1. - Market & its Surroundings-
Overview of Korean PV
- Market & its Surroundings-
5 April, 2017

2. 1. Market Evolution

3. (Newly Installed Capacities/MW) (Cumulative Capacities/MW)
PV Installation in Korea
○ Annual Installation
(Newly Installed Capacities/MW) ↑
→ (Year)
Fig. Annual PV installation in Korea
○ Accumulated PV Capacities
(Cumulative Capacities/MW) ↑
→ (Year)
Fig. Cumulative Capacities in Korea

4. Korean PV market according to Policy Schemes
Installed Capacities (MW)
Y2014
Y2015
Y2016
Subsidies for Residential Installation
22.4
26.8
27.5
Subsidies for Building Installation
5.1
6.0
6.3
Subsidies by local government
11.0 14
11.6
Subsidies for Hybrid Installation
5.6 6
7.1
Public Building Obligation
16.0 33
39.8
Solar Lease
1.0
8.0
RPS(Renewable Portfolios Standards)
865.2
1,040.1
803.8
total capacities (MW)
926.3
1,133.9
904.1
[source: Korea Energy Agency, some segments are estimated]

5. PV in RPS portfolio RPS performance in Y2016
Cumulative capacities in RPS by 2016
RPS in 2016 RE : 1,516MW
PV : 804MW (53.0%)
RPS by 2016 RE : 7,555MW
PV : 3,289MW (43.5%)
PV Wind Hydro Fuel Bio Wastes IGCC PV Wind Hydro Fuel Bio Wastes IGCC
[source: Korea Energy Agency, 2017]

6. Comparison of PV installation
○ Cumulative PV installation by 2016
(Capacities and Proportions)
25.7%
13.5%
13.2%
13.1%
6.3%
3.8%
3.3%
2.3% 2%
1.9%
1.5%
[unit: MW]

7. GDP and PV Installation
(Accumulated PV Capacities by Y2016/GDP in Y2016, unit: MW/billion USD)
※ Remarks: ① GDP data of each country was searched in IMF website.
② The GDP is based on the records of Y2016.

8. PV in Korean electricity capacities
ㅇ PV accounts for 3.1% of Korean electricity capacities
[unit: MW]
2014
2015
Change
capacities
ratio(%)
change(%)
Total capacities
108,664
100.0
114,972
6,308
5.81
renewable energy
11,739
10.80
13,574
11.81
1,835
15.63 PV
2,539
21.6
3,615
26.6
1,075
42.3
Wind
640
5.4
848
6.2
208
32.6
Hydro
1,735
14.8
1,737
34.6 1
0.1
Ocean
255
2.2
1.3
0.0
Bio
1,770
15.1
1,866
12.8 96
Wastes
4,634
39.5
4,702
1.9 68
1.5
Fuel cell
165
1.4
171
13.7 6
3.9
IGCC
381
2.8 -
[source: Korea Energy Agency, 2016]

9. PV in Korean electricity generation
ㅇ PV accounts for 0.7% of korean electricity generation in 2015
[unit: MWh]
2014
2015
Change
generation
ratio(%)
change(%)
Total generation
546,248,948
100
551,625,071
5,376,123
0.98
renewable energy
26,882,190
4.92
37,314,307
6.76
10,432,117
38.81 PV
2,556,300
9.5
3,974,819
10.7
1,418,519
55.5
Wind
1,145,557
4.3
1,339,634
3.6
194,077
16.9
Hydro
2,753,924
10.2
2,147,248
5.8
-606,676
-22
Ocean
492,172
1.8
496,354
1.3
4,182
0.8
Bio
4,656,237
17.3
5,616,983
15.1
960,746
20.6
Wastes
14,334,944
53.3
22,643,910
60.7
8,308,966 58
Fuel cell
943,056
3.5
1,089,270
2.9
146,214
15.5
IGCC
6,089 -
[source: Korea Energy Agency, 2016]

10. the proportion of PV generation
Comparison with EU countries in terms of PV proportion in electricity generation
0.7%
1.2%
Korea
Global Average
[source: Solar Power Europe, 2016]

11. Scenarios of PV dissemination
[source: Solar Power Europe(Jul. 2016)

12. Prospects on Korean PV market
It is 1,300MW that Korean government set as the goal of this year. ; PV(1,300MW) Wind(208MW) Other(196MW) => Total 1,704MW
(Policy Briefing of Korean Government, Feb. 21, 2017)
[source: Solar Power Europe(Jul. 2016)

13. Geographical distribution of PV installation (at the end of Y2015)
[unit: kW]
Julla Province(North Julla+South Julla) accounts for 45% of Korean PV installation in terms of accumulated capacities by Y2015.
North Gyeongsang &
South Chungcheng
have been emerging
as 3rd or 4th places
to install PV systems.
Gangwon Province
156,752
Seoul
65,027
Incheon
44,503
GyeonggI
209,792
North Chungcheong
157,107
Sejong
11,582
North Gyeongsang
377,967
South Chungcheong
369,983
Daejeon
26,619
Daegu
42,897
North Julla
662,738
Ulsan
19,803
South Gyeongsang
291,394
Busan
77,323
Gwangju
75,818
South Julla
920,216
Jeju
105,677
[source: Korea Energy Agency]
Korea Photovoltaic Industry Association

14. Investment in local RE market
■ In addition to private PV enterprises, state-owned companies will
actively invest in RE development with putting more weights on PV
[unit: billion KRW]
2017
2018
Sum PV
334.6
1,099.5
1,434.1
38.6%
Wind
430.1
869.6
1,299.7
35.0%
Hydro
27.8
51.5
79.3
2.1%
Fuel cell
421.0
245.0
666.0
17.9%
Bio
67.0
1.8%
Others
165.9
4.7%
1,280.5
2,431.5
3,712.0
[source: ET News, 2017]

15. 2. Korean PV Policy

16. Change in price determination
<long-term contract on the basis of fixed price>
ㅇ Ensure the predictability of PV power profits
⇒ Promote the investment in PV power development
ㅇ PV price (based on bidding in KEA)
Before
After
Applied
3MW and less
No restriction
Bidding
REC
SMP+REC
Contract term
12 years
20 years
2012
2013
2014
2015
2016
SMP
160.83
152.10
142.26
101.76
77.06
REC
170.65
131.39
112.59
72.08
99.89
Sum
331.48
283.49
254.85
173.84
176.95
[unit: KRW/kWh]

17. Mechanism ㅇ (SMP + REC price) is fixed for 20 years.
Guarantee the long-term power purchase with fixed price.
However, the price is decided in market-following system
including competitive bidding
FIT case
SMP+REC
following market
mechanism
PV systems :
[source: MOTIE, News Tomato, 2017]

18. □ Promoting Policies ㅇ Increase of RPS goal
ㅇ Grid Connection
- Backing the grid connection of RE power plant below 1MW
- Accompanying the reduction of waiting time for grid connection
from 17 months to 11 months at the longest estimate
(Jul., Oct., 2016)
ㅇ Expansion of net-metering
- up to 10kW ⇒ up to 50kW ⇒ up to 1,000kW (Sep., 2016) ㅇ Supporting for PV + ESS
- the multiplier(weighting factor) of REC is 5.0 for PV system combined with ESS
from 2016 to 2017 (Sep., 2016)
Y2018
Y2019
Y2020
Y2021
Y2022
Y2023
Y2024
Remarks
Original Plan
6.0%
7.0%
8.0%
9.0%
10.0% ~
set in 2011
Previous Goal
4.5%
5.0%
Revised in 2014
New Target
Announced in 2016

19. PV and Energy New Industry
Solar PV plays a crucial role as a hub of Korean New Energy
System and Industry
Combined with Storage devices and energy management
as well as smart grid solution

20. To promote PV Penetration?
■ Remove regulatory requirements adversarial to PV development.
(e.g.) ㅇ distance issues between PV systems and roads.
ㅇ licensing for PV installation in local governance
■ Encourage the participation of community in PV installation
ㅇ Increase receptivity of local community toward PV installation ■ Develop business models
ㅇ Solar lease, Community Solar ⇒ B2C, P2P business,
ㅇ Making use of financing platform
■ Ensure the grid connection
ㅇ Reduce the lead time to integrate PV power into grid ㅇ KEPCO : Open Green Grid * Introducing G-platform Station, Increasing transformers, substations, ACCC

21. Prospect of Electricity Portfolio
[source: KEPCO, 2017]

22. Grid Issues
■ RE systems worth 1789MW were waiting for grid connections in 2016/E ㅇ After allowed to be connected to grid for 1MW or below without limit,
the waiting capacities have increased
ㅇ Concentrated on specific areas
- Southern area accounts for 55% of waiting quantities
■ Analysis of waiting RE capacities and ration according to cases
Immediately Connected
Adding
New Lines
Banks
Adding Substations
Sum
Number
2,699
348
838
2,234
6,119
Capacities (MW)
738 (41%)
133
(7%)
298 (17%)
620 (35%)
1,789 (100%)
Leading
Time
1~2 weeks
11 months
72months
[source: KEPCO, 2017]

23. Open Green Grid
[source: KEPCO, 2017]

24. 3. Korean PV Industry

25. Korean RE industries [source: Korea Energy Agency]
[unit: KRW(100million won)]
No. of
companies
employees
revenues
investment
sum
local sales
exports
$million
Overseas
plants PV
127
8,698
75,637
22,975
33,892
2,995
18,770
5,234
ratio(%)
25.8
53.8
66.9
46.2
83.2
83.1
66.8
Solar heat 21
228
290 - -　 1
4.3
1.4
0.3
0.6
Wind 37
2,369
14,571
5,123
5,639
498
3,809
583
7.5
14.6
12.9
10.3
13.8
16.9
7.3
Fuel cell 15
802
2,837
2,143
693 61 47 3 5
2.5
1.7
Geothermal 26
541
1,430
251
5.3
3.3
1.3
2.9
3.1
Hydrothermal 46 29
0.1
Hydropower 4 83
129
116 13
0.8
0.5
0.2
Bio
128
1,511
12,390
11,884
506 45
221
9.3 11
23.9
1.2
2.8
Wastes
132
1,899
5,763
1,539
26.8
11.7
5.1
11.6
19.3
Sum
473
16,177
113,077
49,754
40,743
3,601
22,579
7,965
100
※ Remarks: USD $1 = KRW 1,131 Won(in 2015)
[source: Korea Energy Agency]

26. Records of Korean PV Industry
[unit: KRW 100million Won]
Polysilicon
Ingot
Wafer
Cell
Module
Equipments
Inverter
Material/parts
Collector
Sum
2014 revenues
10,967
1,429
3,157
957
36,442
1,921
3,271
5,161 45
63,358
ratio(%)
17.3
2.3
5.0
1.5
57.5
3.0
5.2
8.1
0.1
100
local sales
1,440 72
373
235
9,677
1,536
2,992
3,471
19,840
exports
9,536
1,356
2,784
722
8,710
385
279
1,690
0.3
25,462
$million
905
129
264 69
827 37 26
160
0.0
2,418
overseas plants 　- -　
18,056
2015 revenues
13,338
4,437
2,288
1,578
41,118
3,222
4,128
5,502
75,637
17.6
5.9
2.1
54.4
4.3
5.5
7.3
717
926
214
405
10,092
3,030
3,629
3,937
22,975
Exports
(KRW)
12,621
3,512
2,074
1,173
12,256
192
500
1,565
33,892
(USD million)
1,115
310
183
104
1,083 17 44
138
2,995
18,770
change rate(%)
21.5
210.6
-27.5 65
12.8
67.8
26.2
6.6
-41.2
19.4
[source: Korea Energy Agency]

27. Production Capacities in terms of nameplate
□ The production capacities of polysilicon and wafer shrank due to consolidation
□ In the cases of cell & module, the production abilities and volumes have increased
owing to market environment and investment of some big players
Polysilicon
Cell
Wafer
Module

28. To foster local PV industry?
■ Industrial growth
ㅇ Combined with local market
ㅇ Technical initiative to take industrial leadership
■ Building up the competence in overseas market
ㅇ Corresponding to trade disputes
ㅇ Market diversification
■ Cohesive structure
ㅇ Make the most of other fields such as financing, related industries and
technologies, etc.
ㅇ Systematic operation in developing markets

29. Summary Korean PV market has been steadily increasing its volume and
market attractiveness owing to RPS and other diverse
policy schemes.
Korean PV companies make an endeavor to enhance their
value from upstream to downstream through investment, technology improvement and market development, etc. 1 2 3
In order to expand the PV market, it is required to relieve regulations imposed by local governance and increase the
receptivity of local communities.
Additionally grid infra should be outfitted corresponding to
increasing PV installations
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30. Thank you