[SEMI Theater] Status of China's PV Industry and Market Development

SEMICON West Mini Theater

Melody Song

SEMI

July 2010

Status of China’s PV Industry and

Market Development

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1.50

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4.50

Suntech(Module)

Trina (Module)

Yingli (Module)

JA Solar (Cell)

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10E

2Q10E

The Challenging 2009

• Polysilicon spot price declined 85% from 4Q08 to 4Q09

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3Q08

4Q08

1Q09

2Q09

3Q09

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1Q10

E

2Q10

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Mod

ule

ASP

($/W

)

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50

100

150

200

250

300

350

400

Spot

Poy

Pric

e ($

/kg)

Average Module ASP Polysilicon Spot Price

Average Module ASP ($/W) Spot Poly Price ($/kg)

Source: company reports

ASPs ($/W)

-46% -54% -55%-63%

-85%

-52%

• Module ASP declined 52% from 4Q08 to 4Q09

2009: A Year of Remarkable Growth

• Gross margin reached historical low in 4Q08, but recovered nicely in later part of 2009

• Quarterly shipment increased steadily since 1Q09

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5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Sunt

ech

Trin

a

Ying

li

JA S

olar

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10E

2Q10E

Gross Margin

Source：SEMI, company reports

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100

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200

250

300

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Suntech Trina Yingli JA Solar

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10E

2Q10E

Quarterly Shipment (MW)

+96%

+185%+154%

+279%

1, 428 1, 762 2, 2012, 795 3, 847

5, 1676, 770

9, 162

15, 112

22, 492

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4, 000

6, 000

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16, 000

18, 000

20, 000

22, 000

24, 000

Inst

alla

tion （

MW） Annual Inst al l at i on

Cumul at i ve Inst al l at i on

Annual Inst al l at i on 278 334 439 594 1, 052 1, 321 1, 603 2, 932 5, 950 7, 380 Cumul at i ve Inst al l at i on 1, 428 1, 762 2, 201 2, 795 3, 847 5, 167 6, 770 9, 162 15, 112 22, 492

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Historical Development of Global PV Market

• Even though global PV industry encountered unprecedented challenges in 2009, total new installations for the year reached 7.3GW, a growth of 24% from year 2008. Worldwide cumulative installation passed the 22GW mark.

• Worldwide PV market has experienced rapid growth in recent years, growing at an impressive CAGR of 44% from 2000 to 2009.

2000-2009 Annual PV Installation CAGR 44％2010 Outlook:

Another record setting year, likely crossing the threshold of 10 GW of PV installed globally in a single year.

Regional Distribution of Global PV Market – 2009 New Installations

Rest of Europe7%

Rest of World7%China

2%Belgium4%

Czech Republic6%

USA7%

Japan7%

Italy9%

Germany51%

2009 New Installations (MW)

Germany 3,806 Italy 720 Japan 484 USA 481 Czech Republic 411 Belgium 292 China 160 Rest of Europe 518 Rest of World 508

Global Total 7,380

China2%

Regional Distribution of Global PV Market – 2009 Cumulative Installations

Germany43%

Rest of World17%

China1%Italy

5%

Spain15%

Japan12%

USA7%

Germany 9,785

Spain 3,424

Japan 2,628

USA 1,580

Italy 1,178

China 300

Rest of World 3,897

Gl obal Total 22, 792

2009 Cumul ati veInstal l ati ons (MW)China

1%

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12, 000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

PV C

ell

Ship

ment

(MW

)

Rest of Wor l dUSATai wanJapanEuropeChi na

Historical Global PV Cell Shipment

Data Source：中国光伏产业研究报告(2006-2007), GTM Research

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Chi na 1% 1% 1% 2% 4% 8% 17% 27% 34% 38%

Europe 21% 20% 23% 27% 26% 26% 27% 27% 25% 18%

Japan 45% 46% 47% 49% 50% 46% 36% 23% 17% 14%Tai wan 0% 0% 0% 0% 3% 5% 7% 9% 10% 11%

USA 26% 27% 22% 14% 11% 9% 7% 7% 5% 6%

ROW 7% 6% 7% 9% 5% 6% 6% 7% 9% 13%

2000-2009 global PV cell shipment CAGR 49%

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1,000

1,500

2,000

2,500

3,000

3,500

4,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Historical China PV Cell Shipment

Five Year CAGR 140%

China PV Cell Shipment

(MW)

• China became the world’s top PV cell producer with over 1GW production in 2007.

• Since then, China has maintained its number one position.

2000 2001 2002 2003 2004 2005 2006 2007 2008 20093 5 6 12 50 146 438 1,088 2,600 4,011

Other Countries andRegions

66%

Rest of China16%

Canadian Solar1%

JA Solar4%

Yingli4%

Suntech6%

Trina3%

Other Countries andRegions

62%

Rest of China15%

Canadian Solar3%

JA Solar5%

Yingli5%

Suntech7%

Trina4%

Market Share of Global PV Cell Shipment

2008 2009

Source：SEMI, company reports

Global Top PV Cell Manufacturers

570

504

498

473

290

282

277

264

237

221

210

209

189

188

180

Q-cell

First Solar

Suntech

Sharp

Kyocera

Yingli

JA Solar

Motech

SunPower

SolarWorld

Sanyo

Trina

Solarfun

Mitsubishi Electric

Gintech

2008年出量货 (MW)1,011

704

595

537

525

509

400

399

398

368

360

326

260

260

225

First Solar

Suntech

Sharp

Q-Cells

Yingli

JA Solar

Kyocera

Trina

SunPower

Gintech

Motech

Canadian Solar

Snayo

Ningbo Solar Electric

E-Ton Solar

2009年出量货 (MW)2008 Shipment (MW) 2009 Shipment (MW)

Data Source：Photon, GTM Research

Regional Distribution of Production Capacity – Crystalline Silicon PV Cells

Source：EPIA, company reports

3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10E 3Q10E 4Q10E

Suntech 750 1,000 1,000 1,000 1,000 1,000 1,100 1,400 1,400 1,400

Trina 300 350 350 400 450 600 800 850 950 1,000

Yingli 400 400 400 450 600 600 700 850 1,000 1,000 JA Solar 425 600 600 675 750 800 800 1,000 1,200 1,300

CSI 270 270 270 270 360 420 450 450 700 700

Suntech6%

Rest of China28% JA Solar

4%

Yingli3%

Trina3%

China47%

Japan9%

Rest of Asia10%USA

5%

Taiwan12%

Europe17%

CSI2%

Regional Distribution of Production Capacity – Crystalline Silicon PV Modules

Source：EPIA, company reports

Europe28%

USA5%

Japan4%

Rest of Asia7%

Rest of World1%

Taiwan1%

China54%

Yingli3%CSI

4%

Trina3%

Rest of China39%

Suntech5%

3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10E 3Q10E 4Q10E

Suntech 750 1,000 1,000 1,000 1,000 1,000 1,100 1,400 1,400 1,400

Trina 300 350 350 400 450 600 800 850 950 1,000

Yingli 400 400 400 450 600 600 700 850 1,000 1,000 CSI 820 820 820 1,000 1,000 1,000

Regional Distribution of Production Capacity

Source：EPIA, SEMI, company reports

Europe18%

Japan12%Rest of Asi a

13%

Chi na18%USA

39%

Rest of Asi a19%

Chi na16%

Rest ofWor l d

1%

Europe31%

Japan16%

USA11%Tai wan

6%

PolysiliconManufacturing

Capacity

Thin Film Manufacturing

Capacity

Current Status of China’s PV Industry

Cell Module

MT MW MT MW MW MW2008 4,500 600 21,000 2,800 2,600 2,800

2009 18,000 2,600 30,000 4,300 4,000 4,500

20082009

MT MW2008 15,000 2,000 2009 9,800 1,400

Polysilicon Ingot/Wafer

Polysilicon Shortage

% of PolysiliconImported

77%35%

China PV Policy - Rooftop Subsidy Program, March 2009

• Ministry of Finance and Ministry of Urban and Rural Development• The turning point of China’s domestic PV market• To provide RMB 15-20 upfront subsidy for qualified rooftop and

BIPV systems• Detailed requirements on system size and module efficiency• Over 500MW applications received• 91MW approved by Nov. 2009

China PV Policy - Golden Sun Demonstration Project, July 2009

• Ministry of Finance, Ministry of Science and Technology, and theNational Energy Administration of the National Development and Reform Commission (NDRC)

• To provide upfront subsidy for grid-connected systems and off-grid remote installations

– 50% of total cost (including transmission) for on-grid systems– 70% of total cost for off-grid systems

• ~640MW (275 PV projects) approved by Nov. 2009– 299MW BIPV applications– 296MW utility scale solar parks– 46MW off-grid remote installations

• Funding allocated to projects totaling ~220 MW by the end of 2009

Open Bids for PV ProjectsJanuary 2010

• National Energy Administration of NDRC• Request PV project proposals from eight provinces and

autonomous regions– Inner Mongolia, Shaanxi, Ningxia, Gansu, Qinghai, Yunnan, Tibet,

and Xinjiang– Project size between 10MW to 50MW– Cap for each region set at 100MW– Priorities given to projects close to substations and transmission

lines and projects that supply local electricity consumption– Projects should be built on non-farm land with excellent solar

resources

Request for Project ApplicationsApril 2010

• Ministry of Finance and Ministry of Urban and Rural Development• BIPV/BAPV Demonstration Projects• Level of subsidy: 13-17 yuan per watt of installation, depending on

the level of integration• 10MW cap for each provinces, autonomous regions, and

municipalities directly under the jurisdiction of the central government

• Construction should start during 2010 and be completed in the next one to two years

• Priorities given to– Projects with high degree of integration– Regions with local PV subsidy programs– Regions that have demonstrated successful PV program management

and subsidy administration• Application deadline: May 20, 2010

2009 China PV Market – New Installations

Large ScalePower Plant

56%

Industry andCommunication

3%PV Product

6%

BIPV29%

RuralElectrification

6%

Application2009 New

Installation（ MW）

%

Rural Electrification 10 6%

Industry andCommunication 5 3%

PV Product 10 6%

BIPV 47 29%

Large Scale Power Plant 88 55%

合计 160 100%

2009 China PV Market – Cumulative Installations

Large ScalePower Plant

31%

PV Product13%

BIPV24%

Industry andCommunication

13%

RuralElectrification

19%

Appl i cati on

2009CumulativeInstallation

（ MW）

%

Rural Electrification 58 19%

Industry andCommunication 40 13%

PV Product 40 13%

BIPV 73 24%

Large Scale Power Plant 89 30%

合计 300 100%

Regional Distribution of China PV Market – 2009 New PV Installations

Anhui12%

Gansu7%

Other28%

Jiangsu22%

Ningxia31%

Source: Institute of Water Resources and Hydropower Planning and Design and NDRC

Completed in2009 (MW)

Ningxia 50.00 Jiangsu 34.67 Anhui 19.77 Gansu 10.80 Other 45.41 Total 160.65

Regional Distribution of China PV Market – 2009 Cumulative PV Installation

Gansu4%

Other50%

Yunnan3%

Beijing6%

Anhui7%

Ningxia17%

Jiangsu13%

CumulativeInstallation(MW)

Ningxia 50.66 Jiangsu 38.71 Anhui 20.27 Beijing 17.69 Gansu 10.81 Yunnan 7.75 Other 154.11

Total 300.00


Regional Distribution of China PV Market -Projects Under Construction


Qinghai10%

Ningxia29%

Other21%

Hubei7% Shanxi

9%Heibei

9%Anhui

9%

Zhejiang6%

UnderConstruction(MW)

Ningxia 183.00 Qinghai 65.00 Anhui 58.00 Heibei 57.59 Shanxi 55.46 Hubei 45.30 Zhejiang 35.44 Other 134.28

Total 634.07

Regional Distribution of China PV Market -Initial Phase


Initial Phase(MW)

Liaoning 606.24 Yunnan 218.00 Shannxi 210.00 Jiangxi 200.00 Shandong 155.86 Inner Mongolia 140.00 Jiangsu 126.49 Other 353.51

Total 2,010.09

Liaoning30%

Shannxi10%

Jiangsu6%

Yunnan11%

Other18%

Jiangxi10%

Shandong8%

InnerMongolia

7%

Note: Projects in Initial Phase are projects that have been reported to central NDRC

China’s National Targets for PV

CumulativeInstallation

(MW)

MarketShare

CumulativeInstallation

(MW)

MarketShare

Rural Electrification 80 27% 200 11%Grid Connected BIPV 50 17% 1,000 56%Grid Connected Large Scale Power Plan 50 17% 200 11%Communication & Industry 40 13% 100 6%PV Products 30 10% 100 6%Concentrating Solar Power (CSP) 50 17% 200 11%

Total 300 100% 1,800 100%

2010 2020

11th Five Year Plan for PV Installations

China’s New Energy Stimulus Plan

InstalledCapacity (GW) %

ElectricityGeneration

(TWh)%

Coal 1,020 63% 4,720 71.0%Hydro 300 19% 1,000 15.0%Nuclear 75 5% 350 5.3%Gas 50 3% 220 3.3%Wind 120 7% 240 3.6%Solar PV 20 1% 30 0.5%Other 35 2% 90 1.4%

Total 1,620 100% 6,650 100%

Year 2020 Electricity Generation by Source

China’s Electricity Generation by Source

Year 2020

Hydro19%

Wind7%

Nuclear5%

Coal63%

Gas3%

PV1%

Other2%

Hydro22%

Coal75%

Wind2%Nuclear

1%

Year 2008

China’s Commitment

• China set a goal of reducing its carbon waste per unit of GDP by 40-45% from the 2005 level by year 2020

• China will increase the share of non-fossil fuels in the primary energy use to 15% by year 2020

New Energy Stimulus Plan –Are these targets realistic?

2008 InstalledCapacity

(GW)

2020 InstalledCapacity

(GW)

AdditionalCapacity

Required (GW)Coal 602.86 1,020 417 Hydro 172.60 300 127

Nucl ear 9.08 75 66

Wi nd 12.00 120 108

Sol ar PV 0.14 20 20

Ot her 0.04 35 35

Total 797 1,570

• Hydro, from 172GW to 300GW, equivalent to 6 Three Gorges Dam projects. Water resource? Ecosystem? Long distance transmission? Cost?

• Nuclear, from 9GW to 75GW. Location? Materials? Construction time?• Wind, from 12GW to 120GW. Local consumption? Long distance

transmission?

Only PV is not limited by natural resource, location, and scale. In order to achieve China’s renewable energy target and carbon reduction goals, China must dramatically increase its target for PV installations.

China’s Solar Future

PV ‘s Contribution to Total Electricity Generation

World Average（ IEA）

China's 11thFive-Year Plan

2010 0.2% 0.02%2020 1.3% 0.08%2030 4.6% 0.23%

World Average data based on IEA Solar PV Economic Milestones

A Recommended China PV Policy Roadmap

It is recommended that China reach global average level by year 2016 and 1.3% PV electricity by 2020

Source：SEMI, International Energy Outlook 2008

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Electricity Demand(Billion kWh) 2,652 2,783 2,914 3,052 3,196 3,346 3,504 3,643 3,787 3,938 4,094 4,256

% of PV Electricity(Global Average) 0.16% 0.20% 0.24% 0.29% 0.35% 0.42% 0.51% 0.61% 0.74% 0.89% 1.08% 1.30%

Cumulative InstallationNeeded to Achieve GlobalAverage Level (MW)

2,632 3,479 4,393 5,547 6,226 7,861 9,926 12,444 15,600 19,558 24,518 30,738

China's Current NationalTarget (MW) 300 1,800

Proposed CumulativeInstallation (MW) 340 840 1,650 2,800 4,300 6,180 8,840 12,280 15,780 19,510 24,485 30,785

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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

China's Current National Target (MW)

Proposed Cumulative Installation (MW)

Cumulative Installation Needed to Achieve GlobalAverage Level (MW)

Achieve global average level

A Recommended China PV Policy Roadmap

2010 2012 2015 2020

Annual PV Installation (MW) 500 1,150 2,660 6,300

Accumulated Installation (MW) 840 2,800 8,840 30,785

Electricity Demand (Billion kWhs) 2,783 3,057 3,504 4,256

PV Generated Electricity (Billion kWhs) 1.34 4.48 15.91 55.41

As a % of Total Electricity 0.05% 0.15% 0.45% 1.30%

Annual CO2 Savings (Million Metric Tons) 0.81 2.69 9.55 33.25

Accumulated CO2 Savings (Million Metric Tons) 1.56 4.24 13.79 47.04

Value of Output (Billion Yuan) 290 836 1,673 3,389

# of Employment in PV ('000) 246 706 1,442 2,917

Thank You!