1. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION PV solar electricity in Europe – competing with Japan, USA and SEA ( China, Taiwan, Korea, India, etc.) Dr. Winfried Hoffmann SCHOTT Solar GmbH, Management Board Member of the Board of the German Solar Industry Association (BSi), the European PV Industry Association (EPIA) and the Scientific Boards of FhG-ISE and ISFH

2. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Ingredients for successful competition within a given world economy region ($, €, ¥)  Big local market size  strong local industrial production $ € ¥ 2

3. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION  the creation of a strong local industry production employment (primary and secondary) taxes  the creation of a corresponding big local market market support programs boundary conditions for "free" markets Development of a new future industry needs 3

4. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION  Global competitiveness strong R&D quick transfer via piloting into production  Economy of scale purchase (@2/3 material cost !) cost learning curve for individual companies For an individual company and a given technology it is important: 4

5. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Historical PV market growth by regions Europe well positioned ! 0 200 400 600 800 1000 1200 1998199920002001200220032004 Market growth in MWp JAPDEUUSAROW

6. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION What are the markets to be served? Consumer Off-Grid Industrial On-Grid Economically viable Dependant on market support programs Off-Grid Residential Source: Strategies Unlimited 6

7. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION 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: 7 Europe well in balance with other regions !

8. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION  Cost and price decrease for technology driven PV solar electricity systems (… -5% (+) p.a.) experience curves and technology roadmap  Cost and price increase for conventional electricity (… +1% … 3% (+) p.a.) fuel price increase internalization of external cost (CO2, … ) price differentiation of peak and bulk electricity in truly liberalized markets  Degree of correlation between times of peak power demand (high price) and delivery of PV produced electricity Point of time for competitiveness of grid- connected PV solar electricity without support 8 Europe together in the same boat with other regions!

9. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Market data Europe including the 100000 rooftop program / feed-in tariff (EEG) in Germany Source: IEA PVPS 9 Yearly installed MWp 100000 roof- top program KfW EEG EEG PV amendment

10. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION European Market Support Programs plannedGreece 100 / 3002044 - 49Italy I, T lifetime 28 – 51Portugal Cap [MW] Duration [a] Tariff [€ct/kWh] complicated -2015 – 30France I, T3002522 – 40Spain -2048 – 62Germany other support programs (I: Investment subsidy T: Tax reduction) Feed-in law Country 10 Good progress in Europe for market acceleration !

11. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION 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) must be revised towards 5 GW cumulative and 1300 MW in 2010 in Europe ! 11

12. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Market-Pull in Japan for PV Solar Electricity Disadvantage of strong € !

13. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION  Worldwide free trade  not enhanced by WTO mechanisms  Macroeconomic parameters as differences in interest rates and changing currency exchange ratio (US Dollar, Yen, Euro) prevent or accelerate import and exports between regions  Need for boundary conditions (as discussed within the scientific economic field e.g. R. Mundell) between the regions; otherwise: return on investment calculations become obsolete and a whole industry, mainly in high investment production, may suffer. Support Programs Boundary conditions for €-, $- and ¥- currency regions 13 Strong € gives disadvantages compared to products from the ¥- and $-regions !

14. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Future Growth of the Global PV Solar Electricity Market in GW and bn $ Turnover 14

15. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Price Experience Curve for PV Solar Modules History Forecast 15 Individual companies: Watch out for corresponding production cost decrease with appropriate economy of scale !

16. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Is there a necessity for 2nd and 3rd generation technologies to replace c-Si wafer technology for module production cost below 1 €/W ? No, but utilize new features of thin film and new concept cells to serve additional customer needs! Technology Evolution 16

17. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Customer needs 17 €/kWhW/m²€/Wpg/Wp Source: Fraunhofer ISE €/m²aestheticsflexibilityW/mm²

18. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION The four main technology routes 18 Crystalline Silicon (wafer based) New Concepts III – V compounds (GaGs) Thin Film

19. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Technology evolution 1) No 1€/W limit for c-Si modules thin-film (e.g. a-Si, CIS) multicryst./Cz-wafer c-Si ribbon (e.g. EFG) Module full production cost [€/W] update (2002) ( < 0,7 ) 0,7 0,8 / 1,00,9 / 1,1 0,60,7 MUSIC-FM APAS-RENA (1997) 19

20. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION a)low cost (price) per m² (BIPV) at lower eta (4-6%) deposition area: 0,6 → 1,4 → 3 → 5 → 10 m² utilize technology development in TFT technology (e.g. ASI) creation of semitransparency by thin-layers b) low cost (price) per Wp ASI/µc-Si and II – VI compound (CIS, CTS) efficiency from 8 – 10 % today up to 10 – 15 % in 2010 and 14 – 18 % in 2030 Technology evolution 2) thin film technologies have 20

21. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION 21 TFT Display Technology Development G1 G3+G3 G2 G6 G5+ G7 G5 G4 Area [m²] Year Watch out for SEA and Japan ! in 2005 more than 500 production / R&D machines

22. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION  true colours with dyes for new applications  low material cost concepts  general improvement for all sunlight converting devices Technology evolution 3) dye cells / organic materials / high efficiency concepts 22

23. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Technology evolution Production of solar modules using different technologies c-Si thin film "New Concepts" 0 500 1000 1500 2000 2500 3000 3500 0 20 40 60 80 100 120 140 2002200520102015202020252030 MW GW 30%p.a. 25%p.a. 23

24. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Support programs A stable and growing R & D policy in the short, medium and long-term From a yearly R&D budget around 80 millions € (2003) to 250 millions € in the near future. Total PV R&D budget 100 % Industrial (e.g. 40%) Applied (e.g. 40%) Basic (e.g. 20%) Most (e.g. 70 %) 30 % 10 % Small (e.g. 20 %) Little (e.g. 10 %) 24 To stay competitive Europe has to increase R&D budget !

25. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION 0 1 Development prediction of worldwide electricity capacity in relation to PV solar electricity contribution 10 100 1.000 10.000 2000201020202030 GW 100 % 10 % 1 % PV 1 100 1,000 10 10,000 worldwide electricity generating capacity 2030202020102000 Year 3.5 35 350 3,500 35,000 TWh / @ 3.500h load factor +30%p.a. +25%p.a. 25

26. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Transformation of Global Energy Systems, an Exemplary Path 2000 2020 2040 200 600 1000 1400 Year 2100 yearly Energy consumtion [EJ/a] Oil Coal Gas Nuclear Hydro Biomass (traditional) Biomass (modern) Solar electricity (PV and solarthermal power stations) Solarthermal (only thermal) other Renewables Geothermal Wind 26 European industry to participate in this exciting future and big business area of PV solar electricity ! Source: Scientific Board "Global Change of Environment" to the German Government (2003)

27. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Back up

28. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Technology evolution EPIA Roadmap - c-Si technology ribbon [ct/W] wire saw[ctW]51122Si cost 19-2217-2014-17cell eff. [%] long term stable, low cost/m² technologymodule 2,5715Si cost 100 150 200 300 250 wafer [µm] kerf loss [µm] 202530feedstock [€/kg] 202020102000 In the long run integrated manufacturing of thin wafers (100 µm or less) and subsequent cell and laminate making is probably the most effective route. 28

29. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Year Increase for productivity related parameters for three Si wafer technologies diameter [mm] for Cz-mono Si ingots diameter [mm] for EFG ribbon Si tubes weight [kg] for mc Si ingots diameter of Cz-Si ingots and EFG tubes [mm] weight of mc ingots [kg] 29 Zunahme der Abmessungen für verschiedene kristalline Si-Substrat-Technologien 10 100 1000 196019701980199020002010 Jahre 10 100 1000 Cz-Si Substrat-Durchmesser [mm] EFG-Röhren Durchmesser [mm] Masse multikritalliner Si-Blöcke [kg] Logarithmisch (Masse multikritalliner Si-Blöcke [kg]) Logarithmisch (Cz-Si Substrat- Durchmesser [mm]) Logarithmisch (EFG-Röhren Durchmesser [mm])

30. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION ROHSCd !CdTe/CdS field tests underwayno experienceCIS field tests underwayno experienceµmorph Si SW well under control ! low efficiency and critical stability (SW) amorphous Si Current status"Public perception"Technology 30

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33. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION Technology evolution 50 100 33 0510152025 0 1 2 3 0510152025 0 1 2 3 2020+ 2010+ Module Efficiency [%] 2000+ 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]

34. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION National R&D budgets for PV from 1998 to 2004 Source: Trends in Photovoltaic Applications, PVPS, Sept. 1999 to 2005 MUSD/ Year 1 EU includes AUT, DEU, DNK, FRA, GBR, ITA, NLD, PRT, SWE 2 EU plus NOR and CHE 34

35. RENEWABLE ENERGY FOR EUROPE - RESEARCH IN ACTION [%] 1 marine 2 geothermal 3 biomass 4 hydro 5 wind 6 solar thermal 7PV solar electricity Source: Own estimates together with data from EREC /11/ and WBGU /12/ Contribution of PV solar electricity to global electricity production in 2040 36,000 TWh 2001 … 2040 ww electricity 35 0 5 10 15 20 25 30 1234567