2015 PV MARKET OUTLOOK

15 June 2015 2015 PV MARKET OUTLOOK ASEF, Manila Xiaoting Wang

PV NEW BUILD BY YEAR, HISTORICAL AND FORECAST TO 2017 (CONSERVATIVE) 55.5GW 61.0GW 61.3GW 40.0GW 45.0GW 28.5GW 30.7GW 18.2GW 6.6GW 7.7GW 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Western Europe Eastern Europe Japan USA China India Rest of World Note: A conservative and optimistic forecast has been developed for each country. It is unlikely that all countries will come in at the conservative or optimistic end, so for the global forecast, conservative is (sum of conservative country forecasts + 25%*(sum of optimistic conservative forecasts). Global optimistic forecast is sum of conservative country forecasts + 75%*(sum of optimistic conservative forecasts). 1

CHINA PV DEMAND (GW) CONSERVATIVE OPTIMISTIC 420% 38% 258% 1% 23% 9% 10% 420% 38% 258% 1% 46% 9% 15% 24.0 12.9 13.0 0.8 2.1 19.3 17.5 16.0 5.0 7.5 10.3 12.9 13.0 0.8 2.1 20.8 19.0 7.0 10.8 16.0 0.5 3.6 12.1 10.9 11.0 10.0 2.6 9.0 0.1 0.5 1.6 2.1 2.0 0.4 2010 2011 2012 2013 2014 2015e 2016e 2017e transmission-grid-connected distribution-grid-connected 0.5 12.1 3.6 10.9 12.0 10.0 2.6 8.0 0.1 0.5 1.6 2.1 2.0 0.4 2010 2011 2012 2013 2014 2015e 2016e 2017e transmission-grid-connected distribution-grid-connected 2

JAPAN PV DEMAND (GW) CONSERVATIVE OPTIMISTIC 10.3 10.2 9.9 12.7 13.7 7.1 1.7 3.1 3.3 4.1 6.4 7.1 10.3 3.1 3.7 4.8 10.1 5.3 1.0 1.3 2.5 3.8 6.0 5.9 4.8 3.3 2.1 1.0 1.3 2.5 1.7 3.8 6.0 7.8 7.9 3.8 2010 2011 2012 2013 2014 2015 2016 0-10kW 10-1000kW 1MW+ 2010 2011 2012 2013 2014 2015 2016 2017 0-10kW 10-1000kW 1MW+ 3

US PV DEMAND (GW) CONSERVATIVE OPTIMISTIC 10.8 11.9 0.9 1.9 3.3 4.6 2.7 1.0 6.3 3.8 1.2 8.4 4.9 1.6 6.3 5.8 1.1 2.0 2.0 0.9 1.9 3.3 4.6 2.7 1.0 6.3 3.8 1.2 9.2 5.4 1.7 7.0 6.3 1.3 2.2 2.2 2010 2011 2012 2013 2014 2015 2016 Residential Commercial Utility 2010 2011 2012 2013 2014 2015 2016 2017 Residential Commercial Utility 4

PV NEW BUILD BY YEAR, HISTORICAL AND FORECAST TO 2017 (OPTIMISTIC) 67.9GW 69.7GW 61.4GW 40.0GW 45.0GW 28.5GW 30.7GW 18.2GW 6.6GW 7.7GW 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Western Europe Eastern Europe Japan USA China India Rest of World Note: A conservative and optimistic forecast has been developed for each country. It is unlikely that all countries will come in at the conservative or optimistic end, so for the global forecast, conservative is (sum of conservative country forecasts + 25%*(sum of optimistic conservative forecasts). Global optimistic forecast is sum of conservative country forecasts + 75%*(sum of optimistic conservative forecasts). 5

SUPPLY CURVE FOR POLYSILICON, 2015 Estimated variable cost ($/kg) 25 20 Tokuyama Malaysia II Hankook Silicon SunEdison FBR Renesola China Silicon 2015 demand 56-61GW Hanwha Chemical REC Siemens, Japanese 15 REC FBR GCL Siemens Wacker Nuchritz, Tennessee OCI Hemlock Michigan TBEA Wacker Burghausen Other Chinese DAQO 10 SMP FBR 5 GCL FBR 0 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 Potential production in 2015 (tonnes) Note: Variable cost includes processing cost and SG&A; depreciation is excluded. 2015 demand estimate is 55.5-61.4GW. Assumes 6% of the demand will be supplied by thin-film modules; 24% by mono modules with polysilicon consumption of 4.52g/W; 70% by multi silicon modules with a polysilicon consumption of 5.0g/W; electronics market is estimated at 30,000 tonnes. 6

DEMAND AND SUPPLY FOR PV MODULES, 2006-2017E (MW/YEAR) 90 Historical Future 80 70 Current effective cell manufacturing capacity - at least 66GW 60 50 40 30 20 10-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Supply - crystalline silicon Supply - thin-film silicon Supply - thin film non-silicon Demand - conservative Demand - optimistic 7

EBIT MARGINS OF QUOTED PV COMPANIES BY APPROXIMATE VALUE CHAIN POSITION, Q4 2014 30% 20% 10% 0% CSIQ Sungrow WCH Silicon Risen REC Solar FSLR Sunflower Daqo Tainergy SPWR Jinko Neo JA Trina ENPH OCI Eging Etrion -10% -20% -30% Renesola AEIS SUNE Silicon Gintech Motech Yingli SMA Solarworld REC Silicon HSOL Akcome Danen Develop, Inverters/ Silicon Wafers Cells Modules Develop/Own Own, BoP Operate $500 Q4 2014 EMEA AMER APAC m 8

ALTMAN-Z SCORES OF QUOTED PUREPLAY PV MANUFACTURERS, AS OF Q4 2014 OR Q1 2015 FILING REC Solar, 4.34 First Solar, 3.60 S-Energy, 2.11 CSIQ, 1.99 SunPower, 1.93 Trina, SolarWorld, 1.17 1.82 Hareon, 1.01 Jinko, 0.91 GCL-Poly, 0.84 Renesola, 0.41 SunEdison, -0.02 Hanwha, -0.09 Yingli, China US Europe -0.18 South Korea REC Silicon, -0.28 9

PLANNED CAPACITIES OF LARGE MODULE COMPANIES BY END OF 2015 (MW) Trina Solar Yingli Jinko Solar JA Solar Canadian Solar Hanwha Talesun Suntech Kyocera SunPower Risen SolarWorld BYD Chint REC Solar Hareon Eging Renesola ZNShine CSUN HT-SAAE ET Solar 0 1,000 2,000 3,000 4,000 5,000 Module Cell Source: Company files, estimates, enquiries, Bloomberg New Energy Finance 10

GAP BETWEEN MODULE AND CELL CAPACITIES FOR LARGE COMPANIES BY END OF 2015 (MW) -1,000-500 0 500 1,000 1,500 2,000 Canadian Solar Jinko Solar Trina Solar Suntech ZNShine Kyocera Yingli Talesun Renesola Risen Chint CSUN ET Solar REC Solar HT-SAAE Eging SolarWorld BYD Hareon Hanwha SunPower JA Solar Gap Source: Company files, estimates, enquiries, Bloomberg New Energy Finance 11

PROPORTION OF TOTAL SHIPMENTS SENT TO INTERNAL PROJECTS BY CHINESE MODULE COMPANIES, 2014 AND 2015 ESTIMATE 17% 20% 18% 17% 13% 10% 9% 8% 9% 4% Jinko Canadian Solar Trina Yingli JA Solar 2014 2015E Source: Company files, estimates, Bloomberg New Energy Finance 12

ESTIMATED INTERNATIONAL CAPACITIES OWNED BY OR CHINESE COMPANIES AND HANWHA Q CELLS BY 2015 Canada: Canadian Solar M500 Germany: Hanwha Solar C230 M130 Chint M200 Turkey: CSUN C100 M300 South Africa: JA Solar M150 Znshine M150 Jinko M120 South Korea: CSUN C200 Hanwha Solar M230 Thailand: Trina C700 M500 Talesun C500 M500 Malaysia: Hanwha Solar C1300 M800 Jinko C500 M450 JA Solar C400 Singapore: Bluestar (REC Solar) C810 M1300 Note: C and M stand for cell and module capacities, respectively. Hanwha SolarOne is considered as a Chinese manufacturer since its headquarter is set in China although Korean Hanwha Chemical is the largest shareholder. Hanwha SolarOne was merged with Hanwha Q Cells in February 2015. 13

GLOBAL PV CAPEX BENCHMARK, UTILITY-SCALE, $/W (DC) 3.42 2.64 1.95 1.35 1.70 1.58 1.50 1.39 1.31 1.24 1.18 1.13 1.09 0.84 0.71 0.68 0.61 0.55 0.51 0.47 0.45 0.42 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Module Inverter Balance of plant EPC Other Note: Every PV project is different and has different costs; this is a typical buildup, from quotes from developers and EPCs, intended as a global benchmark. 14

LEARNING CURVES OF C-SI AND THIN FILM MODULES 100 Cost per W (2013 $) 10 1 0.1 197 200 6 198 5 1 10 100 1,000 10,000 100,000 1,000,000 Experience curve Chinese c-si module prices (BNEF) 200 3 201 2 Q4 201 3 Historical prices (Maycock) Thin-film experience curve 201 2 201 3 Cumulative capacity (MW) 15

C-SI MODULE COST FORECAST FOR 2015 (US CENT/W) 47.0-6.0-3.0-3.0-5.0 30.0 Module 2015 Polysilicon Polysilicon to wafer Wafer to cell Cell to module Module 2025 16

DRIVERS OF COST REDUCTIONS ALONG THE C-SI VALUE CHAIN (US CENT/W) POLYSILICON POLYSILICON TO WAFER 10.0 10.0-3.0-1.5-1.5 7.0-2.0-1.0 4.0 2015 Cheaper poly-si Thinner cells Higher effciency 2025 2015 Diamond saw Higher efficiency 2025 WAFER TO CELL CELL TO MODULE 10.0 17.0-3.0-2.0-1.0 7.0-2.0 12.0 2015 Materials saving Higher efficiency 2025 2015 Cheaper materials Higher 2025 efficiency 17

PATHWAY TO HIGH EFFICIENCY MULTI C-SI SOLAR CELLS (%) 20.0 19.5 19.4 19.0 0.8 18.5 18.0 17.8 0.3 0.5 17.5 17.0 16.5 16.0 15.5 15.0 0.0 P-type multi Al-BSF 4 or 5 BB Black silicon Rear passivation P-type multi PERC 18

C-SI MODULE PRODUCTION COSTS AND EFFICIENCIES, H1 2015 (US /W, %) 100 90 80 70 60 50 40 30 20 10 Multi Al-BSF Multi PERC Mono Al-BSF Mono PERC PERT Mono PERL 0 15.5% 0.0% 16.0% 16.5% 17.0% 17.5% 18.0% 18.5% 19.0% 19.5% 20.0% 20.5% 21.0% HIT IBC 19

C-SI MODULE COST FORECAST (US CENT/W) 100 90 80 70 60 50 89% gap 67% gap 40 30 20 10 0 P-type Multi P-type Mono N-type PERT N-type HIT N-type IBC 2015 2018 20

MARKET SHARE FORECAST OF DIFFERENT C-SI SOLAR CELL TECHNOLOGIES 2015 2018 2025 P-type multi Al-BSF 74% 22% 0% P-type multi PERC 3% 41% 20% P-type mono Al-BSF 14% 7% 0% P-type mono PERC/L 3% 20% 40% N-type mono IBC 3% 4% 6% N-type mono HIT 2% 3% 9% N-type mono PERT 1% 2% 25% 21

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