With this compensation report the Supervisory Board and the Management Board of SOLARWORLD AG again comply with the recommendations of the German Corporate Governance Code in its most recent version of 6 June 2008. While Section 3.10 GCGC provides for the »Corporate Governance Report« to be included in this annual report under a separate headline and is, incidentally, also covered in the Report by the Supervisory Board, Section 4.2.5 GCGC determines the explanation of the compensation system for the Management Board members, including the disclosure of individualized compensation, and Section 5.4.6 – also as part of the Corporate Governance Report – covers the individualized reporting of the compensation for Supervisory Board members (broken down into its components), including compensation paid and advantages granted for personally rendered services, especially consulting and mediation services.

Management Board compensation. The annual Management Board compensation agreed with all Management Board members and determined in terms of its structure by the Supervisory Board of SOLARWORLD AG is made up of fixed and variable components. It is guided by paragraph 87 AktG, according to which the total compensation for an individual Management Board member must be commensurate with his tasks and with the situation of the company. Furthermore, it must be in line with the criteria of the GCGC and take into consideration the special conditions of the company in the context of the group, as well as the individual link-ups in the human resources and functional areas, taking into account the relevant environmental parameters. At the same time the financial situation of the SOLARWORLD Group is also considered. This in turn is reflected in the profit distribution possibilities, which form the basis for the variable components of compensation for the Management Board.

As fringe benefits, all Management Board members receive the accident and D&O insurance costs as well as the use of an upper mid-range company car. Furthermore all work-related out-of-pocket costs, expenditure and expenses are refunded pursuant to paragraph 670 BGB (German Civil Code). In addition, the Management Board members in charge of Finance (CFO), Operations (COO) and Sales (CSO) receive grants towards their health insurance. Finally, mention must be made of the compensation for the Chairman of the Supervisory Board of DEUTSCHE SOLAR AG, for the Chairman of the Management Board (CEO), and of the compensation for other Management Board activities at DEUTSCHE SOLAR AG and for the COO. For the CEO, the compensation as Chairman of the Supervisory Board of SUNICON AG will be added with effect from 1 January 2009, which was approved by the latter’s AGM on 18 December 2008.

In the event of premature termination of service contracts, these Management Board contracts do not contain any severance pay agreement. The severance pay cap recommended in the latest version of the GCGC of 6 June 2008 has been taken into account in the new appointments made since then. In the follow- up contracts for the COO, the CEO and the CFO, this was already implemented with effect from 1 September 2008, 10 January 2009, and 1 May 2009 respectively.

There are no separate pension entitlements. Management Board members are therefore also allowed to convert part of their compensation into an in-company pension plan.

The fixed annual compensation for Management Board members is payable in twelve monthly installments at the end of each month. In addition, every Management Board member receives a variable, performance- related special payment that is equivalent to an individually negotiated euro amount per cent and share of the dividend distributed to shareholders. The pay-out takes place within four weeks of the AGM at which the underlying dividend distribution was approved. The following individualization of Management Board compensation refers, on the one hand, to the fixed compensation that fell due and was paid out in the year 2008. On the other hand, it also covers variable compensation referring to the 2008 fiscal year which can, however, not fall due before the upcoming AGM and which, incidentally, depends on the profit appropriation proposal by the Management Board being approved that provides for a dividend distribution of 15 eurocents per share.

The variable compensation is capped in such a way that a Management Board member must not be paid more in any one fiscal year than a multiple of the fixed compensation previously agreed with the Supervisory Board. For the CFO and the CSO, it is three times the amount (i.e. the variable component amounts to 200 per cent of the fixed compensation), and for the CEO and the COO, it is four times the fixed amount (i.e. the variable compensation must not exceed 300 per cent of the fixed compensation). For the Chief Operating Officer, the fixed compensation from additional Management Board activity at DEUTSCHE SOLAR AG is included.

The Supervisory Board of SOLARWORLD AG is of the opinion that the limitation of Management Board compensation by law as discussed in a legal policy context right now would not be appropriate. On the other hand, the Supervisory Board would consider a ruling practicable that would impose upon it a compensation cap by way of an AGM resolution and/or amendments to the Articles of Association. To this end, in the agreement reached with the CEO concerning the extension of the Management Board appointment from 10 January 2009 to 9 January 2014, the following regulation was adopted: “In the event of the AGM of SOLARWORLD AG resolving to cap the overall compensation per Management Board member to an annual amount of 1 million €, Mr. Asbeck already submits to such a resolution now. He does so under the proviso that a farther-reaching renunciation will not include fringe benefits granted by SOLARWORLD AG such as inventor’s compensation, a company car and Supervisory Board compensation for subsidiaries, sister companies and other companies. The capping would thus only be accepted for the fixed annual compensation and the variable compensation components. The Supervisory Board now already agrees to such a renunciation by Mr. Asbeck.” Here again the Management Board and the Supervisory Board express their respective belief in an appropriate level of Management Board compensation.

The amount and the structure of compensation are continuously verified by the Supervisory Board, made the topic of an annual meeting on Management Board matters, and conjointly updated and agreed upon with every Management Board member.

Supervisory Board compensation. The Annual General Meeting of SOLARWORLD AG on 25 May 2005 adopted Supervisory Board compensation consisting of a fixed component, a performance-related variable component, fringe benefits, and the refund of out-of-pocket expenses. This came into effect as of 1 January 2005, and was to apply for the following years unless another AGM passed resolutions of a different content for the future.

In line with paragraph 113 Sec. 1 AktG the Supervisory Board compensation must be in appropriate proportion to the tasks of the Supervisory Board members and to the situation of the company. The AGM of the company also decided that the company will pay the premiums for adequate insurance cover against the legal liability resulting from Supervisory Board activities (D&O insurance).

Accordingly, the members of the Supervisory Board each receive annual compensation of € 17,500.00; the Deputy Chairman of the Supervisory Board receives one and a half times this amount; i.e. € 26,250.00, and the Chairman of the Supervisory Board receives twice this amount; i.e. € 35,000.00, plus in each case, turnover tax if and when applicable. This compensation was paid in the year 2009 retroactively for fiscal year 2008. In addition, each member of the Supervisory Board was paid a costs lump sum of € 250.00 for each Supervisory Board meeting and AGM attendance which, in the year 2008, was triggered ten times adding up to a total of € 2,500.00, again plus turnover tax where appropriate, which the company could however set off as input tax. Over and above this, every member of the Supervisory Board received and receives performance-related special compensation which was originally determined to be € 150.00 per dividend cent, with a capital stock split into 6,350,000 shares, subject to the proviso that the basic amount would go up in line with the increase in the number of shares. As a result of the increase in the number of shares from 6,350,000 to 111,720,000, the multiplier 17.5937 applies in this fiscal year which, in turn, triggers a basic amount of € 2,639.055. With a dividend to be adopted at the next AGM of 15 eurocents per share this will trigger variable special compensation of € 39,585.83 (previous year: € 36,946.77) for every member of the Supervisory Board. However, at its meeting on 6 August 2007, the Supervisory Board of SOLARWORLD AG issued a “Self-Commitment Declaration” that involves a partial renunciation, links up with the agreement made with the Management Board members on variable compensation, and reads as follows: “As long as the resolution of the AGM on 25 May 2005 applies to the compensation for the Supervisory Board, the Supervisory Board members accept capping of the variable compensation that is due to them to double the fixed annual compensation that is due to them, respectively. Consequently, even if due to special results for the year and/or a further increase in the relevant number of shares, more than twice the fixed annual compensation could be claimed as variable special compensation, overall, no more than three times the fixed annual compensation will be paid per fiscal year. The Supervisory Board members thus agree to (and among themselves), the cap ruling provided for in Section 4.2.3, penultimate paragraph of the German Corporate Governance Code.”

The performance-related special compensation is also paid out plus turnover tax where it is incurred. Payment is due after the end of that AGM at which the underlying dividend distribution is approved. The variable compensation shown in the following list for the year 2008 will therefore fall due and be paid out when the AGM approves the dividend proposed by the Management Board and by the Supervisory Board.

With regard to the disclosure recommended in the last paragraph of section 5.4.6 of the German Corporate Governance Code, it is pointed out that the Chairman of the Supervisor Board of SOLARWORLD AG is a partner in the law firm of Schmitz Knoth Rechtsanwälte. Essentially via other partners and employees of the company, this law firm provides legal advice and representation services to the SOLARWORLD Group as well as the international coordination services that are necessary in this context. As far as the provision of its services in the year under review of 2008 is concerned, the law firm Schmitz Knoth Rechtsanwälte charged a total of € 375,129.83 to SOLARWORLD AG, of which € 8,945.93 were tax-free expenses (legal fees and other official fees). Refunds from third parties amounted to € 3,799.60, so that a net amount of attorney’s fees of € 362,384.30 remained for SOLARWORLD AG in the year 2008 in which services were received. For this period, further attorney’s fees were incurred amounting to € 166,147.20 for DEUTSCHE SOLAR AG, to € 5,306.60 for DEUTSCHE CELL GmbH, to € 2,010.40 for SOLAR FACTORY GmbH, to € 22,448.86 for SOLARWORLD industries deutschland GmbH, to € 130.00 for SOLARWORLD industries schalke i.l. GmbH, to € 21,283.60 for SUNICON AG, and to € 11,590.80 for SOLARWORLD INNOVATIONS GmbH. All individual items as well as the total sum of attorney’s fees of € 591,301.76 (previous year: € 387,212.22) to be paid by the group were approved by the Supervisory Board of SOLARWORLD AG, a resolution on the commissioning of relevant legal work was adopted, and the latter’s necessity and appropriateness were confirmed at the balance sheet meeting on 16 March 2009.

Finally, it is stated that the Supervisory Board members, Dr. Claus Recktenwald and Dr. Georg Gansen, are concurrently and respectively Deputy Chairmen of the Supervisory Board of DEUTSCHE SOLAR AG. The CEO of SOLARWORLD AG, Frank H. Asbeck, is the Chairman of that Supervisory Board. Compensation for the Supervisory Board at DEUTSCHE SOLAR AG was increased to an annual amount of € 25,000.00 on the occasion of the AGM on 6 December 2007. This compensation of € 25,000.00 (previous year: € 12,500.00) was also the same for each member of the Supervisory Board in the year 2008. Added to this must be in each case the attendance fees of € 750.00 shown in the following list. With the six meetings charged for in the year 2008 this comes to a total amount per Supervisory Board member of € 29,500.00 net which, like all other compensation for the Supervisory Board, will not fall due and be paid until after the end of the fiscal year.

The previously mentioned Messrs Dr. Claus Recktenwald, Dr. Georg Gansen and Frank H. Asbeck are also members of the Supervisory Board of SUNICON AG. At the company’s AGM on 18 December 2008, Supervisory Board compensation of € 15,000.00 net per member of the Supervisory Board was decided upon, which will apply for the first time in fiscal year 2008 and which, like the attendance fee of € 400.00 net, will not fall due until 1 January 2009. With five meetings for which a claim is made, the total per member of the Supervisory Board will come to € 17,000.00, plus turnover tax.