Key Findings of China Solar Energy Market Fact Book

Fact Book
Prepared as Context for
the Key Findings of
the Renewable Energy Sector Team
The China Solar Energy Market

2
Contents
 Overview of the China Solar Power Industry
 Segment Definition
 Market Context
 Regulatory Environment
 Existing and Emerging Standards
 Technology Innovation and Alternative Solutions
 Competition and Industry Structure
 Financial Investment
2
China Solar Energy Fact Book

3
China’s solar energy industry is poised to make a
major impact on the worldwide solar energy market
Solar Energy – overview
Source: XYZ.
 There are four major types of solar energy technologies currently being used in China:
– Solar Photovoltaic (PV) is the main technology used in China for the generation of solar electric power
– Concentrating Solar Power (CSP) is a technology that is new to China
– Building-Integrated Photovoltaic (BIPV) is a relatively under-developed technology branch expecting rapid growth in China
– Solar Thermal Water Heaters (SWH) in which China is a world leader in terms of both production and installed capacity
 The Chinese market for solar components is export oriented:
– Currently, over 90% of Chinese made PV cells and PV modules are exported to overseas markets
– Based on government targets for China’s domestic market for accumulated PV installation is expected to reach 300MW by
2010, up from only 10MW installed in 2006 – although government targets are currently being revised upwards
 China is a leader in the production of solar components:
– Since 2004, China’s solar cell production capacity has reached growth rates ranging from 100-400% per year contributing
to the world’s shortage of poly-silicon feedstock
– In 2008, cell capacity of 4 Gigawatts (GW) was announced and, after growing a projected 40% in 2009, China’s solar wafer
capacity will also reach 4GW
 Chinese solar technology is less sophisticated compared to the applications employed by overseas
competitors:
– The average efficiency of Chinese c-Si PV technology is approximately 16–17%
– Chinese solar industry enterprises are still at a disadvantage when competing with global technology leaders, especially in
terms of new Thin Film PV technologies

4
Contents
 Market Context
4

5
There are four major types of solar technologies currently
produced and used in China, or with high growth potential
Solar Energy – definition – overview
5
Source: Wikipedia; XYZ.
Types of Solar Technologies
Solar Thermal
Water Heater
The most common types of
thermal water heaters include
evacuated tube collectors (44%),
glazed flat plate collectors (34%)
generally used for domestic hot
water heaters and unglazed plastic
collectors (21%) used mainly to
heat swimming pools
Generation of Heat Energy
Generation of Electricity
Solar Photovoltaic
(Solar PV)
Concentrating Solar
Power (CSP)
A solar cell, or photovoltaic cell
(PV), is a device that converts light
into direct current using the
photoelectric effect
Solar PV is the main technology
used in China for the generation of
electric solar power
Concentrating solar power (CSP)
technologies use lenses or mirrors
and tracking systems to focus a
large area of sunlight into a small
beam, then convert the
concentrated light to heat for
power turbines to generate
electricity
Building-Integrated
Photovoltaic (BIPV)
Building-Integrated Photovoltaic
(BIPV) technologies integrate
photovoltaic cells into buildings to
generate electricity as a distributed
energy solution
BIPV technologies are relatively
new in China, but growth in
applications is expected under new
MOF & MOHURD subsidy

The Solar PV value chain includes silicon suppliers, wafer,
cell and module manufacturers, system installation and end use
Source: UBS Asia Solar Report 2007; XYZ Note1: Based on Deutsche Bank Solar Photovoltaic Industry report, Jan 2009
Photovoltaic (PV) Energy Value Chain and Participants
IIIustrative Industry Activities:
 Poly-silicon
sorting
 Poly-silicon type
check
 Poly-silicon Etch
 Solar Grade
Poly-silicon
manufacturing
 Polysilicon
feedstock is
crystallized into
ingot
 Ingot shaping and
sizing
 Ingots are cut and
shaped then sliced
into wafers
 Entails etching,
doping, coating
of wafers and
applying
electrical
contacts to
form a PV cell
 The assembly
and array of
multiple cells
on a solar
panel, along
with electrical
connections
 Power conditioning equipment to
convert generated electricity for home
use / transmission
 Installation equipment to mounting
racks, wiring
 Installation labour
 Solar power farm
 BIPV
 LED
 Solar Battery
Thin Film Approach
Crystalline Silicon (c-Si) Approach
Manufacturing Equipments
Material Manufacturing Services Energy Sales
Ancillary Equipments
Poly-silicon Wafer/Ingot PV Cell PV Module End Use
PV Cell PV Module
PV System Integration End Use
End Use
PV System Integration
New Financing and Partnering1
6
Solar Energy – definition – value chain – Solar PV

7
CSP systems use mirrors to concentrate sunlight onto receivers
and convert it to heat to power traditional steam turbines
 Concentrating solar power (CSP) systems use lenses or mirrors and
tracking systems to focus a large area of sunlight into a small beam
 Concentrated light is then used as a heat source for a conventional
power plant or is concentrated onto photovoltaic surfaces
 Claimed to be better than photovoltaic for large scale (50-200Mw)
power plants, whilst PV applications are much better suited to smaller,
decentralised applications
 Concentrating solar power systems are divided into concentrated
solar thermal (CST) and concentrated photovoltaics (CPV)
Solar Energy – definition – CSP
Concentrating Solar Power (CSP) Definition
Concentrated
solar thermal
(CST)
 Used to produce renewable heat or electricity
(generally, in the latter case, through steam)
 Uses lenses or mirrors and tracking systems
to focus a large area of sunlight into a small
beam
 Concentrated light is then used as heat or as
a heat source for a conventional power plant
(solar thermoelectricity)
Concentrated
photovoltaics
(CPV)
 Employ sunlight concentrated onto
photovoltaic surfaces for the purpose of
electrical power production
 Solar concentrators of all varieties may be
used, and these are often mounted on a solar
tracker in order to keep the focal point upon
the cell as the Sun moves across the sky
Schematic of an Active Concentrating Solar Power System

8
Note: CSP is a new industry, and the roles and actors in the value chain vary significantly by technology and project. In addition, the value chain structure is still evolving; R&D is an integral
part of the value chain and conducted by a single company or by closely related companies; there is significant vertical integration across the five stages of the value chain; CSP is
very new to China and there are very few domestic players (Himin, a key Chinese component provider, is an exception).
8
Concentrating Solar Power (CSP) Value Chain
The CSP value chain includes five stages, but can vary
significantly by technology and project
Source: Center on Global Governance & Competitiveness, company annual reports, individual interviews, and company websites.
Industry Activities:
 Materials include steel,
copper, brass, concrete,
plastic, silica, synthetic oil
and molten salt
 Components include
collectors, mirrors, heat
collection elements,
steam generators, heat
storage and central
controls
 The finished products
including solar technology
and plant development
 Distribution is via
ownership and
operation of the CSP
plant
 The end users are utility
companies
Materials Components
Finished
Products
Distribution End Use
Selected Companies:
 Boeing, Chicago, IL
 3M Company,
 Siemens
 Luz/Solel
 Alanod
 Luz
 Acciona
 Abengoa Solar
 Carrizo Energy
 BrightSource
 Sunray Energy
 Florida Power&Light
 Acciona
 Arizona Public
 Abengoa Solar
 BrightSource
 Southern California
Edison
 Nevada Power Co
 Sierra Pacific Power Co
 Pacific Gas & Electric Co
 Florida Power & Light
 San Diego Gas & Electric
Solar Energy – definition – value chain – CSP

9
Solar water heaters (SWH) technologies transform solar energy into
heat, and are now widely applied worldwide
 Solar heating systems are generally composed of solar thermal
collectors and a fluid system to move the heat from the collector to
its point of usage
 May use electricity for pumping the fluid, and have a reservoir or
tank for heat storage and subsequent use
 May be used to heat water for a wide variety of uses, including
home, business and industrial uses
 Three types of solar thermal water heaters are being widely
applied
Solar Energy – definition – SWH
Solar Thermal Water Heater (SWH) Definition
Formed plastic
collector
 Formed plastic collectors (such as
polypropylene, EPDM or PET plastics) consist
of tubes or formed panels through which water
is circulated and heated by the Sun's radiation
 Often used for extending the swimming season
in swimming pools
Flat plate
collector
 A flat plate collector consists of a thin absorber
sheet (of thermally stable polymers, aluminum,
steel or copper, to which a black or selective
coating is applied) backed by a grid or coil of
fluid tubing and placed in an insulated casing
with a glass or polycarbonate cover
Vacuum tube  Made of a series of modular tubes, mounted in
parallel, whose number can be added to or
reduced as hot water delivery needs change
Schematic of an Active Solar Heating System

10
10
Solar Water Heater (SWH) Value Chain
The Solar Water Heater (SWH) industry is characterized by a highly
fragmented manufacturing base throughout the value chain
Source: Company annual reports, individual interviews, and company websites
Industry Activities:
 Materials include
aluminum, steel, copper,
fibreglass, plastic,
polyutherane foam
 Components include
collectors, storage
tanks, valves and
central pumps and
controls
 The finished products,
including add-on product
manufacturers
 Independent sales
representatives
 Wholesale distributors
 Retailers
 Builders and developers
 Contractors and
plumbers
 Homeowners
Finished
Products
Selected Companies:
 Consol Changzhou
 Changzhou Flying
Water Heater Co.
 Huayang Solar Energy
 Beijing Tsinghua Solar
Systems
 Sunrain
 Hi-min Solar
 Solahart (Australia)
 Sunshore
 Linuo Paradigma
 Sangle Solar Energy
 Mondial Energy (Canada)
Manufacturing Equipments Building Integration
Given the relatively low technology requirements and barriers to entry for SWH manufacturers,
the industry is extremely fragmented with over 5,000 players – of these, only a few stand out
based on product quality and technological innovation
Solar Energy – definition – value chain – SWH

11
Contents
 Market Context
11

12
Solar energy’s potential application in China exceeds existing
government targets, with high long-term growth expected
Market Context Overview
Source: XYZ
Market Size
 China has abundant solar resources; two-thirds of the country enjoys over 2,200 radiation hours annually, and 70% of the
country has solar resources in excess of 500KJ/square cm/year (in contrast, solar market leader Germany averages only
400KJ/square cm/year
 The Chinese government has set a solar target of 5% total energy consumption by 2050; however, the potential of solar
energy is much greater
Energy
Security
 Provides an alternative electricity and heat energy source, suitable for both utility scale (electricity supplied through the
grid) and as a distributed energy solution
 Could reduce China’s dependency on world energy imports, and inherent vulnerability to world energy price fluctuations
Limitless
Renewable
 Provides a limitless natural resource that is not depleted like conventional energy sources of oil and coal
Socio-
economics
 The development of the solar energy industry may generate millions of direct and indirect employment opportunities and
social and economic benefits
 In China, over 150,000 jobs are linked to the Solar Photovoltaic (PV) sector - over RMB150 billion revenue is generated
per year with a CAGR over 20%, with significant ongoing growth potential
Carbon
Regulation
 Various forms of carbon regulations facilitating “cleaner” energy industries are gradually taking place
 In March 2009 MOF and MOHURD announced a RMB20/Watt subsidy for Building Integrated PV (BIPV) applications
D
R
I
V
E
R
S
Resources
Solar Energy - market context - overview
Renewable Energy Final Deliverables

13
China is abundant in solar resources and leads in manufacturing,
but solar energy remains a government-driven market
Solar Energy – market context – overview
 Solar Photovoltaics (PV):
– China is the world’s largest PV cell/module producer, but domestic installation levels are
comparatively small
– China’s government is seeking to stimulate domestic market demand
– China’s abundant solar resources, economic considerations and national energy strategies make
Solar PV an attractive market
 Solar Water Heater (SWH):
– China is the world’s largest market for solar thermal water heaters, accounting for almost two-thirds of
total production and installation capacity
– Even though solar thermal water heaters are widely utilized in China, average usage per capita is still
very low
 Concentrating Solar Power (CSP) Market:
– Dormant since the early 1990s, solar CSP technology is undergoing a re-evaluation in the solar-rich
areas of the world
– The U.S., Germany and Spain are leaders in CSP projects, with China still at an early stage of
development
Solar Energy – market context – overview
Market Context Overview
Source: XYZ.

14
Solar Energy – market context – background
14
Solar energy accounts for a tiny fraction of both
the Chinese and global energy mix
Primary Energy Mix – China Versus Global
Primary Energy Mix in the World (2006)
Source: European Photovoltaic Industry Association; China Solar PV Report – 2007; China Environmental Science Press.
The International Energy Association has indicated that solar power generation currently
accounts for less than 1% of the world’s total electricity output, but that the proportion is
expected to increase to approximately 20% by 2040
Primary Energy Mix in China (2006)

15
China is abundant in solar resources and has great potential
for solar energy development
15
Solar Energy Resources in China
Solar Energy – market context – resources
China lies between 20N and 40N, and
the North and West are almost
completely cloudless
Two-thirds of the country enjoys over
2,200 radiation hours annually
70% of the country has solar resources
in excess of 500KJ/square cm/year (by
comparison, Germany and Japan
average only 400KJ/square cm/year
and 450KJ/square cm/year respectively)
Source: Chinese Academy of Meteorological Science, http://www.cams.cma.gov.cn.
Distribution of Solar Energy Resource in China
Unit: ： MJ/Square Meter

16
16
Solar Photovoltaic
(Solar PV)
Solar Thermal Water
Heater (SWH)
Concentrating Solar
Power (CSP)
 China is the world’s leader in the
solar hot water market and over
95% of the core technology is held
by Chinese companies
 As of 2007, the global capacity of
solar hot water systems was
approximately 154 GW
 China is ranked number one
worldwide in PV cell production
 In 2007, China’s PV cell production
was 1189 MW*, which accounted for
approximately 29% of worldwide
installation. By 2008 cell production
capacity was 4GW
 Over 90% of China’s Solar PV cells
and PV modules are exported
 U.S., Germany and Spain are
leaders in this technology
 Chinese companies like Himin have
been investing in R&D
Note: Megawatts - 25 MW solar cell with a conversion rate of 7% can light up 10,000 LED lamps.
Source: XYZ based on China Daily news.
China’s Solar Energy Market – Production and Installation
 China is the world’s largest solar
thermal water heater market; it
installed 70 GW and 107GW of
capacity in 2006 and 2007
respectively, or about two-thirds of
the world’s total capacity
 China’s long term goal is 210GW
by 2020
 China’s domestic demand accounts
for only 4% of total global PV
installations
 Government targets are seeking to
stimulate domestic demand – 2010
target is 300MW, and 2020 1,800MW
target will likely be upgraded to over
10,000MW
 Estimated that worldwide installed
CSP capacity will reach 6,400 MW in
2012
 Development is still at an early stage
in China, with a stronger PV
manufacturing base
Supply
Demand
China has the world’s largest solar PV and SWH production
capacity, but domestic demand is still under-developed
Solar Energy - market context – market size

17
Solar Energy – market context– growth – solar PV
17
In terms of installed capacity, the global solar PV industry has
grown rapidly with an average annual growth rate over 30%
Global PV Capacity and Installations
Global Cumulative Solar PV Installed Capacity
Source: European Photovoltaic Industry Association.
MW Growth
Rate %
 Global PV capacity is projected to increase to approximately 21.9 GW
by 2010
 Technology improvement and government subsidies also effectively
reduce the cost of solar energy
 Increasing oil and coal prices bring solar energy good opportunities to
expand more market share as an alternative energy source
Cumulative Solar PV Installations by Regional Share (2007)
 China is still a small market for PV systems and
installation with domestic demand accounting for
only 1% of the total market in 2007
0
5,000
10,000
15,000
20,000
25,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2010E
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20
25
30
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40
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18
 In July 2008, Morgan Stanley believed the solar PV industry well insulated against recession, predicting sustained medium-term growth at 27% CAGR: they
have dampened solar PV industry growth forecasts for 2009, but long term outlook remains positive
 Analysts believe that with re-instatement of incremental financing, coupled with lower silicon prices, and driven by new regulations and incentives in US and
China, there is pent-up demand that will be realised with high growth predicted for 2010
 Solarbuzz projects that by 2011 Germany will account for 28-30% of total global market demand while the U.S. will likely account for 16-23% of the total –
Spain’s annual solar installation capacity is predicted to decline rapidly in line with reduced incentive schemes, reflecting a policy-driven market
 Market projections suggest that China will exceed original 2020 target of 1800MW installed capacity – a new target is expected to be announced in excess
of 10,000MW
Due to global solar PV industry troubles analysts have dampened
growth forecasts for 2009, but long term outlook remains positive
18
Annual Global Solar Installation, MW
Source: Solar Buzz 2008, Green World Scenario, CICC, Morgan Stanley; Barclays Capital estimates, www.chinadaily.net
Annual China Solar Installation, MW
South Korea China Rest of world
Germany Spain Japan USA
2007 2008E 2009E Base 2009E Low
2826
4307
6177
4177
Solar Energy– market context – demand forecast – solar PV

19
Solar Energy – market context – size – solar PV
The global solar PV market is predicted to double or triple
2006 revenue of US$ 10 billion within five years
19
Source: Solarbuzz annual world PV Market Review, 2007
Global Solar PV Annual Installation (Volume)
Global Solar PV Annual Revenue (Value)
Unit: MW
Unit: USD in million
Conservative Scenario
7,630
1,744
Optimistic Scenario
CAGR: 24%
10,589
30,463
Global Solar PV Annual Installation (Volume)
Unit: MW
Global Solar PV Annual Revenue (Value)
CAGR: 12%
1,744
10,589
4,177
18,619
Solar PV Market Growth Scenarios – Demand
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2006 2007E 2008E 2009E 2010E 2011E

20
China Solar PV Cumulative Installation (1990 – 2007)
Unit: MW
Annual Installed Capacity Cumulative installed Capacity
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China’s PV installation levels are small even though China’s
PV cell manufacturing sector is the world’s largest
China Solar PV Production and Demand
 In 2007, China’s cumulative solar PV installation reached
100 MW, which accounted for less than 4% of the worldwide
installation capacity
 Dependent on coal consumption and petroleum imports to
meet its energy needs, China is actively providing incentives
to boost solar PV installation
 During the last five years, China’s PV cell production
has increased at between 100%-300%
 In 2007, China’s PV cell production amounted to
1,189 MW accounting for approximately 29% of
worldwide installation, followed by Germany and
Japan
World Solar PV Cell Production (2007)
Unit: MW
Source: European Photovoltaic Industry Association; China Solar PV report 2007; PwC Research.
0
10
20
30
40
50
60
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80
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1990 1995 2000 2002 2004 2005 2006 2007
Solar Energy – market context – size – solar PV
World Total:
9200MW

21
Our Solar PV market context analysis examines market
characteristics by value chain components
The following slides will analyze the key components of the solar PV value chain,
focusing on the following market characteristics:
Solar Energy – market context – solar PV - value chain components
 Historical market size and growth
 Forecasted market size estimates
 Market dynamics
 Market trends
Solar PV Value China Components
Source: XYZ.

22
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2007 2008 2009E 2010E 2011E 2012E
Demand Supply
By late 2008, the polysilicon market experienced
overcapacity and subsequent price erosion
 As a result of polysilicon shortages and high-surging ASP, aggressive capacity expansion occurred during 2006-2008 and
resulted in excess output
 It is estimated that there will be around 30% overcapacity during 2009 resulting in decreasing prices
 When the cost per KW of solar PV generated electricity falls below the average retail price of grid supplied electricity, the
industry will likely absorb this excess capacity
2007-2010 Highly Pure Polysilicon Production in China
Unit: MT
Polysilicon Production
Source: Hongyuan Securities Co.,Ltd.; XYZ.
Worldwide Polysilicon Demand and Production
Unit: MT
Solar Energy – market context – solar PV - value chain component – poly-silicon
1,130
4,110
10,000
30,000
0
5000
10000
15000
20000
25000
30000
35000
2007 2008 2009(E) 2010(E)

23
Despite poly-silicon prices falling more than predicted, global
solar demand growth has been smaller than analysts expected
23
Poly-silicon and PV Wafer Price Outlook
 Precipitated by global financial crisis, poly-silicon prices have dropped
precipitously since 4Q08, matriculating down the solar PV value chain, affecting
cell and module prices
 February 2008 SunTech estimated 10-15% drop in crystalline silicon module
ASPs in 2009 while Deutsche Bank estimated 20%+ drop in ASP
 Elasticity of demand in the near term has been much lower than expected due
to:
- Project financing constraints
- Slower grid electricity price CAGR
 In January 2009 Deutsche Bank forecast 4.6GWp global demand growth in
2009 followed by 6.6GWp in 2010
 As a result there has been demand and supply mismatch
2007 2008 2009E 2010E
Total Capacity (MWp) 13300 19600 28600
C-Si Module Prouction (MWp) 2520 3630 5663 9131
CdteModule Prouction (MWp) 208 498 1100 1590
Amorphous-Si Module Prouction (MWp) 144 323 688 1252
Total Solar Module Prouction (MWp) 2872 4451 7451 11973
Industry utilization (%) 33.5% 38.0% 41.9%
Reduction from DB Q208 forecast (%) 3% 18% 12%
3000 4800 7900
800 1500 2700
3800 6300 10600
Reduction from prioe forecast(%) 2.6% 22.2% 28.3%
-607 -1090 -1613
S&D mismatch(MW)
c-Si Module Sales(MWp)
Thin film Module SalesMWp)
Total solar Module Sales(MWp)
Cell and Module Price Outlook
Supply and Demand Dynamic
Source: Lazard Report, 2008, Suntech Interview in May 2009, DB, PV Industry Looking through the storm, 2009. Feb

24
Rapid capacity expansion is likely to continue driving down
polysilicon solar prices in the near term
Source: XYZ.
Polysilicon Capacity – History and Forecasts
Solar Energy – market context – solar PV - value chain component – dynamic – poly-silicon
Description
2002-2005
Worldwide tight supply
 Silicon supply constraint s were the most important hurdle during this period as the
tight silicon market created significant disadvantages for many players that lacked the
capability to secure feedstock suppliers
 Smaller solar firms found conditions particularly difficult as they tended to be less
successful in obtaining silicon supply , a fact that contributed to lower utilization rates,
lower profit margins and missing growth plan targets
2006-2008
Rapid capacity expansion
 A breakthrough in high quality polysilicon production technology occurred as nearly 40
enterprises developed high quality polysilicon projects
 Over 3000 tons of high quality products were expected in 2008, with production to
reach as high as 20,000 tons by the end of 2009
2009-2010 Forecast
Overcapacity and decreasing ASP
• An oversupply dynamic likely will emerge in 2009 resulting from the rapid expansion of
capacity between 2006 and 2008
• Demand increase from system manufacturers may slow due to the economic downturn
as well as the changing subsidy policies in major PV markets such as Spain and Italy
• The production of polysilicon is forecasted to reach 125,000mt, with 97,000mt destined
for solar energy applications (the realistic demand for polysilicon for solar may only be
83,000 in 2010)

25
As polysilicon accounts for the largest portion of PV module
costs, price erosion will pave the way for downstream integration
Polysilicon Capacity and Production Forecast
Source: Deutsche Bank 2009
 Price Erosion:
- Fundamentally, polysilicon material currently comprises 20-25% of solar PV
system cost, or 40-50% of PV module cost, or 70-80% of PV cell cost, and so
comprises the largest lever for cost reductions
- Historically, polysilicon was available at US$40-50/kg, but rapid growth in the
solar sector resulted in supply constraints that led to poly costs reaching as high
as US$400/kg(spot) and US$150-200/kg(contract) in 2Q08
- As polysilicon oversupply sets in, it is estimated that spot prices will fall about
70% over 3Q08-4Q10F
- Factoring in contracted polysilicon (assuming 50% for the industry buys on
contract basis), it is estimated that blended polysilicon costs will fall by about
57%
 Impact on downstream:
- Adequate polysilicon supply will enable module production to precipitate an
oversupply situation
- Consequently, the present supply shortage will revert to a module overcapacity
dynamic for a few years beginning in 2009
- The oversupply dynamic will initiate a short-term shakeout within the solar PV
industry among public and private companies
- However, consolidation will be a strong long-term positive for the industry as
companies are forced to be more efficient and accelerate the march to grid parity
- Over time, commodity parts of the value chain (modules) will be less attractive
and the return on selling energy under a distributed model will be more attractive
 Impact on business model:
- Critical for solar companies to realign business modules with industry reality
- For solar PV module manufacturers, being low cost is crucial (i.e., Thin Film is
imperative)
- Control the value chain to the end user and energy provisioning at commercial
level will be desired in order to enhance competitiveness
Price Implications on Downstream Integration
An oversupply dynamic in
the poly-silicon would lead to
falling prices which would
matriculate down the value
chain, resulting in an
industry shake-out

26
China was the world’s largest producer of PV cells in 2007
Regional and National Shares of Global PV Cell Production (2007)
Source: European Photovoltaic Industry Association.
China ranks number one in PV cell production and capacity,
accounting for almost one-third of the world’s total production
PV Market Share by Region/Country
Solar Energy – market context – solar PV - value chain component – size – PV cell

27
 Solar PV cell production capacity increased significantly
 In 2007, China’s solar PV cell production exceeded 1 GW,
and 97.5% of the total output was exported to overseas
markets
 China accounted for 29% of global PV cell production in
2007
The worldwide production of PV cells is predicted
to reach 7.2 GW in 2009
Worldwide Polysilicon Cell Production and Thin Film Cell production
27
Worldwide Annual PV cell Production
Source: Hongyuan Securities Co., Ltd. Report on the development of the Photovoltaic Industry in China (2006-2007).
MW
Global Production of Thin-film PV Cells
MW Growth Rate%
 Estimated that thin-film market share will reach about 20% of the total
production of PV cells by 2010 and around 30% by 2015
 Among thin-film PV technologies, amorphous silicon (a-Si) development
is most significant in terms of technology maturity, production,
application scales and installation capacity (approximately 5.2% of the
total market in 2007)
 Compared with the average conversion rate of crystalline silicon- based
(c-Si) PV cell (15-20%), thin-film PV cell’s average conversion rate (5-
10%) still needs to be improved greatly
Growth Rate %
4100
5535
7195
11243
14053
8994
35
30
25
25
25
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2007 2008 2009E 2010E 2011E 2012E
0
5
10
15
20
25
30
35
40
0
50
100
150
200
250
300
350
400
2002 2003 2004 2005 2006 2007
0
10
20
30
40
50
60
70
80
90
Solar Energy – market context – solar PV - value chain component – size – PV cell

28
4.45
4.5
4.55
4.6
4.65
4.7
4.75
4.8
4.85
4.9
4.95
USA Europe
Solar PV modules are expected to decrease in price during 2009,
partly due to the new passive policy adopted by EU countries
 Since demand for the major solar energy products
produced in China is driven by exports, U.S. and European
retail prices are more relevant to domestic suppliers
 JP Morgan estimates that by 2009 module ASPs will likely
decline by 14-26%, depending largely on the terms of a
new Spanish subsidy
 In 2007, China’s PV solar module production exceeded
1.7GW, while the total generation capacity installed was
much less (only 100MW in 2007 and 120-130MW in 2008)
 The solar PV domestic market will scale up continuously:
- Solar PV rooftop system demonstration projects are
being implemented
- BIPV has been installed at commercial buildings,
Olympic facilities and the Beijing Airport
- RMB20/watt subsidy from government
Source: Solarbuzz, 2008.
Retail Price Per Watt Peak
Unit USA:USD/Watt; Europe: Euro/Watt
2006 2007
2005 2008 2009
Solar PV Module Dynamics
Solar Energy – market context – solar PV - value chain component – trend – PV module

29
Different Solar PV modules compete primarily for lowest LCOE, but
high conversion efficiencies are also a consideration
Source: DB, PV Industry Looking through the storm, 2009. Feb, Company Data
Cost Curves of c-Si and CdTe Modules
Crystalline
Silicon
(c-Si)
Thin Film
 Highest power per area
 Requires less racking
and support material
 Fewer modules mean
lower shipping costs
 Large number of module
choices
 Greater inverter flexibility
 Output less affected by
temperature
 Less manufacturing
materials used
 Lower cost per watt
 Good aesthetics for building-
integrated applications
 Faster energy payback
 Non-glass substrates
possible
 More shade tolerant
× High cost per watt
× High temperatures
impact output more
× Low shade tolerance
× Individual cell visibility
× Lower power per area
× Takes months to stabilize
output
× Twice as much rack material
required
× More modules mean higher
shipping costs
× Lower series-string capacity
× Less suitable for battery
charging
× Requires more combiner
boxes
 Limited inverter flexibility
 Fewer module manufacturer
choices
Deutsche Bank’s
View:
 c-Si cannot challenge
CdTe at the module
level: although the
gap will narrow, CdTe
module cost and ASP
leadership will not be
effectively challenged
by average
conversion efficiency
c-Si modules, even as
c-Si module ASP
begins to approach
$2.00/Wp and
installed system
approach $4.00/Wp
 High efficiency c-Si
will be the only
volume technology
able to compete with
CdTe in terms of
Levelized Cost Of
Electricity (LCOE)
C-Si module market is likely to become a commodity market with
gross margins under 15% compared with 40% for CdTe Modules

In the near-term CdTe Thin Film technology holds a significant
LCOE advantage over c-Si
Poly Ingot Wafter Cell Module Total
Industry Average US
$/Watt produced
0.7 0.2 0.25 0.35 0.45 1.95
Target for 2011 US
$/Watt produced
0.39 0.15 0.2 0.2 0.3 1.24
Poly-Si Price $/KG (Processing Cost $1.25)
1.25 50 60 70 100 125 150 175 200
6.60 1.58 1.65 1.71 1.91 2.08 2.24 2.41 2.57
6.70 1.59 1.65 1.72 1.92 2.09 2.26 2.42 2.59
6.80 1.59 1.66 1.73 1.93 2.10 2.27 2.44 2.61
6.90 1.60 1.66 1.73 1.94 2.11 2.29 2.46 2.63
7.00 1.60 1.67 1.74 1.95 2.13 2.30 2.48 2.65
7.10 1.61 1.68 1.75 1.96 2.14 2.32 2.49 2.67
7.20 1.61 1.68 1.75 1.97 2.15 2.33 2.51 2.69
7.30 1.62 1.69 1.76 1.98 2.16 2.35 2.53 2.71
7.40 1.62 1.69 1.77 1.99 2.18 2.36 2.55 2.73
 The current cost of PV system installation is $3.20, the direct cost is
$2.25 (including BOS, Inverter, labors and others, excluding land costs)
- according Deutsche Bank, the direct cost could fall to $1.69
Source: 1. DB, PV Industry Looking through the storm, 2009. Feb, Company Data 2. MorganStanley Research, Sempra Energy, FSLR, NREL
30
LCOE Inputs (2009)
Sub-Assembly Cost Of c-Si, US$/Watt produced
Grams
of
/Wp
13.86 €
LCOE, €/kWh¹
10.86 €
LCOE, €/kWh
$30.00
Fixed O&M ($/MWh)
$0.00
Variable O&M ($/MWh)
O&M Costs
$3.17
Total Capital Cost ($/W)
20%
Gross Margin (%)
$0.55
Labor & Design ($/W)
$0.75
BOS ($/W)
$0.25
Inventer ($/W)
$1.00
Moduel ($/W)
Captial Costs
30%
Federal Incentive (%, total capital cost)
Subsidies
3%
Inflation Rate (%)
35%
Tax Rate (%)
9.28%
Discount Rate/WACC (%)
20%
Loan Term (Yrs)
8%
Debt Required Return (%)
12%
Equity Required Return (%)
40%
Debt Financing(%)
60%
Equity Financing (%)
Financing
23.2
1st year generation (GWhs)
20%
Capacity Factor (%)
0.80%
Output Degradation (%, starting year 2)
20
Lifetime
12,600
DC Rating (KW)
System
Assumptions
13.86 €
LCOE, €/kWh¹
10.86 €
LCOE, €/kWh
$30.00
Fixed O&M ($/MWh)
$0.00
Variable O&M ($/MWh)
O&M Costs
$3.17
Total Capital Cost ($/W)
20%
Gross Margin (%)
$0.55
Labor & Design ($/W)
$0.75
BOS ($/W)
$0.25
Inventer ($/W)
$1.00
Moduel ($/W)
Captial Costs
30%
Federal Incentive (%, total capital cost)
Subsidies
3%
Inflation Rate (%)
35%
Tax Rate (%)
9.28%
Discount Rate/WACC (%)
20%
Loan Term (Yrs)
8%
Debt Required Return (%)
12%
Equity Required Return (%)
40%
Debt Financing(%)
60%
Equity Financing (%)
Financing
23.2
1st year generation (GWhs)
20%
Capacity Factor (%)
0.80%
Output Degradation (%, starting year 2)
20
Lifetime
12,600
DC Rating (KW)
System
Assumptions

However, new Thin Film technologies and core equipments are
dominated by American, Japanese and European companies
Source: Company data and public reported
Leading Thin Film Companies
Company Year Founded Location Technology Production
Equipment
Cell Efficiency Module
Efficiency
Costs/Wp Capacity
2008
Expansion Goal Finances
Solyndra Jan .2005 USA CICG on glass
cylinders
Proprietary
development
12-14% 7.6-10% $3.5 to $4 per
Wp
110 MW 520 MW in next
few years
Investors includes argonaut Private
Equity, ARTIS, CMEA VC, Masdar
NanoSolar May 2002 USA Printed CIGS cells Proprietary
development
9-14.50% N/A The goal is 35¢
per W
*0MW 430 MW Benchmark, MDV VC, etc, $420
million
Solibro End of 2006 Germany CIGS on glass Proprietary
development
16% 8-12% N/A 30MW 45 MW; 90MW Qcell
Miasole 2003 USA CIGS on steel Proprietary
development
10.20% 50MW KPCB
GlobalSolar
Energy
1996 USA CIGS on Flexible
materials
10.20% N/A 65MW 85MW Privately held
Wurth Solar 1999 Germany CIS 13% N/A 30MW 30MW Wholly-owned subsidiary of the
Würth Group
Flexcell 2000 Switzerla
nd
Amorphous silicon Proprietary
development
10.90% 3% 60 euro cents
(76.2¢)
25MW A second line
with another
25MW
Qcell
Nesxpower
tech
2005 Taiwan Amorphous-Si ULVAC 7% N/A 25MW 100MW in 2010 Founded by UMC Group
Kaneka 1998 Japan Micromorphous silicon Proprietary
development
9-10% $1 per W after
2010
40MW (plus
30 MW a-si)
240MW by
2011
Ommon stock traded: Tokyo, Osaka
Nagoya
Sontor 2007 Germany Micromorphous silicon Applied
Films
Up to 12% 7-8% N/A 25MW 120MW Qcell
Inventux Tech 2007 Germany Micromorphous silicon Oerlikon Solar AG 8.50% Goal:<€1($1.27
)
33MW 100MW by
2010
Financial secure until 2010,
Oerlikon, BEOS, Berlin Partner
AVA Solar 2007 USA Cadmium telluride Proprietary
development
10.50%
(Expected)
N/A Less than $1
per W
Pilot line with
3MW
200MW in 2009 $150 million DCM, GLG Partners,
Tchnology Partner, Invus etc.
Calyxo 2005 Germany Cadmium telluride Proprietary
development
Up to 16% 6% N/A 25MW A second line
with 60MW
Qcell
CSG 1995 as Pacific
Solar
Germany Crystalline thin-film
silicon on glass
Proprietary
development
10.40% 6.10% N/A 20MW No plans Qcell
First Solar 1999 USA Cadmium telluride 10.90% $.93/watt 735MW 1.1 GW end of
2009
NASDAQ listed
31

Chinese players have invested in a-Si R&D and manufacturing,
but lag in CdTe and CIGS Thin Film production and development
Source: company data and public report and interview
Company Year
Founded
Location Technology Production Equipment Recent progress Expansion
Goal
Finances
Shenzhen
ChuangYi
1993 Shenzhen
Guangdong
a-Si Domestic or Proprietary
development
5-6%; 50MW-100MW;
produce 25MW in 2007
1000MW by
2013
Intel 20M M S
JinTaiYang a-Si,
uc-Si/tandem
Domestic or Proprietary
development
6-7%; 200MW around IDGVC
PuLe 2006 Bengbu Anhui a-Si Domestic or Proprietary
development
12-18MW; 5-6% 200MW by
2012
SAIF not Close
XinAo 1995 Langfang Hebei uc-Si/tandem AMAT (5.72m²) Small batch production,
they will produce at the end
of this month
500MW by
2010
IFC 15M M S
ZhengTai 2006 Hangzhou
Zhejiang
uc-Si/tandem Oerlikon (1.43m²) Equipment just arrived and
in the process of debugging
380MW by
2010
50M M S? SaiBoLe
investment together
Hangzhou
LongYan
2008 Hangzhou
Zhejiang
CdTe Domestic or Proprietary
development
In the process of debugging
of 30CM*30CM
Lenovo, morning
star,GSR; 10M M S
around
Hangzhou
ShengTong
2008 Hangzhou
Zhejiang
CdTe Domestic or Proprietary
development
Just set up, complete the
debugging at the end of the
year
Private enterprises in
Zhejiang province. 4M M
S
University of
SiChuan
Chengdu Sichuan CdTe Domestic or Proprietary
development
In the process of debugging
0.3MW of 60CM*30CM
Wuxi ShangDe
Suzhou FST 2006 Suzhou Jiangsu CIGS Optorun & Proprietary
development
10CM already complete,
13% change frequency and
in the process of debugging
of 3MW
40MW by
2010
8.6M M S; individual
investor
NUVO Solar 2006 Chengdu Sichuan CIGS Proprietary development 9%, in the process of 3-
5MW
2.7M M S; in financing
Thin Film Companies in China
32

CIGS technology is currently untested at commercial scale, but
has low LCOE and high conversion efficiency potential
 There are more than 30 companies which use their
own technical roadmap, coating, printing, vapor
deposition or sputtering and different bottom material
 The laboratory data has shown 19.9% conversion
efficiency, but only Global Solar, Wurth, Showa Shell
have industrial-scale production
 Venture capital has backed it excessively, keen to find
the next First Solar: Nano Solar, 420mms
 They want to control the cost to within $1Watt
 It is believed that AMAT have just established a group
which research and develop the equipment of CIGS
 Technology
- Control of multi-layer coating
- Unavailable of the standard process and tools
- Home made equipment
 Cost
- The output of Indium was only 510 tons in 2007,
84% of it used to the coating of display and 13%
used to do the additives and catalysts
- At present, all the costs are estimated
 Large-scale Production
- Compared with the production of the a-si and
CdTe, this process is much more complex
At present, whilst a-Si companies are looking at ramping production, key
players in CIGS development are still looking at how to industrialize the
technology, and very few Chinese companies are actively engaged
Status Challenges
33
Source: Deutsche Bank Solar Photovoltaic Industry report, Jan 2009

34
The overall positioning of Chinese companies upstream in the
value chain leave them vulnerable to current industry shake-out
Chinese companies are disproportionately positioned
upstream in supply chain, leaving many vulnerable:
 Chinese companies are major producers of solar-grade
polysilicon, as this graph demonstrates
 The oversupply dynamic has significant impact
downstream on other Chinese solar companies:
 China has around 140 solar-grade crystalline silicon wafer
makers who are expected to be adversely affected
 China was the world’s largest producer of solar PV cells in
2007, accounting for 29% of production
 Lazard estimate a 30% drop in module ASPs this year1
,
Deutsche Bank believe module market will become a
commodity market
 It is estimated that between 50% and 80% of Chinese
module manufacturers have closed their factories since
February 2009
 Overall Chinese solar companies are suffering:
Chinese solar stocks plummeted from $23/share in Sept
2008 to $3.45/share March 2009, compared to an
equivalent fall of 45% in US stocks2
Oversupply of Polysilicon is Expected Across 2009
Source: Hongyuan Securities Co.,Ltd.; XYZ.
1 Lazard Solar report Jan 2009, 2 Barclays Solar Report, May 2009
2007-2010 Highly Pure Polysilicon Production in China
Unit: MT
1,130
4,110
10,000
30,000
0
5000
10000
15000
20000
25000
30000
35000
2007 2008 2009(E) 2010(E)
Poly-silicon
Wafer
Cell
Module
Downstream
 Polysilicon oversupply dynamic: As a result of
polysilicon shortages and high-surging ASP, aggressive
capacity expansion occurred during 2006-08 and
resulted in excess output and falling prices
 Excess capacity expected to be absorbed when the
cost per KW of solar PV generated electricity falls below
the average retail price of grid supplied electricity
Solar Energy – market context – solar PV - value chain component – China overview

Evaluation of China’s Solar Production Capacity and Inhibitors
35
Production resource
Manufacturing
equipment
Financing
Technological
comparisons
Suitable companies
China’s competitive position
 Quantity vs. quality: China a world leader in production capacity, but
questions exist about the quality of production
 Oversupply dynamic: position of Chinese companies upstream in supply chain
is negative
 Government incentives in the form of feed-in tariffs can act as an annuity
stream for project investors, similar to interest earned on a government bond –
although investors faith in government commitment is central
 Cell conversion rates are lower on average than companies in other countries.
Concerns over silicon quality and development of new high technologies
 New market entrant in high technologies like CdTe and CIGS, and also a new
market entrant to CSP and BIPV technologies
 Position in value stream leans heavily towards cell-level and upstream
 Chinese companies are net manufacturers: 2007 cell production represented
29% global installations, but installed capacity was only 4%1
 Major Chinese firms focus on a-Si and c-Si – leaders in new technologies
 Human resource shortfall in downstream parts of value chain like installation
Source: XYZ
1 China Greentech Analysis based on China Daily news
Overall, China’s solar industry lacks some competitive
advantages, especially in new technology areas
Solar Energy – market context – solar PV – China’s competitive overview

36
The Global Concentrated Solar Power (CSP) industry
is expected to grow rapidly in the next few years
Global CSP market
Solar Energy – market context – size – CPS
Global CSP Pipeline by Country
Unit: MW
 Dormant since the early 1990s, solar CSP
technology is being re-evaluated in the solar-rich
areas of the world
 2007 was a pivotal year for solar CSP
development as both Acciona and Abengoa
inaugurated 65 MW of parabolic trough and 11
MW of central receiver technologies respectively
 There are over 5,800 MW of solar CSP projects in
the planning stages worldwide with Spain and
California taking the lead – although only
financially sound players are moving forwards
with projects
 With close to 130 projects under development in
Spain and over 50 projects in the U.S., the CSP
sector may require as much as US$80 billion of
investment over the next decade
Source: Emerging Energy Research.
Cannot edit since we
do not have the data.
MangoStrategy
colors should be
used.
Note: More specificity to source info?

37
 Funding requirements: With close to 130 projects under development in Spain and over 50 projects
in the U.S., the CSP sector will demand as much as US$80 billion of investment over the next
decade
 Global CSP Players altering their strategies amidst the backdrop of a troubled global
economy: Financially sound players are moving forward with their 3,000 MW of planned projects as
emerging players revaluate their strategies to utilize the US$420 million in capital raised in 2008
 Development in Spain is key to industry success as U.S. market remains questionable: Spain’s
130-Project 5,700MW pipeline is taking on greater significance amidst the U.S. economic downturn
and the lagging U.S. permitting process
 CSP supply chain build-out creates opportunity for new entrants: A new group of CSP
technology providers are emerging to meet the 23 GW global capacity that has been proposed
Global Concentrated Solar Power (CSP) implementers are
continuing cautiously amidst the global economic downturn
Key Trends in Global Concentrated Solar Power (CSP) Development
Solar Energy – market context – market dynamics – CPS
Source: Emerging Energy Research.

38
The Building-Integrated Photovoltaics (“BIPV”) market
is forecasted to expand rapidly in the future
 According to Frost & Sullivan market research, the
emerging building-integrated photovoltaic (BIPV) market
sales amounted to US$199 million in 2007, representing
an annual growth rate of 33%
 According to the NanoMarkets report "Building Integrated
Photovoltaics Markets 2008”:
- By 2013, there will be an installed capacity of
10.8GW peak of BIPV, of which 4.6GW peak will
come from Europe and 3.7 GW peak will come from
the U.S.
- BIPV market is estimated to exceed US$4 billion in
revenues by 2013 and surpass US$8 billion in 2015
- About 7 GW peak of total BIPV capacity by 2013 will
be from residential applications
- Rooftop installations will continue to dominate the
market
- Facade BIPV will reach 1.1 GW peak in five years
Solar Energy – market context – Solar PV – trend – BIPV
Cost Structure for Large Commercial
BIPV Installation
Source: Frost & Sullivan Market Research; NanoMarket Report “Building Integrated Photovoltaic Markets 2008”; United Solar.
BIPV Historical Growth – Future Market Size and Cost Structure

6.4
13.4
15
18
23.4
2000 2004 2005 2006 2007
39
Chinese companies account for two-thirds of SWH global
production, and dominate leading technologies
China Solar Thermal Water Heater (SWH) Production
39
China Solar Water Heater Production (2000-2007)
Unit: square meters in million
Source: National Development and Reform Commission’s (NDRC) comments; XYZ.
 China is now the number one solar
thermal water heater producer in the
world accounting for over 50% of total
production
 Over 95% of the core technology for
production is held by Chinese
companies
 Some leading firms, such as Huang
Ming, have already improved technology
transfer rates from 35% (the average) to
38% or higher
Solar Energy – market context – size – solar thermal water heater
China Solar Thermal Water Heater Export (2005-
2007)

40
China, as the world largest market for solar thermal water
heaters, also accounts for two-thirds of installed systems
40
Global Solar Thermal Water Heater (SWH) Market
Source: Renewable Energy Policy Network for the 21st Century.
Solar Thermal Water Heater Market Installation
Size by Country (2006)
 Market Demand:
- China accounts for about 65% of world total installed
capacity
- Europe is the second largest market for solar thermal
water heaters with Spain and Germany the most
important individual countries
- Japan’s penetration rate reached its peak in the mid-
1980s with installation of over 110,000 sets
- Other solar rich countries and regions such as Australia
and Brazil show increasing market demand
 Impact of Government Policy on Demand:
- Israel’s penetration rate of solar water heater exceeds
90% with the highest use of one square meter per capita
due to compulsory laws on using solar water heaters
- Since 2000, the usable area of solar water heaters in
Germany has grown rapidly due to subsidies on solar
energy and other beneficial policies for renewable energy
- Spain became the second country (after Israel in 2005)
to regulate the installation of solar hot water systems
- Japan’s growth lags as a result of government policy

41
However, although government targets will be met, average
usage per capita is still much lower than in the EU
China Solar Thermal Water Heater Installation
41
China Solar Thermal Water Heater
Accumulative Installation (2000-2020E)
Unit: Square Meters in million
Source: National Development and Reform Commission’s (NDRC) comments; XYZ; China Custom;
Renewable Energy Policy Network for the 21st Century; People’s Daily Online, 15 April 2009
 As the world largest market for solar thermal water
heaters, China’s total accumulative installation was
over 100 million square meters (m3
) in 2007, an
amount that may reach 150 million m3
in 2010 and
300 million m3
by 2020 if government targets are
met
 However, even though solar thermal water heaters
are widely used in China, the average usage square
per capita is only 0.038 compared to an EU average
of 0.3-0.5
 According to the National Development and Reform
Committee’s Medium-Long Term Plan, China’s
target is to reach a 20%-30% household penetration
rate by 2010, with solar energy consumption to be
over 2% and 5% of the nation’s total energy
consumption in 2010 and 2020 respectively
 Latest figures show Chinese industry meeting
government targets: in 2008, accumulative
installation reached 125 million m3
, and
production capacity reached 40 million m3

42
The overall attractiveness of solar implementation in China is
mostly driven by national energy strategies
Resource
consideratio
ns
Energy
security
consideration
s
Economic
consideration
s
 China lies between
20N and 40N,and the
North and West are
almost completely
cloudless
Cloudless Weather Long Sunshine
Hours
Rich in Solar
resource
Dependency on
Imported Petroleum
Dependency on
Coal
Environment
Protection
Job Creation Value Added Rural Market Potential
China’s Target for Solar Energy
2050 Solar Power
Installation:
1000MW
2010 Solar Power
Installation:
300MW
By 2050, attain 5%
of total electricity
generation
capacity
Source: National Development and Reform Commission http://www.ndrc.gov.cn; National Energy bureau http://nyj.ndrc.gov.cn; XYZ and individual interviews.
 Two-thirds of the
country enjoys
over 2,200
radiation hours
annually
 70% of territory has
solar resources in
excess of
500KJ/square cm/
year
 Over 150,000 jobs
linked to the sector
 Over RMB150
billion revenue per
year with a CAGR
over 20%
 Suitable for stand-
alone power stations
in rural areas without
easy access to other
traditional energy
sources
 Current high
petroleum import
dependency (over
50%) should
decrease to a
reasonable degree
 Current coal
consumption
dependency (over
70%)
 China’s CO2
emissions account
for 15.1% of the
world’s total, the
largest of any
country
Solar Energy – market context – demand driver

43
China’s solar energy market is expected to expand rapidly in
the next few years, influenced by market and regulatory drivers
Market Context Implications
Solar Energy – market context – implications
43
Market Context and Implications
Solar Energy – market context – implications
 Solar PV: The solar PV market in China is currently driven by government subsidies;
however, significant cost reductions will create price-elastic demand and replace
subsidies as the main market driver
 Solar Thermal Water Heaters: The lower than average usage per capita of solar
thermal water heaters in China implies that there is still large room left for market
participants
 CSP: Improving technologies create more opportunities in CSP markets which also
results in a high demand for investment in the market
 BIPV: As a new technology in the solar PV industry, BIPV may contribute to the creation
of a dynamic new market
Source: XYZ. 1. Solar Technology, Asia Pacific, 24 Nov 2008
“The solar industry is entering a new era. The main demand driver so far has been government subsidies. We expect significant cost
reductions will set the stage for price-elastic demand creation that will replace subsidies as the main driver”1

44
Contents
 Market Context
 Technologies Innovation and Alternative Solutions
44

45
45
Incentives and privileges have been allotted by the Chinese
government to boost China's solar industry
Overview
 Given that solar energy is one of China’s key renewable energy sources, ambitious targets
have been established:
- The national targets for solar PV of 300MW by 2010 and 1.8 GW by 2020 are currently being revised upwards
– the new 2020 target is likely to exceed 10,000 MW
- Existing SWH uptake targets of 150 and 300 million square meters by 2010 and 2020 respectively may be re-
examined as China is expecting to beat targets – some estimates expect 800 million square meters by 20301
- If the two proposed Gigawatt-sized solar power plants located in the western plateau provinces of Qinghai and
Yunnan are completed, China will have the world’s largest solar power stations
 A number of regulatory agencies oversee China’s solar energy market:
- National Development and Reform Commission (“NDRC”)
- Ministry of Environment Protection (“MEP”)
- Ministry of Commerce and Ministry of Science & Technology (“MST”)
 A long awaited “Measurement of Financial Subsidy for Photovoltaic Building Construction” was
recently announced and is expected to substantially boost the solar power industry
Solar Energy – regulatory environment – overview
Source: National Development and Reform Commission http://www.ndrc.gov.cn; XYZ. 1. http://www.unep.org/PDF/ourplanet/2008/dec/en/OP-2008-12-en-ARTICLE3.pdf

National
46
Institutional Arrangements for Renewable Energy
Numerous regulatory agencies are involved in
the management of China’s renewable energy resources
Source: XYZ
Government organized bodies
Grid Companies China General Certification Center (CGC)
State Council
(SC)
Urban Construction
Commission
(UCC)
Local Price
Bureaus
(PBs)
National
People’s Congress
National Development
and Reform
Commission (NDRC)
Sub-national
Ministry of Housing & Rural-
Urban Development (MOHRUD)
Ministry of Science
and Technology
(MOST)
Environmental
Protection
Bureaus (EPBs)
Ministry of Environment
Protection (MEP)
Price Bureau
(PB)
Ministry of Finance
(MOF)
State Electricity Regulatory
Commission (SERC)
Local Bureau of
Finance
(BF)
Provincial
Government
Direct oversight
Indirect oversight
Chinese Wind Energy Association (CWEA)
Provincial Offices of
the State
Administration of
Taxation
Photovoltaic Subcommittee of Chinese Renewable Energy Society (CRES)
Ministry of Land and
Resources (MOLR)
Ministry of Agriculture (MOA)
National
Energy
Bureau
Solar Energy – regulatory environment – regulatory entities

47
As the largest emitter of carbon dioxide worldwide, China
has established targets to reduce its coal consumption
Energy Consumption Targets Related to the Solar Energy Industry
Source: a. “China Passes Renewable Energy Law,” RenewableEnergyWorld.com, http://www.renewableenergyworld.com/rea/news/story?id=23531; b. Ivan Lee and Evan Li, Global
Equity Research: Climate Change in China, Lehman Brothers, 2008.
Solar Energy – regulatory environment – targets
Use Renewable Energy Sources
The Chinese government envisions that 10%
and 15% of China’s total energy needs will be
met by renewable energy by 2010 and 2020a
National Energy
Consumption
Goals
Laws and Regulations Enacted to Support These Targets Include:b
• The Renewable Energy Law
• Medium and Long-Term Development Plan for Renewable Energy (2004-2010)
• Medium and Long-Term Energy Conservation Plan (2004-2010)
• National Promotion Plan for the Use of Solar Energy
• Measures of Financial Subsidy for Photovoltaic Building Construction
• National Climate Change Program
• Program of Action for Sustainable Development
Energy Efficiency
Regulations have been set to reduce energy
consumption per GDP by 20% by 2010b

48
Effective January 1, 2006, the objectives of the law are:
• Develop and utilize renewable energy
• Improve the energy structure
• Diversify energy supplies
• Safeguard energy security
• Protect the environment
• Realize the sustainable development of the economy
The general provisions of the law extend to:
• Resource Survey and Development Plan
• Industry Guidance and Technology Support
• Promotion and Application
• Price Management and Fee Sharing
• Economic Incentives and Supervisory Measures
• Legal Responsibilities
Medium and Long-Term Development Plans and National Promotion Plan
Measures and Programs
The Renewable Energy Law seeks to have 15% of China’s
energy mix by 2020 be comprised of renewable energy
The Renewable Energy Law
Constitution of PRC
Solar Energy – regulatory environment – policies and incentives
Source: The Renewable Energy Law – The People’s Republic of China document, January 1, 2006.

49
Provisions of the Renewable Energy Law display the
government’s support of the renewable energy industry
49
Source: The Renewable Energy Law – The People’s Republic of China document, January 1, 2006.
Solar Energy – regulatory environment – regulations and incentives
Investment Pricing Rural Area Planning
Financial institutions may offer preferential
loans with financial interest subsidies to
renewable energy development and
utilization projects
The grid power price of renewable energy
power generation projects shall be
determined by the price authorities from the
State Council
Energy authorities of various local
governments above the county level shall –
on the basis of local economic and social
development requirements and ecological
protection and health needs – prepare
renewable energy development plans for
rural areas to promote biomass energy,
household solar, small-scale wind energy
and small-scale hydraulic energy use
The government will establish a renewable
energy development fund to support
research, development and promotion of
renewable energy
The excess costs associated with the
purchase of renewable power (compared to
the purchase of power generated by
conventional sources) will be factored into
the selling price
Encouragement and support for the
development and utilization of renewable
energy in rural areas is stressed
The government will grant tax benefits to
projects listed in the renewable energy
industrial development guidance catalog
Grid connection expenses paid by grid
enterprises for the purchase of renewable
power and other reasonable expenses may
be included in grid enterprise power
transmission costs and recouped from the
selling price
Governments above the county level shall
provide financial support for renewable
energy utilization projects in rural areas

50
Medium and Long Term Development Plans and National Promotion Plan
The Medium and Long-Term Development Plan is aimed
at increasing the use of renewable energy
Medium and Long-Term Development Plan For Renewable Energy (2004-2020)
 Establish sustainable and stable market demand by means of favorable price policies, Mandated Market
Share (MMS) policies, government investment, and concession programs
 Improve the market environment by formulating regulations that encourage the use of renewable energy
 The renewable power tariff and cost-sharing policies are based on renewable energy development and
sound economic principles
 Increase fiscal inputs and tax incentives to activities related to research and development of renewable
energy
 Accelerate technology improvement and industry development through the integration of various
renewable energy technology resources, the improvement of the technology and industry service
systems, speeding up of human resource development, and increasing all aspects of technical
innovation capabilities and service levels
Constitution of PRC
1
Source: Ivan Lee and Evan Li, Global Equity Research: Climate Change in China, Lehman Brothers, 2008.

51
The Energy Conservation Plan supports China’s goal of
reducing energy consumption per capita by 20% by 2010
Medium and Long-Term Energy Conservation Plan (2004-2020)
 The law is comprised of the following steps:
–Assess the current situation with respect to energy utilization in China
–Create tasks for energy conservation
–Prepare the way forward for energy conservation, principles and objectives
–Formulate key energy conservation projects
–Implement measures
 Encourages the utilization of different types of renewable energy in various industries such as solar
power
 Designed to monitor the energy utilization efficiency using advanced countries as a model
 Geared toward reducing the annual emission of sulfur dioxide and other harmful substances that are
catalysts for greenhouse gases and environmental pollution
 Positioned to stimulate a sustainable, rapid and sound development of the national economy
Constitution of PRC
2
Source: “China Medium and Long Term Energy Conservation Plan,” World Resources Institute, http://projects.wri.org/sd-pams-database/china/medium-and-long-term-energy-conservation-plan.

52
The National Promotion Plan for the Use of Solar Energy
provides guidance to China’s solar energy industry
National Promotion Plan for the Use of Solar Energy
 Section 1:
Promote the application of solar power utilization technologies via mandatory policy measures
 Section 2:
Promote the use of solar power applications
 Section 3:
Strengthen the use of solar thermal management
 Section 4:
Establish and improve the use of solar thermal technology and promote economic development by issuing incentive
policies
 Section 5:
Match projects with subsidies based on several conditions that aim to promote efficiency and effectiveness in the sector
 Section 6:
For 2009, the subsidy will be 20 RMB/Watt with specific criteria to be adjusted based on the integrity of construction and
the degree of technical sophistication of photovoltaic projects
Constitution of PRC
3
Source: Jeff Osborne, “New Subsidy Announced - Can The Chinese Government Prevent The Solar Industry From Seeing Red?,” Thomas Weisel Partners, March 26, 2009.

53
The program is being supported by the Chinese Renewable Energy Fund
Constitution of PRC
Introduced by the Ministry of Finance and the Ministry of Construction:
 Section 3: Subsidies supporting projects should meet the following
conditions:
- Solar photovoltaic products installed capacity for single
projects must be not less than 50kWp
- Sc-Si products must be more than 16%, the efficiency of
polisilicon products must be more than 14%, and the
efficiency of non-crystalline silicon PV products must be more
than 6%
- The projects that combine and integrate solar electricity PV
components and buildings will be prioritized
- Grid-connected solar photovoltaic building projects will be
prioritized
- Building projects related to schools, hospitals, government
offices and other public utilities will be prioritized
 Section 6: Subsidy will be 20 RMB/Watt in 2009
 China formulated policies to substantially decrease its greenhouse gas
emissions in order to help mitigate climate change
 Some of these policies and measures are related to the solar power industry:
- Continuous support for the development and utilization of wind, solar,
geothermal and tidal energy, including popularizing family-use
photovoltaic power systems or small-scale photovoltaic power plants in
remote areas; disseminating integrated solar energy buildings, solar
energy-based hot water supply, space heating and cooling pilot projects
in urban areas and popularizing household solar water heaters, solar
greenhouses and solar stoves in rural areas
- Prioritize the development of low-cost and scale exploitation and
utilization technologies, including the development of large-scale wind-
power generation equipment, high-performance and low-cost PV battery
technology, solar thermal power generation, integrated solar energy
building technology, and biomass and geothermal energy development
and utilization technologies
Source: “China’s National Climate Change Programme,” Embassy of the People’s Republic of China in the Islamic Republic of Pakistan, http://pk.china-embassy.org/eng/ep/t326796.htm .
1 National Climate Change Program
2
Measurement of Financial Subsidy for
Photovoltaic Building Construction
The Chinese Renewable Energy Fund aims to promote
the efficiency of the domestic solar industry

54
State policies and regulations also contribute to the development
of the U.S., Japanese and European PV industry
United States Japan France Spain Germany Italy
The Investment Tax
Credit (ITC) policy is
a tax refund of up to
30% of the total
investment (or up to
US$2,000 for
residential solar
energy projects)
Expired at the end of
2008
In 2008, a subsidy for
PV systems installed
(>50kw) in small to
mid-sized enterprises
designed to provide
one-third of the total
investment costs
was implemented;
a subsidy for home
use PV systems of
up to 70000 JPY(ca.
US$715) was also
established
The fixed rate price
of PV electricity was
modified: the uniform
fixed price 0.45
EUR/W (the price
before 2009: BIPV
0.55 EUR/W, roof
project and power
generation station
0.45 EUR/W)
Fixed rate of price
reduced to as much
as roof project
equivalent (0.33
EUR/W, ground
project 0.29 EUR/W)
Gradual price
deduction for small-
sized, large sized
and ground PV
project to as much as
10% in 2009- 2010,
and 9% in 2011-2012
Fixed price rate cut
down: 2% in 2009
and 2010
The fixed rate price
will be discussed and
modified in 2010
Since 2009, ITC
policy extensions of
eight years for
commercial PV
projects and two
year extensions for
residential PV
projects are allowed;
the upper limit of
US$2,000 can be
exceeded
Since April 2008, the
subsidy to
school/hospital/rail
station PV projects
has been increased
to one half of the
total investment
Selected Photovoltaic – International Regulations
Solar Energy – regulatory environment – international
Source: www.chinadialogue.net; www.docin.com; www.china-solarenergy.com; www.renewableenergyworld.com; www.mysolarshop.co.uk; www.austrade.gov.au; XYZ.

55
Several countries have issued tariffs to regulate the circulation
of concentrated solar power products
United States Spain Italy
The government gives preferential tax
treatment to concentrated solar power users
A guaranteed tariff of 0.27 EUR per kWh A guaranteed tariff of 0.27 EUR per kWh
Concentrated Solar Power – International Regulations
Solar Energy – CSP – regulatory environment – international
Source: S. Sakakura,“Sunshine project of the Japanese Government,” The Smithsonian/NASA Astrophysics Data System, http://adsabs.harvard.edu/abs/1975ente.proc..105S.

56
China is implementing regulations and various value-added
incentives in order to guide the solar power industry
Regulatory Environment
 Subsidies and incentives are granted by the Chinese government to certain companies
that enter the domestic solar power industry market
 Various strategic plans and programs have been established by the Chinese government
to regulate and monitor movement in the solar power industry
 Policies and measures should give full play to the solar power industry and use economic,
legal and necessary administrative means to actively promote the use of solar thermal
technology and the development of solar power industries
 Other tax, tariff and fiscal incentives will probably be needed to drive the green
transformation of China’s solar power industry further
 Aside from China, other countries also stimulate their solar industry by establishing
regulations and fiscal policies
Solar Energy – regulatory environment – implications
Source: XYZ.

57
Source: 1 NDRC press converence, March 2009, 2 www.chinadaily.com, 3 XYZ
Breakdown of ¥4 Trillion Stimulus Package1
Analysis of Package
Overview of Commitment2
Of the ¥4 Trillion ($586 million) package only
¥210 billion ($30 billion) is directly earmerked
for green investments
However, HSBC estimate that $221 billion
has green features, including grid and
infrastructure investments, making it the
largest green stimulus package in the world
America’s green stimulus package stands at
only $112 billion, although the economy is 1.5
times larger
Qualitative Considerations3
As with the Renewable Energy Law, the
effectiveness of measures will depend on
ensuring sufficient detail and transparency to
remove uncertainties and improve spending
quality
The finalized package will be locked in later
this year and is expected to favor SOEs,
limiting opportunities for foreign companies
Infrastructure
1.5 trillion yuan
Rural civilian projects
1.5 trillion yuan
Civilian projects
400 billion yuan
Sustainable environment
210 billion yuan
Technology advances/
industry restructuring
370 billion yuan
Post-earthquake reconstruction
1 trillion yuan
Social welfare
150 billion yuan
38%
9% 10%
5%
9%
25%
4%
The NDRC stimulus package is the largest green stimulus in the
world, but it’s effectiveness is dependent on the detail
Solar Energy – regulatory environment – stimulus package

58
Contents
 Market Context
58

59
Internationally standards have been set for installation of both
on- and off-grid solar PV systems
Solar Energy – standards – solar PV - international
Source: www.saiglobal.com; www.mbipv.net.my; www.sunsecond.net
International Standards on Solar PV
AS
4777.1-
2005
Grid connection of energy
systems via inverters Part 1:
Installation requirement
AS
4777.2-
2005
Inverter requirements
AS
4777.3-
2005 :
Grid protection requirements
MS 1837-
2005 :
Installation of Grid-Connected
Photovoltaic (PV) System
AS4509.1-
1999 :
Stand-alone power systems
Part 1. Safety requirements
AS4509.2-
2002 :
Part 2. System Design
Guideline
AS4509.3-
1999 :
Part 3. Installation and
Maintenance
AS4086.2 -
1997 :
Secondary batteries for use
with stand-alone power
systems
National Electrical Code
(NEC) 2005 Article 690
NF C57-
310-1988
Direct transformation of Solar
energy into electrical energy;
Photovoltaic pumping system
NF
P50-
503-
1985
Solar Energy
Solar collectors Methods
of measurement of
optical characteristics
NF
C57-
100-
1986
Direct transformation of
solar energy into
electrical energy,
terrestrial photovoltaic
modules
Stand Alone PV Systems (Off-grid systems)
Installation of Grid Connect PV Systems Module

60
China has established key standards designed
to manage Solar PV sector components
GB/T19064-2003 Solar home system specifications and test procedures
GB/T2680-1994 Determination of light transmittance, solar direct transmittance, total solar
energy transmittance and ultraviolet transmittance for glass in building and
related glazing factors
NF C57-326-1996 Covers photovoltaic devices and requirements for reference solar modules
Solar Energy – standards – Solar PV
Domestic Solar PV Standards
Source: www.bjzhxy.com; www.51zbz.com; www.sunsecon.net; www.standardcn.com;

61
Industry standards have been structured to ensure
the quality of solar-related products
Domestic Solar PV Standards – Panels and Generating Systems
Solar power – standards
 GB2297 － 89 :Terminology of solar photovoltaic energy system
 GB2296 － 2001: Designation method of solar cells (PV device)
 GB12632 － 90: General specification of single silicon solar cells
 GB6497 － 1986: The general rules of terrestrial solar cell calibration
 GB6495 － 86: Measurement procedures for electrical characteristics of
terrestrial solar cells
 IEEE 1262-1995: Recommended practice for qualification of photovoltaic
(PV) modules
 GB/T 14007-92: General specification for terrestrial-use solar cell
modules
 GB/T 14009 － 92: Measurement procedures for parameters of solar cell
modules
 GB 9535-1988: Environmental test methods for terrestrial silicon solar cell
module
 GB/T 14008-92: General specification for sea-use solar cell modules
 GB11011 － 89: General rules for measurements of electrical
characteristics of amorphous silicon solar cells
 GB/T6495.1 － 1996: PV devices Part 1:Measurement of PV current-voltage
characteristics
 GB/T6495.2 － 1996: Photovoltaic devices Part 2: Requirements for reference
solar cells
 GB/T6495.3 － 1996 : Photovoltaic devices Part 3:Measurement principles for
terrestrial PV solar devices with reference spectral irradiance data
 GB/T6495.4 － 1996: Procedures for temperature and irradiance corrections to
measured I-V characteristics of crystalline silicon photovoltaic devices
 SJ/T11127-1997: Overvoltage protection for PV power generating systems
 GB/T9535-1998: Crystalline silicon terrestrial PV modules-design qualification
and type approval
 GB/T18210-2000: Crystalline silicon photovoltaic （ PV ） array ─ On-site
measurement of I-V characteristics
 GB/T18479-2001: Terrestrial photovoltaic(PV)power generating systems
 GB/T19064-2003: Solar home system specifications and test procedures
Source: www.standardcn.com; www.bylm.net; www.geoenv.cn; www.elecm.com

62
These standards cover a wide array of operating
systems, including batteries
Domestic Solar PV Standards - Batteries
Solar power – standards
 GB 13337.1-91 Stationary acid spray-proof lead-acid batteries Technical conditions
 GB 5008.1-85 Lead-acid starter batteries Technical requirements and methods of test
 GB 9368-88 Nickel-cadmium alkaline secondary cells
 GB/T14162-93 Sampling procedures and tables for product quality audit (Apply to inspection by attributes for
nonconformities per hundred units)
Source: www.gb99.cn; www.chinaeeb.gov.cn.

63
Although it is a new technology in China, the Concentrating
Solar Power (CSP) sector is also being standardized
NF P50-530-2-2003 Thermal solar systems and components - Solar collectors - Part 2:
test methods
NF C57-323-1994 Photovoltaic devices. Part 3: measurement principles for terrestrial
photovoltaic (PV) solar devices with reference spectral irradiance data
NF C57-322-1994 Photovoltaic devices. Part 2: requirements for reference solar cells
Solar Energy – standards – domestic - CSP
Domestic Concentrating Solar Energy Standards
Source: www.sunsecond.net

64
Leading countries in the solar energy industry have also
developed standards for solar water heating (SWH)
AS/NZS 2712:2002 Solar and heat pump water heaters – design and construction
CAN/CSA-379.1-88 Solar domestic hot water systems
E 1056-85 Standard practice for installation and service of solar domestic
water heating systems for one- and two-family dwellings
CNS 12555 Solar water heater for dwellings
NF P50-601-1/A1-1998
DTU 65.12.
Building works - plain solar collector installations using heat
transfer liquid (used for heating and the production of domestic
hot water)
NF P50-601-2-1993
DTU 65-12.
Building works, private contracts, plain solar collectors (uses
heat transfer liquid for heating and production of hot water)
JIS A 4111: 1997 Solar water heater for dwellings
Solar Energy – standards – international - SWH
Source: http://www.standards.co.nz; www.egnret.ewg.apec.org; www.astm.org; www.bzcity.net; www.sunsecond.net; www.bzjsw.com
International Standards for Solar Thermal Water Heaters
Note: More specificity to source info?

65
The revision and integration of national standards can help
accommodate the evolving SWH market
GB/T12936.2-1991 Solar energy—Thermal applications—Terminology part 2
GB/T12936.1-1991 Solar energy—Thermal applications—Terminology part 1
Solar Energy – standards – domestic - SWH
Domestic Solar Thermal Water Heater Standards
 The solar thermal water heater (SWH) industry is handicapped by decentralized production
and inconsistent product quality
 To ensure the continued growth of China's SWH industry, the government has established a
series of national SWH standards and three national testing centers
 The China General Certification Centre (CGC) has developed the “Golden Sun” product
certification and labelling system in order to:
- Help manufacturers meet explicit and consistent quality requirements and to identify and fix deficiencies
- Improve quality control in order to contribute to the creation of reputable Chinese solar water heating products
and brands
Source: www.86ne.com; www.efluid.com.cn

66
China needs to establish a set of national solar energy standards
in order to support the proper development of the sector
Standards – Implications
Solar power – standards – implications
Note: SWH – Solar Water Heater.
Source: “Standards for Solar Water Heaters Orientation Workshop.” Capacity Building for the Rapid Commercialization of Renewable Energy in China, Beijing September
14th
-15th
2000.
 Although China has developed certain standards for solar water heaters over the course of the last
20 years, these standards have not been developed in a systematic manner
 National standards that need to be urgently developed in the near future include:
– Technical specifications for the design, installation, checking and accepting for solar water heating systems
– Technical specifications for flat type solar water heaters
– Testing methods for the performance of flat type solar water heaters
– Testing methods for the reliable and enduring ability of vacuum tube solar water heaters
– Testing methods for the performance of vacuum tube solar water heaters
– Technical specifications for vacuum tube solar water heaters
– Testing methods for the quality and safety requirements of solar water heater components (mainly water tanks)
 China should also consider the establishment of a national quality testing and inspection center
which is fair, impartial and independent

67
Contents
 Market Context
67

68
C-Si PV technologies compete with Thin Film based on cost per
watt and conversion efficiencies under different conditions
Source: Erika Weliczko, “Solar-Electric Options: Crystalline vs. Thin-Film,” Home power website, October/November 2008, http://www.homepower.com/view/?
file=HP127_pg98_Weliczko.
Solar Energy – technology and innovation – solar PV
Crystalline Silicon Versus Thin Film
Crystalline Silicon (c-Si) Thin Film
Advantages
 Highest power per area
 Requires less racking and support material
 Fewer modules mean lower shipping costs
 Large number of module choices
 Greater inverter flexibility
 Output less affected by temperature
 Less manufacturing materials used
 Lower cost per watt
 Good aesthetics for building-integrated
applications
 Faster energy payback
 Non-glass substrates possible
 More shade tolerant
Disadvantages
 High cost per watt
 High temperatures impact output more
 Low shade tolerance
 Individual cell visibility
 Lower power per area
 Takes months to stabilize output
 Twice as much rack material required
 More modules mean higher shipping costs
 Lower series-string capacity
 Less suitable for battery charging
 Requires more combiner boxes
 Limited inverter flexibility
 Fewer module manufacturer choices

69
Solar Energy – technology and innovation – solar PV
Polysilicon cells are far more efficient and cost effective
compared with other classes of crystalline silicon cells
Source: “Solar Panels,” Planetary power website http://www.planetarypower.com.au/solar_panels.htm.
Polycrystalline Versus Monocrystalline
Polycrystalline
(Polysilicon)
Monocrystalline
(Monosilicon)
Application
Most common (and cheapest) application Typically used in telecommunications applications
In use for over 20 years
Efficiency
Conversion efficiency of sunlight to electricity is
12-12.5%, meaning that one square meter of
panels exposed to the full sun will generate
120W-125W of electricity
Conversion efficiency of sunlight to electricity is
similar to the efficiency levels of polycrystalline cells
Price
Retails at between US$8.50-9.50 per watt Retails at between US$10.00-11.00 per watt
Selected Companies
BP SX (formerly Solarex), Sharp and Kyocera BP and Siemens

70
As dependence on silicon is gradually reduced over time,
PV retail prices will tend to decrease as well
Price Decreasing Trend of Solar Energy Cells
300
240
200
180 170 160
150
12
7.5
8
8.5
9
10
11
0
50
100
150
200
250
300
350
2004 2005 2006 2007 2008 E2009 E2010
0
2
4
6
8
10
12
14
Silicon consumption(g/wp) wafer thickness(um)
Less Silicon Dependency of Solar Cell Manufacturers
USD/Wp
 In a market characterized by low-level concentration rates, the intense competition among solar cell manufacturers
inevitably results in price erosion
 Some leading manufacturers implemented technology innovations in order to improve the efficiency rate of wafers
and reduce their thickness, actions which greatly reduced the cost of silicon and the attendant risks from
silicon/wafer supply variations
 The reduction in the use of silicon raw material in solar cell manufacturing will likely enhance the downstream
bargaining power of manufacturers and also increase their profit margins
Solar Energy – technology innovation and alternative solutions – drivers
Source: Sino-link Securities Co., Ltd.

71
Advantages of Various Solar PV Technologies
71
Polysilicon Wafer/Ignot PV Cell
PV Module PV System &
Installation
Amorphous
•Proven technology
•Flexible substrate
CIGS
•No degradation
•Highest efficiency
•Flexible substrate
CdTe
• Low production cost
Crystalline Silicon
 High module efficiency
 Low BOS cost
 No degradation
Source: NanoWin Technology Co.,Ltd
Different Thin Film PV technologies are emerging as serious
competitors within the solar energy industry
Solar Energy – technology innovation and alternative solutions – Thin Film
Thin Film
 Low manufacturing cost
 Higher accumulated electricity generation
 Lower $/KWh costs
 Attractive physical appearance
 Light weight modules
 Potential production cost of US$1/watt
Raw Materials
 Copper
 Indium
 Gallium
 Selenium
Glass
Material
CIGS powder onto
sputtering target
E.g. CIGS
(pictured)
Thin Film Cell
CIGS Solar Cell
E.g. Nanowin 12%
CIGS Solar Module

72
Thin Film technology is less reliant on silicon than its
crystalline silicon competition
Description Pros & Cons
Amorphous
silicon (a-Si),
 A Si PV cells can be used with glass (or other materials as
substrates)
 The use of glass as a substrate for conventional glass walls
with plated membrane is used for making PV curtain walls
Most developed Thin Film technology to date
Can achieve further development by combining the stable
high efficiency of Si technology with the simpler and cheaper
large area deposition technology of amorphous silicon
Cadmium
telluride
(CdTe)
 Utilizes long flat mirrors at different angles that focus sunlight
on one or more pipes containing heat-collecting fluid
High efficiency
Easier to deposit and more suitable for large-scale
production
× Toxicity (still being debated)
Copper-
indium-
gallium-
diselenide
(CIGS)
 Made by depositing several layers of metal compounds on
semi-conductive films (with a thickness of about 2-3 microns)
 CIGS has demonstrated the highest laboratory efficiency
rates
 Stable performance
 Non-polluting
 High anti-radiation capacity
 Long service life
 Thin Film PV uses Thin Film coating technologies similar to those used for putting metallic and transparent coatings
on plastics and glass for food processing, architectural glass, mirrors, eyewear, etc.
 A temporary shortage of silicon has given the Thin Film sector an opportunity to increase its market share
 The European Photovoltaic Industry Association expects Thin Film applications to represent approximately 20% of
total PV cell production by 2010
Source: “Solar Panels,” NanoWin Technology Co.,Ltd., http://www.planetarypower.com.au/solar_panels.htm.

73
Cadmium telluride (CdTe) will define Thin Film module
production volumes over the near-term
73
 Value Proposition:
– An excellent semiconductor for solar cells because its band-gap of 1.4 electron-
volts is matched nearly perfectly to the solar spectrum
– The device structure also includes a very thin layer of cadmium sulfide that
allows most sunlight to pass through to the CdTe layer
– Current research is geared towards:
 Boosting efficiencies by, among other things, exploring innovative
transparent conducting oxides that allow more light into the cell to be
absorbed and that more efficiently collect the electrical current generated by
the cell
 Studying mechanisms such as grain boundaries that can limit the voltage of
the cell
 Understanding the degradation that some CdTe devices exhibit at contacts
and then redesigning devices to minimize this phenomenon
 Designing module packages that minimize any outdoor exposure to moisture
 Engaging aggressively in both indoor and outdoor cell and module stress
testing (e.g., tests for thin-film modules in hot and humid climates)
 Commercialization:
– NREL currently holds the world-record conversion efficiency for CdTe of 16.5%
Description
 Utilizes long flat mirrors at
different angles in order to focus
sunlight on one or more pipes
containing heat-collecting fluid
which are mounted above
mirrors
Selected Actors
 First Solar (U.S.)
 PrimeStar (U.S.)
 AVA (U.S.)
 Sichuan Apollo Solar Science &
Technology Co., Ltd.
 Sichuan Xinju Mineral Resource
Development Co.
Source: “Solar Panels,” Planetary power website, http://www.planetarypower.com.au/solar_panels.htm.

74
Amorphous silicon (a-Si) is expected to establish a presence in the
market given the strong backing of several major companies
China's Solar Power Industry Fact Book
– Amorphous silicon is full of natural defects, but said defects do not affect the
overall characteristics of the material too drastically
 Improving the stability and conversion efficiency of a-Si modules in actual
use (in a detrimental phenomenon called the Staebler-Wronski effect, the
conversion efficiency of an a-Si module decreases when the module is
first exposed to sunlight)
 Reducing the capital equipment costs for manufacturing a-Si panels by
improved manufacturing processes that include increasing the rates of
depositing material
 Improving module-packaging designs to make them more resilient in
outdoor environments and less susceptible to glass breakage or moisture
ingress
 Developing new module designs for building-integrated applications
– Amorphous silicon is expanding its market share as a result of increasing
efficiencies, proven manufacturability, and innovative products
 Cost-Benefit Analysis:
– With an efficiency of sunlight to electricity rate of 6.3% (about half that of
polycrystalline or monocrystalline panels), an array of amorphous panels will
require about twice as much roof space as an array with a similar rating using
other types of panels, thereby presenting a challenge when the amount of
unobstructed roof space is limited
Description
 A Si PV cells can be used with
glass (or other materials) as
substrates
 The use of glass as a substrate
for conventional glass walls with
plated membrane is used for
making PV curtain walls
Selected Actors
 Sharp
 Applied
 Unisolar (retails at US$10.00
per watt)
 China Solar Energy Holdings
Ltd. (has a thin-film panel turn-
key production line)
 Sinonor Corporation – Hsichu,
Taiwan, 3MW
 Tianjin Jinneng Solar Cell Co.
Ltd. (produces a-Si, multi-
junction, glass or SS substrate)
Source: “Solar Panels,” Planetary power website, http://www.planetarypower.com.au/solar_panels.htm.

75
Copper-Indium-Gallium-diSelenide (CIGS) has great potential,
but very little is currently being produced
– After two decades of R&D and with prototype modules reaching efficiencies
greater than 11%, CIGS is being introduced to the market
– CIGS is also enjoying success in the laboratory, with cell efficiencies climbing to
a world-record rating of 19.2%
 Pushing efficiencies even higher by exploring the chemistry and physics of
the junction formation and by examining concepts to allow more of the high-
energy parts of the solar spectrum to reach the absorber layer
 Dropping costs and facilitating the transition to commercial production by
increasing the yield of CIS modules, a stage which requires increasing the
percentage of modules and cells that make it intact through the
manufacturing process
 Decreasing manufacturing complexity and cost and improving module
packaging
- Production volume was only 5MW in 2006
- Production capacity is estimated to reach 213MW by end of 2009
 Cost-Benefit Analysis:
- A production cost US$1/watt was achieved by Nanowin Technology Co.Ltd
(although CIGS technology is untested at commercial scale)
Description
 CIGS is made by depositing
several layers of metal
compounds on semi-conductive
film (with a thickness of about 2-
3 microns)
Selected Actors
 International Solar Electric
Technology
 GSF GroupSat Solar
 Nanowin Technology
Source: Sun & Wind Energy

76
Thin Film manufacturing capacity is expected to increase to about
4GW in 2010, close to one-third of total PV production capacity
Source: Street Research
Thin Film Manufacturing Capacity
Announced 2007 Manufacturing Capacity
Announced Expected Manufacturing Capacity in 2010

77
Improvements in solar cell technology are aimed at reducing
manufacturing costs and increasing overall efficiency
Description
First Solar
(2007)
Produced 200 MW of CdTe solar cells making it
the fifth largest producer of solar cells in 2007 and
the first ever to reach the top 10 from production of
second generation technologies alone
Wurth
Solar
(2007)
Commercialized its CIS technology in 2007
producing 15 MW in the process
Honda
Soltec Co.,
Ltd.,
(2008)
Began to commercialize its CIGS base solar panel
in 2008
Nanosolar
(2007-
2008)
Commercialized its CIGS technology in 2007 and
reached a production capacity of 430 MW for 2008
in the U.S. and Germany
 Third generation technologies aim to enhance
the poor electrical performance of second
generation (thin-film) technologies while
maintaining very low production costs
 Current research is targeting conversion
efficiencies of 30-60% while retaining low cost
materials and manufacturing techniques, a
move that should allow producers to exceed
the theoretical solar conversion efficiency
limits for a single energy threshold material of
31% under 1 sun illumination and 40.8%
under maximal concentration of sunlight
 In 2007 CdTe production represented 4.7% of
total market share, thin-film silicon 5.2% and
CIGS 0.5%
 While there is a trend among major
manufacturers towards implementing second
generation technologies, commercialization of
these technologies has proven difficult
Second and Third Generation Solar Cell Development
Source: Company Annual Reports and Presentations; XYZ.

78
Each of the four CSP technologies have relative advantages
and risks in various areas of application
Note: CSP – Concentrating Solar Power.
Source: XYZ.
Description Pros and Cons
Parabolic
Trough
Parabolic Trough power plants consist of large
parallel arrays of parabolic trough solar
collectors which constitute the solar field
Currently the technology with the strongest track record and
cost efficiencies (costs are to US$0.10/kwh or less)
 Heat storage by melted salt and hybridization with gas firing
allows the system to work during the night and cloudy days
Fresnel Mirror
Instead of using trough-shaped mirrors that
track the Sun, Fresnel Mirrors utilize long flat
mirrors at different angles that have the effect
of focusing sunlight on one or more pipes
containing heat-collecting fluid which are
mounted above the mirrors
 Relatively cheap to manufacture
 Easy integration into buildings
 Shaded areas under the mirror provide a suitable environment
for plants
Power Towers
Power towers are towers surrounded by a
large array of heliostats (mirrors that track the
sun and reflect its rays onto the receiver at the
top of the tower)
 Higher conversion efficiency
 Heat storage by melted salt and hybridization with gas firing
allows the system to work during the night and cloudy days
× Lack of a commercial track record
× High financial risks
Dish/Stirling-
engine
systems and
concentrating
PV(CPV)
Solar dish systems consist of a dish-shaped
concentrator (like a satellite dish) that reflects
solar radiation onto a receiver mounted at the
focal point
Higher conversion efficiency
Smaller PV area is needed
× Not well suited to hybridization with gas firing and cannot be
stored by melted salt meaning that its operations are subject to
weather conditions
× Less able to provide dispatchable power
Solar Energy – technology innovation and alternative solutions – CSP

79
Hi-Min has taken the lead in developing CSP technologies for
applications in China
79
 Hi-Min Solar Energy Group Ltd. was the first manufacturer to discover new applications for
CSP infrastructure technologies, beginning R&D into CSP technologies in 20001
 These new technologies/applications have strong advantages over earlier versions:
- The investment and operating costs of Fresnel power generation systems are much lower
- The life span of the system is longer than comparable alternatives
- Maintenance is easier given the absence of moving parts in the collector apparatus
 Hi-Min Solar Energy Group Ltd.’s competitiveness in both thermal water heater
technologies and CSP applications are core advantages that should allow the company to
weather the current economic downturn
Solar Energy – technology innovation and alternative solutions – CSP
Source: XYZ, 1. www.chsel.com/english/news/2009-5-27/110434-1.htm
Hi-Min Solar Energy Group Ltd.

80
 Highly reliable in the long-term with a life span of 20-25 years
 Maintenance-free panels
 Cost-saving for building owners
 No extra space is taken up
 No extra supporting structure is necessary for installation
 The burden on electricity supply can be reduced
 The deterioration level of grid-line network can be reduced
 Conventional building material can be replaced by BIPV
 Can be integrated with the other building systems including protection,
control and operation
 Building Integrated Photovoltaic (BIPV) systems
incorporate solar PV materials (whether
crystalline or thin-film) into the building structure
itself and can integrate with windows, or can be
laminated onto a low-slope industrial roofs
Section 3 – Value Chain
BIPV Advantages
BIPV Sub-Categories
 The most widely installed version to date is a thin-film
cell integrated to a flexible polymer roofing membrane
 Modules shaped like multiple roof tiles
 Solar shingles are modules designed to look and act like
regular shingles, while incorporating a flexible Thin Film
cell
 Modules mounted on exterior faces of buildings can
provide additional weatherproofing or simply be used as
a style element
 (Semi) transparent modules can be used to replace a
number of architectural elements commonly made with
glass or similar materials such as windows and skylights
 Limited cost-down potential
 Low manufacturing yield and higher risk related to product safety and
durability leads to high installation costs
 As modules account for over 50% of system cost, cost-down potential is
limited for both crystalline-based modules and Thin Film modules due to
material price hikes for the former and lower efficiency for the latter
 While cost reductions can be achieved by improvements in efficiency,
optimized design and economies of scale, the potential is quite limited
on the BOS (Balance-of-System) front, especially for thin-film-based
systems given their lower efficiency and operating voltage
 Higher energy generation costs would require higher subsidies to boost
demand
 While Thin Film modules are superior to standard roof mounted systems
in terms of aesthetics and transparency, low efficiency and questionable
scalability are problems
BIPV Disadvantages
Different types of modules can be integrated into various
Building Integrated Photovoltaic (BIPV) applications
Source: XYZ.
BIPV Applications
Solar Energy – technology innovation and alternative solutions – BIPV
Pitched roofs
Flat roofs
Facades
Glazing

81
Various PV technologies are consistently being developed to
stimulate interest in efficient and effective renewable energy
Alternative Solutions and Technologies
Solar Energy – technology and innovation – solar PV implications
81
 Though Crystalline Silicon PV units yield the highest output per area, they also have the
highest cost per watt
 Thin Film PV, on the other hand, has a lower cost per watt but also provides lower power
per area
 With over 90% of the solar industry market share, Crystalline Silicon PV technology is
bound to face intense competition as Thin Film PV emerges as a less silicon-dependent
technology
 Consistent improvements in the PV industry are geared toward reducing manufacturing
costs and heightening overall quality of PV units
 Various CSP technologies provide simple solar structures that can be utilized to fit
potential PV locations wherever they are available
Source: XYZ.

82
Contents
 Market Context
82

83
83
China’s solar energy industry faces a shakeout
among both public and private companies
China’s Solar Energy Sector in Transition
 China’s solar PV production capacity is mainly exported due to the small size of domestic market
demand
 The competitive landscape within China is also undergoing a transition:
- The degree of consolidation is increasing along the value chain of solar PV, with decreasing
profit margins in each sector
- It is estimated that between 50% and 80% of Chinese module manufacturers have closed their
factories since February 2009
- CSP will become increasingly attractive to investors as prices fall with refinements in the
technology and economies of scale
- China’s solar water heater sector is a highly fragmented market
 A wide range of state-owned and private companies, both domestic and foreign, are involved in
China’s solar energy market:
– Many of the largest players in China’s solar energy industry are listed on the Shanghai, Hong
Kong or international stock exchanges
– The manufacturers in different market segments (e.g., solar PV, thermal water heater and CSP)
face various challenges and opportunities
Solar Energy - competition - overview

84
Core components in the Solar PV industry are generally
controlled by companies outside China
Illustrative Global Solar PV Landscape
Source: Clean Tech Overview, Morgan Stanley, 21 July 2008.
Solar Energy – competition – solar PV

85
Several Chinese firms specializing in Solar PV have successfully
listed on international and domestic stock exchanges
Selected
Companies
Listed
Market
Capacity
(2008)
Unit: MW
Polysilicon
Ingot/
Wafer
PV Cell
Module
System
Integration
Application
c-Si
Thin Film
Mono-Si Poly-Si a-Si Cd-Te CIGS BIPV
Suntech NYSE 1000
Renesola AIM 580
Trina NWSE 350
CSI Changsu NAS 1500tons
JASolar NAS 500
Solarfun NAS 360
CEEG NYSE 600
Yingli NYSE 600
LDK NYSE 1000
Solargiga HKSE 2000tons
Topray SHSE 55
Notes: BIPV=building-integrated photovoltaic
Solar PV Competition Landscape
Source: Company Annual Reports and news clips; XYZ.

86
Chinese solar PV companies are generally perceived
as not being technology leaders
Source: Asia Solar, UBS, September 7, 2007.
High Medium Low
Solar PV Companies Leading Technology Sustainable Cost
Competitiveness
Branding Financial Strength Profitability Revenue Growth
REC
Sunpower
LDK
MEMC
Q-Cells
Suntech
Solarworld
Yingli
Trina
Ersol
Renesola
JA Solar
Sino American
Conergy
Evergreen Solar
Motech
E-ton
Canadian Solar
Solarfun
Aleo Solar
Solon
Akeena Solar
Phoneix SS
Solar-Fabrik
Reinecke+Pohl

87
87
Analysis of the relative competitiveness and market size for
sub-sectors of the value chain reveal some clear trends
Competitive Variables Across China’s Solar PV Value Chain
Source: XYZ.
Degree of
fragmentation
Import
Export
Profitability
Historic growth
Polysilicon Wafer/Ingot PV
Cell
PV Module PV System &
Installation
Key Observations
 High entry barriers to upstream
characterized by only a few
silicon suppliers
 Numerous players and markets
with highly dispersed structure
and intense competition
 High quality polysilicon for solar
energy cells is still dependent
on overseas suppliers
 Over 90% of PV
cell/module/system produced in
China are exported to overseas
markets
 Under pressure from
decreasing profit margins, the
degree of consolidation is
increasing along the value
chain
High
Low
1
2
4
3

88
Poly-silicon margins are compressed significantly by oversupply,
a factor that will likely contribute to a decrease in gross margins
Source: XYZ
Challenges and Opportunities for Poly-silicon Suppliers
Solar Energy – competition – solar PV – poly-silicon
Competitive Forces Trends Status Opportunities
Threat of
new entrants
High entry
barriers
 High entry barriers due to the high cost for product line construction and
economies of scale (initial investment for a 1000-ton-capacity facility
exceeds RMB1 billion)
 Downstream firms enter the market in order to avoid further dependency on
silicon supply
 Upstream vertical
integration
 Semi-conductor
polysilicon enter PV
polysilicon production
Threat of
competitors
Overseas
competitors
with incumbent
advantages
 Sophisticated technology ensures high quality production
 Realized economy of scale with production over 2500 tons
 Low unit cost: less than US$30/kg, while most Chinese manufacturers’
average cost per unit exceeds US$50/kg
 China’s polysilicon producers apply less advanced technology which
consumes 2-3 times the energy to produce the same amount of raw
material than overseas competitors do
 Expand capacity
through horizontal
integration
 Technology
improvement
Bargaining power of
suppliers
Tight supply on
raw materials
 The supply of industrial silicon: China’s average annual production of
industrial silicon is 700,000 tons, of which two-thirds is exported to
overseas markets
 Increasing demand from solar energy polysilicon production results in
increasing price
Location selection: close
to silicon resources
Bargaining power of
customers
Excess supply,
price erosion
 Supply (estimated as around 30%) will result in ASP falling from US$400 (in
2008) to US$150 ( early 2009) per ton
 The expected polysilicon price erosion makes cell/module vendors cautious
in placing poly/wafer orders and upstream companies can no longer collect
cash pre-payment to meet their capex needs
Upstream vertical
integration

89
Challenges for ingot/wafer manufacturers include low entry
barriers, historical supply shortages, and price erosion
Source: XYZ
Challenges and Opportunities for Domestic Ingot/Wafer Manufacturers
Solar Energy – competition – solar PV – ingot/wafer
Threat of
new entrants
Low entry
barriers
 Low entry barriers result in numerous players and markets with highly
dispersed market structures
 Intense competition but less sophisticated technology applied
 Unsteady quality
 Profit margin will continuously decrease as more and more silicon makers
and cell makers enter the market
 Heightened
downstream
integration,
 Realization of
advantages in
economies of
scale/more efficient
production
 Increasing market
concentration
Threat of
substitutes
Technique
bottleneck: low
conversion rate
 Thin Film: less dependent on silicon price, with higher cost per unit and less
than 10% of the domestic market
 Technology innovation
 Investment in R&D
Bargaining power of
suppliers
Shortage of
supply
 Shortage of supply during 2005-2008
 Due to the unsophisticated technology of domestic suppliers, the price and
production of silicon wafers are still highly dependent on overseas suppliers
 Downstream integration
by silicon makers
Bargaining power of
customers
Excess supply,
price erosion
 Rapid increasing capacity compared with steady increasing demand from
cell/module makers
 Upstream vertical
integration (including
silicon suppliers) by cell
makers

90
Solar Energy – competition – PV cell
Chinese PV cell manufacturers supply over
35% of the world market
Source: XYZ.
Challenges and Opportunities for PV Cell Manufacturers
Threat of
new entrants
Few barriers to
entry other
than cost and
risk appetite
 Higher profit margins attracted some semi-conductor
firms to transfer to solar silicon cell production
 Decreasing price of polysilicon will continue to reduce
the cost and increase the gross margins of silicon-
based PV cell makers
 Industry shake out and consolidation
Threat of overseas
competitors
Imperative to
retain cost
advantages
 Big firms such as Q-cells use long-term purchasing
agreements to ensure the future cost of silicon since
they can promise considerably larger acquisitions
 The current silicon price is lower than the predicted
long-term future price
 Leverage low labor costs over foreign
competitors
 Upstream integration to grasp the profit
margin on silicon supply side
Threat of substitutes Technique
bottleneck: low
transfer rate
 Thin Film: less dependent on silicon price, with higher
cost per unit, low technology transfer rate as
technical bottleneck
 Improved transfer rate increasingly makes Thin Film
a good alternative to silicon-based techniques
 Technology improvement needed to maintain
the higher transfer rate advantage over
alternative solutions
 Thin-film cell maker can take chances to
become more competitive
Bargaining power of
customers
Oversupply
dynamic
 Oversupply since the 2Q 2008 resulted in the sharply
decreasing price of poly-silicon; the current price is
lower than the predicted long-term future price
 Polysilicon accounts for 70%-80% of the total cost in
cell production meaning that its decreasing price
effectively cuts down costs
 Upstream integration
 Technology innovation to continue reducing
the average amount of silicon used in cell
production

91
China’s production capacity is mainly exported due to
the small size of domestic market demand
Solar Energy – competition – PV Module
Source: XYZ.
Challenges and Opportunities for Domestic Module Manufacturers
Threat of
new entrants
High entry
barriers
 High entry barriers due the high cost of product line
construction and economies of scale
 Less sophisticated technology compared with
overseas incumbents
 High production costs and low efficiency
 Downstream integration initiated by PV cell
makers
Threat of substitutes Technique
bottleneck:
breakthroughs
 Recent advanced technology greatly enhanced the
Thin Film PV module’s conversion rate (the highest
efficiency recorded at 19.5%) and made it more
competitive as an alternative solution available for
commercialization
 The physical characteristics of Thin Film make it
more suitable for BIPV installation
 Time for entering thin-film module sector with
more sophisticated technology
Bargaining power of
suppliers
Shortage of
supply
 Increasing demand for polysilicon due to the release
of expanded capacity
 Upstream integration by module makers
Bargaining power of
customers
Excess
supply/price
erosion
 Slower demand predicted compared with 2007-2008,
due to policy changes in Spain, a major market
 Solar energy sector experienced cuts in subsidies
 Decreasing module prices due to policy changes in
major markets like Spain
 No expectation for a “gold rush” in terms of emerging
market demand
 TBD

92
With a low concentration rate, China’s solar water heater
sector is a highly fragmented market
Solar Energy – competition – solar thermal water heater
Source: XYZ.
Challenges and Opportunities in the Solar Water Heater Sector
Threat of
new entrants
Low entry
barrier
 A large number of entrants rushed into the market during the last decades  Market leaders can
increase their market
share and realize
economies of scale by
horizontal integration
Threat of
substitutes
Sophisticated
markets of
gas/electricity
water heater
 As the first mover, gas water heaters hold the biggest share of
accumulated installed market while electricity water heaters account for
70% of the annual installation in the Chinese market
 Compared with solar water heaters, gas/electricity have advantages on unit
price and adaptability to weather changes, which make them easier to be
applied in most regions of China
 Solar water heaters account for less than 10% of market share in China
Bargaining power of
consumers
Market to be
explored
 Aesthetic considerations became an important hurdle; many apartments
forbid the installation solar water heaters on their roofs
 Supportive policies are
called for to get rid of
the restriction on
installation of solar
water heaters in some
residential areas

93
While there are few domestic companies active in the BIPV
arena, the sector has considerable market potential
BIPV – competition landscape
Source: XYZ.
Challenges and Opportunities in the BIPV Market
Threat of
new entrants
High entry
barriers
 High entry barriers
 Promising market outlook attracted some construction firms to
enter the market
Threat of overseas
competitors
Design
sophistication
 Most Chinese players are less competitive in aesthetic design  Outbound acquisitions or
strategic alliances
Bargaining power of
suppliers
Dependency on
module supply
 As PV modules account for over 50% of the total cost for BIPV,
the sector is sensitive to any fluctuations in module price trends
 Encourage module makers to
add new business on BIPV
Bargaining power of
customers
Policy driven  The regulation published by China's Ministry of Finance provides
a subsidy for BIPV of 20 RMB (about US$2.90) per watt
 The "Measures Regarding Subsidies for Solar BIPV Applications"
contain the following provisions:
1. BIPV applications are eligible for the subsidy
2. No single BIPV project should be less than 50KW
3. Monosilicon BIPV modules should have conversion rates
higher than 16%, multicrystalline modules need a conversion
rate higher than 14% and thin-film BIPV products need to have
a conversion rate higher than 6%
4. Preference for products integrated into the building
5. Preference for grid-connectivity

94
94
Major listed poly-silicon suppliers
Solar Energy – competition – companies – Solar PV – poly-Si
Source: Bloomberg; XYZ
Polysilicon Wafer/Ignot PV
Cell
32.01
PV
Module
PV System &
Installation
Major Polysilicon Suppliers
Selected International Companies Key Multiples
Company
Name
Country Market
Cap
Enterprise
Value
Revenue Net
Income
Price
(Feb 13)
Gross
Margin
Rate
Price/
Earning
EV/
EBITDA
EV/
EBIT
MEMC
ELEC
MATER
US 3,194.0 2,124.3 2,004.5 390.3 14.23 50.13 7.95 6.73 2.49
TOKUYAM
A CORP
JAPAN 1,563.3 2,047.7 3,378.8 207.6 5.67 32.01 7.89 3.65 6.26
MITSUB
MATERIAL
S
JAPAN 3,317.1 11,442.6 18,235.1 816.2 2.59 14.09 5.44 9.18 13.65
WACKER
CHEMIE
AG
GERMANY 4,257.8 4,034.2 4,868.4 543.3 81.64 30.47 6.16 2.83 6.43
Average 3,083.0 4,912.2 7,121.7 489.3 26.0 31.7 6.9 5.6 7.2
Median 3,255.5 3,079.2 4,123.6 466.8 10.0 31.2 7.0 5.2 6.3

95
Polysilicon production capacity in China is predicted
to reach 60,000 metric tons (MT) in 2010
LDK （江西赛维）
6000MT(2009) to 15,000(2010)
Emei （东汽峨嵋）
1500MT(2009)
Xinguang （新光硅业）
6000MT(2010)
Zhongneng （中能光伏）
6000MT(2009) to 15,000(2010)
Shunda （顺大）
1,500 (2009)
Tianhe （天和光能）
10,000MT(2009)
Shennanbo （深南玻）
1500MT(2009) to 5,000(2010)
Mudanjiang （牡丹江）
3,000MT(2010)
Jingxin （益阳晶鑫）
5,000MT(2010)
Zhonggui （洛阳中硅）
2,000MT(2009)
Xuntianyu （迅天宇）
6000MT(2010)
Aixinjia （曲靖爱信多）
10 ， 000MT(2010)
Asian Silicon
2000MT(2010)
Jinzhou Chem （锦化）
1,000MT(2009)
Jinglong （晶龙）
5,000MT(2010)
Source: Company websites and news clips; XYZ.
Silicon Suppliers in China
Solar Energy – competition – Solar PV – key players – Poly-Si

96
Comparable listed companies:
Wafer/Ingot Suppliers
Solar Energy – competition – Key players – Wafer
Source: Bloomberg; XYZ.
Polysilicon
Wafer/Ingot PV
Cell
PV
Module
PV System &
Installation
Major Wafer/Ingot Suppliers
Company
Name
Country Market
Cap
Enterprise
Value
Revenue Net
Income
Price
(Feb 13)
Gross
Margin
Rate
Price/
Earning
EV/
EBITDA
EV/
EBIT
LDK
SOLAR
CO-ADR
CHINA
1,222.7 1,886.4 524.0 144.1 10.81 32.49 3.66 5.31 13.22
SOLARGI
GA
ENERGY
CHINA 338.2 228.2 131.0 37.7 0.20 31.82 2.35 4.06 N/A
JA SOLAR
HOL-ADR
CHINA 505.3 142.4 354.0 52.6 3.01 22.31 68.22 3.29 11.37
Average 688.7 752.3 336.3 78.1 4.7 28.9 24.7 4.2 12.3
Median 505.3 228.2 354.0 52.0 3.0 31.8 3.7 4.1 12.3
Selected Chinese Companies
Note: Fix header to reflect style rules.

97
PV Cell Manufacturers (non-integrated)
Solar Energy – competition – Key players – PV cell
Wafer/Ignot PV
Cell
PV
Module
PV System &
Installation
Single/Multi-sector PV Cell Manufacturers
Single-sector PV Cell Manufacturers (only focus on PV cell manufacturing)
Polysilicon
Company
Name
Country Market
Cap
Enterprise
Value
Revenue Net
Income
Price
(Feb 13)
Gross
Margin
Rate
Price/
Earning
EV/
EBITDA
EV/
EBIT
Q-CELLS SE GERMANY 2,636.2 3,030.2 1,105.8 191.1 23.28 N/A 10.39 9.18 29.58
ERSOL
SOLAR
ENER
GERMANY 1,417.9 1,328.6 206.2 11.2 132.23 N/A 36.68 11.17 21.32
SUNWAYS
AG
GERMANY 32.2 44.8 274.9 1.6 2.78 N/A 21.60 3.88 25.24
SUNTECH
POWE-ADR
CHINA 1,4732.2 2,727.1 1,348.3 171.3 9.57 20.33 7.14 10.91 24.71
MOTECH
INDUSTRIES
TAIWAN 582.4 545.5 458.0 71.8 2.33 18.98 7.59 5.46 24.56
EVERGREE
N SOLAR
U.S. 268.7 465.0 112.0 -84.9 1.63 16.87 N/A 15.60 N/A
Average 1,068.4 1,356.9 584.2 60.3 28.6 18.7 16.7 9.4 25.1
Median 1,000.2 937.1 366.4 41.5 6.2 19.0 10.4 10.0 24.7

98
98
PV Cell Manufacturers (non-integrated)
Solar Energy – competition – Key players – PV cell
Wafer/Ignot PV
Cell
PV
Module
PV System &
Installation
Single/Multi-sector PV Cell Manufacturers
Multi-sector PV Cell Manufacturers (with some core business in other industrial sector such as consumer electrics)
Polysilicon
Company
Name
Country Market
Cap
Enterprise
Value
Revenue Net
Income
Price
(Feb 13)
Gross
Margin
Rate
Price/
Earning
EV/
EBITDA
EV/
EBIT
SHAP CORP JAPAN 8,947.2 13,454.6 37,560.0 1,120.1 8.06 22.09 9.29 4.29 9.89
KYOCERA
CORP
JAPAN 12,110.1 1,328.6 14,181.6 1,178.6 63.30 31.51 10.72 5.46 6.95
SANYO
ELECTRIC
JAPAN 2,798.4 8,541.8 22,175.4 315.4 1.49 15.82 33.39 7.06 9.94
MITSUB ELEC
CORP
JAPAN 9,037.7 13,230.5 44,506.4 1,736.1 4.21 26.98 5.64 4.02 6.34
KANEKA
CORP
JAPAN 1,761.7 2,319.6 5,527.5 206.8 5.03 25.24 11.38 6.03 8.59
Average 6,242.2 8,999.4 24,354.4 812.1 13.9 22.9 17.3 5.7 8.6
Median 5,872.8 8,541.8 22,175.4 717.8 4.6 23.7 11.1 5.7 9.2

99
PV Cell Manufacturers (Integrated)
Solar Energy – competition – Solar PV – key players – PV cell
Wafer/Ignot PV
Cell
PV
Module
PV System &
Installation
PV Cell Manufacturers
Polysilicon
Company
Name
Country Market
Cap
Enterprise
Value
Revenue Net
Income
Price
(Feb 13)
Gross
Margin
Rate
Price/
Earning
EV/
EBITDA
EV/
EBIT
SOLARWORLD
AG
GERMANY 2,485.5 2,336.4 887.8 145.8 22.25 N/A 18.89 5.52 12.13
RENEWABLE
ENERGY
NORWAY
NORWAY 5,300.7 5,718.5 970.4 194.8 10.72 N/A 15.29 11.84 21.74
Average 3,893.1 4,027.4 929.1 170.3 16.5 N/A 17.1 8.7 16.9
Median 3,893.1 4,027.4 929.1 170.3 16.5 N/A 17.1 8.7 16.9

100
Thin Film PV Cell Manufacturers
Solar Energy – competition – Solar PV – key players – Thin Film PV cell
Wafer/Ignot PV
Cell
PV
Module
PV System &
Installation
Thin Film PV Cell Manufacturers
Polysilicon
Company
Name
Country Market
Cap
Enterprise
Value
Revenue Net
Income
Price
(Feb 13)
Gross
Margin
Rate
Price/
Earning
EV/
EBITDA
EV/
EBIT
FIRST SOLAR
INC
U.S. 11,908.9 11,361.2 504.0 158.4 146.86 49.88 43.32 23.94 45.73
RENESOLA
LTD-ADR
CHINA 245.6 N/A N/A N/A 3.62 N/A N/A N/A N/A
Average 6,077.2 11,361.2 504.0 158.4 75.2 49.9 43.3 23.9 45.7
Median 6,077.2 11,361.2 504.0 158.4 75.2 49.9 43.3 23.9 45.7

101
PV Cell Module Manufacturers
Solar Energy – competition – Solar PV – key players – PV Module
Wafer/Ignot PV Cell PV
Module
PV System &
Installation
PV Cell Module Manufacturers
Policilicon
Company
Name
Country Market
Cap
Enterprise
Value
Revenue Net
Income
Price
(Feb 13)
Gross
Margin
Rate
Price/
Earning
EV/
EBITDA
EV/
EBIT
SUNTECH
POWE-ADR
CHINA 1,473.2 2,727.1 1,348.3 171.3 9.57 20.33 7.14 10.91 24.71
TRINA
SOLAR-ADR
CHINA 242.1 541.7 301.8 35.7 8.23 22.41 2.69 4.57 7.79
SOLARFUN
POW-ADR
CHINA 251.3 528.9 328.3 20.3 4.67 16.61 7.51 14.63 17.21
CANADIAN
SOLAR I
CHINA 181.0 263.5 302.8 -0.2 5.08 7.85 2.70 3.75 10.23
CHINA
SUNERG-ADR
CHINA 96.5 209.7 234.9 -4.9 2.44 7.67 61.00 13.64 26.16
YINGLI
GREEN-ADR
CHINA N/A N/A 1,107.1 100.0 N/A 21.58 N/A 5.66 8.23
Average 448.6 854.2 603.9 53.7 6.0 16.1 16.2 8.9 15.7
Median 241.1 528.9 315.6 28.0 5.1 18.5 7.1 8.3 13.7

102
Sichuan Chuantou Energy Company Limited mainly
focuses on electricity and solar energy
Sichuan Chuantou Energy Co. Ltd
 Company history
Sichuan Chuantou was previously known as Sichuan Emei Ferroalloy
(Group) Holdings Ltd
 Company Leadership
Chairman: Mr. Huang Shunfu; CFO: Amy Yi Zhang
 Company Ownership
Listed on Shanghai Stock Exchange in 1993
 Revenue
– 2007: RMB363 million
By business segment:
– Electricity : RMB252 million
– Solar PV: RMB91 million
– Other production and services: RMB20 million
 Growth
– Net Revenue (2006-2007): 8.1%
Company Profile Financial Overview
Source: Sichuan Chuantou Energy Company Limited, Corporate Website.
.
 Primary Product and Service Lines
– Developing, managing and providing hydroelectricity and investing in
electrical power
– Other activities include provision of repair services and car
transportation
– The group also develops automatic transport systems and provides
Internet information servicing of communication items including
software, photoelectron and microelectronics
 Company Geographical Presence
The company operates mainly in Sichuan province
 Principal shareholders
Sichuan Province Investment Group Limited
Business Overview Shareholder Structure
Solar PV – competition – key players profile – Poly-Si supplier

103
Leshan Electric Power Company Limited is China’s first
electricity shareholding enterprise
Leshan Electric Power Co.,Ltd
 Company history
Founded in 1988, Leshan Electric Power Co.,Ltd., which was
established by Leshan Ministry of Finance and nine electric power
companies, is China’s first electricity shareholding enterprise
Chairman: Mr. Liao Zhengquan; Chief Accountant: Sun Zhiyuan
Listed on Shanghai Stock Exchange in 1993
 Revenue
2007: RMB660 million
– Electricity : RMB473 million
– Water supply: RMB41 million
– Gas: RMB97 million
– Coal: RMB19 million
– Hotel services: RMB25 million
– Others: RMB6 million
 Growth
Net Revenue CAGR (2006-2007): 11.5%
Source: Leshan Electric Power Co.,Ltd , Corporate Website.
103
.
– The development, supply and management of electric power
– Production and supply of coal gas, communication equipment and
electrical transmission equipment
– Hotel services, supply of tap water and development of real estate
The business mainly operates in Sichuan province
– Leshan Assets Operation Co.,Ltd
– Sichuan Electricity Power Co.,Ltd
– Meishan Assets Operation Co.,Ltd
Solar PV – competition – key players profile – Poly-Si supplier

104
Suntech Power is a worldwide leader in the design and
manufacture of innovative solar energy solutions
Suntech Power Holdings
 Company history
Founded in 2001, Suntech is one of the largest solar module providers
worldwide
CEO: Dr. Zhengrong Shi (also Chairman), CFO: Amy Yi Zhang
Listed on the New York Stock Exchange (NYSE: STP)
 Revenue
2007:US$1,348 million
– PV modules :US$1,332 million
– PV cells: US$13 million
– PV system integration: US$3 million
 Growth
Net Revenue CAGR (2006-2007): 125%
Source: Suntech Power, Corporate Website.
104
.
– Suntech designs, develops, manufactures, and markets various
photovoltaic (PV) cells and modules to provide electric power for
residential, commercial, industrial, and public utility applications
worldwide
– It offers various monocrystalline and multicrystalline silicon PV cells,
PV modules and a range of BIPV products and systems
– Suntech is the second largest PV cell manufacturer globally, with
over 500MW annual capacity
– The company has five production Sites in Wuxi, Luoyang, Qinghai
Nagano, Japan, and Shanghai (under construction).
 Principal Shareholders
– Directors and executive officers
– D&M Technologies Limited
– FMR LLC
– As of March 25, 2008, approximately 65.5% of the ordinary shares
were held in the U.S.
By geographical segment:
– Europe: US$1,196 million
– U.S.: US$87million
– China: US$26 million
– South Africa: US$1 million
– Japan: US$8 million
– Others:US$30 million
Solar PV – competition – key players profile – PV cell and module manufacturer

105
China Sunergy is a pure-play cell manufacturer
China Sunergy Co., Ltd
 Company history
Commencing business operations in August 2004, China Sunergy is a
leading manufacturer of solar cell products in China as measured by
production capacity. It is also a pure-play cell manufacturer focusing
on the highest value segment of the solar value chain
CEO: Dr. Allen Wang, Chairman: Mr. Tingxiu Lu, CFO: Mr. Kenneth
Luk
Listed on the Nasdaq Stock Market (NASDAQ: CSUN)
 Net Revenue
2008:US$350.9 million
– solar cells :US$333.4 million
– modules: US$10.9 million
– cells processed : US$2.8 million
– Others: US$3.8 million
 Growth
Source: China Sunergy, Corporate Website.
105
.
– China Sunergy Co., Ltd., together with its subsidiaries, engages in
the design, development, manufacture, and marketing of solar cells
in China and overseas
– It manufactures solar cells from silicon wafers utilizing crystalline
silicon solar cell technology to convert sunlight directly into electricity
through a process known as the photovoltaic effect
– Head office: Nanjing, China
– Branch: Munich, Germany
– All directors and executive officers
– Elite Shine Group Limited
– Smooth King Investments Limited
– Brightest Power Holdings Limited
– Exuberance Investment Limited
– PraxCapital Fund II, L.P.
– Luck Great Investments Limited
By Related Party& Non related party:
– Third Parties: US$297.3 million
– Related Parties: US$53.6million

106
Trina Solar Limited is an internationally recognized
manufacturer of mono and multicrystalline PV modules
Trina Solar Limited
 Company history
– Established in 1997, Trina Solar is committed to improving the
competitiveness and efficiency of solar energy and developing a
sustainable PV industry
– CEO: Jifan Gao (also Chairman), CFO: Terry Wang
– Listed on the New York Stock Exchange
 Net Revenue
– 2008: US$831.9 million
– 2007: US$301.8 million
By geographical segment in 2007:
– Europe: US$291.3 million
– China: US$6.4 million
– Mongolia: US$1.5 million
– Others: US$2.6 million
 Growth
– Net Revenue CAGR (2007-2008): 175.6%
Source: Trina Solar Limited, Corporate Website.
106
.
– Trina Solar Limited, through its subsidiary, Changzhou Trina Solar
Energy Co., Ltd., engages in the manufacture and sale of solar
power products primarily in China. The company manufactures
ingots, wafers, and solar cells for use in its solar module production,
provides silicon wafers to toll manufacturers and purchases solar
cells from toll manufacturers
– Trina Solar Limited sells its products to distributors, wholesalers, and
PV system integrators
– Trina Solar's increasingly global presence includes offices in China,
Germany, Spain and the U.S.
– Topower International Limited
– South Great Investment Limited
– Divine Land International Investment
– Sino Base Investment Co., Ltd
– Perseverance International Invetment Limited
– Changzhou Tianhe Investment Co., Ltd
– Changzhou Wujin Nanfang Bearing Co., Ltd
– Wai Tat (Hong Kong) Limited
– Sino Super Investment Limited
– Sun Era Industries Limited

107
Solarfun Power is founded on a strong tradition
in electronic manufacturing
Solarfun Power Holding
 Company history
Established by leading electricity meter manufacturer Lingyang
Electronics in August 2004, Solarfun Power is a leading global
manufacturer of photovoltaic (PV) cells and modules
CEO: Dr. Sven M. Hansen, Chairman: Mr. Yonghua Lu, CFO: Ms. Amy
Liu
Listed on the Nasdaq Stock Market (NASDAQ: SOLF)
 Net Revenue
2008: US$725.4 million
– Photovoltaic modules:US$678 million
– Photovoltaic cells: US$37 million
– PV cells processing: US$0.4 million
– Raw materials:US$10 million
 Growth
Net Revenue CAGR (2007-2008): 106.6%
Source: Solarfun Power, Corporate Website.
107
.
– Solarfun Power Holdings Co., Ltd., through its subsidiaries, engages
in the development, manufacture, and sale of photovoltaic (PV) cells
and PV modules
– It offers monocrystalline and multicrystalline silicon cells and
modules, monocrystalline ingots, and raw materials
– The company sells its products directly and through third party
distributors to solar power system integrators and distributors
Solarfun Power Holdings operates primarily in China, Germany, Spain,
and Italy
– Lingyang Electronics
– Citigroup Venture Capital
– Hony Capital
– Legend Capital
– Good Energies

108
Yingli Green Energy is one of the leading vertically-integrated
PV product manufacturers in China
Yingli Green Energy Holding
 Company history
Founded in 1998, Yingli, through its principal operating subsidiary in
China, Baoding Tianwei Yingli New Energy Resources Co., Ltd.,
designs, manufactures and sells PV modules and designs,
assembles, sells and installs PV systems that are connected to
electricity transmission grids or those that operate on a stand-alone
basis
CEO: Mr. Liansheng Miao (also Chairman), CFO: Mr. Zongwei Li
Listed on the New York Stock Exchange
 Net Revenue
2007: US$556.5 million
– PV modules : US$550.5 million
– PV system: US$0.3 million
– Other: US$5.7 million
 Growth
Net Revenue CAGR (2006-2007): -66.1%
Source: Yingli Green Energy, Corporate Website.
108
.
– Yingli Green Energy Holding Company Limited and its subsidiaries
engage in the design, development, marketing, manufacturing,
installation, and sale of photovoltaic (PV) products
– Its products include PV modules, integrated PV systems,
multicrystalline polysilicon ingots and wafers, and PV cells
– The company sells its PV modules under the Yingli brand name
primarily to installers, PV system integrators, property developers,
distributors, and other value-added resellers
Principally in China, as well as in Europe, particularly the U.K. and
Germany
– Public shareholders
– Financial investors and other Shareholders
– Yingli Power Holding Company Limited (British Virgin Island)
– Europe: US$520.2million
– U.S.: US$5 million
– China: US$8.4 million
– HK: US$14.2 million
– Others:US$ 8.7 million

109
Canadian Solar is a major manufacturer of solar components
Canadian Solar
 Company History
– Founded in Canada in 2001, Canadian Solar Inc. is a vertically-
integrated manufacturer of silicon, ingots, wafers, cells, solar
modules (panels) and custom-designed solar power applications
– CEO: Shawn (Xiaohua) Qu (also Chairman), CFO: Arthur Chien
– Listed on the Nasdaq Stock Market (NASDAQ: CSIQ)
 Net Revenue
2008: US$303 million
 Growth
– Net Revenue CAGR (2007-2008): 344%
Source: Canadian solar, Corporate Website.
109
.
– Products include a range of standard solar modules built to general
specifications for use in various residential, commercial, and
industrial solar power generation systems
– Specialty solar modules and products consist of customized modules
that customers incorporate into their own products, such as solar-
powered bus stop lighting, and complete specialty products such as
solar-powered car battery chargers
– Canadian Solar has successfully established seven wholly-owned
manufacturing subsidiaries in China manufacturing ingots, wafers,
solar cells and solar modules
– All directors and Executive Officers as a Group
– Columbia Wanger Asset Management, L.P
– Europe: US$287million
– Asia: US$13 million
– US: US$3 million

110
ReneSola, Ltd operates upstream in the value chain, focusing
on manufacturing wafers
ReneSola, Ltd
 Company history
Founded in 2003 and based in Jiashan, China, the company is a
leading manufacturer of wafers and one of the fastest growing
companies in the photovoltaic (PV) industry
CEO: Xianshou Li, Chairman: Martin Bloom, CFO: Charles Xiaoshu
Bai
– Listed on the New York Stock Exchange (NYSE: SOL)
– Listed on the New York Stock Exchange (Ticker: SOLA.L)
 Revenue
– 2008: US$670.4 million
– 2007: US$249.9 million
By business segment in 2007:
– Product Sales: US$231.2 million
– Processing Service: US$18.7 million
 Growth
– Net Revenue CAGR (2007-2008): 169.3%
Source: ReneSola, Ltd, Corporate Website.
110
.
– ReneSola, Ltd., along with its subsidiaries, engages in the
development, manufacture, and sale of solar wafers and related
products in China
– It offers silicon ingots and solar wafers, which are processed from
silicon raw materials, including reclaimable silicon raw materials, in
the form of partially-processed and broken wafers, broken solar cells,
pot scrap, silicon powder, ingot tops and tails, and other off-cuts
Subsidiaries across China, the U.S. and Malaysia
– Directors and Executive Officers
– Ruixin Holdings LTD
– Yuncai Holdings LTD
By geographic segments:
– China: US$155 million
– Rest of Asia: US$87million
– U.S.: US$7 million
– Others:US$0.9 million

111
Shenzhen Topray Solar Co., Ltd. is a PV cell, module and solar
related consumer products manufacturer
Shenzhen Topray Sola Co., Ltd.
 Company history
Founded in 2002, Shenzhen Topray Solar Co., Ltd. is a manufacturer
of solar cells, solar panels, solar chargers, solar lights, solar
gardening products and solar power systems
General Manager: Ms. Li Fenli, CFO: Ms. Zhang Hongying
Listed on the Shenzhen Stock Exchange (002218)
 Net Revenue
2008: RMB 294.8 million
– Solar cells: RMB 17.5 million
– Solar power applications/solar power systems: RMB 11.8 million
– Others: RMB 29.3 million
 Growth
Source: Shenzhen Topray Solar, Corporate Website.
111
.
 Primary Products and Service Lines
– Over 95% of Shenzhen Topray Solar’s output is exported and its
current annual production capacity is up to three megawatts, making
it one of the world's highest volume producers
– It is the only company in China that has the ability to produce
amorphous silicon solar cells with 50MW capacity, and mono-
crystalline & poly-crystalline solar cells with 30MW capacity
– Head office: Shenzhen, China
– Branch: Kampala, Uganda; Sichuan, China
– Public shareholders
– Shenzhen AoXin Investment and Development Limited
– Shenzhen He Rui Yuan Investment and Development Limited

112
Solar Energy – competition– CSP
Selected International CSP Companies
CSP will become increasingly attractive to new entrants as prices
fall as a result of technology innovation and economies of scale
Source: CGGC; company annual reports and websites.
Finished
Products
Selected Companies:
Boeing, Chicago, IL
3M Co.
Siemens
Luz/Solel
Alanod
Luz
Acciona
Abengoa Solar
Carrizo Energy
BrightSource
Sunray Energy
Florida Power &
Light
Acciona
Arizona Public
Abengoa Solar
BrightSource
Southern California
Edison
Nevada Power Co.
Sierra Pacific Power Co.
Pacific Gas & Electric Co.
Florida Power & Light
San Diego Gas & Electric
Status Trends Opportunities
 There has been a proliferation of new entrants up
and down the value chain ranging from technology
innovators looking to change the economics of
CSP to investors and IPPs looking to gain first
mover advantages by trying up sites
 The largest owners of wind power plants
globally are emerging as significant players
in the CSP sector
 Wind power plants invest in the CSP
sector

113
There are a wide range of domestic and foreign actors involved
in solar thermal, CSP and BIPV
Source: Company websites; XYZ.
 Ecoo Solar
 Hi-min Solar
 Linuo Paradigma Solar Engergy
 Huayang Solar
Solar Thermal Water Heater
(SWH)
Concentrating Solar Power
(CSP)
Building Integrated PV
(BIPV)
Selected SWH, CSP and BIPV Companies
Solar Energy - competition – companies
 Xinjiang Sun Oasis
 eSolar
 Edison
 Acciona
 Abengoa
 Suntech Power Holdings Co.,
Ltd.
 Giant Vigo
 Johanna Solar Technology
GmbH
 Phoenix Solar AG

114
Contents
 Market Context
114

115
Financing alternatives for solar energy are becoming plentiful as
the industry matures and price points become lower
Financial Investment Overview
 Solar PV and solar thermal have access to various sources of capital while the lack of
capital is still a barrier to entry for CSP
 Investors will look to see that operational, financial and strategic milestones have been met
and will pay premiums for demonstrated high revenue mix and growth, expansion, profit
margin uplift, long-term contracts, production volume, sustainability of feedstock, and
realistic strategies to reach grid parity
 Investors seek vertical integration for several reasons:
– Multiple products allow for multiple margin opportunities in the form of differentiated technology,
cost-saving, and system integration
– Protection against over- and undersupply choke points as industry evolves
– Maximize overall system design to assemble the right products in the design for each installation
 There are venture capital firms, private equity concerns and IPO markets, as well as
government renewable energy funds and subsidy activities, investing in the solar sector
Solar Energy – financial investment – overview
Source: XYZ.

116
Solar PV and solar thermal have access to various sources
of capital, unlike the CSP sector
Solar PV Solar Thermal CSP
Use of Proceeds
R&D Capacity
expansion
Value chain
consolidatio
n
Application R&D Production
facility
R&D Production
facility
Project
sourcing
Funding Size/Stage
US$5
million-10
million
US$30 million US$100
million-300
million
Growing
stage
US$5 million-
10 million
US$100
million
Early Early Early
Opportunity
Seek
technology
leadership in
Thin Film
 Thin Film
Production
capacity
critical to
success
 Turn key
Capitalized
on vertical
integration
 BIPV tax
and fiscal
incentives
 Project
developer
 Improve
efficiency
 Reduce
operation
costs
 Licensing
 Achieve
econo-
mies of
scale
 Project
develop-
ment
 Tax and
fiscal
incentive
Acquire
technology
/solution
 Connect
with grid
 Leverage
scale
 Turn key
 OEM
 Out-
bound
 Gov’t
projects
Funding
Source
Active
Investors
Government
Renewable
Energy Fund
China
Development
Bank
Renewable
Energy Fund
Renewable
Energy Fund
Renew-
able
Energy
Fund
Financial IPO CDH,
Tsing, GS
Industrial Suntech LDK, Yingli Suntech,
Yingli
Himin Himin,
Solar Rain
Himin
Financial Investment in Solar
Solar Energy – financial investment
Source: XYZ.

117
Greentech companies need to achieve certain milestones
before they can achieve an initial public offering (IPO)
Source: Clean Tech Overview, Morgan Stanley, July 21, 2008.
Valuation Versus Key Milestones
Investors will pay
premiums for
Revenue growth
Revenue diversification
Long-term contracts
Production capacity
Gross margins
Grid parity
Global expansion
Sustainability of material
resources

118
The recent wave of interest in renewable energy offers
Chinese solar companies access to capital
China Clean Tech’s Access to Capital
Source: Clean Tech Overview, Morgan Stanley, July 21, 2008.
Please double check the charts, the data on
the “Clean Tech Venture Investments in
China” looks old since it refers 2007 as an
estimate. Meaning a forecast. Which means
this data has been generated 2006 the
lastest.
Re “Capital Raised in Primary Market” Q2’06
indicated a “0” as for its statistic. Although
it would most probably mean that it is less
than a million but some might think of it as
plainly zero. To avoid confusion, it would be
best if we would indicate the actual capital
raised such as “0.45” and the like so that we
are clear about the data.

119
Recent solar M&A has exhibited vertical integration across the
value chain to drive overall costs down and to increase scale
Source: Clean Tech Overview, Morgan Stanley, July 21, 2008, XYZ.
Solar Market Consolidation Themes
Thin Film
Equipment Silicon Feedstock Solar Cells Solar Modules
Ingots & Wafers
System Intergration/
Installation/ Services

120
We have identified a number of key financial investors that are
active in the sector
Solar Energy – financial investment – financial investors profile
Source: XYZ.
House Business Description Sample Investments Comments
Tsing Capital
 Industry focus: Cleantech
 Typical investment size: US$1 million-5 million
 Beijing Giant Hemu Technology
 Beijing PowerU Technology Co., Ltd.
 China Sunergy
 Environmental Services Group
 Fujian Haiyuan Automatic
Equipments Co., Ltd.
 LDK Solar Co., Ltd.
 Shenzhen Dongjiang
 ET Solar
 Green Bio
 Tsing Capital is the first cleantech
venture capital management firm in China
 The company manages the China
Environment Fund
 In September 2008, the company
invested in wind power equipment
accessories manufacturer Wuxi Qiaolian
Wind Power Technology Co., Ltd.
Shenzhen Capital
Group
(SCGC)
 SCGC is a balanced fund manager with an equal
focus on expansion along with funding of early and
seed stage companies
 Industry focus: Primarily hi-tech, but also service and
logistics industries
 Geographic focus: Shenzhen and Greater China
 Jinkosolar Holding Company Ltd.
 Shenzhen HJ Technology Co., Ltd.
 Kingsun Photoelectricity Co., Ltd.
 Beijing Shenwu Thermal Energy
Technology
 Mingyang Electric
 Jiangsu Highstar Battery
Manufacturing Co., Ltd .
 SCGC is one of China’s largest PE firms
 SCGC is a state-controlled PE
 Shareholders include the state-owned
Assets Supervision and Administration
Commission of Shenzhen Municipal
Government and other state-owned
entities
 In October 2008, the company invested
in silicon wafer manufacturer Jinkosolar
Holding Company Ltd.
Milestone Capital
 SCGC is a balanced fund manager with an equal
focus on expansion along with funding of early and
seed stage companies
 Instead of focusing on any particular industry,
Milestone Capital’s investment team looks for
companies with sound financial and operating track
records that have already established leading
positions in their respective market segments
 Typical investment size: US$ 10 million-100 million
 Trina Solar Ltd.
 China Bio Solutions Group Ltd.
 VisionChina Media Inc.
 Focus Media Holding Ltd.
 Dehaier Medical Systems Ltd.
 Kingsun Photoelectricity Co., Ltd.
 The company invests in a limited number
of portfolio companies where it can
dedicate significant resources to each
investment
 The company wants to play an active role
and work closely with the management of
its portfolio companies

121
Source: XYZ.
NewMargin Venture
 Industry focus: broader IT, sustainable growth
technology, healthcare and high margin
manufacturing
 Geographic focus: China
 Goldwind Science & Technology Co.,
Ltd.
 Zhenghe Bioenergy
 EcoGreen Fine Chemicals Group Ltd.
 Shenzhen Dongjiang Environmental
Company Ltd.
 NewMargin currently has about US$520
million under management
 The company is seeking to invest in
companies that will be future technology
leaders and dominate China’s economy
in the 21st century
 The company is one of China's oldest
domestic venture capital companies
CDH Investment
 Deal size typically US$700,000-900,000
 Industry focus: environmental protection,
pharmaceuticals, telecommunications, optical-
mechanical-electrical integration, new materials and
energy, etc.
 Geography: Beijing/Guangdong
 Himin Solar Energy Group
 Meihua Monosodium Glutamate Group
Co., Ltd.
 Meng Niu Dairy
 Li Ning
 Focus Media
 Sina
 Air Media
 Focuses on industries that have been
promoted by the Chinese government
 All investments require a rate of return
greater than 30% and yearly dividends
need to be greater than 16%
 Provides growth capital to companies
that have strong business fundamentals,
favourable growth prospects and viable
exits via listings or trade sales in 1-2
years
New Horizon Fund
 Industry focus: chemicals, energy, multimedia, high-
tech, consumer products, and auto components
 Goldwind Science & Technology Co.,
Ltd.
 Yingli Solar
 The company’s investment holding
period is 2-5 years
 The company’s two limited partners are
Tamasek Holdings Private Limited and
SBI Holdings Inc.
TDF Capital
 Typical investment size: US$ 3 million-10 million
 Investment focus: new energy and Greentech,
technology, telecoms, healthcare, consumer
 Geographic focus: Greater China
 Universtar Science & Technology
 Zhong Hang (Baoding) Huiteng
Windpower Equipment Co., Ltd.
 Hefei Sungrow Power Supply Ltd.
 Although primarily an early to expansion
stage investor in the consumer, media
and technology sectors, the company has
also begun investing in the new energy
and greentech industries

122
Source: XYZ.
Qiming Venture
Partners
 Industry focus: Clean technology, media and
Internet information, technology, healthcare, and
consumer and retail
 LP Amina  The company has origins and expertise in
making IT-related investments
 Although the company has made only one
cleantech investment thus far, it views the
industry as having strong potential
 Over US$500 million under management
GSR Ventures
 Industry focus: Semiconductors, Internet, wireless,
new media and green technology
 LatticePower Corporation
 Sierra Solar Power
 Sinowyde Energy
Technologies Corporation
 Times Energy Corporation
 The company’s expertise is in Internet and
telecommunications sector investment
 However, the company has been broadening
its focus to invest in greentech
 In January 2009, the company announced that
it had raised US$ 383million for a new fund to
focus on investing in Chinese technology
companies
Blackstone Group
 Deal size generally ranges from US$50 million -$5
billion
 Industry focus: Cleantech, manufacturing,
chemicals, transportation, communications,
insurance, lodging, entertainment
 Geographic focus: U.S., Europe and Asia -Pacific
 Coskata Inc.
 Sithe Global Power
 In mid-2008, Blackstone Group formed
Blackstone Cleantech Venture Partners
indicating Blackstone Group’s growing focus
towards cleantech investment
 Also in mid 2008, Blackstone Group
announced a partnership with Windland
Energieerzeugungs GmbH to develop and
construct a 400MW offshore wind farm in
Germany
Draper Fisher
Jurvetson
 Industry focus: diversified including
energy/greentech, life sciences, consumer apps,
media, enterprise applications, hardware, mobile,
and nanotechnology
 Geographic focus: Mainly U.S., Canada, China, and
India
 Jing-Jin Electric
 Prudent Energy
 Nottingham International
 SolarCity
 GreenFuel Technologies
 BioFuelBox
 Draper Fisher Jurvetson has been investing in
cleantech since 2001
 In 2007, the company was involved in 11
cleantech deals with a total investment of over
US$40 million

123
Source: XYZ.
Warburg Pincus
 Deal size range from US$10million-$1billion
 Industry focus: financial services, healthcare,
consumer and industrial, media and business
services, information and communication technology,
energy and real estate
 Geographic: Global
 Conergy Wind GmbH
 Competitive Power Ventures
Holdings
 PwC is the PE fund’s tax advisor
 Invested more than US$29 billion in more than
600 companies in 30 countries around the world
 Has been in Asia for more than a decade and has
invested more than US$2 billion in the region
 As a foreign PE house, it prefers to invest in
companies with a high return (usually above 20%
to 30%) in short term (usually three years) and a
clear path to exit (i.e., through IPO)
Intel Capital
 Intel's global investment organization makes equity
investments in innovative technology start-ups and
companies worldwide
 Industry focus: cleantech, information technology,
semiconductor manufacturing
 Trony Solar Holdings Co.,
Ltd.
 NP Holdings Ltd.
 In April 2008, Intel established the US$500 million
Intel Capital China Technology Fund II
 In Oct. 2008, the company made its first
investment in China’s cleanteach industry by
investing US$20 million in Trony Solar Holdings
Co., Ltd., a leading Chinese thin-film solar energy
and solution provider
 Over the past 10 years, Intel Capital has invested
in more than 80 companies across mainland
China and Hong Kong
 In 2007, Intel Capital invested about US$639
million in 166 deals with approximately 37 percent
of funds invested outside the United States
New World
Strategic
Investment Ltd
 Industry focus: any
 Geographic focus: China and Asia
 Other investment criteria: companies are 1-3 years
old before their listing
 Biomax Environment
Holdings Ltd.
 Renhe Commercial Holdings
Co., Ltd.
 In Dec. 2008, the company’s Managing Director
Adrian Cheng said the company is seeking to
explore investments in the alternative energy
territory
 Based in Hong Kong, the company is a wholly-
owned subsidiary and the strategic investment
arm of conglomerate New World Group

124
We’ve identify three potential business and funding models
to promote solar energy development in China
Financial Investment Implications
Solar power – financial investment – implications
124
Licensing
Model
Project
Developer
Integrated Power
Company
Business Model
 Sell equipment and license
technology to developers of solar
projects
 Provides revenue and profits in a
similar way to manufacturing of
industrial equipment
 Use technology as a “currency” to
invest in solar projects
 Developer of solar projects
 Provides revenue and profits through
a developer fee, service and O&M
contracts, and associated tax credits
or incentives
 Develop projects and establish
the company as an integrated
energy concern
 Provides revenue and profits
through the sale of electricity to
power and utility entities and
through any associated tax credit
or fiscal incentives
Funding Sources
 Venture Capital
 Private Equity
 IPO
 China Renewable Energy Fund
 Provincial/Municipal/Government
 Growing stage venture funds
 Private equity funding
 Project Financing
 IPO
 Utility company Joint Venture
 Private equity funds
 IPO
Risks
 Strong balance sheet requirement
to offer O&M contracts
 Least overall business risk
 Potential for sales to be less
 Strong balance sheet requirements
 Sell-down timing uncertainty
 Greatest level of business risk
 Least diversified revenue stream
What the
Market Needs
Best of breed
technologies
Development
and operation
of projects
F
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Key Findings of China Solar Energy Market Fact Book

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