Cost / kWh halved 6 times. Can we do it a 7th time?
Volumes have grown 300 times over 12 years, 60% p.a.
Break even cost for solar PV vs. Alternatives and annual installed volume (MW)
10
Breakeven solar cost
(USD/kWh)
USD/kWh
1
0,1
Other electricity cost
(USD/kWh)
0,01
1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016e 2020e
CONFIDENTIAL
Source: Swedbank
1
How important is the unpredictable nature of solar?
What about storage, grid access?
Germany electricity production through the week (illustration). GW
CONFIDENTIAL
Source: Photon consulting, LLC based on data from EEG and SMA, Swedbank
2
Where is next source of demand growth
…and when the poorer developing countries be a key growths source (Afr, ME, Chi)
Global PV installations (MW)
60 000
50 000
40 000
Germany
Italy
Rest of Europe
US
China
Japan
India
Rest of World
56 GW
46 GW
38,5 GW
30,5 GW
30 000
20 000
~65% CAGR 2007-12
10 000
0
2008
CONFIDENTIAL
2009
2010
2011
2012
2013e
Source: SFS, EPIA, Photon, Companies. Consensus incl. IMS, iSuppli, EPIA, Bloomberg NEF
2014e
2015e
3
Financing costs are key – how can they be reduced?
Project selection is key for for the revenues/capital cost considerations
Example of Solar Project Value Creation
100%
15%
33%
17%
10%
25%
Revenues
Interest payment
Debt repayment
State and local Free Cash Flow to
taxes
Equity
20y fixed price
Fixed O&M
contract
20y fixed
interest
Fixed
Agreement
Spot
(20% It, Jp, 80% Ch)
-
-
-
General tax
changes
Fixed
Variable
Operating cost
Irradiance
CONFIDENTIAL
Source: Etrion, Swedbank
Spot,
irradiance
4
Highly fragmented industry – what may drive consolidation
Major solar players module production/shipments vs. expected capacity (GW)*
25
20
15
10
5
0
2010
CONFIDENTIAL
2011
2012
2013e
REC
LDK Solar
Trina Solar
Yingli Green Energy
Canadian Solar
JA Solar
Jinko
Hanwha Solar One
ReneSola
SolarWorld
SunPower
SUM Capacity
Source: Companies, Swedbank
2014e
3Q13 ann
*Capacity estimates are based on company comments and should be viewed as indicative
5