China

China


Germany

Germany


Vatican

Vatican


Africa

Africa


Spain

Spain


USA

USA


Opportunities from the development of the general conditions

Energy demand will rise further. One of the key challenges of the 21st century will be global supplies of energy. In the reference scenario of its World Energy Outlook 2008, the International Energy Agency (IEA) assumes a rise of 45 per cent in the demand for energy by 2030. Demand for oil is expected to rise from currently 85 to 106 million barrels per day in the same period of time. Since fossil fuels are becoming increasingly scarce, a steady rise in fuel costs is to be expected. The IEA expects an average oil price of 100 US dollars per barrel during the period from 2008 to 2015, which will rise further to 120 US dollars per barrel by 2030.

This process is primarily triggered by the increase in demand for energy in developing countries and emerging economies, which are demanding their share in wealth and technical progress. A figure not to be underestimated is that around 32 per cent of the population in non-OECD countries, which is equivalent to around 1.6 billion people – currently have not yet got access to electricity. With an increase in electrification, the share of electricity in overall energy requirements will rise in the future.

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Development of worldwide power requirements // 1990 – 2030

Source: Energy Information Agency, 2008

This will create many opportunities for solar power technology as solar energy can be produced in a reliable, uncomplicated and decentralized manner. Solar power technology may be used to supply power even to off-grid areas in rural regions without having to first build a power grid with a significant input of  time and costs. EPIA therefore expects the market share of off-grid solar applications to rise significantly by 2030. Up to 3 billion people are to use this type of power supply by then. World map For SOLARWORLD AG this development offers an opportunity because, to date, we have positioned ourselves in strategically important off-grid markets such as Asia (SOLARWORLD ASIA PACIFIC PTE.) and Africa (SOLARWORLD AFRICA LTD.) and successfully realized numerous off-grid projects. We have thus gained a competitive edge and consolidated our market position as a future-oriented solar power technology supplier in this market, which hitherto has been hardly tapped.


Development of the solar market by application

Source: EPIA/greenpeace, 2008

Grid parity near. However, solar technology will make its major contribution to worldwide power supplies on-grid, i.e. via feed-in into power grids. Thanks to economies of scale and volume effects, technical progress, and declining costs of materials as a result of lower silicon prices, grid parity is expected to be achieved within one decade. When exactly it will be achieved will depend on a variety of specific country factors, e.g. solar radiation and the respective prices for household power. In California, Hawaii, and Italy, where both solar radiation and household electricity prices are very high, EPIA expects to achieve grid parity as early as in 2009/2010. Germany, France, and most EU countries will probably follow suit by 2015. In Italy, for example, where the average radiation of the sun amounts to some 1,400 kWh per square meter a year, grid parity would be reached at a module price of around 3 €/Wp (including installation). Because, due to the favorable radiation conditions, the costs of solar power generation would then amount to about 0.23 €/kWh and this would be on a par with the Italian electricity retail price. This development- oriented forecast will result in enormous potential for the solar industry since solar power will be a competitive competitor for all conventional energy sources upon the achievement of grid parity. The previous market shares of solar power in the various regional power markets are expected to grow strongly.

We presume that this development will particularly benefit the SOLARWORLD group and that we will be able to further expand our sales in a large number of markets. In this respect, we benefit in particular from our international sales structure that enables us to serve these markets if and as required. We are planning to achieve grid parity early on and thus benefit in particular from the expansion of market potentials. This will be based on our intensive research activities at all stages of the value chain and on strict control of cost and materials usage in all process steps to reduce the production costs for our solar modules. Research and development

Climate change challenge. Another key growth driver for the solar sector is the global concern about the increase in greenhouse gas emissions and the associated negative effects not just on the world climate but also on the world economy. According to the IEA, emissions would amount to 41 Gt CO2eq by 2030 if current energy trends are continued. In accordance with calculations carried out by former World Bank economist Nicholas Stern, a dramatic development of this type will correspond to economic damage of at least five per cent of the Global Gross Domestic Product. In other words: the world cannot afford a fossilbased future of energy following the current pattern neither in ecological nor in economic terms.


Forecast development of greenhouse gas emissions based on current trends

Source: Energy Information Agency, 2008

Against this backdrop, the IAS is calling for increasing usage of renewable energies alongside an increase in energy efficiency. According to a forecast by the IEA, renewable energies may account for up to 40 per cent (currently around 18 per cent) of worldwide total power generation in 2030, provided the governments would rapidly, persistently and emphatically promote their expansion. This would be the equivalent of up to 23 per cent reductions in the greenhouse gas emissions forecast in the reference scenario.


Scenarios concerning the development of greenhouse gas emissions by 2030

Source: World Energy Outlook 2008, International Energy Agency

The expected rise in demand for low-carbon technologies for power generation such as solar energy will create opportunities for SOLARWORLD. Our group persistently works to reduce greenhouse gas emissions at all stages of our value chain. Our emissions are disclosed within the framework of the Carbon Disclosure Project. The SOLARWORLD Stock


Corporate strategy opportunities

SOLARWORLD derives corporate strategy opportunities from the further expansion of our established market position as a fully-integrated solar technology group. We attach particular importance to a secure and stable growth strategy in order to expand our international competitiveness in a sustainable manner. Strategy and action

We have the necessary financial resources available to successfully expand production. Due to our solid liquidity basis we have safe access to the required financial resources and the capital market, even in difficult phases of the economy. We expand our capacity at all stages of the value chain in a coordinated and moderate manner and secured by our strong commodity basis with internal and external procurement parameters. Comprehensive research and development results and our long-standing customer and supplier relationships are excellent prerequisites for further expansion of our leading market position on the world market.

We expect to tap opportunities in future growth markets through the formation of new companies or the expansion of existing sites in the corresponding region. The Joint Venture SOLARWORLD KOREA LTD., formed in 2008, enables us to better serve the strongly growing Asian solar market. Planned groupwide expansion 2009+

We expect the expansion of our wafer and cell production at our Hillsboro site in the USA, opened in 2008, to create additional growth opportunities for the future: the US solar market is expected to grow strongly as of 2009 and offers us enormous potential as a local supplier. Worldwide sites of the group


Economic performance opportunities

Market analysts expect silicon prices to fall as of 2009. The future solar power market  This will benefit the procurement market for the key raw material in our solar sector and thus create opportunities for SOLARWORLD.

Additional perspectives for the SOLARWORLD group relate to the implementation of process and product innovation. We are confident that we will be able to generate additional economic performance potential in the form of a crucial competitive edge from our recycling unit, SolarMaterial.

A topical survey by the US environmental protection organization, Silicon Valley Toxics Coalitions, deals with the question of production and disposal of solar power technology. The organization calls upon industry to take used modules back and recycle them. This far, solar manufacturers have not been obliged to do so, neither under the German Act on Electrical Equipment nor under the EU regulations (WEEE Directive: Waste Electrical and Electronic Equipment; RoHS Directive: Restriction of Hazardous Substances). Nevertheless, the European Union already expects the companies to install responsible waste management systems. In the USA, too, pressure is rising to transfer responsibility for the entire product lifecycle to the manufacturers.

SOLARWORLD has already taken its recycling responsibility seriously for several years. Our Freiberg business unit, SolarMaterial already has a vast array of finished recycling solutions for silicon available. This results in diverse possibilities for the SOLARWORLD group:

  • All-round customer service via a module recycling system
  • Avoidance of expensive, legally prescribed solutions by means of actively assuming manufacturer responsibility
  • Strengthening of group-owned raw materials basis
  • Image gains with positive proof as a sustainable solar power manufacturer

The efficient design of our distribution channels also results in opportunities for SOLARWORLD. In logistics, for example, we can draw cost benefits from the expansion of our Joint Venture module production in South Korea. Production


Overall statement by the Executive Board on the anticipated development of the group

We continue to see a good market environment for long-term growth. The current financial crisis is clearly less of a burden to us than for companies in other industries and for competitors because we can rely not only on our substantial liquidity position but have also largely avoided becoming dependent on individual banks. As one of the leading providers of solar power technologies, we have positioned ourselves to be very competitive. Economies of scale and technological progress in manufacturing technology as well as an easing on the raw materials side will further consolidate our position. As a fully integrated company, we are particularly well equipped to withstand the competitive and price pressure. Following our strategy we will further expand our position in our core markets and open up new growth regions at an early point in time.