Strategic Agenda for Global PV Market Growth

Agenda
1. Overview
1.1 Global Market
1.2 Technologies
1.3 Competition
2. Strategic Marketing
2.1 Link Between R&D, Sales
2.2 Product Development Strategies
2.3 Marketing Strategy
2.4 Product Benchmarking
2.5 QA/ Customer Satisfaction
3. Global Spare Parts & Service Coverage
4. Integration Of Newly Acquired Companies
5. Product Harmonization/ Consolidation

Agenda
1. Overview
1.1 Global Market
1.2 Technologies
1.3 Competition
2. Strategic Marketing
2.1 Link Between R&D, Sales
2.2 Product Development Strategies
2.3 Marketing Strategy For The Group
2.4 Product Benchmarking
2.5 QA/ Customer Satisfaction
3. Global Spare Parts & Service Coverage
4. Integration Of Newly Acquired Companies
5. Product Harmonization/ Consolidation

Global PV Market 2010

Source: GTM Research, 2010 GLOBAL PV DEMAND ANALYSIS AND FORECAST , May 2010

• 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 this new world, demand is determined at the project
level based on the economic value proposition of a solar
investment relative to alternative investments.
• The gold rush is necessarily followed by the government
reducing, and often capping, incentives in order to
constrain market growth.


• As Germany’s star begins to fade in the second half of
2010, no individual market will emerge to soak up
excess inventory in sufficient volume to become the
singular focus of global demand.
• In other words, no country has the necessary
characteristics to replace Germany as the singular
market of last resort.
• Over-reliance on the gold rush mentality and its resulting
boom-bust cycle is an ineffective way to build a global
industry.
• In contrast, supporting steady but controlled growth in a
larger number of markets provides a platform for global
expansion and de-risks exposure to individual incentive
programs.

• Module prices will resume their rapid decline in 2011:
Following steady to slightly upward price movements in
the first half of 2010, global module ASPs will resume
their decline in the second half of the year.

• In 2011, difficult demand conditions will force module
prices down by a further 19 percent, reaching below
US$1.40/W on average.

• However, ASPs declines will begin to moderate in 2012
and 2013 as stronger demand growth returns to the
global market, supported by a class of secondary
markets.


• Thin-film will grow to 30% market share by 2013: The
promise of thin-film technologies will begin to match
reality over the next four years, as winning proponents of
newly commercialized modules, as well as First Solar’s
CdTe, will find increasing demand for their products.

• But while thin film’s market share of demand will grow,
some technologies (particularly amorphous silicon) will
have an even larger share of manufacturing capacity.

• As a result, high-margin thin film production will be
enjoyed by a selected few suppliers.


• Looking forward, the industry will return to
high growth in 2010 and also over the next
5 years. Even in the slowest growth
scenario, the global market will be 2.5
times its current size by 2014.
• Under the Production Led scenario, the
fastest growing forecast, annual industry
revenues approach US$100 billion by
2014.
http://www.wikinvest.com/industry/Solar_Power

New Laser Sources For Efficiency
Enhancement

http://en.wikipedia.org/wiki/Solasys#Laser-selective_emitter_doping

Laser Technologies
• Market dynamics drive technology preferences.
Adoption rates for laser sources within the solar
industry are dictated by a range of different
factors, including:
→ Supply-demand market dynamics;
→ Maturity and qualification of new process
steps disseminated from within the research
community;
→ Return on investment (ROI) of laser-based
processing versus alternative (non-laser)
technologies available to cell manufacturers;

Source: Finlay Colville, Coherent Inc., Photonics Online, 29/11/2009

Laser Technologies
→ The extent to which production equipment
utilized is supplied by complete (turnkey) full
production line manufacturers, compared to
discrete (customized) modular inline tooling;
→ Availability of 24/7 production-qualified laser
sources to commercialize research proven
laser-based process stages;
→ Availability of turnkey laser-based tools with
wide process windows, optimum process
quality, and acceptable cost entry points.


Laser Technologies

Breakdown of relative revenues (in U.S. $) for lasers sold into solar cell
manufacturing during 2008 showing a strong bias towards nanosecond diode-
pumped solid-state (DPSS) lasers.

Laser Technologies
Early Laser Adoption
• First, let’s summarize those applications used
extensively by the solar industry, in which laser-based
process tools featured heavily until the end of 2008:
• Junction isolation (also known as laser edge isolation)
has become a well-proven laser-based process in c-Si
lines as the final step at the back-end of cell
manufacturing.
• Here, lasers scribe an electrical isolation groove
around the perimeter of the front surface, between the
finger grid and the edge of the cell.


Laser Technologies
• Finger groove formation and mask creation (for
both heavy diffusion and metallization) was
applied extensively by BP-Solar within the well-
known laser grooved buried contact (LGBC) c-Si
cells. Lasers again performed scribing. This time
along finger and bus-bar lines on the front
surface.
• Thin-film patterning uses lasers to selectively
remove layers of materials during the various
deposition stages employed to fabricate thin-film
solar panels. These scribe lines provide cell
isolation and interconnection across the panels.


Laser Technologies

The three main applications historically for lasers used in solar cell manufacturing
have been (left to right) laser edge isolation, laser scribing for buried contacts, and
thin-film selective removal.

Laser Technologies
• Laser types used for these applications have been
dominated by nanosecond diode-pumped solid-state
(DPSS) sources operating at 1064 nm (IR), 532 nm
(green) and 355 nm (UV).
• The quality of scribing is optimized by choosing laser
wavelengths to overlap with the absorption bands of the
materials being ablated.
• In those niche cases where process windows for
nanosecond material removal prove too challenging for
reliable and repeatable industry implementation, some
researchers are currently exploring the use of sub-
nanosecond (in particular picosecond) laser types.


Laser Technologies
• Lasers used in c-Si fabs during this same time
period received far less attention.
• Skepticism had been raised over laser
technology in general when LGBC cell types
failed to reach mass production levels (more on
account of market dynamics then at play,
coupled with the absence of any equipment
supply-chain in place).
• And lasers were up against both dry (plasma)
and wet (chemical) etching solutions for junction
isolation— technologies preferred by much of
the equipment supply chain at that time.

Laser Technologies

The MWT (metal wrap through) cell concept "wraps" front contacts to the cell
backside. Complete backside wiring is a technological advantage and the
wrapped front side contact can use a larger area. (Courtesy of Jenoptik)

New Laser Sources For Efficiency
Enhancement
Laser-based processes forming part of efficiency
enhancement stages within c-Si cell production
can be allocated to one of four categories, defined
as:
• Assisting in mask writing for subsequent metallization,
secondary diffusion in selective emitters, or surface
etching to texture;
• Localized secondary diffusion (laser doping via
phosphorous- or boron-contained precursor layers);
• Contact preparation (finger and busbar grooves,
through-silicon-vias, interdigitated structuring);

Top 10 Solar PV Equipment
Suppliers

Source: VLSI Research

China PV Market 2010
-- Newsflash --
• Apollo Solar Energy Technology, Fujian Apollo (an
indirect wholly-owned subsidiary of the Group) and
Hanergy have entered into the principal sales contract of
providing Hanergy equipment and integrated turnkey
solution for the manufacturing of silicon-based thin film
solar PV modules, for a total contract sum of US$2.55
billion.
• The equipment sales contract will be divided into three
batches of production lines and be produced and
delivered by Fujian Apollo in three phases.
• Each batch of the production lines consists of, among
other items, 140 units of PECVD equipment and 30 units
of PVD equipment, which are the core equipment of the
new turnkey equipment, tools and machinery of the solar
PV modules production system.
Source: www.solarbuzz.com, 17 June, 2010

China PV Market 2010
-- Newsflash --
• Fujian Apollo shall complete the delivery of all
equipment for each batch of the production lines
within six months after the payment of the first
installment of the prepayment for such batch of
the production lines.
• The aggregate equipment consideration is
US$2.55 billion which was arrived at by
reference to the historical selling price of similar
equipment with similar capacity for the
production of the thin film solar PV modules.
• The equipment consideration for each batch of
production lines is US$850 million.
Source: www.solarbuzz.com, 17 June, 2010

Chinese Solar PV Equipment Industry
2010
• Of the 10 major equipment required for solar cell
production lines, 8 types can be made in China.
• 6 (diffusion furnace, plasma etching machines,
cleaning/texturing machines, phosphorous-silicate glass
(PSG) removal equipment, and low-temperature drying
oven) take a leading role in production lines in China;
• The remaining two (tube-type PECVD and fast sintering
furnace) coexist with the imported equipment, and their
market share keeps increasing.

Source: Market Research.com, 5. May, 2010
http://www.marketresearch.com/map/prod/2681499.html

2010
• However, automatic screen printer, automatic sorting
machine, and plate PECVD are still dominated by
imported products.
• Presently, the mainstream production lines of solar cells
in China adopt both domestically made and imported
equipment.
• A standard 25MW production line calls for the
investment of approximately USD 5-9 million.
• To build a PV production line, the equipment investment
accounts for over 70%.


2010
• Though Chinese investment in the PV
production lines increases continuously in recent
years, the core PECVD equipment is totally
dependent on import.
• Of the 6 key cell manufacturing devices, the
technology levels of Chinese domestically made
products are as follows:


2010
• Diffusion furnace, plasma etching machine,
cleaning/texturing machine: Meet or approach the
international advanced level; they possess cost/
performance advantages; occupy a large part of the
domestic market.
• The home-made texturing machines for surface texturing
of polycrystalline silicon cells fall behind imported ones.
• Besides, there is neither laser etching/resistance
trimming machine for peripheral etching nor wet
chemical etching equipment.


2010
• PECVD: with large production capacity and better film
quality, the tube-type PECVD equipment has been on
equal terms with the plate PECVD.
• Now tube-type PECVD equipment has entered large
production lines in large quantities.
• Since 2008, new progress has been made in the
techniques of domestically made tube-type PECVD
equipment.
• Its processing quality approaches that of equipment by
famous, international manufacturers.


2010
• Thus, it is favored by more clients and its share
is increasing.
• It is expected that the domestically made tube-
type PECVD equipment will become the
mainstream in the industrial application in the
future.
• Presently, the research on the domestically
made plate PECVD is also in progress.


2010
• High-temperature sintering furnace: It falls slightly behind
the international standard, but has made good progress
in recent years.
• Some high-end products are used in large production
lines, displaying outstanding performance.
• Screen printer: Automatic printers with multiple printing
heads have entered the market. It will take a period for
users to accept them.
• The manually operated and semi-automatic products
cannot enter the mainstream production lines.


2010
• Automatic detection/ sorting machine: Technology has
reached the international medium level. In 2009, the
sales revenue of Chinese solar equipment rose by
14.3% to reach about CNY 3.20 billion. In 2010, with the
decline of poly-silicon prices, the cost of solar power
generation will gradually approach that of traditional
power generation. The support by domestic and foreign
governments will also be enhanced. Thus, the PV
market will continue the current rapid development trend.
It is forecasted that the growth rate of Chinese solar
equipment in 2010 will exceed that in 2009.


2010
• China announced in March of 2009 that it would
subsidize solar energy installations at a rate of $3 per
watt - about 60% of the cost - as part of its economic
stimulus package.
• In January 2009, the Qinghai province announced the
world's first 1 GW solar farm, with 400 MW going to
Suntech Power Holdings, 200 MW going ReneSola, 200
MW going to JA Solar, and the remaining 200 MW being
competed for by various other solar firms.
• Furthermore, two other provinces are rumored to be
planning 2 GW projects.

Source: http://www.wikinvest.com/industry/Solar_Power

2010
• Since China's "Golden Sun" program was
announced in July 2009, China's Ministry of
Finance already selected 294 solar projects
totaling 642 MW.
• Under the program, China's Ministry of Finance
will subsidize 50 percent of the construction
costs for on-grid solar power plants and up to 70
percent of the construction costs for off-grid
installations, plus transmission costs where
necessary.
Source: http://www.wikinvest.com/industry/Solar_Power

Competition – centrotherm PV AG
• centrotherm photovoltaics AG is reporting an additional
milestone achievement of its solar cell division.
• Efficiencies of 17.1 percent have now been achieved on
high-quality, multi-crystalline customer material.
• With these results, the photovoltaic specialists
demonstrate the great potential inherent in the selective
emitter technology in the multi-crystalline area.
• The efficiency enhancements achieved are the result of
the newly developed cell front side based on selective
emitter technology.
• First production lines with selective emitter technology
have been sold to Asia.
• centrotherm photovoltaics is directly passing on the
achieved development progress to customers in the form
of upgrade options for existing turnkey production lines.

• Innovative production processes such as the selective
emitter technology are being developed in such a way
that they can be integrated and retrofitted into existing
process flows.
• "An efficiency enhancement of 0.5% allows production
costs to be cut by around 3%," was how Dr. Peter Fath,
CTO of centrotherm photovoltaics, summed up the
significance of this goal. "This allows us to continuously
realize cost-saving potentials for our customers that
strengthen their competitiveness."
• In the initial process runs for the new cell back side, the
centrotherm photovoltaics research and development
team has achieved best values of 18.6 percent on a
mono-crystalline material.

• The company anticipates that significantly higher results
can be attained in combination with the selective emitter
technology on the cell front side.
• The product range is supplemented by reactors and
converters for the manufacturing of solar silicon.
• It guarantees its customers important performance
parameters such as production capacity, degree of
efficacy, and completion deadlines for turnkey lines.
• The Group employs around 1,100 staff members, and
operates in Europe, Asia and the USA.
• centrotherm photovoltaics achieved revenue in the 2008
financial year of €375 million, and EBIT of €56 million.

Competition – Manz Automation
• Many c-Si solar cell manufacturers are developing
various selective emitter processes that place emitters
underneath the front contacts of cells to boost
conversion efficiencies.
• However, Manz Automation may be taking a lead in
announcing that its laser-based production technology
has been selected by Yingli Green, Bosch, and Conergy.
• “Our selective emitter technology, coupled with our
ultraprecise screenprinter, will enable us to develop
additional market shares,” commented Dieter Manz,
CEO of Manz Automation.
• “This technology offers just what solar manufacturers
need. According to our research, the process we have
developed to create selective emitters offers by far the
lowest production costs, and that is why it will help our
customers to improve their profitability.”

• Specially developed laser optics allow parts of
the phosphorous, present after diffusion in
phosphorus glass, to be carefully diffused again
to the surface of the solar cell without any
defects.
• As a result, the doping with phosphor atoms can
be locally increased, thus significantly boosting
the conductivity between the silicon wafer and
the contact fingers.
• Manz uses a high-precision printer (HAP2400)
and the OneStep selective emitter laser line to
produce the SE structure.

• Manz has presented technical papers on the
technology with other companies, such as
Deutsche Cell and REC Solar.
• With these properties, HAP2400 is by far the
most precise and fastest screen-printer on the
market.
• The machine is an integral component of the
Manz back-end line, and together with the
OneStep Selective Emitter laser line it offers the
ideal combination to produce highly efficient
solar cells.

Competition – Oerlikon Solar
• Oerlikon Solar leads the thin film silicon PV
equipment sector with more than 450 MW
installed around the world.
• Over 1 million panels have already been
produced by its customers.
• With the company's Micromorph® factories,
Oerlikon Solar plans to reach production costs at
grid parity in 2010 making solar energy cost
equal to fossil fuel-generated energy.

• The company is on track to offer its customers
an advanced fab design capable of producing
modules for $0.70/W by the end of 2010 offering
the fastest time to revenue in the thin film silicon
PV industry.
• Oerlikon Solar's thin film silicon technology
offers cost-advantages over crystalline silicon,
and is making strong efficiency gains. At the
same time it provides long term competitive
advantages compared to most other
technologies.

• In the past 12 months, Oerlikon Solar has
continued to significantly drive down
module costs by approximately 25
percent, and improving the productivity of
its lines from 60 MW in 2008 to 100 MW in
2009 without additional equipment.

Competition – Applied Materials
• The Chief Technology Officer of Applied Materials, Mark Pinto,
announced that he is picking up and moving from Silicon Valley to
China.

• Pinto is the first CTO to actually relocate to China, which in itself is a
watershed event, but also shows how important China is to Applied
Materials and the changing landscape of technology investing.

• I consider this to be a monumental move for the high tech industry
because it signals a major shift of power.

• Pinto has a young family (two boys, 10 and 11), so he isn’t making
this move because he likes Kung Pao chicken. He is doing it
because he and the rest of the Applied Materials management team
understand the threat and the opportunity in China.

Source: http://www.marketoracle.co.uk/Article18505.html

• The threat stems from the fact that the Chinese are
producing more engineering graduates, technological
breakthroughs and opportunity because the market for
1.3 billion is so huge.

• It is the largest supplier of semiconductor manufacturing
equipment in the world, one of the largest suppliers of
materials for solar panels, and one of the top technology
companies on the planet. What Applied Materials does
matters.

• Applied Materials recently completed the construction of
its newest and largest research lab in Xian, which is best
known as the home of the terra cotta warriors.

• This is not an inconsequential first step. This new
research lab is the largest non-governmental solar
energy research facility IN THE WORLD and will be one
of the largest employers in the city of Xian.

• Applied Materials is no newbie to China, either. It has
had operations there for 25 years and currently gets 13%
of its revenues from China, but it isn’t the only tech giant
moving into the country.

• Intel, Microsoft, Google, Cisco, and IBM, for example,
have large offices and/or research facilities in China.


Strategic Marketing
-- Link Between R&D, Sales --

• Collaboration is key!
• Market analysis
• Competition/ Benchmarking
• Market Communication
• Trade Shows

Collaboration Solutions
• eGroupWare is a free open source groupware software
intended for businesses from small to enterprises. Its
primary functions allow users to manage contacts,
appointments, projects and to-do lists.
• It is used either via its native web-interface, making
access platform-independent, or by using different
supported groupware clients, such as Kontact, Novell
Evolution, or MS Outlook. It can also be used by mobile
phone or PDA via SyncML.
• It currently has translations for more than 25 languages,
including right-to-left language support. It depends on a
standard X-AMP System and as such requires no
specific operating system. Most popular internet
browsers are supported for use as web based clients.
Source: http://www.egroupware.org/

eGroupWare Features
• Calendar (including support for scheduling of groups, resources and
contacts)
• Contact-manager using an SQL database or LDAP
• Integrated IMAP webmail client (FelaMiMail)
• Infolog, an application for tasks and notes
• Element based project manager highly integrated with all other apps
• Resources management (inventory) and booking tool integrated into
eGroupWare calendar
• File manager
• SiteMgr: Web-based authoring system with fine granulated access
control lists
• Time-tracker application integrated with project manager
• Tracking of bugs or other, integrated with project manager
• Wiki
• Knowledge base

Source: http://www.egroupware.org/

Public Relations Management
Software
• Vocus Professional PR Software allows you to create
media lists, build relationships with key journalists and
manage your news.
• Vocus Professional Edition provides all of the features
that most small and mid-sized organizations need to
generate, track and analyze publicity.
• Professional Edition includes access to the industry's
most comprehensive media database that you can use
to conduct media research and easily create targeted
media lists.
http://www.vocus.com/content/prprofessionaled.asp

Product Development Strategies
• Idea Generation is often called the "fuzzy front end" of
the NPD process.

• Ideas for new products can be obtained from basic
research using a SWOT analysis.

• It includes looking at market and consumer trends,
company's R&D department, competitors, focus groups,
employees, salespeople, corporate spies, trade shows,
or Ethnographic discovery methods (searching for user
patterns and habits) may also be used to get an insight
into new product lines or product features.

Source: http://en.wikipedia.org/wiki/New_product_development

• Idea Generation can begin when you have done
your OPPORTUNITY ANALYSIS to support your
ideas in the Idea Screening Phase.

• The objective of Idea Screening is to eliminate
unsound concepts prior to devoting resources to
them.

• The screeners should ask several questions:

– Will the customer in the target market benefit from the
product?
– What is the size and growth forecasts of the market
segment/target market?
– What is the current or expected competitive pressure
for the product idea?
– What are the industry sales and market trends the
product idea is based on?
– Is it technically feasible to manufacture the product?
– Will the product be profitable when manufactured and
delivered to the customer at the target price?

• Concept Development and Testing

• Business Analysis

• Beta-Testing/ Market Testing

• Technical Implementation

• Commercialization

• New Product Pricing

Marketing Strategy For The Group
• How many & which trade shows?
• Harmonization/ integration/ consolidation
of product lines.
• Retain existing brand names?
• Develop new brands from newly acquired
companies?
• ‘Bleeding Edge’ or ‘Me Too’?

Product Benchmarking
• Performance Benchmarking
• Informal Benchmarking
• SWOT Analysis
• Best Practice Benchmarking
• Over 60% of organizations that are not
currently using these tools indicated they
are likely to use them in the next three
years.
Source: http://en.wikipedia.org/wiki/Benchmarking

Product Benchmarking
• Identify your problem areas.
• Identify other industries that have similar
processes.
• Identify organizations that are leaders in these
areas.
• Survey companies for measures and practices.
• Visit the "best practice" companies to identify
leading edge practices.
• Implement new and improved business
practices.
Source: http://en.wikipedia.org/wiki/Benchmarking

QA/ Customer Satisfaction

ISO 9001:2000 System

Global Spare Parts & Service
Coverage
• Global sales and marketing offices are
nice, global service coverage is nicer.
• Customer proximity is a key differentiator.
• Logistics, capital invested is strategic.
• Make or buy (i.e. use local partners or
establish a local service company).

Global Spare Parts & Service
Coverage
• What kind of business software solution to
manage/ track it?
• Service Level Agreements (SLA)?
• Customer training/ workshops?
• Remote access?
• What kind of warranties?
• Are service handbooks localized?

Post Acquisition Integration
The ability to successfully integrate acquired
companies is generally ranked as the single most
important factor influencing acquisition success.

Integrate where it matters.
Companies should integrate only where valuable or
necessary. Speed makes a difference, but only in the
right direction.
Put culture high on your leadership agenda.
Decide quickly on a specific approach and use hard
tactics -- organization structure, compensation
incentives, and a shared decision-making system -- to
address cultural integration.

Source: Bain & Company

Post Acquisition Integration

Make tough decisions early.
The best acquirers move quickly to determine the new
organizational structure and the key people who will
drive the integration.
Focus firepower on the base (key) businesses.
They must have a plan to maintain the market share of
both companies and their brands while the integration is
underway -- acquirers are also most vulnerable to
competitive attacks on customers and employees in the
months following the announcement of a deal.

Source: Bain & Company

Product Harmonization/
Consolidation
Post acquisition activities:

• Facility planning and industrial engineering
actions can be very useful in the transition after
an investment.
• To reach the expected levels of growth,
modernization, new product introduction,
technology, integration, or interaction for which
the investment is targeted.
• End results will probably involve action
throughout all facilities and operations.

Jack Greene, Jackson Productivity Research Inc.

Consolidation
Maximize

1. Operating utilization and throughput at facilities.
2. Return on assets.
3. Product consolidation and integration, product mix.
4. Capacity for existing and new products.
5. Proximity to markets.
6. Customer service.
7. Access to technology, people, utilities.
8. Company image and quality of life objectives.


Consolidation
Minimize

1. Location sensitive operating costs, such as labor at all
levels of the organization chart, taxes, occupancy,
utilities, waste disposal.

2. Distribution and incoming freight costs.

3. Constraints, cycle times, inventory.

4. Facility asset value and operating cost.

5. Antiquated facilities which impede operations.


THE END!

THANK YOU FOR YOUR ATTENTION

Strategic Agenda for Global PV Market Growth

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