1. COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 11 A Systems Perspective for Managing Commercial Portfolios of Research and Technology for the Solar Industry J.M. Morabito - Sr. Director, Bell Labs Fellow, Chief Technology Office (CTO) February 2012 Bell Telephone Laboratory, ca. 1955

2. COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 22 Presentation Objectives Present a framework, proven in other high-technology industries, for assessing the opportunities, required resources, and complex, interrelated bottlenecks facing the solar industry and its role in building a Global Knowledge Society. Demonstrate how this framework can be applied to maximize solar industry value creation and its contribution to Sustainable Development. ­ Sustainable development is in itself a “killer application,” and ­ A major driver of the innovation necessary to achieve sustainability and a Global Knowledge Society ­ Sustainability will require limits on consumption but not Knowledge and a new focus on human well being and purpose as indicators of growth

3. COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 33 Solar Industry Structural Evolution Industrial strategy is about structural evolution and market positioning to secure a sustainable competitive advantage. ­ Successful strategy for the U.S. Solar Industry, will be determined by actions of multiple factors, economic conditions, policies and programs. ­ Anticipating/envisioning the Solar Industry’s likely evolution and supporting actions can secure a sustainable competitive advantage. Ultimately, the Solar Industry will dwarf the Information, Communications Digital Technologies (ICT) industry, but the Solar Industry can benefit and learn from these industries’ characteristics: ­ Supporting structures for long-term growth, sustained profitability, & collective response to environmental, regulatory and other challenges ­ Global supply chains linked by industry-wide technology roadmaps, industry & environmental standards, manufacturing diagnostics, & other collective dependencies that accelerate technology transfer, reduce cost, & facilitate innovation. Need to explore, in collaboration with all stakeholders, how best to nurture and develop a supportive and collaborative Solar Industry.

4. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 4 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Value Migration 1800 to 2050 will be remembered as a period of intense technological expansion that fundamentally increased humankind’s ability to extract and harness energy. EconomyEconomic Drivers InfrastructureEconomic Indicators Environmental Protection Agrarian (before 1800) Land and CropsDirt roads and couriers on horseback Commodity pricesNo Industrial Revolution (1800-1900) Cheap steel, coal, textiles Railroads, shipping, telegraph, steam engine Coal and pig iron production, cotton consumption, railroad operating income No Mass Production (1900-1980) Cheap energy, especially oil Highways, airports, telephones, broadcasting, electric power grid Retail sales, auto sales, housing starts, industrial production, capacity utilization Command and control development of strict federal regulations Technology/ Information (1980- 2010) Ever-cheaper semiconductors and photonics, R&D programs, rapid technology change, knowledge/ software, direct electronic access Satellites, fiber optics, networks, wireless, distributed power Worldwide web/the internet Book to bill ratio, computer sales, deflation in high tech prices, power value, high tech, trade balance, employment in knowledge intensive Industries Pollution prevention, industrial ecology, international standards (ISO), renewable energy

5. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 55 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Value Migration 1800 to 2050 will be remembered as a period of intense technological expansion that fundamentally increased humankind’s ability to extract and harness energy. EconomyEconomic Drivers InfrastructureEconomic Indicators Environmental Protection Sustainable Energy/ Information Intensity Era (post 2010) Convergence of Electric Power and Information Technology, i.e., the Digital Economy of the Global Knowledge Society Transition from EXTRACTION- based technology to SUSTAINABLE technology. Costs; Capital; Competition/ Cooperation; China; Consumers; Climate Carrying Capacity; Convergence Computer-Mediated (Smart) Advanced Communication Networks. Electronically linked devices such as sensors, activators, processors, cameras, etc. that communicate interactively with minimum human intervention over Networks. Smart Grid, i.e., the Energy Internet. Global Electrification Global population stabilization Employment in clean energy technologies Efficient systems for utility grids, traffic management, food distribution, water conservation, and health care Sustainability Air and water quality Biodiversity Forestation Carbon Tax Eco-incentives Renewable Portfolio Standards & Fuel Efficiency Standards (i.e., CAFE) Transnational Agreements

6. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 66 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. New Economy It’s global It’s networked It’s based on information It decentralizes power It rewards openness It’s specialized, i.e., mass customization Information, Communications, Digital Technologies (ICT) Portfolio Processors Advanced wireless and optical communication links Sensors Actuators Renewable Energy/Advanced Storage Technologies New materials, for example, nanotechnologies, carbon nanotube, graphene, room temperature superconductivity, etc. Features of the Sustainable Energy/Information Intensity New Economy and Digital Technology of the Global Knowledge Society

7. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 77 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Population & Economic Growth 6 3 2 1 0 4 5 BC400BC200 AD1 200 400 600 800 1000 1100 1200 1300 1400 15001600 1700 1800 1900 1975 1993 2000 World Population (Billions) Year The technological advances of this era have enabled modern economies and the human population to grow rapidly. Total Industrial production 300 200 100 1930195019701990 Index (1963 = 100) industrial production/capita World Industrial ProductionWorld Population

8. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 88 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Carbon Dioxide Concentration in the Atmosphere Sources: L. Machta; T. A. Boden 380 360 340 320 300 1860 188019001920194019601980 2000 Actual atmospheric measurements Parts per million by volume Source: www.eia.gov Environmental Impact The US Energy Information Administration (EIA) forecasts an annual average 1.5% growth in CO 2 emission levels (based on projected Kaya factors) through 2035, representing a 49% increase in 2008 levels.

9. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 99 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Computational Learning Curve Source: R. Kurzweil, “The Singularity is Near” The Global Knowledge Society

10. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 10 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Effect of Electrification on Birth Rate and Income About one quarter of the human race lives today without access (Inclusion Gap) to modern energy services, Information and Communications Digital Technologies (ICT). This energy and ICT Inclusion Gap tends to be greatest in those regions where population is growing most rapidly and would offer the greatest benefits.

11. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 11 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Effect of Electrification on Birth Rate and Income Source: gapminder.org, Effect of Electrification on Birth Rate and Income

12. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 12 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Improving access to electricity and Information, Communications Digital Technologies (ICT) must play a central role in managing sustainable growth because: Electricity allows for diversity in primary energy supply, yet is an intrinsically clean energy carrier. It is generated at 60/50 Hz., but can be converted to any frequency in the spectrum: infrared, ultraviolet, and microwave. Electric services and ICT enable the modern technological innovation essential to human opportunity. Application of ICT will enable carbon emission reduction five times the size of the sectors own carbon footprint (Source: Smart 2020 Report), i.e., Decarbonization. Application of ICT would replace goods and services with virtual equivalence and also provide technology to enable energy efficiency in key opportunity areas – travel/transport, buildings, electric grids and industry systems, i.e., Dematerialization. Sustainability will require limits on consumption and a new focus on human well being and purpose as indicators of growth. Sustainability is defined as living in harmony with each other and our planet by experiencing freedom and prosperity on a global level. The Sustainability Challenge to the Global Knowledge Society

13. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 13 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. The Kaya Identity First described by Y. Kaya in a paper submitted to the IPCC Energy & Industry Subgroup, Paris, 1990. Numerical example: 2008 World Data (Source: US Energy Information Administration, www.EIA.gov) Where: C= CO 2 emissions [metric tons] E= Total Energy consumption [BTU] Y= Economic activity [$] P= Population [persons] An d: C/E= CO 2 Intensity of Energy [Metric tons/BTU] E/Y= Energy Intensity [BTU/$] Y/P= Economic Intensity = Per Capita GDP [$/person]

14. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 14 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Global Environmental Dilemma: Projected (2008-2035) CO 2 Emission Levels and Associated Kaya Factors (World) The US Energy Information Agency (www.eia.gov) projects an ~1.5% average annual percent increase in world CO 2 emissions based on the above projected average annual percent changes for the 4 Kaya factors, through 2035.www.eia.gov Projection: 49% increase in 2008 world CO 2 emission levels by 2035. Most significant driver of growth in CO 2 emissions is economic output per capita (Y/P). ­ Governments generally pursue policies that increase Y/P. Population growth (P) is projected to increase everywhere except Japan & Russia. Energy Intensity (E/Y) is generally indicative of energy efficiency. CO 2 Intensity (C/E) is indicative of regional fuel source mix (renewables). Change in CO2 Emissions = Change in CO2 Intensity + Change in Energy Intensity + Change in Per Capita GDP + Change in Population +1.5% = -0.2% + -1.8% + +2.6% + +0.9% Opportunity for Technology

15. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 15 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. "Enabling Effect" of the ICT Industry: Projected Reductions in World Emissions (2008-2035) by ICT Enabled Innovations The Climate Group Report: “Smart 2020: Enabling the Low Carbon Economy in the Information Age”, page 30, 2008 7.8 GtCO 2 e of ICT-enabled abatements are possible out of the total BAU emissions in 2020 (51.9 GtCO 2 e) The SMART opportunities including dematerialisation were analysed in depth

16. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 16 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. "Enabling Effect" of the ICT Industry: Projected Reductions in World Emissions (2008-2035) by ICT Enabled Innovations The projected annual average percent change (reduction) in the revised C/Y Kaya factor (through 2035) is computed to be ~-3.5% for the most optimistic ICT benefit (i.e., Smart 2020 Report). Using an equivalent 3-factor form of the differential Kaya relation and the current EIA projections (2008-2035) for annual average Per Capita Economic Activity (Y/P) growth (+2.6%) and Population (P) growth (+0.9%), yields a revised prediction of CO 2 emission growth through 2035... Baseline/Current EIA Projection

17. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 17 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Predicted Annual Average Growth (2008-2035) in World CO 2 Emissions Including Beneficial "Enabling Effect" of ICT Assuming the most optimistic predicted benefits due to the “enabling effect” of the ICT industry is realized, the differential form of the Kaya identity indicates essentially no (~0%) growth or increase in world CO 2 emissions (relative to 2008 levels) through 2035. This no growth/increase result is in contrast to the current EIA projection of a 49% growth/increase in world CO 2 emission levels by 2035 (relative to 2008). Change in CO 2 Emissions = Change in CO 2 Intensity of Economy + Change in Per Capita GDP + Change in Population ~0% = -3.5% + +2.6% + +0.9% Opportunity for Technology Change in CO 2 Emissions = Change in CO 2 Intensity + Change in Energy Intensity + Change in Per Capita GDP + Change in Population 4-factor Kaya Identity Equivalent 3-factor Kaya Identity

18. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 18 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Maximizing benefits and speed of market adoption of “Dematerialization & Smart Solutions”, enabled by the ICT industry, should be a focus of global technology development & innovation to mitigate CO 2 emission levels. ICT is central to Energy Internet/Smart Grid that: Enable higher renewable energy market penetration (developed countries) Build demand for distributed generation based on ICT applications – telemedicine, entertainment, education, e-banking, …. (developing world) All scenarios predicting significant beneficial ICT “enabling effects” assume a 10X-50X increase in solar/PV electrical generating by 2035. Realizing the full potential of the ICT “enabling effect” depends, in part, on a rapidly accelerated development of the solar/PV industry. Need to explore, in collaboration with all stakeholders, how best to nurture and develop supportive & collaborative Solar Industry. Decisions made today will impact the efficiency, sustainability, & profitability of a Global Solar Industry over the next 10, 20, 50 years — as well as determine which countries will be its leaders, e.g. China, Japan, USA, Germany, Spain…. The Role of Renewables in the ICT “Enabling Effect”

19. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 19 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. A Tool to Understand, Integrate and Evaluate Think of the portfolio of project activities at the system level as an interconnected set of functions that reinforce each other. Examine and understand the linkages and interactions between elements that comprise the entirety of the Solar Industry development system. Systems thinking shows how events that are separated in distance and time can interact and how the rules of the system drive system behavior. Small catalytic events, especially ones that change the rules, can cause large changes in complex systems. A goal of Systems Thinking is identifying “leverage” -- seeing where actions and changes lead to sustainable improvement.

20. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 20 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Compliance Process Innovation Compliance Activity delay Gov’t & customer requirements Investment Strategy Operational Efficiency ALU Value Growth New Products ALU Business Design delay ALU Supply Line Design Shareholder ValueCompetitive Advantage delay Product Development Interval Value creation by management of centralized Global Compliance assets and achievement of best- in-class value creates sustainable superior shareholder value. References: The Fifth Discipline – Senge Clockspeed – Fine Theory of Constraints – Goldratt Technology Integration – Lansiti The Innovator’s Solution – Christensen Six Degrees - Watts Systems Thinking (Senge Diagram) Representation of the Compliance Activity and its effect on Alcatel-Lucent Value Growth

21. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 21 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Global Solar Industry Value Creation Market Supply-Chain Transformation “Smart Grid” Infrastructure Development Innovation National Labs Industry & Universities National and International Policy SEIA EPVIA RE Portfolio Standards Investment Tax Credits Feed-In Tariffs Carbon Taxes Industrial Policy Public & Private Investments Accelerate Competitive Advantage Break-Through Technology Transfer Global Supply-Chain Design Innovative R&D Portfolio Mgt Energy Policy Analysis Bottlenecks: Meters & Sensors Grid Interconnection Inflexible T&D Transmission Siting Transmission Access Lack of Storage Sunk Costs Bottlenecks: Performance-Cost Improvement Manufacturing Capacity/ Deployment Velocity Supply-Chain Design Market Conditioning Analysis: IPCC IEA DOE CEC EPRI EC Other Technology Innovation Manufacturing Scale-up Sustainable Profit delay Market Growth Solar Industry Supply-Chain Consortium Energy Internet Sustainable Development Unanticipated & Expanding Applications delay Senge Diagram — Representation of System-Focused Solar Industry Development 21 SEPA SEMI ISES ISGAN etc.

22. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 22 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Key Takeaways The world has not yet reached an equilibrium point in terms of population, economic growth, or environmental impact that can be called “Sustainable”, i.e., The balancing of human activity with the earth’s Carrying Capacity and living in harmony with each other and our planet by experiencing freedom and prosperity on a global level. We have the paradox of a unified global economy but divided global society which pose the single greatest threat to the planet because it makes difficult the cooperation needed to address the remaining challenges. The developed world has reached a critical point at which its future economic, environmental, and social health depends upon increasing the rest of the world’s access to clean, cost-effective energy, Information and Communications Digital Technologies (ICT). Electrification is the foundation for a global sustainable development strategy. Sustainable development is in itself a “killer application” and a major driver of the transition to the sustainable energy/information intensity economic era and the stabilization of GHG emissions. Sustainability is defined as living in harmony with each other and our planet by experiencing freedom and prosperity on a global level.

23. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 23 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Global Solar Industry Value Creation Market Supply-Chain Transformation “Smart Grid” Infrastructure Development Innovation National Labs Industry & Universities National and International Policy SEIA EPVIA RE Portfolio Standards Investment Tax Credits Feed-In Tariffs Carbon Taxes Industrial Policy Public & Private Investments Accelerate Competitive Advantage Break-Through Technology Transfer Global Supply-Chain Design Innovative R&D Portfolio Mgt Energy Policy Analysis Bottlenecks: Meters & Sensors Grid Interconnection Inflexible T&D Transmission Siting Transmission Access Lack of Storage Sunk Costs Bottlenecks: Performance-Cost Improvement Manufacturing Capacity/ Deployment Velocity Supply-Chain Design Market Conditioning Technology Innovation Manufacturing Scale-up Sustainable Profit delay Market Growth Solar Industry Supply-Chain Consortium Energy Internet Sustainable Development Unanticipated & Expanding Applications delay Senge Diagram — Representation of System-Focused Solar Industry Development 23 SEPA SEMI ISES ISGAN etc. Analysis: IPCC IEA DOE CEC EPRI EC Other

24. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 24 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Technology Life Cycle Factors, Another View Time Low High FutureWide-ApplicationEmergingLegacy Availability Value Cost Risk Competition based on Product Innovation Competition based on Value-Chain (Supply Chain) Innovation $1,785/W, 1955 1990 Early Emerging Phase 2008 Wide Application?

25. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 25 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. PV is being pulled into supply chain competition ­Players, particularly in Asia, know supply chain and manufacturing competition well and see it as a competitive advantage ­Can manufacturing investments adapt quickly and cheaply to innovations still in the pipeline, particularly in optics – AR coatings, light trapping, and concentrators? Is the transition premature? Competition increasingly about cost, volume, scale Addresses PV as bulk commodity – cells and modules at lowest cost based on combinations of performance and life Facilitates high value applications, but does not create them Absolutely necessary, but not sufficient, for PV to become a major energy source Supply Chains

26. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 26 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Smart Grid is Key, but Energy Internet Goes Beyond Electricity Development Will Benefit from Network Effects: ­Each additional participant increases value to all participants ­First-to-market with compelling applications for utilities, consumers, businesses has advantage in setting standards and expectations Will Be Different Where There is No Grid or Weak Grid ­Opportunity to leapfrog past centralized systems to distributed systems ­Closely tied to suitability for powering high value end-use applications ­PV has potential to ride network effects of applications it can support, just as RAM and ICs in general ride network effects of Internet, cell phone applications, and expansion of computing power ­Every new connection to an antique grid is a lost opportunity In Developed World Sunk Costs and Current Infrastructure Create Different Challenges Energy Internet

27. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 27 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. PV will remain interesting where and if it can participate in network effects, based on its attributes alone or in combination with other technologies. Most of the network benefits are indirect for PV, but the more central PV is to the package, the greater the potential. ­Flexible, adaptive grids removing the 20% penetration barrier, where network participation makes more intermittent resources possible. ­Virtual utilities of dispersed generation and storage tied together with software and communications. ­Disrupting centralized models, serving the unserved in developing countries with more than electricity ­tele-medicine, tele-banking, tele-commerce, tele-education, tele-government. ­more responsive to bandwidth extension married to electricity than extension of raw power ­Virtual environmental performance, delivering and accounting for clean energy on a real time basis to increase its value and availability. Smart Grid and Network Effects: Some Possibilities

28. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 28 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Ultimately sustainability is the rationale for PV and other renewable energy – otherwise fossil fuels could power the world economy, even with billions of new people, for many decades. There is a physical aspect to sustainability. There is a political aspect to sustainability. If the two do not connect, effectively, sustainability will only be a weak or non-existent leverage point for PV and other renewable energy. Sustainability does imply limits to consumption, but not limits to growth. There are no growth limits on Knowledge. Unlike other “killer applications” sustainability depends on people acting as a community to choose what is best for the future, rather than acting alone to choose what is easiest for themselves. Innovation is the best option for advancing sustainability. ­People who denied the decline in whales for whale oil in the 19th century and continued to invest in whaling ships went bankrupt. ­People who developed petroleum as a substitute and then found new uses for it beyond making lamp oil became billionaires. ­People who despaired of finding more whales to light their lamps ended up buying kerosene from the new petroleum barons. Sustainability – The “Killer Application” for PV and Other Renewables…. Or Not

29. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 29 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. This century’s most important lesson will be the value of Humility, Humanity, and Harmony in creating Global Knowledge Societies. Global Knowledge Societies live in Harmony with each other and our planet by experiencing freedom and prosperity on a global level. We express Humility, Humanity, and Harmony by respecting people (Tolerance) who are different from us and by respecting the environment which we so critically depend upon. The more we gain insight into the mysterious forces, cosmic and atomic, that are the universe, the more reason we have to be Humble and see there will always be things beyond our comprehension. The more we harness the huge power of these forces, the more Humility becomes an imperative; now that our ability to destroy ourselves is greater than our ability to understand ourselves. “Humility is nothing more than a man seeing himself as he truly is……. Any man who can see himself as he truly is…….. must surely be Humble indeed.” The Cloud of Unknowing, and Joseph Morabito, 2011

30. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 30 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. If you want to go fast, go alone… But if you want to go far, go together! African Proverb 30 Global Solar Industry Value Creation International Policy & Innovation National and International Institutions Innovation Market Supply Chain Transformation “Smart Grid” Infrastructure Development State and Local Policies & Innovations

31. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 31 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Conclusions Global access to reliable, affordable electricity is essential to insuring sustainable economic growth, protecting environmental assets and improving global health and prosperity Global electrification will require a combination of innovative new policies, finance mechanisms, infrastructure technology, in addition to ICT. Technology innovation can radically increase zero-carbon electricity generation technologies such as Solar, reduce energy intensity, minimize carbon intensity, while enhancing the quality of life and insuring sustainable economic development. Solar needs more resource investment upstream during the concept and exploration phases to introduce system-level considerations as early as possible. This can reduce the product development interval and facilitate technology transfer. Solar Industry Drivers should be considered in the context of Systems Thinking --- Solar Industry Supply-Chain Consortium, Energy Internet, Sustainable Development Electricity from renewable energy combined with ICT in grid operation and new services to consumers, can stabilize CO2 emissions and form the infrastructure for the transition to a globally sustainable energy system Today, we mainly define progress by new developments in technology and economic growth rather than by the broader notion of advancing human well being and “Human Purpose.” The highest leverage will come from strategies that inherently do both. This integration has the potential to expand technology and human development as two aspects of the same process. This integration offers Hope for the creation of a Global Knowledge Society.

32. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 32 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. J.M Morabito Senior Director, Bell Labs Fellow Chief Technology Office (CTO) www.alcatel-lucent.com www.alcatel-lucent.com

33. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 33 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED.

34. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 34 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. REFERENCE MATERIAL & DATA

35. COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 35 COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. PV Learning Curve and Market Penetration Barrier