4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 1 “Towards maturity of the PV industry” 4 th European Industry Forum 22 nd EU PVSEC, Milano, September 5th, 2007 PV solar electricity market overview Winfried Hoffmann Chief Technology Officer (CTO), Solar Business Group of Applied Materials President of the European Photovoltaic Industry Association (EPIA), President of the German Solar Economy Association (BSW) and member of the Scientific Board of FhG-ISE and Supervisory Board of ISFH Applied Materials GmbH & Co. KG Siemensstr Alzenau Phone: Fax:

Applied Material external Authorized Labels for Information: Applied Materials Confidential. Applied Materials Confidential Restricted/Modifier Applied Materials Confidential/Modifier External Use R 255 G 255 B 204 R 202 G 222 B 233 Light Background Palette R 235 G 169 B 0 R 124 G 165 B 0 R 208 G 0 B 30 Bingo Color Palette Main Color Palette R 0 G 204 B 255 R 0 G 153 B 204 R 0 G 51 B 102 R 255 G 153 B 0 R 204 G 51 B 0 R 162 G 0 B 108 R 124 G 168 B 0 2 Applied Materials Overview  Revenue (Past 4 Qtrs.) – $9,868 Million  Worldwide Employees – Approx. 14,000  Worldwide Locations – 18 Countries Vision: We apply nanomanufacturing technology™ to improve the way people live Power $/W Area $/m² Solar Business Group within the Business Segment “Energy and Environmental Solutions” SunFab TM

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 3 European Photovoltaic Industry Association Bundesverband Solarwirtschaft (German Solar Industry Association) European Renewable Energy Council 600 members of the Solar Thermal and PV Solar Electricity Industry 110 members of the PV Solar Electricity Industry PresidentDirectorPresident

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 4 40 % p.a. 63% 18% World PV Market Size and Application Segmentation

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 5 Development of the German PV-market 1991: Electricity Feed-In Act Right of (1) of grid access (2) feed-in of solar electricity (3) refund payment at fixed prices (approx. 8.5 €ct per kWh) 2000: Renewable Energy Sources Act (EEG) Solar electricity feed-in tariff of 51 €ct per kWh 2004: Amendment to EEG Feed-in tariff of €ct per kWh : 1,000 Roofs Program : 100,000 Roofs Progr. Low-interest loans for 300 MWp

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 6 European Market Support Programs 2006 (est.) Feed in Laws: Switzerland (1991); Denmark (1993); Sweden (1997); Norway, Slovenia (1999); Latvia (2001); Austria, Czech Republic, Lithuania (2002); Cyprus, Estonia, Hungary, Slovak Republic (2003); Turkey, Ireland (2005) other countries – 50Greece 51, – 49Italy – 45Portugal Cap [MW] Duration [a] Tariff [€ct/kWh] BIPV France – 41Spain – 49 BIPV + 5ct Germany 2005 Feed-in law Country yearly market [MW]

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 7 Competitiveness between Electricity Generating Cost for PV and Utility Prices Source: RWE Energie AG and SCHOTT Solar GmbH market support programs necessary: Photovoltaics Retail prices private and small business Large power consuming industries

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 8 Tokyo Electric Power Cooperation (Jp) Tariff 2005 Range of Electricity Prices in California (data from Alison Hyde, BSW)

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 9 Different World PV Market Projections until 2010 (Status: 2006/2007 ) MW

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 10 Regional Development until 2011 (Annual Installations – Policy Driven Scenario)

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 11 History Price Experience Curve for PV Solar Modules Forecast

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann ,000 10, Cumulative Units Sold (Millions) Market Price/unit (1996 $) Analog Handset Price ‘00‘95‘90‘85‘80‘75‘70‘65 ~28% reduction for doubling of total volume DRAM Cents/bit Cumulative Bits VLSI/DRAM Cost/Learning Curve Examples FPD Cost (PECVD) Source: Applied Materials

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 13 Scale of manufacturing / Example: TFT Display Technology Development G1 G3+G3 G2 G6 G5+ G7 G5 G4 Area [m²] Year in 2005 more than 500 production / R&D machines G8

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 14 Future Growth of the Global PV Solar Electricity Market in GWp and bn€ turnover

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 15 Total electricity production 1 PV electricity production² 1% of Total 10% of Total World Electricity Production Forecast

4 th European Industry Forum, 22 nd EU PVSEC, Milano, Sept. 5 th, 2007 – W. Hoffmann 16 Electricity generating cost [€ct/kWh] Eurelectric / VGB Power Tech Today 2005 Tomorrow 2030 Day after tomorrow 2050 Fossile (coal, gas) Nuclear (PWR, HTR, FBR) 4 – 63.5 – PV solar electricity (south/north) 20/405/103/6 = own estimates