OTC: ALCE

Our near-term focus is the microgrid and onsite energy market, a rapidly growing segment driven by surging electricity demand from artificial intelligence infrastructure, data centers, and the onshoring of heavy industry. In furtherance of this strategy, we have formed EverOn Energy LLC ("EverOn"), a joint venture with Hover Energy LLC ("Hover Energy"), to deliver state-of-the-art wind-powered clean energy microgrids to corporates, and other facility owners across the United States and United Kingdom. EverOn combines Hover Energy’s award-winning, patented compact wind turbine technology with Alternus’s project development, financing, and asset management expertise, a pairing that provides a compelling and differentiated offering in the market today.

EverOn’s microgrid systems integrate compact wind turbines, solar, and battery storage to produce clean, low-cost power directly on a customer’s premises. Solutions are delivered under long-term Power Purchase Agreements (“PPAs”) or Energy-as-a-Service (“EaaS”) contracts at rates below what customers currently pay, requiring no upfront capital expenditure from the customer. This model is designed to provide faster time to revenues and lower equity requirements compared to traditional utility-scale energy development, while generating stable, long-term recurring income for Alternus.

Our Operating Subsidiaries

As of the date of filing, the Company is a holding company that operates through 8 operating subsidiaries, as listed in Exhibit 21.1 to this Annual Report on Form 10-K.

Business Model

Alternus operates as a focused energy transition platform, dedicated to the development and long-term ownership of decentralized, onsite energy solutions. Our operations are currently concentrated on the microgrid market, which we believe represents one of the most significant near-term opportunities in the global energy transition, driven by structural grid limitations, rising energy costs, and the explosive growth of energy-intensive industries including artificial intelligence and onshored manufacturing.

Our primary route to market is through EverOn Energy, our joint venture with Hover Energy, through which we develop and deliver wind-powered clean energy microgrids to corporates, data centers, and industrial facility owners across the United States and United Kingdom. EverOn targets four high-value verticals; big box retail, real estate, education, and manufacturing, where energy cost savings, resilience, and net zero commitments are critical operational priorities.

Over 70% of our planned near-term growth is already represented in an existing pipeline of large, financially stable, and highly reputable corporations that are dominant leaders in their industries ("Blue-Chip Clients").

Revenue is generated primarily through long-term PPA and EaaS contract structures, whereby customers receive clean, reliable onsite energy at rates below their current tariff, without carrying the capital cost of energy assets on their own balance sheets.

This model creates stable, recurring income streams for Alternus while offering customers the energy independence, cost transparency, and operational resilience that the modern grid increasingly cannot guarantee.

The value creation logic of our model is straightforward: the earlier we engage with a customer or project opportunity, the more of the value we retain as the project progresses from origination through to commissioning and long-term operation. EverOn’s ability to identify high-wind-speed sites minimizes the equity required to deliver each project, improving returns and enabling more capital to be recycled into new pipeline. Each microgrid brought into service adds a durable, recurring income stream to our portfolio, and those streams accumulate as we scale, a stair-step approach to revenue growth designed to deliver predictable, sustainable returns for shareholders.

Our pipeline is generated through EverOn and a cultivated network of technology and development partners. As a long-term owner and operator of critical decentralized energy infrastructure, rather than a transactional developer building assets for others to own, Alternus is positioned to compound value over time as the global demand for energy independence continues to accelerate.

Revenue Model:

During the year ended December 31, 2024, Alternus generated revenues from the sale of clean energy, under long-term offtake agreements, to national power grids (Utility Scale Solar and Storage). No revenue was generated during the year ended December 31, 2025.

Sale of Clean Energy to Private Corporate Clients - from Microgrids and Other Forms Energy Generation Installed and Managed at Client Premises

The renewable energy generated from installed generation microgrid project is delivered and consumed directly - 'behind the meter' - by corporate clients un long term power purchase agreements Revenues are booked by multiplying the energy produced, measured in megawatt hours (MWh), by the energy rate attributable to the hours during the reporting period. The rates received from either local government or investment grade commercial customers are contracted under long-term contracts and/or from local energy markets at the market rates prevailing as the energy is delivered. At any one time, Alternus aims to have approximately 70% of the energy rates contracted long-term on a portfolio basis. This revenue mix creates high margin and long-term predictable income streams that provide us with more flexible debt options that we deploy in ways to maximize returns on equity.

Revenue Model

Alternus intends to generate revenue primarily through long-term PPAs and EaaS contracts, under which commercial and industrial customers receive clean, reliable onsite energy at rates below, or on par with their prevailing grid tariff, with no requirement to invest upfront capital in energy assets.

This model creates stable, recurring income streams for Alternus while delivering the energy independence, cost transparency, and operational resilience that customers increasingly require.

Under the EaaS model operated through our EverOn Energy joint venture, customers pay for energy delivered on a per-kilowatt-hour basis under long-term contracts, typically structured with an initial fixed rate and an annual escalator, which provides Alternus with predictable, long-duration cash flows.

The capital cost of microgrid assets is funded by Alternus and its financing partners, meaning customer adoption requires no capital expenditure commitment, which we believe significantly accelerates commercial uptake.

As the portfolio of operational microgrids grows, revenues accumulate in a stair-step fashion: each new installation adds a durable, long-term income stream that compounds alongside the existing portfolio. This contrasts with business models based on one-time equipment sales or construction fees, where annual revenues are inherently unpredictable.

Vision and Strategy

Alternus aims to become a leading global platform for decentralized energy, empowering critical infrastructure to thrive beyond the limitations of the traditional power grid.

We intend to achieve this by deploying a diversified portfolio of onsite energy technologies, combining wind, solar, and battery storage, that deliver energy independence, predictable value, and resilience to the world’s most demanding energy users.

Our near-term strategy is focused on scaling EverOn Energy, our microgrid joint venture with Hover Energy, across four high-value commercial and industrial verticals in the United States and United Kingdom: big box retail, real estate, education, and manufacturing.

These sectors share a common profile: high energy intensity, long-term site control, strong net zero commitments, and growing urgency around cost certainty and energy security. Over 70% of our planned near-term growth is already represented in an existing pipeline of Blue-Chip Clients.

To pursue this vision, the Company intends to execute the following strategies:

Scale EverOn across the US and UK Commercial and Industrial ("C&I") microgrid market, targeting Blue-Chip Clients in retail, real estate, education, and manufacturing where onsite energy generation delivers immediate, measurable cost savings and supports net zero commitments.

Deepen EaaS contract penetration by structuring all new deployments under long-term PPA and EaaS frameworks that require no customer capital expenditure, enabling faster adoption while locking in recurring income streams for Alternus.

Expand the technology suite over time to include complementary storage, demand management, and AI-driven energy optimisation capabilities, building on EverOn’s existing integration with IBM’s Microgrid Management System.

Preserve optionality on strategic solar assets: Alternus retains exclusive rights to acquire a portfolio of utility-scale solar development projects in Italy, currently totaling approximately 217 MW. While solar is not our primary near-term focus, these assets represent a potential avenue for future portfolio diversification and long-term recurring income as the microgrid business matures.

Pursue additional joint ventures and technology partnerships in adjacent decentralised energy segments, consistent with our capital-light model, to broaden revenue streams and accelerate growth without disproportionate equity dilution.

We believe that Alternus is well positioned to capture a meaningful share of the unprecedented structural growth now underway across the global energy transition, and in particular, the rapid expansion of decentralized, onsite energy solutions driven by the convergence of AI infrastructure build-out, grid congestion, and corporate energy independence mandates.

Competitive Strengths

The Company believes the following competitive strengths have contributed and will continue to contribute to its success:

Differentiated microgrid technology: EverOn’s deployment of Hover Energy’s award-winning, patented compact wind turbine systems, combined with solar and battery storage, provides a multi-technology microgrid offering that is unique in the market. Wind-solar hybrid configurations deliver substantially higher on-site energy generation than solar-only systems, improving the economics and resilience of each installation.

Capital-light, EaaS-first model: By delivering energy under long-term service contracts rather than selling equipment, Alternus removes the single biggest barrier to customer adoption, upfront capital expenditure, while retaining ownership of income-generating assets. This structure is designed to accelerate pipeline conversion and generate long-duration, recurring cash flows.

Established blue-chip pipeline: Over 70% of EverOn’s planned near-term growth is already at various stages in an existing pipeline of large, creditworthy commercial and industrial clients, providing clear near-term revenue visibility.

Experienced transatlantic team: The Alternus team bring decades of combined experience across renewable energy project development, asset financing, operations and maintenance, and commercial energy contracting in various markets.

Exclusive solar asset optionality: Alternus retains exclusive rights to acquire approximately 217 MW of utility-scale solar development projects in Italy. These assets provide a strategic option for future portfolio expansion without requiring immediate capital deployment, and can be pursued selectively as the Company’s financial position evolves.

Long-term owner operator philosophy: As a long-term owner and operator of energy infrastructure, rather than a build-to-sell developer, Alternus is incentivised to design and maintain assets for maximum operational performance over their full useful life. This orientation makes us a more attractive long-term partner for corporate customers, financiers, and government counterparties alike.

Competitive Landscape

The market for commercial and industrial microgrid solutions is growing rapidly, and remains relatively fragmented. Alternus, through EverOn, competes primarily with other microgrid developers and EaaS providers targeting the C&I sector in the US and UK. Key competitive factors include technology differentiation, contract structure, speed of deployment, customer relationships, and access to project financing.

EverOn’s wind-solar-storage hybrid offering differentiates it from the majority of competitors, who deploy solar-only or storage-only solutions. The combination of Hover Energy’s proprietary compact wind technology with solar and IBM-powered energy management software enables substantially higher on-site generation density and grid offset rates than single-technology alternatives. This differentiation is a key driver of EverOn’s commercial proposition and pipeline conversion rates.

In the broader renewable energy market, Alternus may also face competition from larger integrated energy companies, specialist investment funds, and utility-scale developers, particularly if it pursues future expansion into adjacent segments or elects to exercise its solar asset options in Italy. In those segments, we would compete on the basis of development expertise, partner relationships, cost of capital, and operational track record.

The Market

Alternus operates at the intersection of two of the most powerful structural forces reshaping the global energy system: the explosive growth in demand for reliable, onsite power from data centers and digital infrastructure; and the accelerating drive by commercial and industrial organisations to achieve energy independence in the face of grid congestion, price volatility, and net zero obligations.

The AI and Data Center Energy Surge

Global electricity consumption from data centers reached approximately 415 terawatt-hours (TWh) in 2024, representing around 1.5% of total global electricity demand, and has grown at approximately 12% per year since 2017, more than four times faster than total global electricity consumption growth over the same period.¹

The International Energy Agency (“IEA”) projects that data center electricity consumption will more than double to approximately 945 TWh by 2030 under its base case, growing at around 15% per year, a rate more than four times faster than the growth of all other electricity-consuming sectors combined.²

AI is the primary driver of this acceleration. Electricity demand from AI-focused data centers surged 50% in 2025 alone, well outpacing the 17% growth in overall data center electricity demand and the 3% growth in global electricity demand overall. Electricity consumption in accelerated servers, driven primarily by AI adoption, is projected to grow at 30% per year in the IEA’s Base Case, compared to 9% per year for conventional servers.³ The capital expenditure of the five largest technology companies, Amazon Web Services, Google, Meta, Microsoft and Equinix, surged to more than $400 billion in 2025, and is set to increase by a further 75% in 2026.⁴

This surge in demand is straining existing grid infrastructure. Data center developers are increasingly advancing projects with onsite power generation to bypass slow grid connections and constrained transmission capacity.⁵ Onsite microgrid solutions, providing reliable, clean power without dependence on the grid, are a direct and compelling response to this constraint.

Reshoring and Industrial Electrification

Alongside AI infrastructure, the reshoring of manufacturing to the United States represents a significant and growing source of industrial energy demand. In 2024, 244,000 US manufacturing jobs were announced via reshoring and foreign direct investment, continuing the nation’s multi-year push to rebuild domestic production capacity.⁶ The US Council of Economic Advisers estimates that continued electrification of the economy and reshoring of energy-intensive manufacturing will require as much as $1.4 trillion of investment in power generation capacity between 2025 and 2030.⁷

For manufacturers reshoring production, reliable and cost-effective energy supply is a critical operational prerequisite. Grid constraints in many US markets make onsite generation, including microgrid solutions, an increasingly important enabler of domestic manufacturing competitiveness.

The Global Microgrid Market

Microgrids are localized energy systems capable of operating independently or in conjunction with the main electrical grid, integrating distributed energy resources, such as wind turbines, solar panels, battery storage, and generators, to generate, store, and manage electricity within a defined area.

The global microgrid market was valued at approximately $35–43 billion in 2024 across leading industry estimates, and is projected to grow at a compound annual growth rate of approximately 17–18% through 2030–2032, reaching between $95 billion and $142 billion by the early part of the next decade.⁸ The commercial and industrial segment, which represents EverOn’s primary market, accounted for the largest share of global microgrid revenues in 2024, driven by the growing need for reliable, cost-efficient power and energy independence in manufacturing, retail, logistics, and data center applications.⁹

The industrial and commercial scale microgrid segment specifically was valued at approximately $2.2 billion in 2023 and is projected to grow at a CAGR of approximately 24% through 2032, one of the fastest growth rates in any energy sub-segment, driven by rising demand for solutions that deliver cost savings through local generation and reduced grid dependence.¹⁰

The UK Microgrid Market

The United Kingdom represents EverOn’s initial primary market, and is an especially attractive environment for commercial microgrid deployment. Energy prices in the UK have increased sharply over the past five years, driven by wholesale market volatility and structural grid constraints, and now represent the single largest cost concern for many large UK businesses. A recent survey found that energy prices have become the primary operational concern for over half of large UK enterprises.¹¹

The UK microgrid market generated approximately $4.02 billion in revenue in 2025 and is expected to reach approximately $10.21 billion by 2030, growing at a CAGR of approximately 20.5%.12 The UK has also committed to achieve net zero greenhouse gas emissions by 2050 and to source all electricity from renewable sources by 2035, regulatory commitments that create powerful incentives for corporates to invest in, or contract for, onsite clean energy generation. EverOn’s EaaS model, which requires no customer capital expenditure and delivers immediate energy cost savings under long-term contracts, is well aligned with both the economic and regulatory imperatives facing UK businesses today.

References:

1. International Energy Agency (IEA), Energy and AI Report, April 2025. https://www.iea.org/reports/energy-and-ai

2. IEA, Energy Demand from AI, April 2025. https://www.iea.org/reports/energy-and-ai/energy-demand-from-ai

3. IEA, Energy and AI: Executive Summary, April 2025. https://www.iea.org/reports/energy-and-ai/executive-summary

4. IEA, Key Questions on Energy and AI, April 2025. https://www.iea.org/news/data-center-electricity-use-surged-in-2025

5. IEA, Key Questions on Energy and AI, April 2025. https://www.iea.org/news/data-center-electricity-use-surged-in-2025

6. Reshoring Initiative, 2024 Annual Report Including 1Q2025 Insights, June 2025. https://reshorenow.org/june-9-2025/

7. US Council of Economic Advisers, The Economic Benefits of Unleashing American Energy, August 2025. https://www.whitehouse.gov/wp-content/uploads/2025/08/The-Economic-Benefits-of-Unleashing-American-Energy.pdf

8. MDPI - Microgrids as a Tool for Energy Self-Sufficiency- https://www.mdpi.com/1424-8220/25/21/6707

9. The Insight Partners, Microgrid Market Analysis, Size and Share by 2031 - https://www.theinsightpartners.com/reports/microgrid-technology-market

10. Global Market Insights, Industrial & Commercial Scale Microgrid Market Report, August 2024. https://www.gminsights.com/industry-analysis/industrial-and-commercial-scale-microgrid-market

11. SNRG, Huge Growth in Commercial and Industrial Microgrid, 2024. https://oursnrg.com/huge-growth-in-commercial-and-industrial-microgrid/

12. Grand View Research / Horizon Databook, UK Microgrid Market Size & Outlook, 2023–2030, March 2025. https://www.grandviewresearch.com/horizon/outlook/microgrid-market/uk

Facilities and Corporate Information

Our headquarters are located at 17 State Street, Suite 4000, New York, NY 10004. Our main telephone number is (212) 739-0727. Our website is https://alternusce.com

Government Regulations

Environmental:

The Company is subject to environmental laws and regulations in the jurisdictions in which it owns and operates renewable energy facilities. These laws and regulations generally require that government permits and approvals be obtained and maintained both before construction and during operation of these renewable energy facilities. The Company incurs costs in the ordinary course of business to comply with these laws, regulations, and permit requirements. The Company does not anticipate material capital expenditures for environmental compliance for its renewable energy facilities in the next several years. While the Company does not expect that the costs of compliance would generally have a material impact on its business, financial condition or results of operations, it is possible that as the size of its portfolio grows, it may become subject to new or modified regulatory regimes that may impose unanticipated requirements on the business as a whole that the Company did not anticipate with respect to any individual renewable energy facility. Additionally, environmental laws and regulations frequently change and often become more stringent, or subject to more stringent interpretation or enforcement, and therefore future changes could require the Company to incur materially higher costs which could have a material negative impact on its financial performance or results of operations.

Regulatory Matters, Government Legislation, and Incentives:

As the size of the Company’s portfolio grows, or as applicable rules and regulations evolve, it may become subject to new or modified regulatory regimes that may impose unanticipated requirements on the business as a whole that were not anticipated with respect to any individual renewable energy facility. Any local, state, federal or international regulations could place significant restrictions on the Company’s ability to operate its business and execute its business plan by prohibiting or otherwise restricting the sale of electricity. If the Company was deemed to be subject to the same state, federal or foreign regulatory authorities as traditional utility companies, or if new regulatory bodies were established to oversee the renewable energy industry in Europe or in international markets, its operating costs could materially increase, adversely affecting results of operations.

Available Information

Our website address is https://alternusce.com. We make available on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov. The information found on our website is not incorporated by reference into this Annual Report on Form 10-K or any other report we file with or furnish to the SEC.