Dear Customers, Shareholders, Employees and Friends of SOLARWORLD AG,

“A crisis can be a productive state. One just has to remove the bitter aftertaste of catastrophe.” When he said these words Max Frisch did not have today’s crisis of the world economy in mind. Still, his dictum is very much applicable to the current situation.

The financial crisis has arrived in the real economy and is not stopping short of a consolidation in the solar industry either. Looking at it “productively” we are right in the middle of a process of change in which the wise implementation of strategies offers interesting perspectives.

On top of this there are trends that are unstoppable despite the world economic situation and that demand solutions – or change, to use a more apt expression. As a case in point there is energy policy for example. We need answers to the increasing energy demand of a growing world population, to the fossil energy sources getting scarcer, to the skyrocketing energy prices. And we must develop ideas for the protection of our world climate. This begs the question: What do we need oil, gas and coal for, if clean power from the sun will soon be just as affordable thanks to technical progress?

As an entrepreneur I tell you: Our vision of a solar world is more cogent and more powerful than ever before! Yet, that is not enough. The strategy and the tempo have to be right as well. Only if you grow profitably and with a sense of balance and act quickly and flexibly will you be able to stand your ground in a sustainable way – particularly at such turbulent times.

In 2008 we made it to the top in the solar world: SOLARWORLD has become one of the largest solar groups with new, highly advanced solar factories now also in the USA and South Korea. After ten years of intensive growth we have succeeded in achieving the large-scale industrial implementation of the principle of energy supply through solar energy.

With our integrated business model we enhance our independence, guarantee SOLARWORLD quality, find answers to the need for annually declining prices on the cost side and meet the challenge of making solar power competitive. We are soundly financed and are economically successful: A strong capital structure and a liquidity framework of well over € 800 million secure our financing and investment ventures; an economic return which by competitive standards is both healthy and clean flows from our operating business – sales and earnings again grew according to schedule in the year 2008. And last but not least, our economic success enables us to have our corporate value also measured in ecological and social dimensions. Our vision of a solar world does not end with the sales total that we manage to generate with solar power technology: As a “Green Chip” company we meet the demand for both profitability and sustainability.

In view of the current economic environment reliable forecasts across industries have become more difficult – also for us. All the same, SOLARWORLD will maintain its speed of growth in the year 2009 and will expand its production at all locations. So we are ready to pounce on any market opportunities that may come our way. On the North American continent we accompany back the change in energy policy announced by US President Barack Obama.

And there is even more at stake! We will continue to invest in the strengths of SOLARWORLD: in our innovative power, in our strong name and – which is the most important thing to be successful – in our employees. It is you who shaped these growing structures with your commitment! It is you who again accepted the challenges of a rapidly growing company, who again displayed team spirit and strength in implementation, and who have been growing together regardless of national borders. For this you deserve my heartfelt thanks, my appreciation and above all my trust, also in the future!

Even though the winds of change are blowing harder right now we will remain strong: Our sales are driven by the sun and the sun works for us – on the entire globe, at any time and in an inexhaustible manner. The principle of power generation from the sun is simple, successful and sustainable at the same time – evidence of which we provide in our annual report.

On this note let me say: The future is exciting and we will remain “productive”. This is what I look forward to together with you.

With sunny greetings,

Dear Shareholders of SOLARWORLD AG, dear Employees and Friends of the SOLARWORLD group!

The Supervisory Board of SOLARWORLD AG was re-elected in the Annual General Meeting on 21 May 2008. In this report it provides information about its activities in fiscal year 2008. In doing so it again subjects itself to an increased reporting duty which in turn means that the Supervisory Board made available to the auditors of the company the complete minutes of all the meetings of the Supervisory Board in the year 2008 including all the relevant attachments.

In the year under review the Supervisory Board of SOLARWORLD AG again performed all the tasks imposed upon it by the relevant laws, by the articles of association and by the rules of procedure. It did so in a continuous dialogue with the Management Board of the company which it both advises in managing the company and monitors in its activities pursuant to paragraph 111 AktG (German Stock Corporation Act). At the same time the Supervisory Board was engaged in checking its own efficiency. On the whole no complaints resulted from its activities in general and its monitoring of management in particular. This is why the Supervisory Board will propose in the Annual General Meeting that the Management Board be discharged.

In fiscal year 2008 the Supervisory Board had ten formal meetings four of which were ordinary quarterly meetings. The meetings took place on 9 January, 14 February, 6 March, 21 May, 25 June, 11 August, 29 September, 12 November, 2 December and 18 December 2008. The September meeting was part of a Group Supervisory Board meeting which also took place in addition to project and group related working meetings. On a regular basis at least one member of the Management Board attended the Supervisory Board meetings which took place only in exceptional cases without Management Board involvement. The Management Board on its part kept the Supervisory Board informed about all Management Board meetings by submitting the written agenda and afterwards the minutes of the meeting.

In all decisions of fundamental importance to the company the Supervisory Board was involved in a direct and timely fashion. The Management Board informs the Supervisory Board both in writing and verbally, punctually and comprehensively about all the relevant questions of corporate planning and strategic development, about the earnings, asset and finance situation of the company as well as about current business policy and the risk management system being practiced. The reporting duties pursuant to paragraph 90 AktG were complied with as much as the recommendations of the German Corporate Governance Code.

The work of the Supervisory Board of SOLARWORLD AG concentrated in the year 2008 on following priority issues: audit and final conference as well as balance sheet meeting with the auditors on all consolidated companies; monitoring of the accounting process, the effectiveness of the internal control system and the internal audit system as well as the audit itself, the independence of the auditors and the additional services rendered by the auditors; further integration of the foreign subsidiaries; international marketing and supplementary international sales and distribution activities; approval of the consulting and representation services rendered to the group by the law firm of Schmitz Knoth Rechtsanwälte, Bonn, which is close to the Chairman of the Supervisory Board as contemplated by IAS 24; move of the SOLARWORLD administration to new premises; constitution of the Supervisory Board after the completed re-election; opening up new business fields including electric cars; consideration of the legal structure of the group including Management Board and general management structure; current and future raw material projects; advance discussion of the quarterly reports pursuant to section 7.1.2 of the German Corporate Governance Code (GCGC); expansion of Freiberg East and the Evonik Joint Venture Rheinfelden; preparation and publication of the Declaration of Compliance pursuant to paragraph 161 AktG concerning the GCGC version of 6 June 2008 as published on 8 August 2008; implementation of the compensation caps for prolongations of contracts of Management Board members as provided for in Section 4.2.3, 4th paragraph, of the GCGC; considering the potential repercussions of the worldwide financial crisis; considering the press response in the Opel case. The plans of the Management Board regarding the latter topic were seen by the Supervisory Board as a constructive contribution to the public discussion in the run-up to the imminent Annual General Meeting as well as another expression of a declared belief in the principle of transparency. The Supervisory Board had already previously been asked to deal with plans for an electric car, especially in the field of battery development, as well as with a possible cooperation venture in automotive engineering. The acquisition of shares in Adam Opel GmbH seemed an interesting idea to the Supervisory Board in this context. However, in the view of the Supervisory Board a sustainable engagement in this area would initially require a modification of the articles of association for which the Annual General Meeting would be responsible.

In all its activities the Supervisory Board has been guided by the recommendations of the German Corporate Governance Code which it and the Management Board on the whole complied with in the year 2008. In the same way in which the Supervisory Board in its meeting on 6 August 2007 approved the previous version of 14 June 2007 both for the year just ended and for the new fiscal year it now approved the current version of the GCGC of 6 June 2008 as published on 8 August 2008 in a repeat resolution passed on 29 September 2008 and made permanently available to all shareholders pursuant to paragraph 161 AktG on the website of the company with the following wording:

“The recommendations by the ‘Government Commission on the German Corporate Governance Code’ as published by the Federal Ministry of Justice in the official section of the Electronic Federal Gazette are being complied with by the Supervisory Board to the extent that they are applicable to it.”

In connection with this the Management Board of SOLARWORLD AG approved and also published pursuant to paragraph 161 AktG an appropriate GCGC compliance declaration. At the same time the section “Corporate Governance Report” in the present Consolidated Annual Report for 2008 also contains all the relevant details on Management Board remunerations, Supervisory Board compensation and GCGC implementation unless the report by the Supervisory Board also contained in this annual report already includes the information as required by section 3.10 GCGC.

As far as compliance with the GCGC recommendations by the Supervisory Board of SOLARWORLD AG is concerned the coordination of the strategic alignment of the company and the regular discussion of the current state of strategy implementation were dealt with within the framework of the consistently practiced exchange of information with the Management Board (section 3.2 GCGC). In this process the provision of information to the Supervisory Board was and is seen as a joint task of the Management Board and the Supervisory Board (section 3.4 GCGC). Especially the Chairman of the Management Board was regularly informed by the Supervisory Board of the company about his own activities and integrated into these as much as possible. Clashes of interest as defined by section 5.5 GCGC were not observed in the process. Also, the Supervisory Board considers itself to be independent as defined in section 5.4.2 GCGC. To the extent that mandatory approvals were required as per section 5.4.2 GCGC these were invariably obtained.

The tasks described by the new balance sheet modernization law with regard to accounting and auditing are performed by the three-member Supervisory Board itself. To the extent that the law demands in this context that at least one member of the Supervisory Board be independent and have expertise in the areas of accounting or auditing the Supervisory Board as a whole declares itself to be sufficiently qualified. In the first instance it is enough if one member of the Supervisory Board has expertise in the area of accounting or alternatively in the area of auditing. This applies to all Supervisory Board members as fully qualified lawyers who have all specialized in business law. In addition, the necessary expertise is simply taken or granted in the case of “longstanding members in audit committees”. As all the Supervisory Board members have been involved in the annual auditing of the SOLARWORLD group since 18 December 1998 – other words for more than ten years – no further explanations are needed at this juncture.

The audit company BDO Deutsche Warentreuhand Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Bonn, which was appointed by the Supervisory Board on the instructions of the Annual General Meeting of 21 May 2008 to audit the financial statements and the consolidated financial statements of SOLARWORLD AG again for fiscal year 2008 first renewed its declaration of independence as defined in section 7.2.1 GCGC thus confirming that no business, financial, personal or other relationships existed between the auditor and his organization and chief auditors on the one hand and the company and its organization members on the other hand that might give rise to doubts about the auditor’s independence.

The report to be given by the Supervisory Board on the result of its own examination should according to paragraph 171 Sec. 2 AktG also include the statement on which committees it has formed. As, however, the Supervisory Board of SOLARWORLD AG is limited to three members an extensive formation of committees was also superfluous in the year 2008. To the extent that paragraph 175 Sec. 2 AktG requires an explanatory report on the information pursuant to paragraph 289 Sec. 4 and paragraph 315 Sec. 4 of the German Commercial Code (HGB) the Supervisory Board adopts the relevant report by the Management Board fully subscribing to the statements made in it. The management and consolidated management reports affected by this were also audited by BDO Deutsche Warentreuhand Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Bonn, which extended the audit to the accounting as well. The annual financial statements for the fiscal year ending on 31 December 2008 drawn up by the Management Board according to the HGB accounting rules and the management report of SOLARWORLD AG were awarded the unqualified auditor’s certificate on 16 March 2009. At the same time the auditor also gave his unqualified auditor’s certificate to the consolidated management report and the consolidated financial statements of SOLARWORLD AG which pursuant to paragraph 315a HGB were again drawn up on the basis of the international accounting standards IFRS.

After its own examination of the annual financial statements, the consolidated financial statements, the management report and the consolidated management report the Supervisory Board approved the audit result presented by the auditors. It did not see any reasons for objections. Previously it had discussed the audit priorities with the auditors in a meeting on 18 December 2008 and had met with the auditors for a final conference on 25 February 2009 which took place in the presence of the CFO of SOLARWORLD AG. In the balance sheet meeting on 16 March 2009 details following from the unqualified auditor’s certificates of the same day were finally discussed. Here again no doubts concerning the correctness of the results produced by the auditors were raised which is why a further investigation was not required. In the balance sheet meeting the Supervisory Board then approved the financial statements and the consolidated financial statements as a result of which the financial statements are now adopted. The Supervisory Board also adopted the proposal of the Management Board regarding the appropriation of the balance sheet profit.

The Management Board, the executives as well as all employees of the SOLARWORLD group again produced outstanding work in the year 2008 – and did so worldwide. The Supervisory Board offers heartfelt thanks together with respect and appreciation.