Forward Looking Statements

The Management's Discussion and Analysis ("MD&A") is designed to assist investors in understanding the nature and the importance of the changes and trends, as well as the risks and uncertainties associated with the Company's operations and financial position. Some sections of this report contain forward-looking statements that, because of their nature, necessarily involve a number of known and unknown risks and uncertainties, including statements regarding our capital needs, business strategy and expectations, and the factors described under "Risk Factors" contained in Item 1 of the Company's Form 10KSB Annual Report for the period ended January 31, 2008, which are incorporated herein by reference. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. The Company's actual and future results could therefore differ materially from those indicated or underlying these forward-looking statements.

Although the Company deems the expectations reflected in these forward-looking statements to be reasonable, the Company cannot provide any guarantee as to the materialization of the expectations reflected in these forward-looking statements.

The following information should be read in conjunction with the unaudited consolidated financial statements for the three month and six month period ended October 31, 2008 and 2007 and notes thereto. Unless otherwise indicated or the context otherwise requires, the "Company," "ICP," "we," "us," and "our" refer to ICP Solar Technologies Inc. and its subsidiaries.

Compliance with Generally Accepted Accounting Principles

Unless otherwise indicated, the financial information presented below, including tabular amounts, is expressed in US dollars and prepared in accordance with accounting principles generally accepted in the United States ("GAAP").

Use of Estimates

The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Critical items of the financial statements that require the use of estimates include the determination of the allowance for doubtful accounts, the determination of the allowance for inventory obsolescence, the determination of the useful life of fixed and intangible assets for amortization calculation purposes, the assumptions for fixed asset impairment tests, the determination of the allowance for guarantees, the determination of the allowance for income taxes, the assumptions used for the purposes of calculating the stock-based compensation expense, the determination of the fair value of financial instruments, the determination of the fair value of the assets and liabilities acquired on business acquisitions and the implicit fair value of goodwill.

The financial statements include estimates based on currently available information and management's judgment as to the outcome of future conditions and circumstances.

Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

Changes in Accounting Principles

No accounting changes were adopted during fiscal 2007 and 2008 and the first nine months ended October 31, 2008 except for the adoption of FAS 157 (see Note 5 of Consolidated Interim Financial Statements at October 31, 2008).

Company Background

Headquartered in Montreal, Canada, ICP Solar operates in the renewable energy industry. ICP Solar develops, markets, and sells solar energy based products to the consumer goods, Original Equipment Manufacturers ("OEM"), residential and commercial markets through its distribution channels in over 100 countries.

We develop and market solar power products that provide reliable and environmentally clean electric power throughout the world. Solar power products use interconnected photovoltaic cells to generate electricity from sunlight. Solar power products can provide a cost-competitive, reliable alternative for powering highway call boxes, microwave stations, portable highway road signs, remote street or billboard lights, vacation homes, rural homes in developed and developing countries, water pumps and battery chargers for recreational vehicles and other consumer applications. Furthermore, solar power products can provide on-grid customers with a clean, renewable source of alternative or supplemental electricity.

Our plan of operation for the next twelve months is to engage in our marketing, product development and sales channel efforts. We plan to expand our current distribution depth within the markets of North America, Europe and Japan for our consumer goods segment through the marketing of our internal brand Sunsei TM , as well as licensed brand Coleman®. We will launch our next generation metering products for both grid and off-grid RE applications.

Our immediate goal is the development of our thin film amorphous solar rooftop tile which can be seamlessly integrated into roofing lines for homes, buildings and other structures. We are currently developing a distribution channel and technology partnerships to launch products based on the thin film amorphous solar cell technology in 2009. Although there can be no assurances, we plan to deliver on a sustainable growth strategy across each of our main targets. We also intend to increase our addressable markets, further sales and solidify our brand through strategic partnerships with best practice distribution partners worldwide. Strategic partnerships for both distribution channel and technology are expected to be key drivers of our expansion plans.

Reorganization of the Corporation

On September 29, 2006, ICP Solar Technologies Inc. ("ICP") entered into a share exchange agreement with ICP Solar Technologies Inc. (formerly FC Financial Services Inc.) ("ICP Solar"), an inactive public shell company, for the acquisition by ICP Solar of all the issued and outstanding shares of ICP.

On December 12, 2006, ICP Solar Technologies Inc. (formerly FC Financial Services Inc.) changed its year end from November 30 to January 31.

Under accounting principles generally accepted in the United States, the share exchange is considered to be a capital transaction in substance, rather than a business combination. That is, the share exchange is equivalent to the issuance of stock by ICP for the net monetary assets of ICP Solar accompanied by a recapitalization, and is accounted for as a change in capital structure. Accordingly, the accounting for the share exchange is identical to that resulting from a reverse acquisition, except no goodwill is recorded. Under reverse takeover accounting, the post reverse acquisition comparative historical financial statements of the legal acquirer, ICP Solar are those of the legal acquiree, ICP, which is considered to be the accounting acquirer.

We structured the acquisition of ICP to enable ICP Stockholders to receive tax-rollover treatment in Canada. Under Canadian law, when a stockholder disposes of shares, the disposal is considered to be a deemed disposition of the shares and therefore is a taxable event unless the shares are exchanged for the shares of an equal value in another Canadian company.

All of the ICP shares, through a series of transaction, were exchanged for exchangeable shares of ICP Solar's wholly-owned subsidiary (1260491 Alberta Inc.). The exchangeable shares are exchangeable for an equivalent number of common shares of ICP Solar, common shares transferred simultaneously to a trustee as the exchangeable shares were issued. Until such time as the holders of the exchangeable shares wish to exchange their shares for ICP Solar shares, the ICP Solar shares are held in trust by a trustee on behalf of the exchangeable shareholders. The trustee shall be entitled to the voting rights in ICP Solar as stated in the terms of the exchange and voting agreement and shall exercise these voting rights according to the instructions of the holders of the exchangeable shares on a basis of one vote for every exchangeable share held.

The results of operations, the cash flows and the assets and liabilities of ICP Solar have been included in these consolidated financial statements since September 29, 2006, the acquisition date. Amounts reported for the periods prior to September 29, 2006 are those of ICP.

The net assets of ICP Solar acquired on September 29, 2006 are as follows:

                             Cash                                        $ 67,285
                             Accounts receivable                            2,148
                             Prepaid expenses                                  70
                             Loan receivable                            4,964,524
                             Property and equipment                         4,887
                             Accounts payable and accrued liabilities   (131,655)
                             Convertible notes                        (1,642,391)
                             Net Assets Acquired                      $ 3,264,868

As a condition to the closing of the transaction, ICP Solar (formerly FC Financial) committed to raising $5 million of financing. The loan receivable represents advances made pre-closing to ICP for working capital by ICP Solar (formerly FC Financial) as funds were received from the capital raise.

The transaction costs related to the above share exchange amounted to $271,466 and were charged to additional paid-in capital.

Seasonality

ICP's business is subject to certain seasonal cycles, especially during the summer period corresponding to the part of the second quarter and part of the third quarter, traditionally the slowest of the Company's fiscal year, and the month of December as a result of the end-of-year holidays.

Operating Results for the Three Month Period Ended October 31, 2008

Net Sales

During the third quarter ended October 31, 2008 ICP's consolidated net sales posted a decrease of 27% or $422 thousand to $1.15 million, down from $1.57 million for the three month period ended October 31, 2007. The decrease in third quarter sales of 2008 is due to the general economic slowdown.

By geographic location, sales in North America accounted for approximately 66% of total sales, Europe 28%, and Asia 7%.

Gross Margin

The gross margin decreased by 51% or $191 thousand from $376 thousand to $185 thousand for the quarter ended October 31,2008. The gross profit margin as a percentage of sales was 16%, compared to 24% the previous year. This decrease reflects the increase in costs of our manufactured products as new sources of supply had to be found after disposal of our UK manufacturing facility in May 2007.

Selling, general and administrative expenses (SG&A) decreased by 39% or $804 thousand to $1.27 million for the quarter ended October 31,2008 from $2.08 million a year earlier. This decrease was a result of significant decreases in stock based compensation, staff reductions and decreased professional fees. Research and development expenses were $406 thousand for this quarter compared to $9 thousand in the corresponding period a year earlier as the Company increased its R&D efforts on commercializing several new products.

Including depreciation of $8 thousand and foreign exchange gain of $93 thousand, operating losses amounted to $1.41 million compared to losses of $1.78 million for the three month period ended October 31 31, 2007. The decreased loss is due to the lower SG&A expenses this quarter.

Net interest expense for the quarter decreased by $16 thousand to $68 thousand from $84 thousand in the same quarter last year. This decrease is due to lower interest on the convertible notes due to conversion of convertible notes the prior year .The accretion of the discount on convertible notes for the three month period ended October 3, 2007 was $465 thousand compared nil this quarter and was due to an elimination of the discount when the remaining $850 thousand in notes were converted to common shares last quarter. The income resulting from the accretion of discount on the loan receivable was $23 thousand compared to $126 thousand the previous year's quarter due to the renegotiation of terms with Epod Solar (see note 8 in Notes to Financial Statements). The issuance of the Senior Secured Convertible Debentures (see note 10 in Notes to Financial Statements) last quarter resulted in a discount charge of $ 741 thousand for the quarter ended October 31,2008. In addition on the warrants included with these debentures there was interest on put warrants of $466 thousand. The difference between the accounting and tax basis of this item resulted in a recovery of deferred income taxes of $250 thousand. After giving effect to these items, the net loss for the three month period ended October 31, 2008 amounted to $2.41 million and after the foreign currency translation adjustment a comprehensive loss of $2.61 million compared to the net loss of $2.2 million for the corresponding period a year earlier.

The loss per Class A share - basic and diluted amounted to $0.08 on a weighted average of 33,896,040 outstanding shares for the quarter, compared with a loss per share (basic and diluted) of $0.07 on 29,921,981 shares the previous year.

Operating activities before net change in non-cash working capital items used cash flows of $1.49 million during the quarter ended October 31,2008 compared to $852 thousand a year earlier. Net changes in non-cash working capital items related to operations generated a source of cash flows in the amount of $965 thousand for the three months ended October 31, 2008 compared to a source of cash of $666 thousand for the third quarter ended October 31, 2007. After net changes in non-cash working capital balances, operating activities used net cash flows of $491 thousand, compared with a use of cash of $187 thousand for the corresponding period the previous year.

Financing activities for this third quarter decreased cash flows of $ 10 thousand compared to a $640 thousand increase in the prior year's quarter primarily as a result of the exercise of warrants and increase in bank indebtedness.

Investing activities for the third quarter resulted in a source of cash of $495 thousand to a release of $310 thousand of restricted cash and reductions in the loan receivable of $188 thousand. The third quarter ended October 31,2007 had a use of cash of $6 thousand.

The aggregate cash inflows and outflows for the three month period ended October 31, 2008 saw a decrease in net cash flows of $5 thousand compared to an increase of $448 thousand for the same period last year. ICP ended the period with cash of $103 thousand, down $353 thousand from $456 thousand as at October 31, 2007.

Operating Results for the Nine Month Period Ended October 31, 2008

Net Sales

During the nine months ended October 31, 2008, ICP's consolidated net sales posted a decrease of 15% or $894 thousand to $4.99 million, down from $5.88 million for the nine month period ended October 31, 2007. The reduction in sales reflects the reduction of OEM factory customers and a slowdown and an economic decline seen in all markets during the summer and fall of 2008.

By geographic location for the nine months ended October 31, 2008, sales in North America accounted for approximately 71% of total sales, Europe 23%, Asia 5%

Gross Margin

The gross margin decreased by 44% or $1.06 million to $1.36 million during the first nine months of fiscal 2009. The gross profit margin as a percentage of sales was 27%, compared to 41% for the first nine months of the previous year. This decrease reflects the increase in costs of our manufactured products as new sources of supply had to be found after disposal of our UK manufacturing facility in May 2007. There were also additional costs of air freighting our shipments to customers from our overseas production facilities in order to meet shipping deadlines.

Operating expenses

Selling and general and administrative expenses for the nine month period ended October 31,2008 decreased by $586 thousand or 11% to $4.63 million from $5.22 million a year earlier. This decrease was a result of significant decreases in stock based compensation and reductions in professional fees. Research and development expenses increased to $561thousand for the nine-month period as compared to $9 thousand in charges the prior year. The Company increased its R&D efforts on commercializing several new products which will start generating revenues beginning in the fourth quarter of this fiscal year.

Including depreciation of $21 thousand and the foreign exchange gain of $79 thousand, operating losses amounted to $3.77 million compared to losses of $2.95 million for the nine month period ended October 31, 2007.

The loss per Class A share - basic and diluted amounted to $0.21 on a weighted average of 33,896,040 outstanding shares compared with a loss per share of $0.05 on 29,310,074 shares the previous year.

Principal Cash Flows for the Nine Month Period Ended October 31, 2008

Operating activities before net change in non-cash working capital items used cash flows of $3.07 million during the nine month period ended October 31, 2008 compared to $1.46 million a year earlier. Net change in non-cash working capital items related to operations generated cash flows of $1.15 million for the nine months ended October 31, 2008 compared to $876 thousand for the first nine months ended October 31, 2007. After net changes in non-cash working capital balances, operating activities used net cash flows of $1.92 million, compared with a use of cash of $583 thousand for the corresponding period the previous year.

Financing activities for the nine months ended October 31, 2008 generated cash flows of $1.95 million compared to $569 thousand for the prior year's period primarily as a result of repayment of bank indebtedness of $1.11 million and issuance of convertible debentures of $3.33 million. Also, discount on convertible debentures of $333 thousand for this period compared to nil for the same period last year. There were common shares issued for $100 thousand this period and $43 thousand of government grants repaid..

Investing activities generated a $55 thousand source of cash flows this period due to an investment in restricted cash of $836 thousand as a result of the convertible debenture financing offset by the proceeds of the term deposit of $505 thousand. The repayment of the loan receivable of $436 thousand related to an in-kind receipt of goods for this period compared to cash received of $150 thousand in the nine months ended October 31, 2007.when after adjusting for the additions to property and equipment and term deposit resulted in a net source of $ 127 thousand for the nine-month period ended October 31,2007.

The aggregate cash inflows and outflows for the nine month period ended October 31, 2008 generated cash flows of $82 thousand compared to usage of $218 thousand for the same period last year. ICP ended the period with cash of $103 thousand down from $456 thousand as at October 31, 2007.

Financial Position as at October 31, 2008

Total assets amounted to $6.1 million as at October 31, 2008, compared to $6.2 million as at January 31, 2008. The major decrease is a reduction in the Loan receivable which is partially offset by the increase in restricted cash of $836 thousand.

Working capital totaled $2.96 million as at October 31, 2008 for a current ratio of 2.8:1 compared with working capital of $1.86 million as at January 31, 2008 for a current ratio of 1.9:1.

Capital resources and liquidity: The Company will meet its cash requirements on a short term basis through its working capital. On a long-term basis the company will be looking to raise additional capital by securing financing or issuing common shares.

Liabilities: The liability component of the convertible notes amounted to nil as at October 31, 2008, compared with $682 thousand at the end of January 31, 2008. Senior Secured Convertible Debentures totaled $988 thousand, Put Warrants $4.03 million and Future Income taxes $600 thousand, compared to nil for the same period last year.

Shareholders' deficiency amounted to $1.13 million, compared to $3.46 million of Shareholder's equity as at January 31, 2008. The decrease is attributable to the comprehensive loss for the period of $7.17 million and the increase in paid-in capital of $2.57 million related to issuance of stock options, warrants, and the conversion of debentures into common shares. .