SOLARPHOTOVOLTAIK 1 European Status of PV Solar Electricity Technology and Market Dr. Winfried Hoffmann Chairman of the Management Board of SCHOTT Solar GmbH Member of the Board of the European Photovoltaic Industry Association (EPIA) and the German Solar Industry Association (BSi) and member of the Scientific Board of FhG-ISE and ISFH SCHOTT Solar GmbH Carl-Zeiss-Strasse Alzenau, Germany Phone: +49 (0) Fax: +49 (0) Semicon Japan 2005, Tokyo December 9th, 2005

2 SOLARPHOTOVOLTAIK Preamble Europe has, like Japan, defined PV solar electricity as one of the most important future key technologies. In order to enable the production industry to develop competitively, market support programs were encouraged in the EU member states. This, however, will only be supported as long as a strong EU based production industry in harmony with the market size can be established. The industry from the most important world economy regions (Japan, Europe, US, SEA) should proactively secure their local market developments in correspondence with the respective local industry capacity increase.

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4 GPSC: Global Solar Electricity Council History of the initiative: -Paris – June 2004 – Proposal of the action – Industry Day, 19th EUPVSEC -Barcelona – June 2005 – Meeting with national PV associations from around the Globe Mission: Its mission consists to promote the photovoltaic energy on the global marketplace as a sustainable and clean electricity supply for on-grid and off-grid applications. GPSC is a platform for supporting its members in their common interest for the industry needs and for the market development Members: Worldwide PV players and associations Priority Activities: Statistics Warranty and Guarantee issues Boundary conditions Standardization and certification (modules and systems, waste, recycling and reusing) Competitiveness with other energy sources (externalities, socio- economic issues) International cooperation

5 SOLARPHOTOVOLTAIK Alzenau, Headquarters Fully integrated production of wafers, cells and modules Phototronics (PST) Putzbrunn Production of thin film modules SCHOTT Solar GmbH SCHOTT Solar, Inc. Billerica (MA) USA Fully integrated production of wafers, cells and modules SCHOTT Solar Inc. Rocklin (CA) USA System integration Sales of modules and systems SCHOTT Solar CR Valasske Mezirici, CR Production of modules SCHOTT Solar Group Employess: ca. 900 world-wide Turnover: 285 Mio. € in FY 2005 SCHOTT AG Subsidiaries 100 %

SOLARPHOTOVOLTAIK AEG Telefunken Mobil Tyco Solar Energy 1990 MBB 1994 PST DASA 50% NUKEM 50% Mobil Solar Energy % TESSAG 100% NUKEM GmbH 100% RWE Solutions AG ASE GmbH ASE Americas Inc RWE SCHOTT Solar GmbH RWE SCHOTT Solar Inc. Joint Venture RWE Solutions SCHOTT Glas RWE Solar GmbH ASE Americas Inc SCHOTT Solar GmbH

RWE Space Solar Power GmbH © RWE Space Solar Power GmbH More than 300 Satellites with RWE Solar cells

8 SOLARPHOTOVOLTAIK 90 bn cm²45 bn cm²today m² semiconductor areacm² wafer area typical characterization by in-linebatch typeprocess technology thin film (aSi, II-IV, dye, organic) flat panel display (aSi)new products III-VIII-V (GaAs)new materials silicon wafer main stream technology base PV solar electricity industry semiconductor industry

9 SOLARPHOTOVOLTAIK Value Added Chain for PV Systems (c-Si) Laminate Module Si - Feedstock BOS-DC/AC BOS - others Installation (ca.) Cell Wafer 100 % stand-alone Si, Wafer, Cell Laminate BOS Module Installation 40 % 5 % % Parts of PV add-on cost taken by standard building materials 60 – 70 % BIPV

10 SOLARPHOTOVOLTAIK Gary Homan: Hemlock Semiconductor Corporation, 2nd Solar Silicon Conference, Munich 2005 The Solar Supply Chain SGS/ASiMI SiliconIngot/WafersCellsModules HSCCrystaloxQ-Cell Wacker Tokuyama MEMC Others REC SCHOTT Solar * Sharp Solar World Examples of Manufacturing Companies (not all inclusive * addition SG PC) Kyocera, BP Solar

11 SOLARPHOTOVOLTAIK Investments in the Value Chain Crystalline Si- Modules 20 … 40Modules 30 … 50Cells 60 …80Wafer 60 … 120Si feed stock Mio € per 100 MWInvesments

SOLARPHOTOVOLTAIK 12 World PV Market Size and Application Segmentation % p.a. 63 % p.a. 40 % p.a Market Size in MWp Off-Grid & Consumeron-Grid

13 SOLARPHOTOVOLTAIK Competitiveness between Electricity Generating Cost for PV and Utility Prices Source: RWE Energie AG and RSS GmbH Photovoltaics Utility peak power Bulk power market support programs necessary:

14 SOLARPHOTOVOLTAIK Spot Market Prices in Correlation with PV Electricity Generation in Germany Spot market price PV power output Source:

SOLARPHOTOVOLTAIK 15 History Forecast 15 Price Experience Curve for PV Solar Modules

16 SOLARPHOTOVOLTAIK Cost and price decrease of technology driven PV solar electricity minimum - 3 % p.a. realistic- 5 % p.a. maximum - 7 % p.a. Price increase of standard electricity production minimum +1 % p.a. realistic+3 % p.a. maximum + 5 % p.a. Competitiveness of PV solar electricity

SOLARPHOTOVOLTAIK 17 Future Growth of the Global PV Solar Electricity Market in GW and bn $ Turnover installed GWp per year investements in production machinery [bn$] module market volume [bn$ p.a.] (Assumption: $ = €)

18 SOLARPHOTOVOLTAIK Technology Evolution Module Efficiency [%] c-Si TF a-Si-pin/pin a-Si/µc-Si II-VI dye a-Si-pin II-VI r r mc Cz Module Price / Wp [rel. units]

Feedstock for the PV Industry Karl Hesse, Ewald Schindlbeck, April , Page 19 CAGR Poly-Demand : + 15 % SOLAR-GRADE SILICON: SUPPLY CAN NOT FOLLOW DEMAND. Moduleproduction (MW) and Polysilicon Production (tons) tonsMW 3,1 GW

20 SOLARPHOTOVOLTAIK Development of Annual Silicon Consumption

21 SOLARPHOTOVOLTAIK Market data Europe including the rooftop program / feed-in tariff (EEG) in Germany Source: IEA PVPS 21 Yearly installed MWp roof- top program KfW EEG EEG PV amendment

22 SOLARPHOTOVOLTAIK European Market Support Programs plannedGreece 100 / Italy I, Tlifetime28 – 51Portugal Cap [MW] Duration [a] Tariff [€ct/kWh] complicated-2015 – 30France I, T – 40Spain – 62Germany other support programs (I: Investment subsidy T: Tax reduction) Feed-in law Country 22

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24 SOLARPHOTOVOLTAIK Production and Market - Current Situation PV Industry (2003/2004): ProductionMarket JapanEuropeUSAROW JapanEuropeUSAROW

25 SOLARPHOTOVOLTAIK Comparison of the Future Market Development in Europe and Japan Yearly installations mainly Germany Cumulative installations mainly Germany Yearly installations Japan Cumulative installations Japan Additional EU-installations e.g. EU-wide feed-in tariff program (not contained in accumulated curve) cumulated installations in MWp Yearly installations in MWp must be revised towards 5 GW cumulative and 1300 MW in 2010 in Europe ! 25

26 SOLARPHOTOVOLTAIK 0 1 Development Prediction of World-wide Electricity Capacity in Relation to PV Solar Electricity Contribution GW 100 % 10 % 1 % PV , ,000 worldwide electricity generating capacity Year ,500 35,000 TWh 3.500h load factor +30%p.a. +25%p.a. 26

27 SOLARPHOTOVOLTAIK Contribution of PV Solar Electricity to Global Electricity Production in 2040 Source: Own estimates together with data from EREC /11/ and WBGU /12/ [%] 1 marine 2 geothermal 3 biomass 4 hydro 5 wind 6 solar thermal 7PV solar electricity 36,000 TWh 2001 … 2040 ww electricity