The Solar Industry’s Monthly Market monitor

Volume 29, Number 10, October 2010 The Industry’s Oldest Newsletter | Published by Greentech Media

SEIA/GTM Research Quarterly Survey Results; Pennsylvania Makes a Big Leap in the US PV Market Also in This Issue Until this year, Pennsylvania has lagged behind its neighbors, New York and New Jersey, in total solar PV installations. Crystalline Silicon PV - Looking In the first half of 2010, however, the size of the state, Pennsylvania is forward to 2011 Pennsylvania has more than doubled poised to become one of the largest page 3 its combined 2008 and 2009 markets in the region. installed capacities and has even SunEdison The SREC program in Pennsylvania is inched ahead of New York. The Awarded 16.7MW still in the early stages of development, reason New Jersey’s solar market of Solar Projects has consistently been one of the but the state’s Alternative Energy page 14 strongest in the country can be Portfolio Standard (AEPS) requires an increasing amount of the energy sold attributed to its State Renewable Sulfurcell Unveils to customers come from renewable Energy Credit (SREC) market. CIGS Cell With sources. In order for energy retailers Pennsylvania has a similar system in 10.7% Efficiency place, though it is less well defined. (namely PPL and PECO, which control With solar requirements ramping up over 50% of the market) to adhere to page 17 in the near future, and considering continued on page 20... Chinese Wafer Makers GCL- Poly and Comtec Accrue Orders in Excess of 600MW page 18

California’s Proposed Feed- In-Tariff Tracker page 19

PV News Feed- In-Tariff Tracker page 22

1 Letter from the editor

This month, we relaunch PV News, now in its 30th year of publication. PV News, the most analytical, independent, and enthusiastic written record of the PV industry in the world, will retain its name, but upgrade its motto to reflect a new mission: “Monthly Market Monitor of the PV Industry.” When Paul Maycock of Photovoltaic Energy Systems launched PV News in September 1981 as a “monthly report of pertinent, valuable, factual data of the PV industry,” he began a tradition of reporting and analysis that Scott Clavenna was singularly his own, and built a remarkably loyal following over the next 28 years. In this relaunch, Editor-in-Chief we intend to build on that legacy, and continue the tradition of advertising independence and detailed Oka Tai-Lee market analysis with our team here at Greentech Media and GTM Research. Production Editor You’ll see more market research than in the past, and more incisive news-gathering. In addition, we’re Andrew Krulewitz adding two new features to PV News that will appear in each issue: North American and European Assistant Editor Feed-In Tariff trackers, and a Utility Project Tracker. These will provide readers a monthly update on two Kristine LaRocca of the most important areas of the PV market today: public support for PV and utility-scale PV projects. Graphic Designer We’ll also be adding special reports from our team of analysts, as well as pulling data from ongoing research projects that are underway here at GTM Research. Michelle Vessel Copy Editor An important development for us at GTM Research was our recent selection by the Solar Energy Industries

Paul Maycock Association (SEIA) to be the official data collection and analysis firm for the U.S. solar market. Our work Editor Emeritus, in this area is underway, and we’ll be releasing quarterly reports with SEIA on the state of the U.S. PV, Contributing Writer solar heating and cooling, and CSP production and demand markets and a five-year rolling demand forecast. PV News subscribers will benefit from this work as we highlight unique findings from the data Publishers collection process and highlight pockets of growth or rapid change among the states in the U.S. Greentech Media, Inc. 1132 Massachusetts Ave Cambridge, MA 02138 We welcome your feedback on our new look and content, and appreciate your continued support of this esteemed newsletter. E:[email protected] W:www.greentechmedia.com General Inquiries PV News in History Greentech Media welcomes all contact about any topics related to 10 Years Ago in PVNews History | SOLAR WORLD PURCHASES BAYER SOLAR sustainable development and solar energy. We strive to provide top- SolarWorld has purchased an 82% share of Bayer Solar, the cast-ingot poly silicon wafer supplier. Bayer quality data and analysis relating to AG will retain an 18% stake in Bayer Solar. SolarWorld’s Executive Board Chairman, Frank H. Asbeck, sustainable technologies. Please said their decision to acquire Bayer Solar was based on the company’s solid management and a desire feel free to contact us at the address above with comments or to keep wafer production in Germany. Bayer Solar was Germany’s only silicon wafer manufacturer, with suggestions for improvement. a world market share of 20 percent (this would be wafers supporting over 40 MW of PV cells). More than 30% of Bayer Solar’s production goes to Japan. Sources As an open source publication, we 25 Years Ago in PVNews History | JAPANESE PUSH FOR SILICON INDEPENDENCE would be pleased to share sources for the facts and figures used in PVNews. Japan is enlarging both its silicon refining and cell production base, with the following industrial Contact us with any requests. developments reported: 1) Toyo Soda Industry has a joint venture with Siltechs (USA). Reportedly, they have bought 80% of Siltech’s stock and will manufacture wafers this year. 2) Tokuyama Soda, Copyright © 2009 Greentech Media which has been manufacturing 200 tonnes annually of polycrystal silicon, has increased its capacity All rights reserved. to 1,000 tonnes per year. 3) Kawasaki Seitetsu has bought 25% of the stock of NBK of Silicon Valley, California for 1.8 billion yen. The company is expected to manufacture silicon cells. 4) Nippon Steel ISSN 0739-4829 has established a new company, Nittetsu Electron, which will start manufacturing single crystal solar cells in June, 1986. 5) Niho Kokan has bought the manufacturing technology of polycrystal silicon from General Electric and will start manufacturing polycrystal silicon next year. The company plans to purchase silica and refine it to high-purity polycrystal silicon

2 special report

Crystalline Silicon PV - Looking forward to 2011 an excerpt from the new GTM Research report ‘PV Production, Technology, and Cost Forecast’ by Shyam Mehta

On the surface, 2009 was also was another record-breaking year for the industry, with over 7 GW of modules installed, total module production of 8.95 GW, and cell production of 10.66 GW – a 51% increase over 2008 cell production of 7.05 GW (itself an 88% increase over 2007). Still, as shown in Figure 1, growth in supply easily exceeded that in demand on the whole. Installations increased by only 24% last year after growing at close to 50% for the better part of last decade, while capacity expansions that were set into place in 2008 resulted in available module supply in 2009 being almost twice that of demand. However, as discussed below, a large percentage of this capacity was not bankable, which helped to insulate the rest of the market from a prolonged period of overcapacity.

Figure 1: Global PV Supply vs. Demand, 2007-2009 The high-level results in Figure 1 mask the fact that 2009 was one of the most challenging years for PV suppliers in recent memory. The credit crisis, the global recession, the evaporation of demand in Spain (the largest PV market in 2008), and a harsh German winter led to a severe slump in installations in late 2008 and early 2009, and the consequent overcapacity and inventory build led to sharp price declines all across the value chain. However, the situation took a turn for the better in the second half of 2009, as the German market rebounded strongly, aided by looming policy uncertainty in 2010 and the return of project financing in the second half of 2009. As a result of being forced to idle most of their capacity at the beginning of the year, top-tier manufacturers found themselves sold out in the last quarter of the year, during which an unprecedented 2.4 GW was installed in Germany alone. With project economics still working in their favor and established low-cost players (First Solar, Suntech, Yingli, Trina) being capacity constrained, even high-cost manufacturers saw strong demand.

The robust demand environment (fueled primarily by the German market) has continued well into 2010 thus far. As shown in Figure 2, eight cell producers alone shipped over 1.9 GW in the Q2 2010 -- three times what was shipped in Q1 2009. Most bankable producers are sold out for the rest of the year, and consequently, prices, which had been in free-fall for much of 2009, have stabilized across the value chain, actually experiencing a 5% to 10% increase in the second and third quarters of 2010.

3 Figure 2: Quarterly Cell Shipments, Selected Producers,Q3 2008 - Q2 2010 Technology Trends Crystalline silicon cell production in 2009 was 8.02 GW, a 42% increase over 2008. As discussed below, the majority of these cells were manufactured in the low-cost locations of China and Taiwan. Total c-Si module production in 2009 was 6.3 GW. Overall, crystalline silicon still dominated the PV technology landscape, with a cell production share of 81% and a module production share of 78%: for cells, this breaks into a 75% share for “plain vanilla” mono- and multi- crystalline cells, and a 6% share for high-efficiency “super” mono-crystalline cells made by SunPower and Sanyo. Figure 3: 2009 Global PV Cell Production by Technology (MW-dc) In a year where most producers considered themselves fortunate to expand marginally, CdTe producer First Solar doubled its production, from 504 MW in 2008 to a staggering 1,011 MW; the company alone contributed 10% of global supply. Largely thanks to the First Solar factor, thin film’s market share increased yet again from 14% to 19% in cells, and from 15% to 22% in modules. This top- line result masks the turmoil faced by almost every other thin film producer in the space, as an abundance of cheap c-Si modules and lenders’ unwillingness to finance nascent companies and technologies combined to make life very difficult indeed; the top six thin film producers made up almost 70% of production, while the rest were left with only scraps to feed on. Overall, 2009 thin film production stood at 1.98 GW, representing another doubling over the previous year’s production of 966 MW. Amorphous silicon constituted 40% of this, or 796 MW, with Sharp and United Solar as the top producers in this segment. 2009 was also the first year to witness

4 more than 100 MW of CIGS production (166 MW, to be exact), compared to only 74 MW in 2008: progress in CIGS is definitely occurring, albeit at a steady pace, thanks to the efforts of such producers as Solar Frontier (formerly known as Showa Shell Sekiyu), Würth Solar, and the ever-controversial Solyndra.

Regional Trends Breaking down 2009 production by region confirms what the industry has known for quite some time now: manufacturing Figure 4: 2009 Global PV Module Production by Technology (MW-dc) cells and modules is now a game of low-cost production. This is especially true for standard crystalline silicon cells, which have become highly commoditized with little perceived differentiation across suppliers. Almost half (49%) of the cells made in 2009 came from China and Taiwan; when limited to crystalline silicon cells, this number jumps to 56%. With regard to modules, these numbers are slightly lower (40% share for all technologies and 47% for just c-Si).

The continued growth in Chinese and Taiwanese manufacturing has come at the expense of both European and Japanese producers. European cell production actually experienced Figure 5: 2009 Global PV Cell Production by Region (MW-dc) a slight (1%) decline compared to 2008, and its production share, after remaining steadily in the mid-20% range through the last half-decade, dipped a full 10%, from 28% to 18%. This simply illustrates the disparity between cost structures in these two regions; even the most established European producers incurred heavy losses in 2009, simply unable to compete profitably against aggressive pricing strategies adopted by Chinese firms, which correctly assessed the existing environment as an opportunity to steal share. Japanese producers expanded by 19%, aided no

5 Figure 6: 2009 Global PV Module Production by Region (MW-dc)) doubt by a resurgence in the Japanese market, which more than doubled in 2009 to reach 484 MW of demand. Still, overall share declined to just 14% for cells and a mere 10% for modules. This is a far cry from just five years ago, when Japanese firms made up over 50% of the market.

U.S. share of global cell and module production remained relatively flat, at 6% and 9% respectively. As was the case in 2008, the bulk of this came from three producers: First Solar (CdTe) in Ohio, United Solar (a-Si) in Michigan, and Evergreen Solar (string ribbon) in Massachusetts. Thin film still comprised the majority (56%) of U.S. cell production, but was lower compared to 2008 (68%).

Top Producers With regard to cells, First Solar claimed pole position for cell manufacturing in 2009, with 1,011 MW of modules produced, mostly out of its giant facility in Malaysia (another low-cost location on account of its generous tax holidays). The top four positions represent a permutation of sorts: Q-Cells, number one in 2008, fell to the number four slot, while Sharp, Suntech Power, and First Solar each moved up one place. Numbers 5, 6, and 7 are occupied by Yingli, JA Solar, and Kyocera respectively; again, the same three firms occupied those slots in 2008, albeit in a different order. All in all, Figure 7: Top 20 Global Cell Producers, 2009 (MW-dc therefore, the top 20 list looks much the same as it did in 2008, with the most significant changes being related to Chinese firms moving up and European/Japanese firms (with the exception of Sharp) moving down a few notches. The biggest jumps were made by Taiwanese E-Ton Solar (#24 to #15) and Chinese Ningbo Solar (#30 to #14). The top 20 firms made up 74% of global production, almost the same as in 2008. As the industry matures and successful producers expand capacity disproportionately, one would expect this to increase over

6 Figure 8: Top 20 Global Module Producers, 2009 (MW-dc) the long term. And if any further proof were needed of Chinese and Taiwanese dominance, a look at the names on this list will suffice: 12 of the top 20 firms are based in that region.

The list of top module producers in 2009 heavily overlaps that for cells, as the largest PV manufacturers produce both components. There is a much more significant European presence in modules compared to cells, partly because Taiwanese firms by and large are pure-play cell manufacturers, and proximity to local demand is a source of competitive advantage for European module players. Figure 9: Top 20 Global Wafer Producers, 2009 (MW-dc) The list of top wafer producers in 2009 is dominated by large Chinese players, with a few notable exceptions (REC, Solarworld). Chinese wafer production is split between essentially pure-play wafer manufacturers like LDK and Renesola (both of which have actually recently entered into module production, albeit on a much smaller scale than their wafer businesses), and vertically integrated players such as Sharp, Yingli, and Trina.

Crystalline Silicon Supply Constraints, Capacity Expansions Underway

Germany’s late and sudden surge in the back half of 2009 and strong global growth throughout 2010 have meant that even semi-bankable manufacturers have found themselves capacity-constrained and unable to fully exploit the current market environment. Consequently, after a relatively sober 2009 where c-Si wafer, cell, and module capacity grew by 30%, 27%, and 37% respectively, 2010 is witnessing a major build-out in crystalline silicon manufacturing capacity, as shown in Figure 10. Each segment is expected to grow by around 45% to 50% in 2010, with a large majority of the incremental capacity coming online in the second half of 2010 (especially wafers).

7 Figure 10: Crystalline Silicon Manufacturing Capacity, 2008 - 2010E (MW-dc) As one would expect, most of this additional capacity is being added in the China/ Taiwan region (cells/modules in China, mostly cells in Taiwan). Figure 11 details the largest expansion plans for module producers in 2010. In a few cases, expansion plans have been revised upward multiple times through the year. While this capacity will no doubt be well utilized in late 2010 and possibly even early 2011, it remains to be seen what impact such a jump in capacity (and hence available supply) will have on supply-demand and pricing dynamics past that point, as an uncapped German market Figure 11: 2010 Module Expansions, Bankable Producers (MW-dc) becomes less and less viable via significant subsidy cuts. To the extent this capacity needs to be utilized in 2011, we could see substantial price cuts from Chinese manufacturers, which would create significant challenges for their competitors, especially in more cost-sensitive markets.

Technological Innovation

Efficiencies for most c-Si firms have registered only incremental gains over the last several years. Over the past year, however, a number of prominent players have announced the development of new cell technologies to drive step- function improvements in efficiency. Figure 12 details the firms that stand at the forefront of crystalline silicon efficiency, both at the current juncture and looking to the future. Although SunPower and Sanyo both have been ahead of the rest of the pack for years and continue to raise the efficiency bar, they have done so at the expense (quite literally) of a higher cost structure. What is noteworthy about other firms on this list is that they are attempting to raise efficiencies (although to lower levels than the two aforementioned companies) without imposing a meaningful increase in costs.

That each of these seven firms is employing a different approach to commercializing high-efficiency products should dispel notions that we have reached the end of the road as concerns technological progress in crystalline silicon manufacturing. As with the larger question of PV absorber materials, there is a long way to go before the dust will truly settle on which variant(s) of c-Si will emerge as the dominant leader, if any. It can be safely assumed, however, that the success or failure of the firms on this list will, to a significant degree, determine which technology paths the current mass of relatively undifferentiated c-Si producers will follow over the next five years.

8 Figure 12: Efficiency Leaders in Crystalline Silicon PV High- efficiency Commercialized Firm Technology Description Assessment Product Cell Efficiency Status JA Solar SECIUM Uses nanoparticle ink from Pilot (production 18.9% (pilot) Since JA is already the cost leader in cell equipment vendor Innovalight began May 2010; manufacturing, SECIUM (if ramped up to volume commercial successfully) could provide it pole position on both production expected cost and efficiency fronts. However, low barrier H2 2010) to entry for competitors also using Innovalight product. Sanyo Heterojunction Hybrid of monocrystalline Volume production 19.8% Costs considerably higher than standard c-Si; with Intrinsic thin silicon surrounded by ultra-thin (2009: 255 MW) should hold #2 spot in commercial efficiency film (HIT) amorphous silicon layers in near-term, but this will matter less unless it achieves step-function improvements in cost. Enjoys competitive advantage in Japan, given space constraints.

Solarfun Selective emitter “Low surface doping Development (first 18.5% (development) Planning on converting 160 MW of cell capacity monocrystalline concentration everywhere shipments expected to Selective Emitter; if successful, would improve on illuminated surface of cell Q1 2011) competitive positioning substantially, but targets except directly beneath metal may not be realistic inside timeframe. electrode” Suniva ARTisun Has its own paste and texture Volume production 18.3% Lower efficiency than SunPower/Sanyo, but has monocrystalline recipes, is able to customize (2009: 16 MW) a much better cost structure. This, combined with and optimize every layer of its current efficiency advantage over other firms, the cell design to its own makes it competitively positioned for right now; specifications future competitiveness depends on development of differentiated technology. SunPower All-back contact Moves metal contacts to the Volume production 22.0% Gen 3 to exceed 24%; likely to be the efficiency monocrystalline back of the wafer, maximizes (2009: 398 MW) leader for foreseeable future. As company working cell area, eliminates approaches efficiency ceiling, high cost structure redundant wires will come under increased scrutiny. Downstream business affords it some measure of insulation. Suntech Pluto Unique texturing technology Low-volume (2010 19.0% Offers higher efficiency with potential to Power monocrystalline with lower reflectivity ensures run rate of 4 MW per simultaneously lower costs; company has had more sunlight can be absorbed month) trouble ramping production beyond its current throughout the day even without levels of 4 MW/month. direct solar radiation; thinner metal lines on the top surface reduce shading loss Trina Solar Quad Max Square shape allows it Development 18.1% (pilot) Lowest current efficiency amongst high- square to harvest more sunlight (first shipments efficiency initiatives, but will matter less if monocrystalline by avoiding surface area expected Q3 Quad Max does not represent meaningful loss typical with traditional 2010) increase in manufacturing costs. Quad monocrystalline cells, which Max would drive 0.6% increase in module are octagonal-shaped efficiency, which would boost product margins. Yingli PANDA N-type Greater impurity tolerance Pilot (commercial 18.5% (pilot) N-type’s higher impurity tolerance also Solar monocrystalline, and does not suffer from launch in Q3 gives Yingli the option of using lower quality nanoparticle ink light-induced degradation 2010) (thus cheaper) polysilicon for its cells, which that conventional P-type confers a direct cost advantage. This would cells do. Yingli claims the further cement the firm’s position as the module will also have better lowest-cost c-Si manufacturer in the world. performance under high Also plans on leveraging Innovalight silicon temperature/low light ink solution.

9 Figure 13: Q/Q Price Movement, Q1 2008 - Q2 2010) Downstream integration and Acquisitions

The market turn of late 2008 led to a violent shift in pricing power from the upstream segments of the PV value chain into the hands of installers and developers. With their distance from the end-customer, many cell and wafer firms were left vulnerable to the vagaries of the market, and suffered large price declines and losses as a result; as shown in Figure 13, price drops in wafers and cells during the oversupply period were steeper and more persistent than those for modules.

As a consequence of this, the past twelve months Figure 14: Recent Downstream Movements in Crystalline Silicon have witnessed a series of Date Firm(s) Involved Type Description downstream movements Oct 2009 MEMC - SunEdison Acquisition - Developer Wafer manufacturer integrates downstream by upstream players, the into project development; allows utilization most noteworthy of which of cash on balance sheet and exploits value chain synergies are detailed in Figure 14. Nov 2009 Applied Materials - Advent Acquisition - Module Equipment vendor purchases back-contact As shown, these have taken Solar Technology Emitter-wrap-through IP, aims to leverage in various forms, from the future equipment design purchase of a prominent Jan 2010 Motech - GE Purchase - Module Plant Cell manufacturer integrates downstream developer (SunEdison) by into module production; provides foothold into U.S. market a large wafer manufacturer Feb 2010 LDK - Best Solar Purchase - Module Plant Wafer manufacturer integrates downstream (MEMC), to cell firms (JA Solar, into module production China Sunergy) acquiring Mar 2010 China Sunergy - CEEG SST, Acquisition - Module Cell manufacturer integrates downstream module suppliers, to cell and CEEG New Energy Producers into module production wafer firms purchasing module May 2010 MEMC - Solaicx Acquisition - Wafer Producer Acquisition of high-efficiency mono crystalline plants from other companies wafer diversifies MEMC’s manufacturing (LDK – Best Solar, Motech – portfolio, as most wafer production is done via outsourcing GE). However, in each case, Jul 2010 JA Solar - Shanghai Acquisition - Module Producer Cell manufacturer integrates downstream the following arguments Jinglong Solar into module production come into play:

1. Moving downstream gives a company a dedicated sales channel for its primary product (wafers/cells). 2. Greater proximity to the end-customer gives a company more control over its pricing destiny and allows for higher profit margins (by capturing the margin at both cell and module levels, for example). 3. The company’s downstream business has a competitive advantage since it has lower input costs than its competitors. 4. Module production is a low value-add step and has very little complexity or technological risk. Moreover, it has low capital risk for Chinese companies since most module assembly there is done manually.

10 Figure 15: Recent Contract Manufacturing Agreements in Crystalline Silicon It is interesting to note that Date PV Firm OEM Firm Description acquisitions of the type Apr 2009 Evergreen Solar Jiawei Initial 100 MW cell, module production plant in China represented by the recent Jun 2009 SunPower Jabil Circuit 100 MW module assembly plant in Mexico MEMC-SunEdison deal, whereby Oct 2009 BP Solar Jabil Circuit 45 MW module assembly in Mexico, 90 MW in Hungary upstream players move into Mar 2010 Q-Cells Flextronics 200 MW module assembly plant in Malaysia system sales and/or project development, have been few and Apr 2010 SunPower Flextronics 75 MW module assembly plant in U.S. far between in the space. There May 2010 SunPower Solar Semiconductor Module assembly for standard multi c-Si Serengeti product line was a great deal of talk on the part of module firms about integrating downstream back in the first half of 2009 in order to reduce exposure to sales fluctuations and protect margins, but by and large, this situation has not materialized (the only other prominent example is Q-Cells, which integrated downstream organically). A major reason for this is the shortage of bankable capacity once demand picked back up in H2 2009, leading to a return to 20%+ margins for many suppliers. As the industry enters more prolonged down-cycles and becomes more commoditized, module producers (especially high-cost ones) may once again have to confront the issue of downstream integration as a means of differentiation and margin protection.

Figure 16: Recently Announced c-Si Module Assembly Plants in North America Contract Manufacturing Estimated Production Firm Location Value Chain Capacity (MW) Start Date Another key trend in the Canadian Solar Ontario, Canada Module 200 2011 crystalline silicon PV industry Jabil Mexico Module 145 2010 over the past year and a half Silfab Ontario, Canada Module 120 2011 has been the handing over of component manufacturing to Flextronics California, US Module 75 2010 contract producers; Figure 15 Opsun Panels Ontario Ontario, Canada Module 50 2010 displays recent activity in this Siliken Ontario, Canada Module 50 2011 domain. Generally, the companies Solar Semiconductor Ontario, Canada Module 50 2011 concerned have been higher- Wanxiang Illinois, US Module 36 2010 cost manufacturers with strong Suntech Power Arizona, US Module 30 2010 brand names, such as BP Solar, Kyocera California, US Module 30 2010 Q-Cells, and SunPower, and the Heliene Ontario, Canada Module 30 2010 prime beneficiaries have been Photowatt Ontario, Canada Module 30 2010 Jabil Circuit and Flextronics. As can be seen, there is a heavy bias towards outsourcing module assembly: being a low-IP, low value-add step, it is particularly well suited to being contracted out. Unsurprisingly, most of the contractors’ facilities (which have dedicated amounts of capacity reserved for specific customers) are located in low-cost locations such as Malaysia (which has a ten-year income-tax holiday), Hungary, China, and Mexico.

Outsourcing production (particularly of modules) to a contract producer makes a great deal of sense: contracting decreases capital expenditure, operating expenses, and employment risk, and ultimately manufacturing cost, and allows the customer to focus its capital and energy on higher-value functions, such as R&D, sales, marketing, and branding. Given that c-Si PV is a mature technology and is being increasingly commoditized over time, one should expect this trend to gain further traction going forward. The question is which manufacturers are likely to pursue it, and whether it will extend into wafers, cells, and thin-film PV production, as well.

Module Plants Spring Up in North America

A notable trend in 2009 and 2010 has been a stream of announcements from crystalline silicon suppliers about constructing manufacturing facilities in Canada and the U.S. In the case of Canada (see page 15), an extremely generous feed-in tariff (US $0.44-0.78/kWh depending on system size) and a high domestic content requirement for FIT eligibility (60% from 2011) in Ontario

11 have led to a flurry of module plant announcements from manufacturers in that province. Barring a few exceptions, most of these projects are in the 30-50 MW range, which may be a wise move, given that the long-term sustainability of this approach (especially at current rates) remains in question. Similar considerations have driven expansion decisions in the U.S., as well, as these are expectations of a rapidly growing commercial and utility-scale market and the preference for locally sourced modules as a result of the “Buy American” clause in the Obama Administration’s stimulus act. Moreover, in an effort to create “green jobs,” many cities and states in the U.S. offer generous incentives to would-be manufacturers, including tax credits, exemptions, loans, and grants. The logic on part of manufacturers, therefore, is that having a local presence will allow them to exploit manufacturing incentives, obtain stimulus funds, and increase visibility to end-customers, particularly utilities.

Figure 16 details recently announced plants in North America; in total, this will amount to almost 1 GW in additional capacity in the region by mid-2011. As shown, there is a clear preference for module assembly lines. This is understandable, since modules are the closest step in the value chain to the end-user and locating module production close to demand reduces sometimes hefty shipping costs and drives higher visibility to the customer. Whether this trend continues will depend on the ramp-up in domestic installations, the cost spread between Western and Eastern countries, and how strictly domestic content provisions (which are rather loosely defined in the U.S. at present) are enforced.

European Manufacturers

European manufacturers had a horrendous first half of 2009, where they were faced with non-existent demand followed by brutal price wars. The road from then to now has been slow and painful; firms have faced large layoffs and capacity shutdowns (Q-Cells, REC), painful restructurings (Q-Cells, Solon), balance-sheet crises (REC, Solon), and sustained losses (Q-Cells, REC, Solon); only SolarWorld emerged stronger from the market turn, thanks to its vertically integrated manufacturing model, diversified manufacturing presence, and strong presence in the German residential market. In the last two quarters, however, price stability and robust demand has allowed European manufacturers to rebound strongly: most have had a successful 2010 to-date, and the outlook for the rest of the year is extremely positive, as well. Most of these manufacturers have also recovered to a point where they are now expanding capacity across all steps of the value chain.

Figure 17 provides an update on the current status of prominent European manufacturers. It is interesting to note the variety of strategies and business model adjustments that have been undertaken by the firms on this list. These include:

»» Focus on vertical integration (Solarworld, REC) »» Production expansion in low-cost location (Q-Cells, REC) »» Downstream integration into modules and systems (Q-Cells)

»» Acquisition of a technology-diversified portfolio of companies with a main emphasis on c-Si cell manufacturing (Bosch ) »» Focus on less price-sensitive markets (Centrosolar)

It is also interesting to note that many of these manufacturers have managed to increase their sales to foreign (i.e., non-German) markets substantially in 2010. This reflects awareness that Germany post-2010 will no longer be as lucrative a hunting ground on account of the severity of the FIT reductions that will hit starting in 2011 (see pages 22-23). Here, key markets include Italy, France, and Eastern Europe. Whether these firms will be able to handle the inevitable penetration of Chinese manufacturers into these markets as well without major changes to their business model is, however, questionable.

12 Figure 17: Key European c-Si Manufacturers and Current Status s t y t t ion t uc apaci d i C ro S i P t Developmen S ilm t Developmen ion f t ems ules ers t d f W) W) o ecen ells ys olysilicon rojec oca M M ( R ( YE c- 2010 Thin- S P 2009 c- C M P Wa Firm L Aleo Solar Germany, √ 139 200 Produced 133 MW in H1 2010; aims at EUR 480M Spain revenue, 50% foreign sales in 2010; looks to be acquired by Bosch shortly Bosch Solar Germany √ √ √ √ √ √ √ 130 (wafers), 170 180 (wafers), Incorporated CIS producer Johanna under Bosch (cells), 0 (modules) 370 (cells), 90 name; has controlling interest in Aleo, may acquire; (modules) opened new cell plant in Q3 2010; entered into power plant construction Centrosolar Germany √ √ √ 93 150 Business focus on selling complete residential rooftop systems, including BIPV and thin-film; 8% EBIT margin in H1 2010; production at full capacity since May 2009; France is strongest market for components and systems Q-Cells Germany, √ √ √ √ √ 537 (cells) 1100 (cells) Undertook change of strategic direction in mid- Malaysia 2009; formed systems business (QCI) in 2009, entered module sales (via Flextronics) in 2010; ramping up Malaysia fab; divesting from all thin-film investments except Solibro REC Germany, √ √ √ √ 818 (wafers), 134 2104 (wafers), Singapore production ramping up on all three fronts, Norway, (cells) 116 (modules) 455 (cells), 224 expected module production in 2010 = 4X 2009 levels; Singapore (modules) solar business still running at small operating loss in Q2 Solarworld Germany, US, √ √ √ √ √ 648 (wafers), 194 1250 (wafers), Total H1 2010 shipments at 377 MW and all South Korea (cells) 288 (modules) 625 (cells), 950 production sites running at full capacity; Expanding (modules) capacity for all products at all locations; H1 y/y revenue up 50% Solon Germany, US, √ √ √ √ 132 (modules) 435 (modules) Successful refinancing in Q2 2010; Positive Italy cashflow in Q2 2010; expects 250 MW production in 2010; break-even EBIT; weak balance sheet affecting systems business. New industrial module lowers costs by 20%

Crystalline Silicon PV: Looking Forward to 2011 is an excerpt from the new GTM Research report ‘PV Production, Technology and Cost: 2010 Forecast.’ This authoritative report contains a comprehensive analysis of the PV supply chain. It provides detailed estimates and forecasts of PV cost structure, technical characteristics (efficiency, degradation), volumes (capacity and production) for all major components (wafers, cells, and modules) and all major technologies through 2013. Additionally, it details projected market share and selling prices by technology through the bottom-up construction of global supply and demand curves for PV, and profiles the leading 150 manufacturers in the PV space.

The full ‘PV Production, Technology and Cost: 2010 Forecast’ is available for purchase at www.gtmresearch.com.

13 PV News

North American News

SunEdison awarded 16.7MW equipment costs. Construction on three SoloPower is targeting the of Solar Projects of the 15 rooftop PV systems is expected commercial and industrial flat-roof to begin this fall. The majority of projects market with applications that favor a SunEdison has been awarded a will be located in the Greater Toronto lightweight, non-penetrating flexible ground-mounted 14.5MW solar Area, including Vaughan, Brampton, solar solution. The SoloPower panel service contract with the Davis- Burlington, Markham and Mississauga, can be rolled up and walked on, and Monthan Air Force Base (DMAFB) with additional systems located in the flexible units can be affixed to the in Tuscon, Arizona and a contract London. The projects will be hosted at roof with an adhesive or mounted on for 2.2MW of rooftop installations GE Capital Real Estate facilities, and the a lightweight non-penetrating rack. for GE Capital Real Estate. Ontario Power Authority will purchase the energy produced under the terms The 14.5MW solar installation is made of Ontario’s Feed-In Tariff Program (see possible through a solar power service pages 24-25). agreement in which SunEdison will finance, design, construct, operate and www.sunedison.com maintain the approximately 130-acre ground-mounted solar deployment. SunEdison will also maintain a long- MiaSolé to supply juwi with term ground lease agreement with 600MW of CIGS Panels DMAFB for the use of their land for the MiaSolé has signed a multi-year Source: Ascent-Solar solar installation. In return, DMAFB will purchase agreement to supply juwi SoloPower’s thin-film modules were purchase the energy produced from the Solar with 600MW of their CIGS tested to UL 1703, the standard for solar power plant to offset their demand (Copper Indium Gallium Selenide) safety for PV module manufacturing. from the grid at long-term predictable solar panels. This order is a huge SoloPower’s CIGS competitors are also energy pricing. There are no upfront boon to MiaSolé, which earlier in 2010 aiming towards UL and IEC approval. costs required from DMAFB for the set the goal to ship 22MW worth of solar deployment. When completed, panels by the end of the year. As As reported by Greentech Media, the 14.5MW solar farm will produce outlined by the agreement, MiaSolé according to Brian Blackman of approximately 31.5 million kWh of will ship 50MW to juwi in 2011. Ascent Solar, another flexible CIGS energy annually and over 575 million solar vendor, “If you don’t have IEC, kWh over twenty years. It is expected www.miasole.com then UL is just a symbol. We’ve that once completed, the 14.5MW www.juwisolar.com submitted our modules for IEC solar power plant will deliver 35% of approval. From our perspective, DMAFB’s total base load of energy. SoloPower earns UL it’s irrelevant unless you have the IEC -- you have to have the 20-year For GE Capital Real Estate, SunEdison will Certification for Flexible CIGS lifetime.” Ascent just released its also finance, build, own, operate, monitor Panels; Moves Closer to Market new WaveSol module. The five- and maintain photovoltaic solar energy meter, flexible panel is capable of systems with capacity totaling 2.2MW. San Jose-based SoloPower has producing up to 320 watts. GE Capital Real Estate will receive lease announced that their flexible CIGS panels have received UL revenue for rooftop space allocated to www.solopower.com the projects, without any upfront capital Certification, which the company claims to be an industry first.

14 Ontario Ups mandates for While this new mandate in Ontario the facility en route to ultimately Domestic Content in 2011, will drive job and industry growth in hiring up to 1,200 workers to run Concerns about supply the province, there will certainly be a the new manufacturing plant. Arise while Others anticipate shortage of components for at least www.dow.com Market Boom the first quarter of 2011. Companies such as Canadian Solar, Fronius, With its aggressive solar feed-in Silfab, and SMA stand to reap the Honeywell Makes Announcements tariff (see pages 24-25), Ontario’s benefits of this program. for solar module efficiency and solar market grew rapidly in 2010. Protection The number of 2010 installations fit.powerauthority.on.ca is on track to rise over 250% from Honeywell introduced two new the 2009 figure. However, new product lines at this year’s Dow Readies for Production of regulations that mandate the use European Photovoltaic Solar Solar Shingles of locally manufactured PV supplies Energy Conference (PVSEC), the could cause growth to slow in 2011. About a year after announcing its first being a new series of dielectrics and dopants for crystalline silicon In 2010, 40% of the components Powerhouse Solar Shingles, Dow solar panels. These materials can for residential installations and 50% Chemical is now preparing to start mass accelerate the manufacturing of the components for commercial production at its Midland, Michigan process, slow product degradation, installations have to be sourced locally. factory. The shingles are solar panels and boost efficiency. In 2011, all installations must adhere to that can be integrated into rooftops with standard asphalt materials. a 60% domestic content requirement. Dopants are formulated chemicals that alter the electrical properties of silicon Japan has even filed an official In 2007, the company received and can be applied to selectively complaint with the World Trade $20 million in funding from the U.S. change the electrical properties of Organization (WTO) over the Department of Energy to develop specific parts of solar cells. Dielectrics situation. In the European Union, ‘building-integrated’ solar arrays are formulated chemicals that act as laws prevent countries from for the residential and commercial electrical insulators, preventing the flow mandating local content use and markets. What they came up with of electric current through certain areas Japan is concerned that pricing is a CIGS panel that also acts as of the PV cell. The dielectric materials in guarantees offered in Ontario require protection for a house’s roof. This use in Honeywell’s products have been subsidies that are not allowed under design reduces installation costs designed to provide other benefits, international trade law. because the conventional roofing shingles and solar generating such as acting as a passivation layer to The Italian company Silfab has already shingles are installed simultaneously prevent harmful recombination effects, registered a new Canadian subsidiary, by roofing contractors; no specialized a diffusion barrier to prevent unwanted Silfab Ontario Inc., and since last June skills or knowledge of solar array diffusion of dopants into certain has invested CAD $15 million into installations are required. regions, and a masking material. the project. With a 100,000-square- Honeywell dopants will enable broad foot manufacturing space already adoption of n-type Si substrates instead acquired, the company is ramping of currently dominant p-type Si, thus up for production. In early September, eliminating detrimental effects of the Silfab announced that it would be light-induced degradation that is an broadening its manufacturing abilities inherent property of p-type Si. These to produce not only its mono- and new materials can be applied to Si wafers multi-crystalline modules, but also Source: Dow Solar using inexpensive, high-throughput OEM products for outside partners methods such as screen-printing and who are looking to meet the domestic Dow expects at least 100 jobs will be ink-jet printing, methods that are well content requirement. created in preparation for opening

15 proven on the industrial scale in PV and tenKsolar’s RAIS Wave PV system, strips on a substrate with a lensing other electronic manufacturing. which is designed for commercial, flat- system that essentially halves the roof applications. The panels and racking requirement for silicon. The lensing Honeywell also announced its systems will be paired with Sustainable and concentration is integrated into expanded line of PowerShield backing Energy’s inverter technology. the rolled cover glass, representing systems. The new model, called PV270, a significant change from an earlier is 30 percent lighter than traditional The RAIS Wave system is unique acrylic sub-assembly design. backing systems, while providing the because the panels are completely same level of protection and insulation interchangeable with no dependence Three weeks before the funding as traditional backing materials. on other panels in the system. round, enXco, an EDF Energies According to tenKsolar, if one particular Nouvelles Company, and Solaria cell is shaded, only that cell suffers in forged a five-year global supply output and the rest of the system is agreement under which Solaria unaffected, unlike normal systems that will supply their solar module to are tied together in groups. enXco. EnXco made a small equity investment in Solaria, as well. EDF The companies expect this ultra- develops, constructs, operates and efficient combination of the parallel manages wind and solar projects design of the Sunergy inverter and throughout the U.S. Source: Honeywell Solar the tenKpanel will set them apart in The structure of the PV270 has been the commercial rooftop sector. They www.solaria.com | www.enxco.com optimized to decrease the number of have already received 1.2 MW worth of orders, including a 1 MW purchase times manufacturers need to change SunPower working on solar from the Stuart C. Irby Company, a the rolls of backsheet, allowing for Energy Storage longer periods of manufacturing up- large electrical distributor. time. Once installed, the backing After winning a $1.8 million grant systems help seal and protect the from the California Public Utilities electrical components of solar panels Commission (CPUC), SunPower to prevent shorting and power loss is looking to demonstrate the under adverse weather conditions. integration of energy storage The backing is comprised of two outer systems with existing PV systems for Source: tenKsolar layers, one a fluoropolymer film and the commercial customers. SunPower other a proprietary special polyolefin www.tenKsolar.com is partnering with Ice Energy, Xtreme thermoplastic. Sandwiched between www.sustainableenergy.com Power and ZBB Energy and working the outer films is a polyethylene with an unnamed major retailer terephthalate (PET) layer. This inner to demonstrate the benefits of layer is bonded to the outer layers combining PV with energy storage. with a proprietary adhesive system. Solaria raises additional $20 The “unnamed major retailer” is, in www.honeywell.com Million in series D Financing fact, named in the CPUC release After Signing 5-Year Supply Deal – it is Target Stores. The program will be implemented by SunPower Sustainable Energy and tenKsolar Solaria, which raised $45 million in in conjunction with PG&E, KEMA, Offer integrated PV system for capital this past May, has just closed Sandia National Laboratories and Large-Scale Rooftop Applications another funding round, bringing the Target. The CPUC grant is part of total up to $65 million. Solaria’s the California Solar Initiative (CSI) Sustainable Energy Technologies of technology is based on dicing or RD&D program (‘RD&D’ stands Calgary, Canada and tenKsolar, based “singulating” a standard crystalline for Research, Development, in Minnesota, have partnered to deliver silicon wafer and mounting these

16 Deployment and Demonstration). The contract – worth about $3 million Scientists have already been able The CSI aims to create 1,940 – was awarded in a competitive to produce CIGS solar cells with megawatts of new, solar-produced process that drew a number of efficiencies greater than 20% electricity by 2016 with a budget of prominent industry names. Petra under laboratory conditions. In $2.2 billion over 10 years. Solar’s research has focused on three order to exploit this potential, issues: enabling utilities to better Sulfurcell’s CIGS process deploys www.sunpowercorp.com www.ice-energy.com monitor and control solar electricity co-evaporation techniques. www.xtremepowerinc.com as it becomes part of the mix of The manner in which these are www.zbbenergy.com electricity sources, helping utilities utilized to manufacture the record- prevent grid instability that can result breaking cells depends, however, from the high penetration of solar into on proprietary design features and Petra solar wins Prestigious the grid, and creating technological components. A major advantage SEGIS Contract tools to allow the electricity system of this process is that the CIGS to accept and use solar and other layer properties can be precisely Sandia National Laboratories has cleantech resources more broadly configured, which enables the awarded Petra Solar its prestigious among its energy sources. material’s potential to be exploited Solar Energy Grid Integration to the fullest extent. The company’s Systems (SEGIS) contract as part www.petrasolar.com medium-term technology roadmap of the U.S. Department of Energy is clearly defined: Sulfurcell is already Solar Energy Technologies Program. aiming to surpass the 11% threshold Petra has now won a total of $5.8 in 2011 and the 12% threshold in million worth of federal grants. European News 2012. Module efficiencies exceeding Through the contract, Petra Solar 14% are realistic by 2015. will extend its development of Sulfurcell Unveils CIGS Cell electric grid stabilization, micro- www.sulfurcell.com grid and smart grid technologies, With 10.7% Efficiency which will enable utilities to manage At PVSEC, Sulfurcell Solartechnik Oerlikon Continues Driving the massive increase in renewable unveiled prototypes for its new Amorphous Silicon energy deployment expected as the product line, which consists of 1.25m renewable energy markets grow. by 0.65m modules with a considerably Oerlikon Solar remains committed increased efficiency of 10.7% and a to amorphous silicon (a-Si) solar peak output of 86.8 watts. technology and, to that end, is promising improved efficiency After an intensive development trends and improved cost numbers. phase lasting just four months, in Oerlikon clearly believes there’s July of this year Sulfurcell succeeded a future for the oft-pilloried a-Si Source: Petra Solar in producing the first prototypes of photovoltaic technology and the firm large-format CIGS solar modules with The state of New Jersey plans to install continues to make aggressive cost efficiencies greater than 10%. This more than 200,000 modules from and performance claims. Petra on existing utility poles and tie represents a milestone for the highly them into the grid. These line voltage specialized experts in Sulfurcell’s At PVSEC, Oerlikon unveiled new inverters have advanced smart grid research department, since very technology that looks to drive down cost and communication capabilities. few manufacturers of thin-film solar and increase efficiency in its thin-film modules are currently capable of solar production lines. The rechristened Petra Solar won the SEGIS Stage producing high quality modules with “ThinFab” includes a number of changes 3 contract, which is designed to efficiencies in the double digits. to the equipment and process: help the winning company push its products toward commercialization.

17 »» New generation of the core with a certificate of expected panel PI power system. AEG claims that equipments PECVD, TCO and Laser performance (CEPP) to estimate this new system will increase the the value the panel will add to the production output of their polysilicon »» Thinner cell structures with property, and helping those who reactors by 10% to 20%, thus reduced degradation and qualify apply for the FIT. increasing overall efficiency. reduced gas consumption Should customers choose to buy AEG is also partnering with GT Solar »» Stabilized module efficiency of the panels outright, they will benefit to offer the Thyobox PI system as 10 percent (143 Wp per module) from both the electricity that they part of a turnkey solution using GT produce and the FIT payments. To Solar’s SDR series of CVD reactors. »» New low voltage module design, based on simplified new help entice customers to actually This next-generation power system backend equipment purchase the panels, British Gas is is designed to be integrated with offer a two-year, 0% APR deal. GT’s SDR-400 to enable reactor According to Oerlikon’s Chris O’Brien, capacities over 500 MTA. www.britishgas.co.uk these advances will put company into a cost leadership position in PV. www.aegps.com | www.gtsolar.com IMEC Produces Large-Area O’Brien made the bold promise of 50 Cells With 19% Efficiency Euro cents per watt ($0.64 per watt) product cost and 10% efficiency by At PVSEC, IMEC presented several Asian News the end of this year. Working in tandem new large-area silicon solar cells with Corning, Oerlikon has achieved with more than 19% conversion Chinese Wafer Makers GCL-Poly 11.9% conversion efficiency, which efficiency. The silver-printed and Comtec accrue Orders in has been confirmed by the National contacts were able to achieve Excess of 600MW Renewable Energy Laboratory (NREL). 19.1% efficiency and the copper- www.oerlikon.com printed contacts reached 19.4%. GCL-Poly Energy has signed a These efficiencies proved possible second long-term wafer supply through the use of improved texture contract with DelSolar, a solar cell British Gas to Install Solar Panels and firing conditions. Moreover, the and module provider in Taiwan, on Thousands of Homes for Free results were achieved on large-area further strengthening the long-term cells measuring 148cm2, proving strategic alliance between the two British Gas, one of the U.K.’s largest the industrial viability of the process. companies. GCL-Poly will provide energy providers, will offer thousands to DelSolar high quality wafers of residents the opportunity to install IMEC’s silicon solar cells feature that can meet the needs of about solar panels on their homes. Those rear-side passivation, laser ablation, 664MW cells from October 2010 to who choose to take advantage of and local aluminum back-side field December 2015. the program can either have the and screen-printed contacts or system installed free of charge but Cu-plated contacts on advanced The agreement includes a benefit only from reduced energy emitter schemes. mechanism by which the parties prices, or they can finance the up- may adjust prices to better reflect front costs and also receive a greater www.imec.be prevailing market conditions. payout from the country’s feed-in DelSolar expects the alliance tariff. For the moment, the program AEG Power Solutions Unveils to greatly enhance its overall is capped at 1,500 installations. Ultra-Efficient Poly-Silicon operational needs and profitability. British Gas will work with mySolar Power system, announces GCL-Poly also recently won RMB Energy to provide complete Partnership With GT Solar 5 million worth of funding from the installation services, including home National Electronic Information At PVSEC, AEG Power Solutions assessments, providing customers Industry Fund to explore processes unveiled the company’s new Thryobox

18 that will reduce the cost of producing systems. These self-sufficient production starting in March, silicon. The company plans to villages are being developed to LDK hopes to produce 1GW of further its closed recycling system combat the energy-deficient slums crystalline-based solar cells and to help bring costs down. that are located on the outskirts of 500 megawatts of solar modules. the country’s major cities. Mono-crystalline wafer manufacturer In addition to this plant in Hefei, Comtec Solar Systems has signed www.masdarpv.com | www.igsolar.in operation has started at LDK’s new wafer supply framework Xinyu production line, which has an agreements with price subject expected annual output of 5,000 to negotiation to provide major metric tons. All of this additional SunEdison Signs MOU to Build customers Gintech Energy production capacity comes in the Corporation, Jetion Solar, CHINT 400MW of solar Projects in wake of recent deals, such as LDK’s Group Corporation and Neosolar South Korea 50MW agreement with Italy’s Enel. Power Corporation for a total of SunEdison and Gyeongsangnam-do www.ldksolar.com approximately 200MW in mono- (GSND), a provincial government crystalline solar wafers. in southeastern Korea, have Under the terms of the contracts, announced the execution of a JA Solar Signs 500MW Supply Comtec will supply each of the non-binding Memorandum of Agreements GinTech, Jetion, Chint and Neosolar Understanding (MOU) for the JA Solar Holdings has announced with approximately 50MW of mono- establishment of 400MW of solar that it has secured over 500MW crystalline wafers from January 2011 power plants in the Korean province. of supply agreements for 2011. to December 2011. Subject to negotiation and Deliveries of the company’s mono- www.gcl-poly.com.hk completion of definitive agreements, crystalline and multi-crystalline www.comtecsolar.com it is expected that SunEdison will solar cells will begin in January utilize public land and building and continue through December of rooftops to construct 400MW of next year. In August, JA Solar raised Masdar PV to Supply Thin-Film solar power plants. GSND would its 2010 sales forecast and said it Modules for Indian Villages support SunEdison by securing would increase its manufacturing the proper land or building areas Masdar PV, manufacturer of large- capacity to 1.8GW by year-end from and in completing the authorization area, thin-film solar modules, has a previous target of 1.5GW. and permission processes. The signed a contract with IG Solar for projects should be completed by the www.jasolar.com the supply of silicon-based thin-film end of 2013. PV modules for a total of 1.5MW. The solar modules from Masdar will be www.sunedison.com used in new buildings of the Indian http://english.gsnd.net Solar Policy construction project developer MAG, who develops villages with the key goal of sustainability. LDK Starts Construction of 1.5GW California Considers Next- Manufacturing Plant in Hefei Generation Feed-In Tariff Over the next 12 months, ten of these villages will be built utilizing Multi-crystalline solar wafer In late August, the California Public the PV modules on the roofs of the manufacturer LDK Solar has broken Utilities Commission (CPUC) individual dwellings. Each village is ground on a new 1.5GW solar cell proposed to launch a new renewable designed to support 3,000 residents and module manufacturing facility incentive program designed to with full carbon-neutrality and in Hefei, China. With construction drive mid-sized renewable energy efficient water supply and disposal slated to finish by year-end and development. This next-generation

19 feed-in tariff program will require the MW requirement is reached for investor-owned California utilities to that round. The program will use Calendar purchase electricity from renewable standard terms and conditions to energy systems between 1 and lower transactional costs and provide 20MW in size. the contractual transparency needed September for effective financing. Development The CPUC proposal establishes security and relatively short project 2nd International a 1GW pilot program for power development timelines ensure project Photovoltaic Solar from eligible mid-sized renewable viability. The Commission can act to Energy energy systems. The program finalize and adopt the program in as Beijing, China requires California’s three largest soon as thirty days. September 27 - 29 investor owned utilities to hold biannual competitive auctions into www.ipvsee.com which renewable developers can bid. Utilities must award contracts October starting with the lowest cost-viable project and moving up in price until Solar Power 2010 Los Angeles, California, USA October 12 - 14 2010

www.solarelectricpower.org

Solar Industry continued from page 1... Conference (CIS-ES) SEIA/gtm research Quarterly survey results; Pennsylvania makes a Madrid, Spain Big Leap in the US PV Market October 21 - 22 www.solarpraxis.de the standard, they must purchase of Representatives that would set Pennsylvania’s version of SRECs, the 2011 SACP at $450 with a 3% 5th International Alternative Energy Credits (AECs). annual decrease, but would raise the Exhibition Energy- Currently, the solar requirements solar requirement to six times what Photovoltaic ‘10 are fairly minimal (0.012% in 2010 is currently mandated (0.5% vs. 3% Athens, Greece & 0.0203% in 2011), and PPL was by 2024). Though the bill currently October 21 - 24 exempt from participating until this year. under review in the House has the www.leaderexpo.gr PECO’s exemption ends next year. potential to alter the market, it is still a long way from passing. PV Taiwan 2010 Unlike New Jersey, Pennsylvania Taipei, Taiwan has yet to define a specific SACP, Even with the current solar October 26 - 28 which is the punitive fine that energy requirements set relatively low, www.pvtaiwan.com suppliers must pay if they do not Pennsylvania’s AEPS is already meet the state’s AEPS. This has driving substantial market growth. created a significant level of price uncertainty in the AEC market. As Installation and pricing data and of right now, the fine is double the forecasts are available for Pennsylvania average price of the AECs trading in and the other top-20 state markets the previous energy year. The SACP in the latest SEIA/GTM Research is $550 for 2010. There is a bill being Quarterly U.S. Solar Market Report circulated in the Pennsylvania House available at www.gtmresearch.com.

20 PV DATA

Utility-Scale Project Pipeline/ Large-Scale Project Announcement Tracker

U.S. UTILITY PV PIPELINE! CONTRACTED US UTILITY PV PIPELINE BY EXPECTED 10,000! COMPLETION DATE! 1,800! 9,000! 1,600! 8,000! 1,400! 7,000! 9,341! 6,000! 1,200! 5,000! 1,000!

4,000! MWDC ! 800! 3,000! 600! ! (MW-DC) CAPACITY 400! 2,000! 4,439! 1,000! 200! 172! 0! 0! OPERATING ! CONTRACTED (PPA ANNOUNCED (PRE- 2010! 2011! 2012! 2013! 2014! SIGNED)! CONTRACT)!

Est. State/ Projected Date Country Developer Size Completetion Est. Cost Notes Region Start Date Date 3-Sep Italy Lombardy Martifer Solar 3MW 9-Sep Italy Puglia Schneider Electric 43MW 31-Aug Slovakia Slovakia Phoenix Solar 2.2MW Dec-10 27-Aug United Ecotricity 1MW Kingdom 25-Aug USA CO Premier Power 3MW $18.3 million 26-Aug USA NV Nevada Solar Works 1.3MW Oct-10 30-Aug USA CO SunPower 2MW late-2011 US Government Contract 30-Aug USA IN SunPower 1.8MW Jan-11 US Government Contract 1-Sep USA CO Main Street Power 2.8MW Sep-10 2-Sep USA UT NexGen Energy/Bella 2.6MW Energy 8-Sep USA HI Sunetric 600kW Oct-10 $2.5 million 10-Sep USA NC ESA Renewables 1MW Nov-10 14-Sep USA AZ SunEdison 14.5MW 2011 Ground-based system at US Air Force Base

Starting this month, PV News will begin to track the announcements of large scale projects and maintain a database with the most up-to-date information regarding utility scale PV installations that are operating or in the planning or construction phases.

21 PV News Feed-In Tariff Tracker

European Feed-In Tariff Tracker System 2011 Country kWp/location 2009 2010 2011 Type Digression Jan 1- Jun 1 Jul 1 - Oct 1 Oct 1 - Dec 31 <30 € 0.32 € 0.28 € 0.24 - 0.25 € 0.24 9%* € 0.21 - 0.23 30-100 € 0.32 € 0.28 € 0.24 - 0.25 € 0.24 9%* € 0.21 - 0.23 Ground Mount 100-1000 € 0.32 € 0.28 € 0.24 - 0.25 € 0.24 9%* € 0.21 - 0.23 >1000 € 0.32 € 0.28 € 0.24 - 0.25 € 0.24 9%* € 0.21 - 0.23

Germany <30 € 0.43 € 0.39 € 0.34 € 0.33 9%* € 0.30 30-100 € 0.41 € 0.37 € 0.32 € 0.31 9%* € 0.29 Rooftop 100-1000 € 0.40 € 0.35 € 0.31 € 0.30 9%* € 0.27 >1000 € 0.33 € 0.29 € 0.26 € 0.25 9%* € 0.23

Ground Mount € 0.28 € 0.32 45.0% € 0.176

Spain <20 € 0.34 € 0.34 5.0% € 0.323 Rooftop >20 € 0.31 € 0.31 25.0% € 0.233 Jan - Apr May - Sept - Aug Dec Ground Based; 1 to 3 € 0.39 € 0.38 12.3%* € 0.362 € 0.347 € 0.333 Classified as 3 to 20 € 0.37 € 0.37 17.8%* € 0.339 € 0.322 € 0.304 ‘Other Systems’ for 2011 > 20 (20 - 200 for 2011) € 0.35 € 0.34 16.2%* € 0.321 € 0.309 € 0.285 200 to 1000 21.8%* € 0.314 € 0.303 € 0.266 1000 to 5000 22.4%* € 0.313 € 0.289 € 0.264 >5000 26.2%* € 0.297 € 0.275 € 0.251 1 to 3 € 0.39 € 0.38 0%* € 0.402 € 0.391 € 0.380 3 to 20 € 0.37 € 0.36 5%* € 0.377 € 0.360 € 0.342 > 20 (20 - 200 for 2011) € 0.35 € 0.34 5%* € 0.358 € 0.341 € 0.323 Italy

Rooftop 200 to 1000 7.7%* € 0.355 € 0.335 € 0.314 1000 to 5000 11.2%* € 0.351 € 0.327 € 0.302 >5000 15.6%* € 0.333 € 0.311 € 0.287 1 to 3 € 0.48 € 0.47 6.4% 1kW to 20kW € 0.44 1 to 3 (partially € 0.43 integrated) 20kW to 3 to 20 € 0.45 € 0.44 9.1% € 0.40 200kW BIPV 3 to 20 (partially € 0.41 integrated) >20 € 0.43 € 0.42 11.9% > 200kW € 0.37 >20 (partially integrated) € 0.39 Pre 9/1 Post 9/1 Residential <3 € 0.58 € 0.58 TBD Residential >3 € 0.58 € 0.51 TBD Schools and hospitals € 0.58 € 0.51 TBD Roof-integrated Other € 0.60 € 0.50 € 0.44 TBD

France Non-integrated € 0.42 € 0.37 TBD roof Northern France € 0.38 € 0.33 TBD Southern France € 0.31 € 0.27 TBD Mount Ground Ground Overseas € 0.42 € 0.40 € 0.35 TBD 22 The PV News team is excited to introduce our European and North American Feed-In Tariff Trackers. These two summary tables provide up-to-date information regarding government and utility performance-based incentives that promote the use of solar technology.

System 2011 Country kWp/location 2009 2010 2011 Type Digression <100 € 0.45 € 0.45 € 0.44 6.8% € 0.41 Mainland >100 € 0.40 € 0.40 € 0.39 7.7% € 0.36 <100 € 0.50 € 0.44 € 0.42 7.1% € 0.39 Greece Island >100 € 0.45 € 0.49 € 0.47 8.5% € 0.43

BAPV <4 € 0.46 0.0% € 0.46

<4 € 0.40 0.0% € 0.40 4 to 10 € 0.40 0.0% € 0.40 BIPV 10-100 € 0.35 0.0% € 0.35

United Kingdom 100-5000 € 0.32 0.0% € 0.32 Standalone € 0.32 0.0% € 0.32 <30 € 0.48 All >30

Czech € 0.48 Republic

Country 2012 Notes Most Recent Alteration

7/1/2010 - eliminated for cropland field installations; 10/1/2010 - futher 3% 20 year term, FiT digression ~9%-13%. *Additional 1% digression reduction on all rates

Germany for every 1GW installed over 3.5GW in 2010 7/1/2010 - 13% for rooftop installtions; 10/1/2010 - futher 3% reduction on all rates 25 year term; adjusted quarterly. Annual hard caps on FIT: 502 MW 8/2/10 - FiTs decrease 45% for new, large ground-based plants, 25% for rooftop in 2010 and 488 MW in 2011. Cap changes are perfectly negatively

Spain systems >20kW, and 5% for rooftop systems <20kW correlated tomovements in FIT.

9/8/10 - Under new legislation, feed-in tariffs for open-space systems with a capacity 20 year term; further annual degression of 6% is intended for all up to 5MW are to be cut by 9.3% on average during the first four months of 2011, non-integrated solar projects for the years 2012 and 2013. BIPV while incentives for solar projects with a capacity of 5MW and more will be decreased Italy systems are to be subject to a degression rate of only 2%. 3GW cap by 14.2%. The cuts for rooftop solar systems are expected to be between 4.75% and for non-integrated systems and a 200MW cap for BIPV *Digression 13.28%, depending on the size of the system. All tariffs are then to be decreased every rate calcuated through end of 2011 four months during 2011.

20 year term linked in inflation 9/1/2010 - 12% reduction for some rates France

Country 2012 Notes Most Recent Alteration

20 year term indexed at 25% of inflation; new FiTs reduced at 1% per month Greece

€ 0.46

€ 0.40 € 0.40 25 year term; FiTs set through 2012 then subject to readjustment € 0.35

United Kingdom € 0.32 € 0.32

9/15/10 - Legislation passed that eliminates FiTs for ground-based systems, 20 year term linked in inflation (within range of 2%-4%) pending approval from Czech Parliament. If approved, changes become effective

Czech March 1st, 2011. Republic

23 North American Feed-In Tariff Tracker

State/ System Contract Program Utility/Region 2010 2011 Program Size Cap Provinces Resitrctions Duration Type $/kWh IOUs & POUs with 75,000+ <3 MW $0.08-$0.19 10, 15, or 20 years Feed-in Tariff 478 MW customers IOUs 1-20MW TBD TBD Reverse Auction 1GW

California Sacramento Municipal Utilities 100 MW (program full as of <5 MW $0.18-$0.30 $0.15-$0.25 Expires 2016 Feed-in Tariff District (SMUD) 8/2010)

<25 kW $0.32 20 years 4 MW/year (program cap reached Gainsville Regional Utilities (GRU) Feed-in Tariff through 2016) >25 kW $0.26 (freedstanding only) Florida <600 kW PV $0.05 5 years with Performance- Orlando Utilities Comission None < 1200 kW Solar automatic renewal Based Incentive $0.03 Water Heating Hawaii Electric Light Co. <2.72 MW $0.33 Maui Electric Co. <2.72 MW $0.28-$0.35 Performance- 20 years None Hawaiian Electric Co. <5 MW $0.25 Based Incentive Hawaii Kuaui Island Utility Cooperative <5 MW $0.34 PG&E <10 kW $0.60-$0.65 10 kW - 100 kW $0.55 Expires 3/31/2015 or Pacific Power <10 kW $0.60 Performance- when program cap is 25 MW (program full) Based Incentive 10 kW - 100 kW $0.55 reached

Oregon Pacific Power & Idaho Power <10 kW $0.55 10 kW - 100 kW $0.55 $0.071- $0.071- Performance- Eugene Water and Electric Board 10 kW - 1 MW 10 years None $0.11 $0.11 Based Incentive <20 kW Commercial/ $0.14 Performance- Austin Energy Mult-family 10 years $100,000 in 2010 Based Incentive Installation $0.175 Texas Performance- CPS Energy (San Antonio) 25 kW-500 kW $0.27 20 years 5 MW per year for two years Based Incentive Performance- Vermont All <2.2 kW $0.30 20 years 50 MW (program full) Based Incentive Modules/inverter Performance- manufactured out of $0.15 Expires 6/30/2020 $5000 per installation per year Based Incentive state Inverter manfuactured $0.18 Most Utilities in-state Modules Washington $0.36 manufactured in-state Modules/inverter $0.54 manufactured in-state Performance- Wisconsin Madison Gas & Electric 1 kW - 10 kW $0.25 10 years 1 MW Based Incentive $CAD/kWh <10 kW Rooftop $0.80 10-250 kW Rooftop $0.71

250-500 kW Rooftop $0.64 Ontario Power Authority 20 years Feed-in Tariff None Ontario >500 kW Rooftop $0.54 <10 kW Ground $0.64 Mounted 10 kW-10 MW Ground $0.44 24 North American Feed-In Tariff Tracker

State/ Program Proposed/ Note Most Recent Alteration Provinces Start Date Enancted

Avoided cost; alternative to California Solar Initiative 2/14/08 Enacted 1/1/2010 (public utilities with 75,000+ customers must offer FiT) California’s three largest IOUs wil hold biannual auctions 8/26/2010 - California Public Utilities Commission (CPUC) has propsed for developers; contracts are awareded to the lowest cost TBD Proposed an incentive to drive midsize solar developments viable projects and move up until MW cap is reached California Performance-based Incentive 1/19/10 Enacted 8/4/2010 (program has reached its cap) Based on Cost of Generation 3/1/09 Enacted Program has reached its cap “RECs deducted from monthly bills Enacted Florida

9/25/09 Enacted Hawaii

7/1/10 Enacted Fixed-price Incentive Program reached its cap within minutes of going live.

Oregon 1/25/08 Enacted

60% of equipment manufactured in AE’s service area 2/1/10 Enacted

Texas System must be 90% roof mounted 6/15/10 Enacted

Vermont Based on Cost of Alternative Generation 9/30/09 Enacted 6/4/10 - 65% system efficiency required for eligibility

3/2010 (increased eligibility for LLCs, cooperatives and mutural 8/31/06 Enacted corporations) Washington

Wisconsin Fixed-price Incentive 3/6/07 Enacted

Starting 1/1/2011, developers will be required to have at 7/2/10 - microFiT was separated to ground mount and rooftop systems least 60% of their building resources come from Ontario- Mar-06 Enacted <10kW 8/13/2010 - exclusion of commercial aggregators Ontario sourced goods and labor

25 Research

2010 Global PV Demand Analysis and Forecast

Between 2000 and 2009, global PV demand grew at an average annual rate of 51 percent, rising from 170 MW to 7,059 MW. Despite this impressive rate of growth, the past two years have witnessed a fundamental and difficult market shift for manufacturers. Previously, burgeoning European feed-in tariff markets enabled global demand to exceed available supply, driving up feedstock prices and attracting new entrants across the value chain. But the combination of an ensuing rapid capacity build-out and the financial crisis of 2008 and early 2009 shifted market power downstream into the hands of project developers and financiers. Today, global manufacturing capacity greatly exceeds global demand. With an estimated total of 16.1 GW of module manufacturing capacity online by the end of 2010, the global PV market is no longer constrained by supply. early 2009 shifted market power downstream into the hands of project developers and financiers. Today, global manufacturing capacity greatly exceeds global demand. With an estimated total of 16.1 GW of module manufacturing capacity online by the end of 2010, the global PV market is no longer constrained by supply.

In addition, 2010 will mark the beginning of a global PV market diffusion. Over the past few years, PV demand has been characterized by a series of gold rushes in which the majority of production flows into a single uncapped feed-in tariff market. Purchase Today » http://www.gtmresearch.com/report/2010-global-pv-demand-analysis-and-forecast

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