q2 2015 pv market outlook

2015 PV MARKET OUTLOOK

ASEF, Manila

Xiaoting Wang

15 June 2015

1

Note: A conservative and optimistic forecast has been developed for each country. It is unlikely that all countries will come

in at the conservative or optimistic end, so for the global forecast, conservative is (sum of conservative country forecasts +

25%*(sum of optimistic – conservative forecasts). Global optimistic forecast is sum of conservative country forecasts +

75%*(sum of optimistic – conservative forecasts). Source: Bloomberg New Energy Finance

PV NEW BUILD BY YEAR, HISTORICAL AND FORECAST TO 2017 (CONSERVATIVE)

6.6GW7.7GW

18.2GW

28.5GW30.7GW

40.0GW

45.0GW

55.5GW

61.0GW 61.3GW

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Western Europe Eastern Europe Japan USA China India Rest of World

BNEF Market Outlook, ASEF Manila, 15 June 2015

2

CHINA PV DEMAND (GW)

Source: Bloomberg New Energy Finance

CONSERVATIVE OPTIMISTIC


0.4 2.1 2.0

12.1 10.9 12.0 10.0

8.0

0.1 0.5 1.6

0.8 2.1

7.0 10.8 16.0

0.5 2.6

3.6

12.9 13.0

19.0 20.8

24.0

2010 2011 2012 2013 2014 2015e 2016e 2017e

transmission-grid-connected distribution-grid-connected

420% 38% 258% 1% 46% 15%9%

0.4 2.1 2.0

12.1 10.9 11.0 10.0 9.0

0.1 0.5 1.6

0.8 2.1 5.0 7.5 10.3

0.5 2.6

3.6

12.9 13.0

16.0 17.5

19.3

2010 2011 2012 2013 2014 2015e 2016e 2017e

transmission-grid-connected distribution-grid-connected

420% 38% 258% 1% 23% 10%9%

3

JAPAN PV DEMAND (GW)




3.8 6.0 5.9

4.8

2.1

1.7

3.1 3.3

4.1

3.3

1.0 1.3

2.5

7.1

10.3 10.2 9.9

6.4

2010 2011 2012 2013 2014 2015 2016

0-10kW 10-1000kW 1MW+

3.8 6.0

7.8 7.9

3.8

1.7

3.1

3.7 4.8

5.3

1.0 1.3

2.5

7.1

10.3

12.7

13.7

10.1

2010 2011 2012 2013 2014 2015 2016 2017

0-10kW 10-1000kW 1MW+

4

US PV DEMAND (GW)




1.0 1.2

1.6

2.0 2.0 2.7

3.8

4.9

6.3

1.1

0.9

1.9

3.3

4.6

6.3

8.4

10.8

5.8

2010 2011 2012 2013 2014 2015 2016

Residential Commercial Utility

1.0 1.2

1.7

2.2 2.2

2.7

3.8

5.4

7.0

1.3

0.9

1.9

3.3

4.6

6.3

9.2

11.9

6.3

2010 2011 2012 2013 2014 2015 2016 2017

Residential Commercial Utility

5

Note: A conservative and optimistic forecast has been developed for each country. It is unlikely that all countries will come

in at the conservative or optimistic end, so for the global forecast, conservative is (sum of conservative country forecasts +

25%*(sum of optimistic – conservative forecasts). Global optimistic forecast is sum of conservative country forecasts +

75%*(sum of optimistic – conservative forecasts). Source: Bloomberg New Energy Finance

PV NEW BUILD BY YEAR, HISTORICAL AND FORECAST TO 2017 (OPTIMISTIC)

6.6GW7.7GW

18.2GW

28.5GW30.7GW

40.0GW

45.0GW

61.4GW

67.9GW 69.7GW

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Western Europe Eastern Europe Japan USA China India Rest of World


6

Note: Variable cost includes processing cost and SG&A; depreciation is excluded. 2015 demand estimate is 55.5-61.4GW.

Assumes 6% of the demand will be supplied by thin-film modules; 24% by mono modules with polysilicon consumption of

4.52g/W; 70% by multi silicon modules with a polysilicon consumption of 5.0g/W; electronics market is estimated at

30,000 tonnes. Source: Bloomberg New Energy Finance


SUPPLY CURVE FOR POLYSILICON, 2015

Estimated

variable

cost ($/kg)

Potential production in 2015 (tonnes)

0

5

10

15

20

25

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000

2015 demand 56-61GW

GCLFBR

DAQO

REC FBR

GCL Siemens

Tokuyama Malaysia II

Hemlock Michigan

TBEA

OCI

Renesola

Wacker Burghausen

HanwhaChemical

ChinaSilicon REC

Siemens, Japanese

SunEdison FBR

SMPFBR

Wacker Nuchritz,Tennessee

HankookSilicon

OtherChinese

https://www.bnef.com/Insight/11288

https://www.bnef.com/Insight/11288

7


DEMAND AND SUPPLY FOR PV MODULES, 2006-2017E (MW/YEAR)

-

10

20

30

40

50

60

70

80

90

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Supply - crystalline silicon Supply - thin-film silicon

Supply - thin film non-silicon Demand - conservative

Demand - optimistic

Historical Future

Current effective cell manufacturing capacity - at least 66GW


8



EBIT MARGINS OF QUOTED PV COMPANIES BY APPROXIMATE VALUE CHAIN POSITION, Q4 2014

Etrion

Solarworld SMA

WCH Silicon

SPWR

FSLR

SUNE Silicon

AEIS

ENPH

REC Silicon

Sungrow

Yingli

Trina JA

CSIQ

OCI

Motech

Neo

Renesola

Gintech

Daqo

Jinko

Akcome Danen

Tainergy

Risen

Eging

REC Solar

Sunflower

HSOL

-30%

-20%

-10%

0%

10%

20%

30%

EMEA AMER APAC$500

m Q4 2014

Wafers Modules

Develop,

Own,

Operate Silicon Cells

Inverters/

BoP

$500

m

Wafers Modules Develop/Own Silicon Cells Inverters/

BoP

9



ALTMAN-Z SCORES OF QUOTED PUREPLAY PV MANUFACTURERS, AS OF Q4 2014 OR Q1 2015 FILING

REC Solar, 4.34

First Solar, 3.60

S-Energy, 2.11 CSIQ,

1.99

SunPower, 1.93

SolarWorld, 1.82

Trina, 1.17

Hareon, 1.01

Jinko, 0.91

GCL-Poly, 0.84

Renesola, 0.41

SunEdison, -0.02

Hanwha, -0.09

Yingli, -0.18

REC Silicon, -0.28

China US Europe South Korea

10

Source: Company files, estimates, enquiries,

Bloomberg New Energy Finance


PLANNED CAPACITIES OF LARGE MODULE COMPANIES BY END OF 2015 (MW)

0 1,000 2,000 3,000 4,000 5,000

Trina Solar

Yingli

Jinko Solar

JA Solar

Canadian Solar

Hanwha

Talesun

Suntech

Kyocera

SunPower

Risen

SolarWorld

BYD

Chint

REC Solar

Hareon

Eging

Renesola

ZNShine

CSUN

HT-SAAE

ET Solar

Module Cell

11

Source: Company files, estimates, enquiries,

Bloomberg New Energy Finance


GAP BETWEEN MODULE AND CELL CAPACITIES FOR LARGE COMPANIES BY END OF 2015 (MW)

-1,000 -500 0 500 1,000 1,500 2,000

Canadian Solar

Jinko Solar

Trina Solar

Suntech

ZNShine

Kyocera

Yingli

Talesun

Renesola

Risen

Chint

CSUN

ET Solar

REC Solar

HT-SAAE

Eging

SolarWorld

BYD

Hareon

Hanwha

SunPower

JA Solar

Gap

12

Source: Company files, estimates, Bloomberg

New Energy Finance


PROPORTION OF TOTAL SHIPMENTS SENT TO INTERNAL PROJECTS BY CHINESE MODULE COMPANIES, 2014 AND 2015 ESTIMATE

17%

10% 9%

8%

4%

20% 18%

17%

13%

9%

Jinko Canadian Solar Trina Yingli JA Solar

2014 2015E

13

Note: C and M stand for cell and module capacities, respectively. Hanwha SolarOne is considered as a Chinese

manufacturer since its headquarter is set in China although Korean Hanwha Chemical is the largest shareholder. Hanwha

SolarOne was merged with Hanwha Q Cells in February 2015. Source: Bloomberg New Energy Finance


ESTIMATED INTERNATIONAL CAPACITIES OWNED BY OR CHINESE COMPANIES AND HANWHA Q CELLS BY 2015

Germany:

Hanwha Solar C230 M130

Chint M200

Turkey:

CSUN C100 M300

South Africa:

JA Solar M150

Znshine M150

Jinko M120

South Korea:

CSUN C200

Hanwha Solar M230

Canada:

Canadian Solar M500

Malaysia:

Hanwha Solar C1300 M800

Jinko C500 M450

JA Solar C400

Singapore:

Bluestar (REC Solar) C810 M1300

Thailand:

Trina C700 M500

Talesun C500 M500

14

Note: Every PV project is different and has different costs; this is a typical buildup, from quotes from developers and

EPCs, intended as a global benchmark. Source: Bloomberg New Energy Finance


GLOBAL PV CAPEX BENCHMARK, UTILITY-SCALE, $/W (DC)

1.95

1.35

0.84 0.71 0.68 0.61 0.55 0.51 0.47 0.45 0.42

3.42

2.64

1.701.58 1.50 1.39

1.31 1.24 1.18 1.13 1.09

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Module Inverter Balance of plant EPC Other

15 BNEF Market Outlook, ASEF Manila, 15 June 2015

LEARNING CURVES OF C-SI AND THIN FILM MODULES


0.1

1

10

100

1 10 100 1,000 10,000 100,000 1,000,000

Experience curve Historical prices (Maycock)

Chinese c-Si module prices (BNEF) Thin-film experience curve

197

1985

2003

2006

2012

Cost perW (2013 $)

197

1985

2003

Q4 2013

2012

Cumulative capacity (MW)

2013

16



C-SI MODULE COST FORECAST FOR 2015 (US CENT/W)

47.0

-6.0

-3.0-3.0

-5.0 30.0

Module 2015 Polysilicon Polysilicon towafer

Wafer to cell Cell tomodule

Module 2025

17

DRIVERS OF COST REDUCTIONS ALONG THE C-SI VALUE CHAIN (US CENT/W)

10.0

-1.5

-1.5 7.0

2015 Diamondsaw

Higherefficiency

2025

POLYSILICON POLYSILICON TO WAFER

10.0

-2.0

-1.0 7.0

2015 Materialssaving

Higherefficiency

2025

WAFER TO CELL CELL TO MODULE


10.0

4.0

-3.0

-2.0

-1.0

2015 Cheaperpoly-Si

Thinnercells

Highereffciency

2025

17.0

-3.0

-2.0 12.0

2015 Cheapermaterials

Higherefficiency

2025


18



PATHWAY TO HIGH EFFICIENCY MULTI C-SI SOLAR CELLS (%)

17.8

19.4

0.3

0.5

0.8

15.0

15.5

16.0

16.5

17.0

17.5

18.0

18.5

19.0

19.5

20.0

P-type multiAl-BSF

4 or 5 BB Black silicon Rearpassivation

P-type multiPERC

0.0

19



C-SI MODULE PRODUCTION COSTS AND EFFICIENCIES, H1 2015 (US ¢/W, %)

Multi Al-BSF

Multi PERC

Mono Al-BSF

MonoPERC

Mono PERL

PERT

HIT

IBC

0

10

20

30

40

50

60

70

80

90

100

15.5% 16.0% 16.5% 17.0% 17.5% 18.0% 18.5% 19.0% 19.5% 20.0% 20.5% 21.0%0.0%

20



C-SI MODULE COST FORECAST (US CENT/W)

0

10

20

30

40

50

60

70

80

90

100

P-typeMulti

P-typeMono

N-typePERT

N-typeHIT

N-typeIBC

2015 2018

89%gap

67%gap

21



MARKET SHARE FORECAST OF DIFFERENT C-SI SOLAR CELL TECHNOLOGIES

74%

3%

14%

3%

3%

2%

1%

22%

41%

7%

20%

4%

3%

2%

0%

20%

0%

40%

6%

9%

25%

2015 2018 2025

P-type multi Al-BSF

P-type multi PERC

P-type mono Al-BSF

P-type mono PERC/L

N-type mono IBC

N-type mono HIT

N-type mono PERT

22

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