Development of the PV industry in Europe

Michel VIAUDGeneral Secretary

• Non-profit orginasition existing since 19851985• 7575 members: 5959 full + 1616 associate

• 5959 full: manufacturers on the overall value chain

• Budget 2005: 1 000 000 €1 000 000 € ( EC 1/3 + 2/3 members)

• Secretariat Secretariat in Brussels - the heart of EUROPE :

66 permanent employees speaking 13 13 languages

• 66 Board members elected for 3 years3 years• President per yearPresident per year

Winfried Hoffmann2004-2005 2004-2005 2005-20062005-2006

Murray Cameron

WHO is EPIA?

EPIA and its members

EPIA represents 95%EPIA represents 95% of the photovoltaic European industry, covering the whole production chain.

•Silicon feedstock: Wacker …•Wafers and Ingots: Crystallox, Scanwafer, PV Silicon …•Cells: Q-cells, BP Solar, Isofoton, Shell Solar, Deutsche

Solar,…•Modules: RWE Schott Solar, Photowatt, Photovoltech…•Systems: Total Energie, Naps Systems, Conergy, Phoenix,…•Inverters: SMA, Philips, Sunways, Fronius…

EPIA and its membersTop 10 worldwide – 9 EPIA members

Source: EurObserv’ER, Photovoltaic Energy Barometer 2005

EPIA and its membersEPIA members 80% of world cell production in 2004

Source: EurObserv’ER, Photovoltaic Energy Barometer 2005

Mitsubishi; 75; 6%Shell Solar; 72; 6%

Sharp; 324; 28%

Kyocera; 105; 9%

BP Solar; 85; 7%

Q-Cells; 75; 6%

Sanyo; 65; 5%

Isofoton; 53; 4%

RWE; 44; 4%

Deutsche Cell; 28; 2%

Others; 268; 23%

Economically viable

Dependant on market support

programs

Market SegmentsConsumerOff-Grid Industrial

On-GridOff-Grid Residential

Source: Strategies Unlimited

Competitiveness of PV Solar Electricity

• proven in the three segments:– industrial off-grid– consumer– rural electrification

• coming soon in grid-connected systems – First, in local replacement of peak tariff electricity kWh in liberalized

southern OECD countries (… 2010 … 2015)– Second, the same in more northern OECD countries (… 2020 …

2025)

0

5000

10000

15000

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35000

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2004

2005

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1

10

100

1000

10000

Solarsilicon

Byproducts of Electronics

Demand

Moduleproduction

Moduleproduction based on 20 % growth/year

CAGR Poly-Demand 2004 - 2010: + 15 %

Module production (MW) and Polysilicon Production (tons)

tons MW

3,1 GWFeedstock for the PV Industry Karl Hesse, Ewald Schindlbeck, April 11 2005, Page 8

Solar-Grade SiliconSUPPLY CAN NOT FOLLOW DEMAND.

Semiconductor Cycles

Source: RWE Energie AG and RSS GmbH

Photovoltaics

Utility peak power

Bulk power 0,0

0,2

0,4

0,6

0,8

1,0

1990 2000 2010 2020 2030 2040

€/kWh

900 h/a: 0,60 €/kWh

1800 h/a: 0,30 €/kWh

Electricity Generating Cost for PV

and utility prices

24h-Energy Profile

0:0

0

6:0

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12:0

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18:0

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24:0

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Ele

ctr

ica

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erg

y [

arb

. un

its

]

Low Tariff Low TariffHigh Tariff

Electricity supplied by Utility

Fed-InEnergy

Solar Energy

Energy consumption of building

Electricity supplied by Utility

Competitiveness Correlation between Daily PV Power Production and Energy Consumption of an Office Building in Spain

Spot market price

Competitiveness Spot Market Prices in Correlation with PV Electricity Generation in Germany

PV power output

Source:

13

18 % p.a.

63 % p.a.40 % p.a.40 % p.a.

World PV Market Size andApplication Segmentation

0

200

400

600

800

1000

Mar

ket

Siz

e i

n M

Wp

1998 1999 2000 2001 2002 2003 2004

Off-Grid & Consumer on-Grid

Comparison of the Future Market Development in Europe and Japan

Yearly installations mainly Germany

Cumulative installations mainlyGermany

Yearly installations Japan

Cumulative installationsJapan

Additional EU-installations e.g. EU-wide feed-in tarriff program (not contained in accumulated curve)

0

1000

2000

3000

4000

5000

6000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

cum

ula

ted

in

stal

lati

on

s in

MW

p

0

200

400

600

800

1000

1200

1400

Yea

rly

inst

all

atio

ns

in M

Wp

Market Data Europe including the100,000 Rooftop Program / Feed-

inTariff (EEG) in Germany

0

50

100

150

200

250

300

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400

450

1998 1999 2000 2001 2002 2003 2004

Yea

rly

Inst

alle

d M

Wp

DE EU without DE

100.000-Dächer-Programm KfW

EEG

Source: IEA PVPS

Influence of Feed-in tariff on an annual PV installation in Germany (MW)

New Feed-in LawNew Feed-in Law

Source: @ RWE SCHOTT Solar GmbH and EurObserv’ER, Photovoltaic Energy Barometer 2005

Feed-in Law

Feed-in Law

100,000-Rooftopprogram KfW

100,000-Rooftopprogram KfW

1,000-Rooftopprogram

(2.500x3kW)

1,000-Rooftopprogram

(2.500x3kW)

0

50

100

150

200

250

300

350

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1990 1992 1994 1996 1998 2000 2002 2004

Germany vs Rest of Europe in 2004 (MWp)

768

26

172

61

0

200

400

600

800

Germany Rest of Europe

Off-grid

On-grid

Total installed capacity in Europe in 2004 (MWp)

0 100 200 300 400 500 600 700 800

Others

Belgium

Denmark

Portugal

Finland

Sweden

Greece

Great Britain

Austria

France

Switzerland

Luxembourg

Italy

Spain

Holland

Germany

On-grid

Off-grid

Advantages :• Focus of customers will be on product quality and performance of

the systems for a long period of time • Investors confidence secured (attractive rate

of return for investors)• Does not a burden on public funds • No Bureacratic constraints• Appropriate Tool to stimulate Industrial Investment

The most effective support programme

Feed-in tariff Feed-in tariff

Feed-in law as an industry political action to reach competitiveness for the European

industry of new technologies

New Technology

Global for production and application

Two digit growth rates at least over two decades

High-tech production at industrial location, later move of downstream value added steps

Relevance for electricity market

Prove of competitivenes within two decades Industry political action

No budgetary means but long-term secured financing

No subsidy for industry but support for end-customer

EEG - the most effective program worldwideto stimulate the renewable energy market

• Equal market opportunities for all the renewable energies based on specific feed-in-tariffs

• Customer focus is on product quality and performance as a result of high competition in the market

• The long reliable availability (>20 years) of the system performance is the key requirement of the end-user of renewable power technologies

• In contrast to short-term cash subsidy programs the new law offers a perfect basis to forecast annual sales volumes in the mid-run

• EEG Win-win-situation: stimulation of customer‘s demand Economy of scale in production (e.g. SmartSolarFab® RWE Schott Solar)

defined decline of feed-in-tariff rate and price level of system

Annual Market Potential until 2010 (2015)assuming a quick Introduction of an

EU-wide Feed-in Tariff System

Source: @ RWE SCHOTT Solar GmbH and EurObserv’ER, Photovoltaic Energy Barometer 2005

Country Population [Mio]

Market 2004 [MW]

Potential 2010 [MW]

(2015) [MW]

Germany 80 363 600 < 1.000 France 60 5.87 100 > 500 UK 60 1.9 50 > 500 Italy 60 4.3 200 > 1.000 Spain 40 11.8 200 > 1.000 Greece 10 1.3 100 > 500 Benelux/Austria 30 20.83 150 > 700 Rest of EU-15 60 1.26 - - New EU states 75 0.2 100 > 100 Total 455 410.5 Up to 1.500 > 5.000 For comparison: Japan

130

277

1.200

ca. 4.500

Country Price

Installed capacity on 31.12.2003 (kW)

31.12.2004

off-grid

on-grid total

Austria

0,60 €/kWp < 20 kWp 0,47 €/kWp > 20 kWp

1 950 7 050 9 000

Belgium 0,45 €/kWh (only in Flemish part on 01.2006)

0 530 530

Cyprus 0,26 €/kWh      15

Czech Republic 0,19 € /kWh

147 216 363

Denmark no feed-in tariffs 215 1375 1 590

Estonia 0,05 €/kWh 2 0 2

Finland   2 890 140 3 030

France

in metropole 0,15 €/kWp < 5 kW for residential system 0,15 €/kWp < 150 kW for non-building systems such as noise barriers 0,15 €/kWp < 1 MW for commercial and public buildings

15 299 1 942 17 241

0,30 €/kWp for installations in Corsica and Overseas Dep

Germany

rooftops facades 0,574 €/kWp 0,624 €/kWp <30 kW 0,546 €/kWp 0,596 €/kWp <30 ;100> kW 0,540 €/kWp 0,590 €/kWp >100 kW

16 700 260 600 277 300

Greece

0,06 €/kWh for mainland grid 0,08 €/kWh for autonomous island grid

1 330 1 040 2 370

Hungary 0,073 €/kWh 83 55 138

Ireland        

Italy

Decree 05.08.20050 to 20kWp = 0.445 €/kWh 20kWp to 50kWp = 0.46 €/kWh > = 0.49 €/kWh

12 400 10 35022 750

Latvia

0,10 €/kWh = price that equals the double average sales tariff for the conventional electrical energy - now it is app. 0,05 €/kWh

3 0 3

Lithuania 0,056 €/kWh 17 0 17

Lux 0,45 €/kWh     3500

Malta        9

Netherland

0,07 €/kWh 4 632 21 69426 326

Poland no feed-in tariffs 165 69 234

Portugal

Tariff for IPP (Independent Power Producers):

0,51 €/kWh <5 kWp0,28 €/kWh >5 kWp

1 276 392 1 668tariff for producers that consume 50% of generated energy (producer-consumer law): 0,25 €/kWh (independently of the installed capacity)

Slovakiano feed-in tariffs

10 0 10j)

Slovenia 0,375 €/kWh <36 kW0,065 €/kWh >36 kW

90 6 96

Spain

0,40 €/kWh <100 kW 0,22 €/kWh <100; 50 000> kW 0 >50 000 kW 11 390 7 910 19 300

Sweden no feed-in tariffs 3 100 180 3 280

UK no feed-in tariffs 568 3 568 4 136

[%]

Source: Own estimates together with "advanced scenario" according to EREC

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1 2 3 4 5 6 7

1 marine

2 geothermal

3 biomass

4 hydro

5 wind

6 solar thermal

7 PV solar

electricity

100 % RES 29,808 TWh (≡ 80 % of total)

Total electricity consumption 36,346 TWh (from 15,578 TWh in 2001, IEA)

Contribution of PV Solar Electricity to Global Electricity Production in 2040

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