Solaria Energía y Medio Ambiente Fact and fiction in the Spanish PV Market

19 February 2009

Pedro Echeguren. Director. Head of IR Tel.: +34 91 5644272 [email protected] Growth in the Spanish Solar Market

Capturing the Potential for Growth in Spain Supportive Regulatory Environment

PV Installed Capacity (MW) Regg(ppy)ulation RD 661/2007 (Approved 25 May 2007)

3,800 2,973 ¾ Fixed amount to be applied to capacity installed up to 29 September 2008; growth rate indexed to CPI minus 0.25% 1,938 until Dec-2012 and CPI minus 0.50% thereafter: 1000 814

750 692 First 25 years After 25 years

500 Up to 100 kW 44.04 c€ 35.23 c€

250 144 100 1 3 7 11 22 46 100 kW – 10 MW 41.75 c€ 33.40 c€ 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2007 2007 2007 2007 10 MW – 50 MW 22. 98 c€ 18. 38 c€ Spain Japan Italy Source CNE for Spain, EPIA for other countries Germany US

Attractive Radiation Conditions Regulation RD 1578/2008 (Approved 26 Sep 2008)

¾ Applicable to licences applied after 29 September 2008. Market size: 500 MW in 2009 and 2010, 460 MW in 2011 Solar Radiation ¾ Tariffs indexed to CPI minus 0.25%, valid for 25 years

¾ Spain = 1,586 kWh/m2 25 years

¾ Germany = 1,014 kWh/m2 Rooftop installations <20 kW 34.00 c€ Rooftop installations 20 kW - 2 MW 32.00 c€ ¾ Europe= 1,197 kWh/m2 Ground based (Maximum size 10 MW) 32.00 c€ Source European Commi ssi on Pho tovo lta ic Geograp hica l In forma tion Syst em PVGIS http:// re.j rc.ec.europa.eu/ pvgi s/ Regulation passed in September 2008 provides a supportive 3-year framework 3 Fact and Fiction in the Spanish Solar Market

PV Installed Capacity in Spain (MW)

4500 Dec-08 2973 MW Market size per year 4000 4195 MW ¾ 2007: 547 MW 3500 Dec-07 ¾ 2008: 2,281 MW (or 3,503 MW 3000 692 MW under the 569 MW statistical 2500 calculation) ¾ 2009: 500 MW 2000 Dec-06 ¾ 2010: 500 MW 145 MW 1500 ¾ 2011: 460 MW (unless current 1000 scheme is superseded by the expected 2010- 500 2020 renewables plan) 0 2007 2008 Actual CNE data CNE’s Statistical calculation Source: www.cne .es (Spanish Energy Commission) Regulation passed in September 2008 modulates growth 4 Fact and Fiction in the Spanish Solar Market

Cantabria 1 MW Growth in installed capacity: 2008 Asturias 0 MW SOLAR PV per region MW YOY Galicia Basque 16 MW Navarra 156 MW 7 MW CASTILLE MANCHA 791 386% Rioja 74 MW Andalusia 357 391% Catalonia Castille Leon Fuenmayor Castille León 354 309% Aragon 158 MW Extremadura 344 476% 354 MW 110 MW Murcia 280 306% Valencia 215 177% Catalonia 158 312% Madrid 23 MW Navarra 156 159% Aragón 110 1213% RIOJA 74 818% CASTILLE MANCHA Valencia Canary Is. 48 110% Regions <10 MW 85 231% Extremadura 791 MW 215 MW 344 MW Almadén Total Spain 2,973 329% Puertollano Balearic Is. 36 MW Installed Production Murcia GW TWh 280 MW Hydro 17 21 Andalusia Nuclear 8 59 Solaria’s factories: Puertollano, 357 MW Coal 11 50 Fuenmayor and Almadén Fuel & Gas 8 11 Canary Is. 48 MW CCGT 22 96 Wind 15 29 TOTAL SOLAR Solar 3 2 2,973 MW Ceuta & Melilla 0 MW Other 6 37 Exports ‐7 Pumping ‐11 Total Spain 90 279 Source: Red Eléctrica de España (www.ree.es) and CNE (www.cne.es) Jan. 2009, Statistics on sales of renewable energies 5 Turn-key leadership in Spain

LA RIOJA 11 MW Fuenmayor (Logroño) LEON 1 MW Completed: Sept. 2008 Villamañá n (Leó n) Completed: Sept. 2008 MIGUELTURRA 1.3 MW Miguelturra (Ciudad Real) Completed: March 2008

POZUELO 1 MW EXTREMADURA I 11 MW Pozuelo de Calatrava (Ciudad Real) Villanueva de la Serena (B(Bdjadajoz ) Completed: March 2008 Completed: Sept. 2008 PUERTOLLANO 1 MW Puertollano (Ciudad Real) Completed: June 2008 EXTREMADURA II 11 MW Magacela (Badajoz) MURCIA 7 MW Completed: Sept. 2008 Alhama de Murcia (Murcia) Completed: Sept. 2008

Turnk ey pro jec ts: Mark et lead er in Spai n with over 44 MW of Turn-key projjtects compl ltdeted

6 Export activities

Solaria expects 1/3 of 2009 revenues to be generated from export activities (Modules and Turnkey). The remaining 2/3 (domestic business) to be split 60% Modules / 40% Turnkey.

Italy: Exports of PV Modules started in Q4 2007. Local office is well advanced in the application process for obtaining Turnkey licenses

France: Local office to be started in H2‐2009. Outlook for Module and Turnkey demand could exceed market expectations for the Italian market

Morocco: Bids presented in Q1‐2009 for 4 x 40 MW off‐grid projects. Bidding consortium ildincludes well‐positioned lllocal partners

Chile and Brazil: Non‐grid Turnkey applications are being negotiated with local buyers. OtitOpportunity to dldeploy expertise in SihSpanish‐speaking countitries

Expansion into new markets is to reduce dependance on the Spanish market and export a succesful business model

7 Sector Value Chain

Raw Silicon Silicon Blocks Silicon Wafers Solar Cells Solar Modules Distribution/ Turnkey Installations Development

REC Group MEMC Hemlock Wacker SolarWorld AG Schott Solar ESErSol Q-Cells Sharp Evergreen Solar

SOLARIA NOW SOLARIA IN H1-2008

Sunpower Isofoton BP Solar Conergy Mitsubishi Electric Sunways Solon Solar-Fabrik Aleo Solar ATERSA Siliken Phönix Sonnenstrom SAG Solarstrom Acciona 8 Gamesa Capacity and Production Targets

2006 2007 2008 2009 2011

PV Modules Capacityy( (Year end, MW ) 25 150 250 350 650 Production (MW) 6 40 ------Utilization Rate (%) n/m n/m 80% Cells Capacity (Year end, MW) - 25 25 100 650 Production (MW) - 0 ------Utilization Rate (%) - - 80%

Factory sites in 2011

PV Modules: Three factories: Puertollano 250 MW + La Rioja 300 MW + Almaden 100 MW Cells: Two factories: Puertollano 400 MW + La Rioja 250 MW

9 Solaria Tomorrow

Solaria is to maintain the leadership in installing Turnkey projects in Spain and be one of the worldwide leaders in manufacturing PV modules

PV factory in Puertollano reached planned capacity of 250 MW in Q1 2008. Cell manufacturing started in September 2008, now adding new capacity

First phase of investment in new PV Module factory (Fuenmayor) completed in September 2008, recently comissioned 100 MW capacity

Client profile evolves from spot to contract, thus becoming more stable and long term‐oritdiented. Financi ng issues have ilitiimplications on client profiles

We expect more competition in our sector and are leveraging our leadership, ittinvestments, financ ial stthtrength and free cash‐flow to become a world ldleader

Entry into new marketsistoreduce dependance on the Spanish market and export a succesful business model

10 Solaria Energía y Medio Ambiente Back up slides

11 Solaria Today

Solaria manufactures PV modules, Thermal pannels and Solaria’s factories are located in Puertollano develops Turnkey installations and in Fuenmayor

• La Nava II ((PuertollanoPuertollano)) 51,300 sq.m sitesite:: Solar cell and PV module factories • La Nava III ((PuertollanoPuertollano:: 63,700 sq.m site: Under development • Secundary production centers and warehouses in Puertollano • Fuenmayor (La Rioja) 307,000 sq.m sitesite:: PV module factory PV Mod ul es TkTurnkey iitlltinstallations Thermal pannels • Almadén: Feasibility studies for future PV module factory

Solaria began trading in the Spanish Stock Key figures (€ 000s) MktMarket on 19 June 2007

2006 2007 9m 2008 SALES 19,147 186,209 221,265 • First and only Solar PV company listed on the Spanish stock Market EBITDA 8,940 71,695 53,257 • Only traded company from Castilla La Mancha • Market capcap:: € 250 mill EBIT 8,706 71,078 30,11052,087 • Free floatfloat:: 38.5% of shares (61.5% owned by NET PROFIT 5,642 48,400 2330,,791950 the comppyany’s founders )

AVG WORKFORCE 48 324 559590 12 Solaria Today

9-mth 2008 Sales Breakdown

¾ Design, manufacture and sale of PV modules to third parties. Production capacity 250 MW / Year Module Value Added Services Turnkey PV Modules ¾ Technical assistance and post sales service 71% 29% Thermal 0% ¾ End-to-end development of solar PV power plants including engineering services Total Sales = €221 MM Value Added Services Turnkey ¾ Deep knowledge of local market 2007 Sales Breakdown ¾ Extensive project management know-how and experience Thermal 0% ¾ Grid Connection Point Manager status Turnkey 42%

¾ Design, manufacture, sale and installation of PV Modules thermal panels and engineering process 58% ¾ Potential linked to construction sector Thermal Value Added Services ¾ Technology adapted to Spanish climate Total Sales = €186 MM ¾ NO LONGER A CORE ACTIVITY

Source Solaria IFRS Financial Statements 13 Regulatory Framework

Positives:

Licences will total 500 MW in 2009, 500 MW in 2010 and 460 MW in 2011

Flexible feed‐in tariff depending on growth rate of new installations

Supportive 3‐yr framework until 2010‐2020 renewables plan is announced Negatives: Licences to be awarded quarterly. Q1 and Q2 auctions give priority to late runners and are unlikely to generate new demand for PV modules Licences to be awarded quarterly. Q1 and Q2 auctions give priority to late runners and are unlikely to generate new demand for PV modules Other considerations affecting demand outlook are the financing restrictions from banks and markets

14 Cell supplies contracted for 2008

Supply of cells is below the amounts contracted

Supplier Status Q1 Q2 Q3 Q4 Total

Gintech Contact signed 9.5 12.0 15.0 13.5 50.0 E Ton Contact signed 4.9 7.3 12.3 15.5 40.0 Neo Solar Power Contact signed 1.5 3.0 4.5 6.0 15.0 JA Solar Contact signed 6.0 9.0 15.0 15.0 45.0 Supplier 1Spot supply 2.5 2.5 5.0 Supplier 2Spot supply 2.5 2.5 5.0 Supplier 3Spot supply 2.5 2.5 5.0 Supplier 4Spot supply 1.0 3.0 4.0 Internal production Production starts Sept‐08 3.0 8.0 11.0

Cell supply contracted (MW) 21.9 31.3 58.3 68.5 180.0

Cell supply received (MW) 19.5 11.5 20.8

Delays in cell supplies have prevented reaching production targets 15 January – September 2008 results

Sales +127% in 9m2008 vs 9m2007

9m 2008 vs 9‐mth 2008 (*) 9‐mth 2007 (*) FY‐07 9m 2007

Sales. PV Modules € 000s 172,783 80,009 132,385 116%

Sales. Turnkey € 000s 157,817 22,092 77,562 614%

Sales. Thermal pannels € 000s 42 140 142 n/a sq.m. 247 712 722

Adjustments € 000s ‐109,377 ‐4,679 ‐23,880 n/a

Total sales € 000s 221,265 97,561 186,209 127% MW 51.8 21.7 38.3 139%

Sales mix shows substantial growth in Turnkey reflecting the drive to complete projects before end of September 2008

(*) Unaudited figures. 9-mth 2008 consolidated data is fully comprable with parent company figures due to negligible impact of WOS “Solar Cell” division has been integrated in “PV Modules” division 16 January – September 2008 results

EBITDA+58% in 9m2008 vs 9m2007

9m 2008 vs 9‐mth 2008 (*) 9‐mth 2007 (*) FY‐07 9m 2007

PV Modules EBITDA € 000s 29,168 18,198 26,976 60% % sales 16.9% 22.7% 20.4%

Turnkey EBITDA € 000s 24,403 15,314 44,820 59% % sales 15.5% 69.3% 57.8%

Thermal pannels EBITDA € 000s ‐315 129 ‐100 n/a % sales n/r 92.1% n/r

Total EBITDA EBITDA € 000s 53,257 33,641 71,696 58% % sales 24% 34% 39%

EBITDA margin in PV Modules divisionstabilised around 20% in spite of rate of utilisationbelow targets. Lower EBITDA marginsin Turnkey is cyclical and is to improve in thefinal phase of construction(Q4 2008)

(*) Unaudited figures. 9-mth 2008 consolidated data is fully comprable with parent company figures due to negligible impact of WOS “Solar Cell” division has been integrated in “PV Modules” division 17 January – September 2008 results

Net profit: +48% 9m2008 vs 9m2007

9m 2008 vs 9‐mth 2008 (*) 9‐mth 2007 (*) FY‐2007 9m 2007

€ 000s PV Th T/Key Adjust Total PV Th T/Key Adjust Total PV Th T/Key Adjust Total Total

Net sales 172,783 42 157,817 ‐109,377 221,265 80,009 140 22,092 ‐4,679 97,561 132,385 142 77,562 ‐23,880 186,209 127% Other income 84 0 0 84 48 10 0 58 200 19 0 219 45% COGS ‐143,699 ‐357 ‐24,036 ‐168,092 ‐61,859 ‐21 ‐20992,099 ‐63,979 ‐105,609 ‐261 ‐8,862 ‐114,732 163% Adjustments ‐109,377 ‐4,679 ‐23,880 EBITDA 29,168 ‐315 24,403 53,257 18,198 129 15,314 33,641 26,976 ‐100 44,820 71,695 58%

Depreciation ‐1,064 ‐5 ‐100 ‐1,169 ‐305 ‐42 ‐12 ‐359 ‐563 ‐54 0 ‐617 226% EBIT 28,104 ‐320 24,303 52,087 17,893 87 15,302 33,282 26,413 ‐154 44,820 71,078 57%

FINANCIAL RESULT ‐3,678 752 474 ‐589% ORDINARY PROFIT 48,410 34,034 71,552 42% Non‐recurrent items 0 0 0 Pre‐tax profit 48,410 34,034 71,552 42% Taxes ‐14,491 ‐11,062 ‐23,151 31% NET PROFIT 33,919 22,972 48,400 48%

PV: Photovoltaic Modules. Th: Thermal pannels. T/Key: Turnkey projects. Adjust: Internal sales between divisions

Financial data under IRFS (*) Unaudited figures. 9-mth 2008 consolidated data is fully comprable with parent company figures due to negligible impact of WOS “Solar Cell” division has been integrated in “PV Modules” division 18 January – September 2008 results

€ 000s Sep 08 (*) Jun 08 (*) Mar 08 (*) Dec 07 Sep 07 (*) Jun 07 (*) Fixed assets: ‐ Net tangible fixed assets 66,925 64,971 55,972 32,743 22,311 16,559 ‐ Intangibles 260 246 21 17 18 19 ‐ Financial investments 943434343324 Deferred expenses 3,854 7,869 7,201 5,689 3,264 35 Current assets: ‐ Stocks 50,320 21,512 16,750 34,786 27,667 23,974 ‐ Debtors 247,986 174,248 139,976 178,002 88,238 36,013 ‐ Other 1,813 957 1,224 550 165 320 ‐ Cash 71,710 179,108 201,554 153,163 179,250 218,803

TOTAL ASSETS 442,962 448,945 422,732 404,984 320,946 295,747

Shareholder's funds 290,350 275,090 265,669 261,196 240,818 223,877 Deferred income 4,852 4,866 5,158 4,870 5,530 4,928 Deferred taxes 1,679 1,187 1,093 1,171 87 240 Long term debt 30,409 30,765 31,051 14,581 15,181 15,173 Current liabilities: ‐ Short term debt 59,389 61,117 46,701 43,916 17,942 21,811 ‐ Creditors 44,414 37,670 33,589 55,895 30,188 22,725 ‐ Othe r11,868 38,250 39,471 23,355 11,,00200 6,993

TOTAL LIABILITIES & NET WORTH 442,962 448,945 422,732 404,984 320,946 295,747 Financial data underIRFS (()*) Unaudited fig ures. 9-mth 2008 consolidated data is fully comprable with parent company figures due to negligible impact of WOS “Solar Cell” division has been integrated in “PV Modules” division 19 January – September 2008 results

€ 000s 6‐mth to Jun 08 (*) 12‐mth to Dec 07 6‐mth to Jun 07 (*) Cash generated from operations 36,989 ‐67,257 ‐5,053 Interest paid ‐6,510 ‐2,905 ‐571 Income tax paid ‐42334,233 ‐9,800 ‐55 NET CASH FROM OPERATIONS 26,246 ‐79,962 ‐5,679 Acquisition fixed assets ‐32,806 ‐26,060 ‐9,543 Disposal fixed assets 0 77 186 Acquisition intangibles ‐276 ‐12 0 Deposits constituted ‐19 ‐522 ‐109 Deposits liquidated 508 600 600 Repayments on loans 0 591 0 Interest received 3,474 4,378 89 NET CASH FROM INVESTMENT ACTIVITIES ‐29,119 ‐20,947 ‐8,777 Income shares issued 0 210,240 211,410 Dividends paid 0 ‐2,410 ‐2,410 Own stock held ‐8,366 0 0 Proceeds banking debt 33,657 34,292 20,066 Repayments banking debt ‐315 ‐739 ‐35 Net income from current accounts 0 8,500 0 Subsidies received 3,864 0 0 Financial leases repaid ‐22 ‐38 0 NET CASH FROM FINANCING ACTIVITIES 28,818 249,845 229,031

Net increase in cash 25,945 148,935 214,575 Cash at BOP 153,163 4,228 4,228 Cash at EOP 179,108 153,163 218,803 Financial data under IRFS (*) Unaudited figures. H1 2008 consolidated data is fully comprable with parent company figures due to negligible impact of WOS 20 Puertollano factory La Nava III Greenfield Office block Solar cell factory

Solaria

Turnkey plant (1 MW) Warehouse Puertollano PV Module factories

Solaria is located in La Nava II Industrial site, 2 Km from Puertollano

21 Fuenmayor factory

Factory site

Fuenmayor Solaria

Fuenmayor

Solaria is located in the outskirts of Fuenmayor, 12 Km from Logroño

22 Disclaimer

This presentation does not constitute or form part of any offer for sale or solicitation of any offer to by any securities nor shall it or any part of it form the basis or be relied on in connection with any contract or commitment to purchase shares.

The information contained in this document has been provided by Solaria Energía y Medio Ambiente, S.A.

This presenttitation ildincludes fdforward-lkilooking stttatemen ts. All stttatemen tsother than stttatemen tsof his tor ica l ftfacts ilddincluded in thispresenttitation, including, without limitation, those regarding our financial position, business strategy, management plans and objectives for future operations are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements, or industry results, to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we expect to operate in the future.

Forward-looking statements speak only as of the date of this presentation and we expressly disclaim any obligation or undertaking to release any update of or revisions to any forward-looking statements in this presentation, for any change in our expectations, or any change in events, con di ti on s or cir cum stances onwhich ttesehese fooadrward-lookin g statem en ts aaere based or oth erwi se.

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