Management Summary

Quo Vadis, Photovoltaic? Business Designs of the Future

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The future? The PV market is a pure play commodity business with fragmented structures substantial and structural changes expected
Current market and future scenarios PV market 2009
Subsidy driven growth in selected regions Very fragmented market (value chain, regions) Low degree of professionalism (startup atmosphere) Heterogeneous business models Globalization of the businesses and players Chinese players entering EU US players entering China Immature technologies Oliver Wyman study Quo Vadis, Photovoltaic?

Scenarios 2012+
Global competition Just a few, dominating player Focused, differentiated business models Tough competition in each value chain level Manufacturing (cell, module, silicon) Distribution Old economy player entering the market (e.g. Bosch, Siemens) Mature technologies Sustainable price decreases

Commodity Business

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Global PV Market Spanish market collapsed in 2009, Germany is by far the biggest market, US will grow significantly in importance
PV Capacity in selected regions Forecast in MW, 2009 - 2014
CAGR: 29%

3.800

CAGR: 1%

4.000

185
CAGR: 44%

660 484

CAGR: 20%

1.200

2009 France
3.000
CAGR: 58%

2014
CAGR: 10%

2009 Germany

2014
2009
CAGR: 30%

Japan
600

2014

477 2009 2014

730
675

1.200

160 2009

USA

69 2009 2014

2009

Italy

2014

China
CAGR: 28%

2014

Green economic stimulus package of ~70 bn USD1

Spain

CAGR: 53%

Other substantial growth markets in 2009: (Czech Republic, )

Market collapse due to limitation of government subsidies (500 MW until 2011)

30 2009

250 2014

170

400

2009 2014 South Corea

India

2009
Source: EPIA May 2010, New Energy Finance, Bank Sarasin 2009, Oliver Wyman analysis

2014 e 13.810

CAGR ~14%

Worldwide

7.216

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German PV Market Overview of Distribution Landscape PV Modules are distributed via B2B (~70%) and B2C/project business (~30%) channels

Extract of PV Value Chain

Distribution Channel Structure Channel relevance in % of total MWp in 2009

PV Module Producer

Remarks
Separation into: B2B business: Sale of PV products to installers B2C business: Project business for financial investors / financiers and utility- or real-estate companies Supplier market to turn into buyers market Installers to become more selective Established distribution channels and brands with increased importance for for sale of PV modules & systems (e.g. established HVAC, EWS installer networks) Solar Installer / Solateurs to become more sophisticated In other regions (e.g. US, China), the B2C channel will be substantially bigger

PV OEM

~60%
System Integrator & PV-Wholesaler

~20%
Distribution / Project Planning

~10%

Wholesaler (Electrical, HVAC, roofing)

Project engineers

Installers Installation Electricians, HVAC, Roofers Solar

~30%
Non-residential /open space

End customers market

Residential Influencer (e.g. architects, energy efficiency consultants)

B2B business
Source: Oliver Wyman analysis

B2C business

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Development of players Although the PV industry was hit hard by increased margin pressure, some players perform substantially better in revenue and EBIT
Revenues and margins of selected players 1 HY 2008 vs. 1HY 2009, changes in %

= -30%
+100%

Evergreen Solar First Solar

+80%

Revenue change (1 HY 2008 vs.. 1 HY 2009)

Centrotherm Photovoltaics
+60%

Phoenix Solar Renewable Energy Solar Enertech PV Crystalox Solar

Sunways Solarworld +20% Kyocera Mitsubishi Electric +0% Mitsubishi Materials Colexon Energy Trina Solar Sunpower Suntech Power
-20%

Centrosolar Group Gintech Energy LDK Solar Q-Cells SE Solargiga Energy Solon SE JA Solar Renesola Solarfun Power PV Enterprise Sweden
-40%

Aleo Solar Yingli Green Energy

= -16,8%

-40%

Memc Electronic Materials

-20%

Solar Fabrik Solartech Energy Canadian Solar Conergy

+0% +20

-60%

-140%

-120%

-100%

-80%

-60%

-80%

EBIT change (1 HY 2008 vs. 1HY 2009)

Source: Thomson, Oliver Wyman

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PV business models Current positioning of major players In the world-wide PV industry multiple different business models currently exist; no clear archetypes have yet emerged.
Current positioning 2009 (number of major PV players) Poly-Silicon Ingots & Wafers Cells Modules System integration Wholesale

7 3

8 21 2 6 9

10

61 7 6

3 Total: 105 global PV players

1 System integration for projects Source: Oliver Wyman

3 4

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 Oliver Wyman  www.oliverwyman.com