0 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 PV production in Germany - threats & opportunities Dr. Peter Frey, CEO Solar Valley GmbH

1 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Renewable Energy Policy - feed-in tariffs according to German EEG-law Installed PV-power in Germany EEG-law change Annually installed power Installed power cumulative [MWp] Installed power cumulative Annually installed power [MWp]

2 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 The mission - to make solar electricity an essential part of the global energy supply Cost reduction by Economies of scale New technologies for products and production Investment in R&D Industrial engineering Market development Price learning curve for modules 20% price reduction by doubling installed power

3 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 German PV-Roadmap Sustainable Energy and Economic Growth Production capacity (modules)3 GW8 GW Share of world market (modules)20%12% Jobs in PV industry90,000115,000 Jobs in installation40,00015,000 Share of exports (producer)50%80% Share of exports (supplier)75%80% Installed power17 GW70 GW Annual increase7.5 GW4 GW Share of PV electricity2%12% Net costs of price support for PV electricity (1) + € 2 bn/a- € 30 bn/a (2025) EEG surcharge to consumer3.5 cent per kWh4 cent per kWh Share of PV50% (1) EEG Renewable energy law

4 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Emerging PV market - growth and competition Opportunities for producers and manufacturers in Germany Rapidly growing market, almost 50% market share in Germany (2010: 7.5 GW) Competitiveness of solar electricity achieved by intelligent system solutions and building integration Efficient suppliers (inverter, wafer, silicon) Leading edge engineering Opening of new export markets for on-grid and off-grid systems “made in Germany” Well established R&D resources at universities and research institutes Increase of R&D-budgets of producers from 2.5% to >> 5% of turnover New technologies: CIGS, Hetero junction/Tandem III/V on c-Si, a-Si/-µ-Si Innovation by co-operation Threats to production in Germany Keeping production costs competitive in face of decreasing feed-in tariffs Worldwide overcapacity of production without local market in Asia Lack of long term capital in free capital markets for investing in large scale production

5 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 The strategy Co-operation along the PV value chain Concept from basic research to innovative application  € 40 m funding by Federal Ministry of Research & Technology  € 30 m funding by ministries of federal states  € 70 m contribution by industry development of two silicon based technologies: crystalline 90%, thin film 10% Cluster of excellence Solarvalley Mitteldeutschland - Innovation by co-operation

6 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Central Germany – a worldwide leading region for PV-production Key data for Solarvalley in 2010: 40% of total German PV production 12,500 employees in PV production 2,700 employees in PV supplier Consortium: 35 companies operating worldwide 9 renowned research institutions 5 universities 3 federal states

7 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Acceleration of innovation - 40,000 industry jobs in Central Germany Internationally leading PV-Cluster

8 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Solarvalley Mitteldeutschland - Production, Research, Science and Politics in a joint effort Quelle: EuPD Research 08/2009

9 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Cluster of excellence in Germany - product and process innovation along the value chain

10 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Program for grid parity - R&D-focus along the c-Si value chain

11 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Program for grid parity - R&D-focus along the silicon thin film value chain

12 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Electricity for the future - technology and products for achieving grid parity Status 2010 – improvement since % reduction of materials 13% increase of efficiency for crystalline silicon 20% increase of efficiency for silicon thin film modules 30% price reduction Target 2013 – improvement since 2008 >30% reduction of materials 25% increase of cell-efficiency for crystalline silicon (>20% efficiency) 30% increase of efficiency for silicon thin film modules (>10% efficiency) 60% price reduction Reliability and life time of modules > 30 years Building integrated PV, systems for decentralized grids

13 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Sustainable economic growth through further education and training - new jobs 8 Attractive and stable jobs In the region New educational programs in all federal states integrated training concept Qualification skilled personnel / managers

14 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Cluster expansion Implementation of a joint network for all three federal states along the value chain Interregional co-operation International co-operation Target 2013 – improvement since 2008 Establishment of supplier industry, provision of space for expansion Strategic partnership with the European Institute for Innovation und Technology (EIT), Partner of Climate KIC Co-operation with international working groups for standardization, PV-roadmap monitoring of innovation processes High-Tec in Central Germany - appealing for business and society Status 2010 – improvement since 2008 Communication platform for the PV industry with regional offices in the three federal states Local production of PV-power and PV- demonstration centres Network of R&D institutions including universities, research institutes and R&D departments of industry new jobs, € 1.3 bn investment development steps

15 Dr. Peter Frey │ SOLARVALLEY MITTELDEUTSCHLAND │ Paris, 14. April 2011 Our vision: Design and Energy powered by Solarvalley Mitteldeutschland Gehry-Building, Novartis, Basel modules by Solarvalley member Sunways AG