Photovoltaics in Germany and Europe

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1 Fotolia.de: Solarkraftwerk 02, Kaubo Photovoltaics in Germany and Europe Martin Ammon EuPD Research

2 ÜBERSCHRIFT Hoehner Research (ARIAL & Consulting BOLD Group 22/26) (HRCG) about us The Hoehner Research & Consulting Group (HRCG) incorporates the expertise of EuPD Research, 360 Consult and 360 Concept in its integrated solutions. We combine market research with strategic consulting and communications which enable us to provide our customers from governments, associations, chambers of commerce as well as the finance and industry sectors with sustainable integrated business solutions. 12 years of focused research and consulting Founded: 11/24/2000 CEO and Founder: Markus A.W. Hoehner Principal Offices: Bonn Berlin San Francisco Employees: >100 FTE analysts & consultants Interview Center: 60 agents (specialized in CleanTech) Core Areas: CleanTech, Pharmacy & HealthCare, Sustainable Management Special Fields: Market Research, Strategic Marketing, Strategy Consulting, Economics & Financial Research, Commercial Due Diligences, Risk Management

3 Photovoltaics a global success story Global PV sales market GW 30 GW 25 GW 30.0 GW 28.5 GW The potential of the PV market became visible in the end of 2010 and was confirmed in 2011 by installation numbers of about 30 GWp. The markets had managed an average annual growth of 72% since GW CAGR: 72% 74% The global market has so far been dominated by Europe, but already in GW 78% 55% the beginning of a shift towards Asia and the Americas became visible. 10 GW 5 GW 5.9 GW 85% 78% In 2012, the share of Europe has noticeably fallen to about 55%. 0 GW Europe Americas Asia Africa Oceania

4 Photovoltaics a global success story Top European PV sales markets The European PV market was and still is driven by Germany. While countries like 3% 7% 5% 11% % 56% 4% 4% 8% 8% 42% 3% 5% 6% 15% % 48% Czech Republic and Spain were a flash in the pan, Germany and Italy were leading the way more continuously. Based on very reasonable returns and a trustworthy subsidy scheme, the German market was able to attract investors and 2011 private customers to the same extent: The market grew from 7.40 to 7.48 and 7.60 GWp 34% from 2010 to 2012 respectively. Germany Italy Czech Rep. France Spain Belgium UK Bulgaria Rest of Europe

5 Photovoltaics a global success story PV sales market in Europe 25 GW 20 GW 15 GW 10 GW 5 GW 5.1 GW 5.9 GW 13.3 GW 22.2 GW 15.8 GW -31% -35% -33% -28% The growth of the PV market in Europe is mainly driven by the large scale segment above 250 kwp. Especially Germany has turned into a large-scale market between 2010 and 2012 (42% of the installed capacity have been installed above 1,000 kwp in 2012). Nevertheless, also the residential segment and the small commercial segment should not be neglected. Between 2010 and 2012 about 5 GWp have been realized annually in this segment, acting as one important pillar of market growth. 0 GW -13% to 10 kw 10 to 50 kw 50 to 250 kw 250 to 1,000 kw > 1,000 kw The overall slowdown in growth can be attributed to sluggish demand in several core markets such as Italy.

6 Photovoltaics a global success story European PV sales market and NREAPs Germany Italy Spain France Belgium Czech Republic United Kingdom Greece Bulgaria Slovakia Austria Portugal European Electricity Generation % 9% 2% 0 GW 10 GW 20 GW 30 GW 40 GW 50 GW 60 GW Cumulated Installations 2012 NREAP Target % 3% 5% 0% 1% Source: ENC/ Eurostat 2013 Hydropower Solar photovoltaic Onshore wind Offshore wind Biomass Geothermal power Other renewables Conventional energy sources In 2012 the installed PV capacity in Europe reached 66 GW. Germany and Italy cover nearly three-quarter of these installation numbers. Compared to the National Renewable Energy Action Plans (NREAP) some countries already overfulfilled their expansion targets in German has by a large margin the highest NREAP target which means a growth in PV installations by additional 20 GW. Reaching NREAPs in Europe will lead to an average share of renewable energies in gross electricity generation of 29% in 2020.

7 German PV market global leadership Three times seven GW within three years 8 GW 7 GW 6 GW 5 GW 4 GW 3 GW 2 GW 1 GW 0 GW 1.8 GW 11% 3.9 GW 17% 7.4 GW 19% 31% 7.5 GW 7.6 GW 42% to 10 kw 10 to 50 kw 50 to 250 kw 250 to 1,000 kw > 1,000 kw At the end of 2012 the German sales market reached an cumulated PV installed capacity of 32 GW. The growth of sales market in Germany goes hand in hand with an increasing amount of large open space PV projects. In GW PV systems with an size of over 1 MW were installed and summed up to 42% of the whole market. Although on a lower level, the small scale segment of private rooftop PV systems with an average size of below 10 kw shows a stable growth path and accounted for around one tenth of the market in 2012.

8 ÜBERSCHRIFT (ARIAL BOLD leadership 22/26) German PV market global Wide regional disparities of PV installations in Germany Newly installed capacity 2012 by segments < 10 kw 50 to 100 kw > 1,000 kw

9 German PV market global leadership Strong decrease of system prices driven by FiTs 110% 100% 90% 80% 70% 60% 50% 40% 30% Comparing feed in tariff (FiT) and PV system prices in Germany reveals a parallel development. Based on 2006 the prices of small PV systems up to 10 kw dropped by nearly 70% within 7 years. Significant differences between FiT and system price development, which can be observed in 2009, depicts an excessive subsidizing of PV installations. As a consequence, 2010 FiT adjustments were already made during the year. 20% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q PV System Price (<10 kw) FiT (<30 kw)

10 German PV market global leadership Forecast 2013: halving the German PV market 1000 MW 800 MW 600 MW 400 MW 200 MW 0 MW 20% 24% > 15 kw 16% 15 to 50 kw 17% 50 to 250 kw 250 to 1,000 kw 23% < 1,000 kw 3,896 MW Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec After a decade of strong growth, 2013 is going to be the first year with an decreasing PV market in Germany. In January and February 2013 a cumulated number of nearly 500 GW is already installed. After a small peak in summer, average installations per month of 300 MW are expected. All in all a newly installed capacity of around 3,900 MW in 2013 is predicted. Because of changes in the support framework the open space segment with system sizes of over 1 MW will strongly decrease.

11 Photovoltaic industry 2012 Asian region is dominating the global PV production 60 GW 54.2 Global capacity and production numbers of PV module manufacturing in 2012, contain 2 important facts: 50 GW 40 GW 1) there is a high overcapacity of PV module production sites around the world and 30 GW 20 GW ) the Asian region is home to over 80 % of the global PV module production. 10 GW 0 GW Americas Asia Europe Oceania Africa Capacity Production

12 Photovoltaic industry 2012 Top 10 global manufacturer along the PV value chain Silicon GCL Wacker Hemlock OCI REC The Silicon Mine Prime Solar DKT Jupiter Polysilicon Dalu Group Timminco Wafer GCL LDK Yingli Suntech ReneSola Nexolon Jinko Trina Sino-American Solarworld Cells Suntech JA Solar GIGA SOLAR Trina Yingli Canadian Solar (CSI) Motech SunPower GinTech SHARP Module Suntech Canadian Solar (CSI) Trina Yingli LDK SHARP Hanwha Solar One Jinko SunPower Solarworld

13 PV market 2013 trends and drivers Electricity price pushes PV storage systems in Europe Source: Eurostat to 30 Cent 20 to 25 Cent 15 to 20 Cent 10 to 15 Cent < 10 Cent With rising electricity costs and cheap PV solutions, PV is becoming increasingly competitive. After reaching grid parity in the first European countries a new market segment appears: self consumption. Here, new PV systems with integrated storage solutions are needed to maximize the self consumption. This means a shift in paradigm in the residential segment. Instead of electricity generating and feed into the grid, PV systems will be used as energy saver in order to minimize the electricity demand from the grid.

14 PV market 2013 trends and drivers FiT-independent PV projects 1,240 MWp 60 MWp 687 MWp Because of increasing electricity prices and decreasing PV LCOE (levelized costs of electricity), PV projects independent from the feed in tariff became more and more competitive. An impressive project pipeline of non-fit PV projects can be observed in Spain. Until today there are only a lot of announcements, but implementation is going to be verified. Grid infrastructure is one of the crucial aspects besides the identification of buyers for generated power of this PV power plants.

15 Thank you for your attention! Contact: Martin Ammon EuPD Research