its targeted capacity expansion, WNEA
estimates it must raise approximately $69 million in external funding.

Wind Energy America Inc. (OTCBB: WNEA) 3

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Business Model

The Company develops and operates wind energy assets. At present, WNEA owns interests in three wind farms
in Buffalo Bridge, Minn., (Shaokatan Hills, Lakota Ridge and CHI Energy) which are owned by LLCs. In 2010,
the Company’s ownership interest in Lakota Ridge and Shaokatan Hills increases to 80 percent and its stake in
CHI Energy increases to 30 percent. These wind farms contain 79 Vestas and Micon wind turbines and have a
rated capacity of 53.5 MW. In recent years, these projects have collectively produced approximately 165 million
kWh of electricity annually.

The Company is also developing the Averill project. The 10 MW Averill project is in late development stage and
is expected to come online in 2008. The project is expected to generate a 17 percent annual return.

In February 2008, WNEA acquired other wind energy assets from Boreal Energy which include:

• A 15 percent equity interest in Navitas Energy Inc., a Minneapolis-based wind farm developer. Navitas
is majority-owned by Gamesa SA, a leading global wind turbine manufacturer. Gamesa holds a 15 percent share
of the world wind turbine market.

• Development rights to multiple wind farm projects in the upper Midwest and Great Plains and an exten-
sive 1,200 MW pipeline of wind energy projects in development.

WNEA will generate revenues from the sale of electricity and from federal Production Tax Credits, which pro-
vide a 2 cent per kWh tax credit on electricity generated from renewable sources for 10 years.

Corporate strategy

The Company’s business strategy focuses on building a diversified portfolio of wind farm assets, while gener-
ating cash flow that can be used to construct or acquire new capacity. WNEA focuses on U.S. markets known
for favorable wind conditions, increasing demand for renewable energy generation capacity, the political will
to support wind energy development, and existing or expected attractive wind energy pricing. The Company
plans to diversify geographically so as to limit its exposure to risks associated with local weather conditions and
regulations. At present, WNEA is concentrating its acquisition and development activities in the upper Great
Plains and Midwest, including Minnesota, Iowa and the Dakotas.

The Company acquires and/or develops wind farms based on the following criteria:

- Superior wind resources to justify a commercial wind energy facility;

- Availability and access to transmission grid;
- Permitting and zoning policies that allow wind farm development;
- Satisfactory environmental and archaeological studies;
- Satisfactory terrain and geographic features;
- Regional support of renewable energy;
- Local politics promote the wind power development;
- Growing demand for electricity;
- Adequate incentives at the federal and state levels; and
- Attractive electricity prices.

Wind Energy America Inc. (OTCBB: WNEA) 4

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Over the next 12 months, the Company’s primary focus will be completing the development of wind farm proj-
ects acquired from Boreal Energy. WNEA employs its own consultants as well as third-party consultants who
are experienced in assessing wind resources and completing wind farm projects. The Company also plans to
establish close partnerships with local outsourcing partners who can assist WNEA in accessing wind energy
project opportunities and who provide good quality technical, engineering and construction resources.

Wind Energy Projects

The Company owns interests in the following projects:

Shaokatan Hills

Shaokatan Hills is a wind farm located in Buffalo Ridge, Minn. It

was originally built by Northern Alternative Energy Inc. and put
in service in June, 1999. The wind farm consists of 18 modern wind
turbines on 1,000 acres, having a total rated capacity of 11.88 MW.

The Company purchased the developer’s stake in this farm in April

2007.

Lakota Ridge

Lakota Ridge is a wind farm located north and adjacent to Shaoka-

tan Hills. It was built by Northern Alternative Energy Inc. and put
in service in June, 1999. Lakota Ridge has 15 modern wind turbines
on 640 acres and has a total rated capacity of 11.25 MW.

Wind Energy America Inc. (OTCBB: WNEA) 5

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

The Company purchased the developer’s stake in this farm in April 2007.

In recent years, the Shaokatan Hills/Lakota Ridge wind farms have generated electricity at an average annual
rate of 70 million kWh. The LLCs that operate the farms lease the land on which the turbines and transmission
facilities are built. The Shaokatan Hills and Lakota Ridge wind farms use approximately 2 percent of the land
area; the remaining land area is leased for agricultural use until 2013.

CHI Energy

This operation consists of 16 separate wind farms which are managed and maintained collectively and are locat-
ed near Shaokatan Hills/Lakota Ridge. The farms collectively contain 46 modern wind turbines (Vestas turbines
rated 660 kW) representing a total rated capacity of 30.36 MW. In recent years, these wind farms have generated
electricity at an average annual rate of 93 million kWh. Northern Alternative Energy Inc. developed CHI Energy
in the late 1990s and began operating these assets in 2000.

WNEA purchased the developers stake in CHI Energy in December 2007.

Averill project

expected to come online in 2008. Three turbines owned by CHI Energy

are located on-site. The area where Averill is sited is a particularly fa-
vorable region for wind power. Wind data for the site, derived from
the performance of existing adjacent turbines over a six-year period,
suggests returns on this project exceeding 17 percent annually.

WNEA purchased a 3 percent equity stake in Averill Wind LLC in Feb-

ruary 2007.

Gamesa

WNEA has an option to purchase the Gamesa project, located adjacent to the CHI Energy development. The
project consists of 2 Gamesa 850 KW turbines and has a total rated capacity of 1.7 MW. The project is owned by
NAE Shaokatan Power Purchasers LLC and commenced operations in May 2003. Federal Production Tax Cred-
its, as well as a state subsidy, extend through April 2013. The LLC leases the land where the turbines are located
and has a 30-year-lease term.

Boreal Energy assets

two turbine expansion, increasing total capacity to 9.86 MW. Project returns are forecast to exceed 18 percent
annually.

Gascoyne, North Dakota

The first 20 MW stage of the Gascoyne project is ready for construction. This project is expected to produce annual

Wind Energy America Inc. (OTCBB: WNEA) 6

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

returns exceeding 22 percent. Boreal Energy is also in the final stages of negotiating a 300 MW project expansion
with its North Dakota partner, Crownbutte Wind Power LLC.

Ontario, Canada

Boreal Energy owns options on development sites in Ontario, Canada. Initially, two 9.5 MW wind farms are
planned. Boreal Energy has also identified five suitable sites for 10 MW farms and believes there is the potential
for an additional 200+MW of generating capacity in Ontario under the standard offer program. Expected annual
returns on the Ontario projects are 18 percent.

Navitas Energy Inc.

The acquired Boreal Energy assets also include an economic interest in 3.8 million shares of common stock
(15 percent equity interest) in Navitas Energy Inc., a Minneapolis-based wind farm developer that is majority-
owned by Gamesa, a large Spanish wind turbine manufacturer. Boreal Energy is negotiating the sale of the stock
back to Navitas in exchange for wind turbines and other wind farm assets and projects. WNEA has agreed to
pay 10 million shares of its common stock for the assets Boreal Energy receives from this stock sale.

Ongoing development pipeline

In addition to the above-mentioned projects, Boreal Energy has a pipeline of development projects representing
around 1,200 MW of additional capacity. These projects are at various stages of development, have validated
wind speeds, and existing or planned transmission potential. The geographic breakdown of the pipeline projects
is: 300 MW in North Dakota; 200 MW in South Dakota; 200 MW in Ontario, Canada; 200 MW in Wisconsin; and
300 MW in western Minnesota.

Wind Farm Development Process

The development of a wind farm involves five distinct stages, though most stages overlap in the creation of
larger wind farms. The costs involved increase at every step, along with the probability of success and the value
of the wind farm development asset.

Initial prospecting and opportunity analysis

A wind farm developer can log on to many countries’ national wind resource sites (such as the National Renewable
Energy Laboratory in the United States) and use wind resource maps to assess a proposed site or identify a new
greenfield site. From these, a developer can overlay contour maps to find areas of elevation (or large plains) and
existing transmission networks (as well as planned transmission lines or line upgrades). Potential sites can then be
analyzed in greater depth using satellite imagery to assess transportation infrastructure, and the location of struc-
tures and trees that may affect the wind flow.

Wind Energy America Inc. (OTCBB: WNEA) 7

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Once initial prospecting is completed, the developer will then analyze the project’s economic potential. If the
project surpasses a minimum return threshold, the developer will fund a wind study using a meteorological
tower. A wind study measures wind speed, direction, variability and turbulence and is usually performed over
an 18-to-24-month period. A meteorological tower typically costs $10,000 to $15,000 and additional costs can be
incurred for renting the land and for data recovery and analysis.

Project development

After an economically viable site has been selected and wind speeds validated, the next step is to plan the specific
development. This entails legal documentation and processes. The majority of costs incurred at this stage relate to
the developer’s time and cost of legal services. These steps include:

 evaluating land ownership and negotiating leases and sales;

 incorporating the wind farm as a separate limited liability company or partnership;
 obtaining permitting (environmental and local);
 negotiating grid interconnections;
 negotiating off-take agreements;
 ascertaining financing structure and obtaining funding; and
 negotiating turbine and balance of plant delivery contracts.

Project design

The next step is to design the site and make it ready for construction. This includes building access roads and foun-
dations and designing intra-farm transmission and interconnection grids. These services are usually performed by
specialist construction and electrical engineering companies.

Construction and commissioning

Construction of a typical 10-to-20 MW wind farm consists of site preparation, turbine installation and intercon-
nection. This is a relatively simple process often performed by specialists, but easily learnt by general construction
teams. A small wind farm can generally be built in six months. However, larger turbine farms typically require the
services of specialist crane and construction teams and can involve long lead times.

After the farm has been constructed, all turbines and electrical systems must be rigorously tested before final ap-
proval is given to begin generating electricity and feeding into a transmission network.

Operations and maintenance

Turbines are generally sold with a five-year guarantee and a maintenance contract. Maintenance contracts vary sig-
nificantly in price and can range from $8,000/MW (direct drive designs) to $14,000/MW (traditional geared designs).
In terms of maintenance, the key components that require regular service are the hydraulic systems (used for cooling
and yaw movement), lubrication systems and the gearbox.

All modern turbines incorporate remote monitoring, optimisation and management systems. These tools allow
wind farm operators to maximize operating efficiency by remotely diagnosing problems, throttling power output

Wind Energy America Inc. (OTCBB: WNEA) 8

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

(large utilities) and remotely locking down turbines in case of extreme weather conditions.

Value creation during development process

The chart below provides a rough guide to the time required for each development step and the value created at
each stage (excluding construction and turbine costs which currently range around $1.3 million to $1.6 million per
MW.)

Times of Each Development Step

12 – 24 mo 12 – 18 mo 20 + years

Opportunity Project Design Construction & Operations &

Analysis Development Commissioning Maintenance

Wind Study Site Selection & Site Design Site Work Actively Managing
Leases
Transmission & Interconnect Turbine Installation Warranty/Contract
Interconnect Permitting Design Support
Substation/Inter-
Project Economics Interconnect Installation Design connect Construc- Ongoing
tion Monitoring &
Scalability Finance & RFQ & Quote Optimization
Revenue Testing, Approval
Contracts & Startup
Turbine/BOP
Contracts

$15k - $25k / MW $50k - $100k / MW $200k - $300k / MW

Source: Boreal Energy

Wind Energy America Inc. (OTCBB: WNEA) 9

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Industry Outlook

Wind energy is the fastest-growing segment of the $650 billion annual worldwide electricity market. For the past
10 years, the global wind energy market has been growing nearly 30 percent annually. According to the 2007
Global Wind Energy Council (GWEC) annual report, wind farms now produce 94,123 MW of power worldwide,
up 3 percent from 2006. That’s enough electricity to power 28.5 million homes. GWEC is also forecasting 155
percent growth in the global wind market to 240 GW of installed capacity by 2012. Electricity produced from
wind energy will exceed 500 TWh in 2012 (up from 200 TWh in 2007) and represent 3 percent of global electricity
consumption (up from 1 percent in 2007). 3

Cumulative capacity 1995-2012, GW

300.0

250.0 240.3
204.2
200.0
171.9
143.0
150.0 117.3
94.1
100.0 74.2
50.0
4.5
0.0
1995 2006 2007 2008 2009 2010 2011 2012

Source: www.gwec.net/index.php?id=30&no_cache=1&tx_ttnews[tt_news]=143&tx_ttnews[backPid]=4&cHash=773fe52939

world’s installed wind energy capacity. Asia, and particularly China, will likely play a key role in the industry’s
future growth because of that region’s insatiable demand for energy and its industrial infrastructure and man-
power. Asia is becoming a powerhouse for wind turbine production. In China, more than 40 companies are pres-
ently involved in turbine manufacturing, and by 2010, the country is expected to emerge as the leading global
wind turbine producer.4

3 www.gwec.net/index.php?id=30&no_cache=1&tx_ttnews[tt_news]=143&tx_ttnews[backPid]=4&cHash=773fe52939
4 www.moneycontrol.com/news_html_files/pdffiles/mar2007/indowinden.pdf

Wind Energy America Inc. (OTCBB: WNEA) 10

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Cumulative capacity by region - 2007

L. America 0.5%
0.5 GW Pacific 1.3%
Africa & M. East 0.5%
1.2 GW
0.5 GW

Europe 60.7%
N. America 19.9% 57.1 GW
18.7 GW

Source: www.gwec.net/index.php?id=30&no_cache=1&tx_ttnews[tt_news]=143&tx_ttnews[backPid]=4&cHash=773fe52939

U.S. wind energy industry

In its 2007 Annual Energy Outlook, the U.S. Energy Information Agency estimated that U.S. electricity demand will
grow 39 percent between 2005 and 2030 to 5.8 billion MWh. In 2007, wind was one of America’s fastest growing
sources for electricity, second only to natural gas for the third consecutive year. This growth translates into roughly
$9 billion invested in U.S. wind project installations in 2007 and cumulative spending of nearly $28 billion since
5
the 1980s. There are wind farms in 34 states; as of April 2008, U.S. wind farms had a combined capacity of 18,302
MW.
U.S. installed megawatts for each state

Source: www.awea.org/projects/

5 www.awea.org/projects/

Wind Energy America Inc. (OTCBB: WNEA) 11

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

In 2006, President Bush emphasized a national imperative for greater energy efficiency and a more diversified en-
ergy portfolio. One of the goals of his national energy policy is to produce 20 percent of U.S. electricity from wind
power by 2030. To accomplish that objective, U.S. wind power capacity must increase to 300+ GW or more than
300,000 MW. This would require 290 GW of capacity expansion within 23 years.6

The United States reported a record 5.2 GW of new installed capacity in 2007, more than double the 2006 figure.
Wind power accounted for about 30 percent of the country’s new power production capacity.7 Overall U.S. wind
power generating capacity grew 45 percent in 2007; total installed capacity increased to 16.8 GW. New wind farms
contributed roughly 35 percent of the new capacity added to the U.S. electrical grid in 2007, compared to 19 percent
in 2006, 12 percent in 2005, and less than 4 percent from 2000 through 2004.8 According to an American Wind Energy
Association report, new wind power installations continued at a rapid pace during the first quarter of 2008. Ap-
proximately 1.4 GW or $3 billion worth of new generating capacity was installed, sufficient to serve the electricity
needs of 400,000 homes.9 U.S. wind farms are expected to generate 48 billion kWh of wind energy in 2008, more than
one percent of the U.S. electricity supply.

Annual and cumulative U.S. capacity

6,000 18,000
Annual US Capacity (left scale)
5,000 Cumulative US Capacity (right scale) 15,000

Cumulative Capacity (MW)

Annual Capacity (MW)

4,000 12,000
3,000 9,000
2,000 6,000
1,000 3,000
- -
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

Source: www.nrel.gov/docs/fy08osti/43025.pdf

The states with the most installed wind power capacity are Texas, California, Minnesota, Iowa and Washington.

6 www.20percentwind.org/20percent_prepublicationversion_Ch1.pdf
7 www.gwec.net/uploads/media/Global_Wind_2007_Report_final.pdf
8 www.nrel.gov/docs/fy08osti/43025.pdf
9 www.gwec.net/index.php?id=30&no_cache=1&tx_ttnews[tt_news]=150&tx_ttnews[backPid]=4&cHash=685ee00c8a

Wind Energy America Inc. (OTCBB: WNEA) 12

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Top 20 states for wind energy potential

(as measured by annual energy potential in the billions of kWhs)

State Potential State Potential

1 North Dakota 1,210 11 Colorado 481

2 Texas 1,190
3 Kansas 1,070
4 South Dakota 1,030
5 Montana 1,020
6 Nebraska 868
7 Wyoming 747
8 Oklahoma 725
9 Minnesota 657
10 Iowa 551
12 New Mexico 435
13 Idaho 73
14 Michigan 65
15 New York 62
16 Illinois 61
17 California 59
18 Wisconsin 58
19 Maine 56
20 Missouri 52

Source: Pacific Northwest Laboratory, 1991

U.S. annual average wind power

Source: http://rredc.nrel.gov/wind/pubs/atlas/maps/chap2/2-01m.html

U.S. Production Tax Credit

The Production Tax Credit or PTC is unique to U.S. energy policy and can be viewed as a variant of the fixed price
system. PTCs provide at 2 cents per kWh tax incentive to facilities that produce electricity from renewable energy
10
resources such as wind, biomass, geothermal and hydropower. The credit can be claimed for 10 years, beginning on
the date the qualified facility is placed in service. The facility must begin operation before the credit expires.

Although the PTC system was due to expire at year-end 2005, a two-year extension to December 2007 (the date
by which a wind farm must begin operation to qualify for the 10 year credit) was included in the Energy Policy

10 www.bbwindpartners.com/bbw-industry-overview/bbw-regulatory-overview.aspx

Wind Energy America Inc. (OTCBB: WNEA) 13

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Act that President Bush signed into law in August 2005. In 2007, PTC was renewed again and the expiration date was
moved to December 2008. On April 10, 2008, the U.S. Senate overwhelmingly approved an amendment to the Clean
Energy Stimulus Act, which provides for a one-year extension of the Production Tax Credit.

Financial Record

The Company plans to generate revenues from the sale of electricity produced from its operating wind energy
projects. During the nine months ended March 31, 2008, and March 31, 2007, WNEA produced no revenues from
electricity sales.

Operating expenses rose to $365,741 during the nine months ended March 31, 2008, due to increased professional
fees, and expenses relating to an employment termination agreement with the Company’s former CEO/CFO effec-
tive March 1, 2008.
Income statement, $

9 months FY 9 months FY
Q3 FY 2007 Q3 FY 2008
2007 2008
Total Revenue 0 0 0 0

General & Administrative 89,607 72,807 267,066 195,183

Professional fees - 116,321 9,350 170,558
Total Expenses 89,607 189,128 276,416 365,741

Operating loss -89,607 -189,128 -276,416 -365,741
Income taxes benefit -50,710 - -117,338 -
Net Loss ($140,317) ($189,128) ($393,754) ($365,741)

Diluted EPS ($0.01) ($0.01) ($0.03) ($0.01)

Source: SEC Filings, fiscal year ending June 30.

The Company is generating losses from operations, has negative cash flows and a small cash balance. These are
all factors that raise questions about WNEA’s ability to execute its growth strategy. During the first nine months of
FY 2008, WNEA consumed $267,054 in operating activities and used $851,175 in investing activities, consisting of
investments in various wind farm developments. The Company raised $1 million through its financing activities,
which included $945,416 from a private equity placement and a $100,000 short-term loan.

WNEA has relied primarily on equity private placements to provide funding for its wind farm development and
acquisition activities. The Company’s current business plan focuses on developing the assets it acquired from Boreal
Energy. However, WNEA lacks sufficient funding to complete its development plans and must pursue additional
debt or equity financing. There is no assurance that the Company will be able to raise the needed capital.

Wind Energy America Inc. (OTCBB: WNEA) 14

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Balance sheet, $

30-Jun-07 31-Mar-08

Total Current Assets, including 144,595 46,782

Cash and equivalents 114,595 41,782

Investments in wind farms 1,750,000 4,900,000

Investments in wind projects 250,000 13,346,175
Investment in Grand Sierra Resort Corp. 415,000 415,000
Investment in Navitas Energy Inc. - 11,287,250
Goodwill - 1,387,750
Total Assets 2,529,595 31,377,957

Total Liabilities, including 172 127,359

Debt - - 100,000

Stockholders’ Equity, including 2,559,423 31,255,598

Accumulated deficit - 15,201,208 -15,566,949

Source: SEC Filings, fiscal year ending June 30.

Wind Energy America Inc. (OTCBB: WNEA) 15

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Valuation

Over the next four years, WNEA plans to complete approximately 280 MW of wind energy projects in the upper
Great Plains and Midwest. The Company estimates approximately $69 million of external funding will be required
to complete these projects, including $40 million from equity financing. Assuming funding is secured and the vari-
ous projects are completed, WNEA would expand installed capacity to 400 MW over the next four years. At this
generating capacity level, the Company could be producing annual revenues exceeding $80 million from electricity
sales and annual income ranging between $40 million and $45 million.

Income estimates

Year-End December ($ 000) 2008E 2009E 2010E 2011E 2012E

Income from Boreal Assets 1,319 7,852 18,331 25,010 32,078

Income from Boreal Equity in farm projects 419 4,252 9,331 15,110 20,078
Revenue from early stage partnerships 0 1,800 7,200 7,200 9,300
Navitas Dividend 900 1,800 1,800 2,700 2,700
Income from “Big 3 farms” 0 0 8,904 9,349 9,816
Other income 30 58 61 64 67
Total Income 1,349 7,910 27,295 34,423 41,961

SG&A Expense -3,381 -4,354 -6,466 -8,277 -10,098

EBIT -2,031 3,556 20,830 26,146 31,864

Interest income 280 280 120 120 120

Interest expense 0 -591 -2,494 -4,491 -4,573
Corporate revolver interest expense 0 -88 -488 -488 -968
EBT -1,751 3,157 17,968 21,287 26,443

Net Tax Expense 0 -549.5 -3127.5 -3705.2 -4602.6

Net Income -1,414 2,608 14,840 17,582 21,840

EPS, $ -0.029 0.038 0.187 0.196 0.219

Weighted average shares outstanding, 49.51 69.51 79.51 89.51 99.51
Million

Source: Analyst estimates, management guidance

The Company’s business model is highly scalable. With the significant pipeline of development projects included as
part of the Boreal Energy acquisition, we believe WNEA has excellent growth opportunities and income potential
much greater than the profits modeled in or 2008-2012 forecasts.

Peer comparison

We believe WNEA should trade at valuation multiples comparable to other alternative energy stocks. Reflecting
the alternative energy sector’s strong growth momentum, wind and solar energy stocks were recently trading at 67
times P/E multiples and 39 times forward P/E multiples. Given the Company’s early development stage and need
for additional financing, we value WNEA at a 16 times forward P/E multiple.

Wind Energy America Inc. (OTCBB: WNEA) 16

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Comparative analysis

Company Name Ticker Mrkt. Cap. PE

Symbol Price Mn
ttm 2008E 2009E
Babcock and Brown Wind A$ BBW.AX $1.70 1,110.57 100.98 n/m n/m
Clipper Windpower GBP CWPR.L 6.17 796.61 n/m n/a n/a
EDF Energies Nouvelles` EUR EEN.PA 45.6 2,825.42 55.01 43.02 31.23
Renewable Energy Holdings GBP REH.L 48.50 31.8 n/m n/m n/m
Theolia EUR TEO.PA 23.15 882.4 54.2 1157.50 100.65

First Solar Inc. , $ FSLR $267.54 21340 106.42 91.31 46.69

Suntech Power Holdings, $ STP $42.54 6570 41.79 27.27 16.49
Evergreen Solar Inc. ,$ ESLR $10.40 1260
Source: Yahoo Finance n/m n/m 22.61
Median 55.0 67.2 39.0

Source: Reuters

By multiplying our 18 cent 2010 EPS estimate by a 16 times forward P/E multiple, we derive a $2.98 target price for
WNEA shares.

The recently signed record contract between Gamesa SA and Iberdrola Renovables SA to provide wind turbines,
construction and services valued at $9.7 billion is indicative of the rapid development in the wind energy sector and
supports the prospects for strong wind market growth across the globe. Moreover, the improvement in the wind
generation technology; decreasing costs and greater competitiveness of wind energy; environmental concerns as
well as high degree of governmental support will enhance the wind energy industry growth rates and market share
gains in the overall energy market.

We believe WNEA is providing strong exposure for investors to wind energy market fundamentals and accordingly
rate these shares a Speculative Buy. The Company has established wind energy assets and a robust pipeline of new
projects but must secure significant external funding to implement its business plan. We are initiating coverage of
Wind Energy America with a $2.98 price target.

Investment Risks

Additional capital required to execute on development plans

The Company will require additional financing to complete its wind energy projects. Management estimates
spending of $69 million will be required over the next four years to complete approximately 280 MW of wind en-
ergy projects. If the Company fails to obtain sufficient funding, it will be unable to complete its business plan.

Wind Energy America Inc. (OTCBB: WNEA) 17

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

History of losses

WNEA has operating losses, negative cash flow and an accumulated deficit that raises doubts about its ability to
execute its expansion plans. While the Company anticipates generating profits in 2009, there is no assurance that
WNEA can develop the required new generating capacity within that short timeframe.

Threat from alternative energy sources

Alternative energy resources such as hydro or solar power may become more economically viable and limit
the deployment of wind energy as a power source. In addition, if oil prices decline significantly, wind energy’s
competitive advantages over fossil fuel are reduced.

Spot power market prices

WNEA plans to sell a significant proportion of its generating capacity into the emerging merchant power mar-
ket. Prices are expected to rise due to power generation shortfalls in the Midwest. The risk exists, however, that
new generating capacity coming online will reduce spot price and WNEA’s returns. This risk is mitigated by
the fact that new nuclear energy facilities take many years to build, oil prices are expected to remain high and
opposition to new coal power plants is growing due to pollution concerns.

Management
Darrel Kluge Mr. Kluge brings to the Company more than 19 years of experience in invest-
Interim CEO ment banking, working mainly with local emerging growth companies.

Alan Cross Mr. Cross began his career at Arthur Andersen and Co. where he developed
Chief Financial Officer expertise in creating and syndicating investment vehicles used to raise capital
for natural resource development projects. After becoming a partner with the
firm, he left public accounting to serve as the CFO for a number of private
companies. He is a CPA and earned his Bachelor of Arts, Master of Business
Administration and holds a Juris Doctor from the University of South Da-
kota.

Robert A. Williams
Director and Chairman of the Board
Mr. Williams has been a director and chairman of the board since April 2007.
Mr. Williams is the founder and principal owner of Bobby and Steve’s Auto
World, which owns and operates eight gas/service stations in the Minneapo-
lis/St. Paul area. Mr. Williams serves on the city council of Columbia Heights,
Minn.

Paul R. Knapp Mr. Knapp is president and CEO of Space Center Ventures, a St. Paul, Minne-
Director sota-based venture capital fund that invests in emerging Twin City companies.
He has served on the boards of a number of private and public companies, and
currently serves as a director of Minneapolis-based Venture Bank. Mr. Knapp
is a 1982 graduate of The College of St. Thomas and a 1985 graduate of William
Mitchell College of Law.

Wind Energy America Inc. (OTCBB: WNEA) 18

 Analyst: Victor Sula, Ph.D.
Initial Report
June 23rd, 2008

Disclaimer
Beacon Equity Research (otherwise known as BER) is an independent research firm specializing in small and micro capitalization companies.
BER has no investment banking or consultation conflicts thereby minimizing the inherent conflicts of interest between the research analysts and
the companies they cover. BER is not a registered investment advisor or broker dealer. No information in this report should be construed as an
endorsement to either buy or sell any securities mentioned in this report. The analyst(s) who prepared this report rely on publicly avail¬able
information which neither the analyst, nor BER, can guarantee to be error-free or factually accurate. All conclusions in this report are deemed
reasonable and appropriate by the author. The Private Securities Litigation Reform Act of 1995 provides investors a “safe harbor” in regard
to forward-looking statements. To fully comply with the requirements of this law, BER cautions all investors that such forward-looking state-
ments in this report are not guarantees of future performance. Unknown risk, uncertainties, as well as other uncontrollable or unknown factors
may cause actual results to materially differ from the results, performance or expectations expressed or implied by such forward-look¬ing
statements. Investors should exercise good judgment and perform adequate due-diligence prior to making any investment. Beacon Equity
Resources and its affiliates have been compensated a total of one hundred fifty thousand Restricted Rule 144 shares directly from Boreal En-
ergy Inc. for enrollment of WNEA in its research program and other services. Ratings and price targets in this report should not be construed
as recommendations or stock price predictors. Readers of this report are urged to use due-diligence in any purchase of security listed herein.
Readers should consult the Company’s SEC filings as well as our initial report on the firm to better understand the inherent risks associated
with this security. There may be many uncontrollable or unknown factors which may cause actual results to materially differ from the results,
performance or expectations expressed or implied by such forward-looking statements. Investors should exercise good judgment and perform
adequate due-diligence prior to making any investment.

All decisions are made solely by the analyst and independent of outside parties or influence.

I, Victor Sula, Ph.D, the author of this report, certify that the material and views presented herein represent my personal opinion regarding the
content and securities included in this report. In no way has my opinion been influenced by outside parties, nor has my compensation been
either directly or indirectly tied to the performance of any security listed. I certify that I do not currently own, nor will own and shares or se-
curities in any of the companies featured in this report.

Victor Sula, Ph.D. - Senior Analyst

Victor Sula, Ph.D. has held the position of Senior Analyst with several independent investment research firms since 2004. Prior to 2004, Mr. Sula
held Senior Financial Consultant positions within the World Bank sponsored Agency for Restructuring and Enterprise Assistance and TACIS
sponsored Center for Productivity and Competitiveness of Moldova, where he was involved in corporate reorganization and liquidation. He is
also employed as Associate Professor at the Academy of Economic Studies of Moldova. Mr. Sula earned his Ph.D. degree in 2001 and bachelor’s
degree in Finance in 1997 from the Academy of Economic Studies of Moldova. Mr. Sula is currently a level III candidate in the CFA program.

Wind Energy America Inc. (OTCBB: WNEA) 19