ELENI DESPOTOUDEPUTY SECRETARY GENERAL

Munich, 28/10/2009

A PART OF OUR FUTURE

SOLAR PV ELECTRICITY

2

Overview

1. Who’s EPIA ?

2. Our Policy activities

3. PV Market Outlook

4. Competitiveness of PV

5. Impact on Regional Development

6. Solar Europe Industry Initiative

3

Overview

1. Who’s EPIA ?

2. Our Policy activities

3. PV Market Outlook

4. Competitiveness of PV

5. Impact on Regional Development

6. Solar Europe Industry Initiative

4

Created in 1985 More than 208 members Represents the whole value chain of the Photovoltaic Industry Secretariat in Brussels - 17 people in 2009 8 Board members elected for 4 years

Who is EPIA?

EPIA is the world's largest industry association devoted to the solar electricity market.

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EPIA and its members

• Silicon feedstock: Wacker, REC, DC Chemical…• Wafers and Ingots: Crystalox, Scanwafer, Pillar, Podolsky, PV Silicon…• Cells: Q-Cells, BP Solar, Isofoton, Shell Solar, SolarWorld, Sharp…• Modules: Aleo, Schott Solar, Photowatt, Suntech Power…• Systems: Tenesol, Naps Systems, Conergy, Phoenix …• Inverters: KACO, SMA, Sputnik, Sunways, Fronius…• Cabling: Multi-contact…• Equipment and services: AMAT, Centrotherm, Oerlikon, Stangl, IB Vogt, M+W Zander, Vesuvius…

EPIA represents 95% of the European photovoltaic industry, and 80% of the global photovoltaic industry world-wide

Total Turnover of EPIA members (2008): ~14.000 M€

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Photovoltaïcs (PV)

= tranformation of the solar irradiation to electricity

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Applications

Source: Fraunhofer ISE

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Skylights

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Why Solar Energy ?

1. Sun is the biggest renewable energy source

2. Sun Provides every hour as much energy on earth as mankind consumes yearly

• PV covering only 0,71% of EU surface would provide 100% EU electricity needs

• PV covering only 4% of world’s very dry deserts would meet world PRIMARY energy demand (IEA)

3. PV can be deployed globally – not only in the world sunbelt – but also in regions of less

radiation

4. PV is reliable for decades with virtually no maintenance need

5. PV has a very limited – and decreasing – ecological footprint: 1.5 – 3 years payback

6. PV can be implemented from small electrical devices up to large scale solar farms

7. PV can contribute substantially to decrease energy dependence

8. PV stimulates national & regional economies and employment (Germany).

9. PV is perfectly adapted – and already competitive – for remote rural electrification

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Finite resources

11TITLE OF THE PRESENTATION

Climate Change

1. Depending on the energy mix replaced by PV, each kWh generated can save up to 900g of CO2 (coal fired power plants).

2. 12% of PV electricity in Europe by 2020 can save up to 220 millions metric tons of CO2 each year.

Munich, 28/10/2009

12

Overview

1. Who’s EPIA ?

2. Our Policy activities

3. PV Market Outlook

4. Competitiveness of PV

5. Impact on Regional Development

6. Solar Europe Industry Initiative

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Our major interlocutors

1. European Institutions (EC, EP, Council)

2. International institutions

3. Governements of MS

4. Other related industries/associations

5. Utilities

6. NGOs

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Areas of activities

1. Advocacy

2. Regultory frameworks/policy

3. Business intelligence

4. Two ways communication

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Policy areas

1. RES directive – EU’s Renewable Energy Directive

2. Third energy package

3. WEEE & RoHs – Electronic Waste and Hasardous materials directive

4. EPBD – European Directive on Energy Performance of Buildings

5. MSP

6. PV Cycle – PV Modules Recycling

7. REACH – EU’s Directive on Chemical Products

8. SET plan/solar industry initiative

9. ETS/NEPs

10.FPs – European Research Programs

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Overview

1. Who’s EPIA ?

2. Our Policy activities

3. PV Market Outlook

4. Competitiveness of PV

5. Impact on Regional Development

6. Solar Europe Industry Initiative

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PV represented 19% of new EU capacity installations in 2008

Source: Platts, EPIA, EWEA

Wind Gas Photovoltaic Fuel Oil Coal Hydro Biomass Other Nuclear -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

8,484

6,932

4,700

2,495

762 473 296 149 60

PV represented in 2008 more than 19% of new power capacity installed

EU New Power capacity installed in 2008: 24.351 MW

Source: Platts, EPIA, EWEA

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EU vs. Global

Source: EPIA, 2009

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E

EU NaN NaN NaN NaN 90 128 188 266 373 543 1089 1981 3107 4867 9267 13000

GLOBAL 502 580 669 795 948 1150 1428 1762 2201 2795 3847 5253 6851 9162 14160 19300

1000

3000

5000

7000

9000

11000

13000

15000

17000

19000

Historical Development of cumulative installed capacity global and EU PV capacity (all figures in MWp)

EU

GLOBAL

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European annual PV market Outlook until 2013 (Policy-Driven scenario)

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Historical development of Global Cumulative PV power installed per Region

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Historical development of Global Cumulative PV power installed : grid-connected vs. off-grid

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Historical development of the Global annual PV market per Region

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Annual PV MarketsTOP 10 worldwide

Worldwide ranking annual market

2006 2007 2008Country MWp Country MWp Country MWp

1 Germany 850 Germany 1.100 Spain 2,511 2 Japan 287 Spain 560 Germany 1,500 3 USA 145 Japan 210 USA 342 4 Spain 88 USA 207 Korea 274 5 Korea 20 Italy 70 Italy 258 6 Italy 13 Korea 43 Japan 230 7 China 12 China 20 Czech Republic 51 8 India 12 India 20 Portugal 50 9 Australia 10 Belgium 18 Belgium 48 10 France 8 Portugal 14 France 46

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Cumulative PV power installedTOP 10 worldwide

Worldwide ranking cumulative installed PV power

2006 2007 2008Country MWp Country MWp Country MWp

1 Germany 2.708 Germany 3.808 Germany 5,308 2 Japan 1.708 Japan 1.919 Spain 3,223 3 USA 624 USA 831 Japan 2,149 4 Spain 151 Spain 712 USA 1,173 5 China 80 Italy 120 Korea 352 6 Australia 70 China 100 Italy 350 7 Netherlands 53 Australia 82 China 145 8 Italy 50 Korea 78 Australia 100 9 Korea 35 Netherlands 53 India 90 10 India 31 India 51 France 87

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Europe: Global PV Market Leader

2626

2010 ESTIMATES

Country Market figure 2009 Market figure 2010 Comments

Germany 2.3-2.5 GW 2 GW – 3GW Possible changes in policy in 2010

Italy 400 – 500 MW 600 MW EPIA estimates

France 200 – 280 MW 450 – 600 MW 2009: with off-grid systems.

Spain 100 - 150 MW 400 MW EPIA+ASIF estimates

USA 400 MW (240 MW CA) > 600MW SEIA estimates

Japan 400 MW 100 - 400MW Unclear policy for 2010.

China 100– 460 MW 380 - 1 GW Various sources indicates various results

Total World 5.2 GW 7-9 GW Source: Pv-tech, EPIA

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Overview

1. Who’s EPIA ?

2. Our Policy activities

3. PV Market Outlook

4. Competitiveness of PV

5. Impact on Regional Development

6. Solar Europe Industry Initiative

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Indicative

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

2005 2010 2015 2020 2025 2030

3 PV deployment scenarios in Europe1

GW

p

PV deployment scenarios in Europe1) (GWp)

1) Europe 27, Croatia, Norway and TurkeySources: EPIA, EU DG TREN “European Energy and Transport: trends to 2030, update 2007”, Eurostat Data Portal,

EU JRC Photovoltaic Geographical Information System, A.T. Kearney analysis

Asymptote without paradigm shift

Possible evolution after Paradigm Shift

Scenario 3

Scenario 2

Scenario 1

The Paradigm Shift requires significant changes in the

existing electricity system and at market and regulatory level,

together with a strong collaboration with other players in the energy

sector 12%

6%

4%

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3 PV deployment scenarios

1. Scenario 1) Baseline - 4% penetration: this PV penetration does not require changes to the existing electricity system, it requires full cooperation from the whole industry to achieve price reductions and the definition of a good market strategy

2. Scenario 2) Accelerated Growth - 6% penetration : this PV penetration requires minor changes to the existing electricity system, it requires the industry to optimize their Supply Chain, to cooperate with the Utilities on infrastructure changes and compelling product and service offering

3. Scenario 3) Paradigm Shift - 12% penetration: this PV penetration assumes important changes at market, regulatory and utility level, together with significant technology advancements in the electricity system, that free PV penetration from the risk of producing more electricity than the current system can absorb

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In order to sustain a large PV deployment, the PV industry will need to deliver between 70 and 160 GWp p.a. WW by 2020 depending on the scenario

Worldwide1 annual PV installation (GWp)

1)The analysis assumes 33% of cumulative installation by 2020 in Europe in the Baseline Scenario; 43% in Accelerated Growth Scenario; 55% in Paradigm Shift Sources: EPIA, A.T. Kearney analysis

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Overview of main Feed-in Tariff and Green certificate schemes in Europe

Country Main support scheme

Ground mounted

BIPV BAPV Duration Cap Cumulative PV Power installed (end 2008)

France FiT 0.32 - 0.43 0.60 0.32 - 0.43 20 - 87 MW

Germany FiT 0.32 0.33 – 0.43 20 - 5,308 MW

Italy FiT 0.35 – 0.39 0.43 – 0.48 0.39 - 0.43 20 1200 MW 430 MW

Switzerland FiT 0.30 - 0.40 0.38 - 0.56 0.37 - 0.46 25 16 Mio CHF 46 MW

Austria FiT 0.30 - 0.46 10+1+1 3.3 MW/year 30 MW

Belgium GCBrussels: 0.15 - 0.65Wallonia: 0.15 - 0.63

Flanders: 0.45

Brussels 10Wallonia 15Flanders : 20

- 71 MW

Bulgaria FiT 0.38 - 0.42 25 - 1.4 MWCzeck Republic

FiT 0.48 - 0.49 20 - 54 MW

Greece FiT 0.40 - 0.50 20 - 20 MW

Luxembourg FiT 0.36 - 0.39 15 5MW 24 MW

Netherlands FiT 0.29 15 15 MW (2009) 59 MW

Portugal FiT 0.62 5+10 12 MW 68 MW

Romania GC 0.11 – 0.22 10 0.45 MW

Slovenia FiT 0.33 - 0.37 5+5+10 - 2.1 MW

Spain FiT 0.32 – 0.34 25500 MW (2009)

3,137 MW

UK GC 0.03-0.06 lifetime 24.1 MW

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With the transition to grid parity, the attractiveness of the PV value proposition becomes the driver of mass penetration

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Overview

1. Who’s EPIA ?

2. Our Policy activities

3. PV Market Outlook

4. Competitiveness of PV

5. Impact on Regional Development

6. Solar Europe Industry Initiative

34

PV as a driver for regional development

1. Saxony Anhalt, DE

2. Puglia, IT

3. Poitou – Charentes, FR

4. Rhone Alpes, FR

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Employment

Ingots/WaferFeedstock/materials Solar cell Solar moduleBOS including Installation

• Physics• Chemists• Electronic Engineers• Production Engineers

• Installers• Retailers• Service Engineers

• Physics• Electronic Engineers• Production Engineers

Value Chain

Profiles needed

Mn FTE created1)

1) Does not take into account FTEs displaced in other industriesSources: Freiburg university PV employment study; EPIA Solar Generation V 2008; A.T. Kearney analysis

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Employment

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Overview

1. Who’s EPIA ?

2. Our Policy activities

3. PV Market Outlook

4. Competitiveness of PV

5. Impact on Regional Development

6. Solar Europe Industry Initiative

38

List of projects proposed for the SET Plan

1. EU Solar Cities: Large-scale integration of PV in urban areas

2. Gigawatt PV manufacturing (GigaFabs and accompanying pilots) and integral value chain management

3. Environmental sustainability of large-scale deployment of PV

4. Education in support of large-scale PV deployment, and public awareness

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2010PV electricity price(€ / kWh)

0.35

0.25

0.29

0.22

0.19

PV electricity prices

compared withexpected

consumerelectricity

prices(+ 1%/yr)

consumer electricity price(€ / kWh)

0.150.17

0.17

0.21

0.11

0.23

0.13

0.11

source: EUPVTP

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2015PV electricity price(€ / kWh)

0.25

0.18

0.21

0.16

0.14

PV electricity prices

compared withexpected

consumerelectricity

prices(+ 1%/yr)

consumer electricity price(€ / kWh)

0.160.18

0.18

0.22

0.11

0.24

0.13

0.12

source: ECN

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2020PV electricity price(€ / kWh)

0.20

0.14

0.17

0.13

0.11

PV electricity prices

compared withexpected

consumerelectricity

prices(+ 1%/yr)

consumer electricity price(€ / kWh)

0.160.19

0.19

0.23

0.12

0.26

0.14

0.12

source: ECN

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“Solar future is not about fashion,

is about survival...”

N. Foster

www.epia.org

43Solar Electricity A Part of Our Future

www.epia.org

Eleni DespotouDeputy Secretary Generale.despotou@epia.org