Dr. Karl Kuhlmann; CEO Solarstrom AG

1. S.A.G. Solarstrom AG
Dr Karl Kuhlmann
CEO
June 8, 2010
Munich

2. Agenda
1. Facts and Data of the S.A.G. Solarstrom Group
2. The Photovoltaics Market in Germany
3. The Costs of Photovoltaics for the German Economy
4. The Future of the Photovoltaics Market in Germany
5. Future Strategy of the S.A.G. Solarstrom Group
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3. 1. Facts and Data of the S.A.G. Solarstrom Group
Experience and strength
Unique value chain
Key figures
© S.A.G.
Ground-mounted system Location: Brindisi, Apulia, Italy
Performance: 9.7 MWp Year of grid connection: 2010 3

4. 1.1 Covering the entire value chain: A major advantage for S.A.G. customers
 S.A.G. Solarstrom AG: industry pioneers and international specialists in PV
 Founded in: 1998, around 160 employees, ten locations in Germany and Europe
 Cover the entire value-added chain and are thus uniquely positioned
 Extensive experience:
 Based on more than 2,700 installed systems and 70 own PV systems with a total output of
11.8 MWp
 meteocontrol GmbH:
 Worldwide monitoring of around 12,500 PV systems in total over 1.4 GWp
 Experience in projects with an investment of over €5 billion
 The S.A.G. Group is uniquely positioned in photovoltaics
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5. 1.2 Group key figures: Sales and EBIT
Sales (in million €) EBIT (in million €)
250 25
€190 - €210 million
200 20 Sales
EBIT
150 15
BBV started €8 - €11 million
as main
100 shareholder 10
with approx.
10 % share
50 5
0 0
2005 2006* 2007 2008 2009 2010e
* 2006 corrected in line with IFRS
 Growth has been sustainably profitable since 2007
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6. 2. The Photovoltaics Market in Germany
The Renewable Energy Act as support for photovoltaics
Power production from renewables increased considerably
Feed-in tariff boosted photovoltaic business in Germany
Germany most important photovoltaic market
© S.A.G.
Rooftop system Location: Rain am Lech, Germany
Performance: 4.6 MWp Year of grid connection: 2009 6

7. 2.1 The Renewable Energy Act and its goals
 Full name: Act on Granting Priority to Renewable Energy Sources (EEG)
 Goals according to §1 of the EEG:
 To facilitate a sustainable development of energy supply
 To reduce the economic costs (in particular) by incorporating external factors
(climate change, etc.)
 To further develop and promote technologies for renewable energies
 To distribute the costs fairly to all market participants by means of allocation
 The legal foundation of the Act and the allocation are legally protected by the European
Court of Justice
 The EEG has been “exported” to 47 countries to date
(such as China, France, Spain, Portugal, Brazil and the Czech Republic)
 The EEG is supporting renewable energies efficiently
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8. 2.2 Development of renewable energies in Germany up to 2009
Power production (in TWh)
120
Gross power generation in 2009: 597 TWh
Portion provided by renewable energies: 15 %
100
Wind energy
40.4 %
80
60 Biomass
32.7 %
40
Hydraulic power
20 20.3 %
Photovoltaics
0 6.6 %
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1991: 2000: 2004: 2009:
Introduction of forerunner Introduction of 1st amendment 2nd amendment
to EEG the EEG of EEG of EEG
Sources: Agency for Renewable Energies, March 2010 and German Federal Association for Energy and Water, February 2010
 The EEG is a success story that started 20 years ago
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9. 2.3 Development of feed-in tariff from 2002 to 2010
Feed-in tariff (in €Cent/kWh)
60,00
60
PV-systems:
Rooftops
50,00
50
Veto of Federal
Assembly on
40,00
40 04/06/2010
Ground-
mounted
30
30,00 ?
?
Final decision in
20,00
20
07/2010
10,00
10
0,00
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 1.7.2010
MWp installed: 290 432 1,053 1,961 2,773 4,017 5,950 9,800 14,300e
Sources: EEG and German Telecommunications Network Agency
 Installed PV capacity grew exponentially despite decreasing FIT
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10. 2.4 Feed-in tariff for the different PV systems in €cent/kWh
2009 January 1, 2010 July 1, 2010
Rooftop systems
up to 30 kWp 43.01 39.14 32.88
own consumption (up to 29.9 kWp) 25.01 22.76 16.48/20.88*
from 30 kWp 40.91 37.23 31.27
own consumption (30 – 99.9 kWp) - - 14.87/19.27*
from 100 kWp 39.58 35.23 29.59
own consumption (100 – 500 kWp) - - 13.19/17.59*
from 1,000 kWp 33.00 29.37 24.67
Ground-mounted systems
Arable land 31.94 28.43 -
Conversion land 31.94 28.43 25.3
Other land 31.94 28.43 24.17
*Up to 30 % own consumption or more than 30 % own consumption Source: EEG
?Veto of Federal Assembly on June 4th, 2010
 Germany will see a massive cut in July 2010
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11. 2.5 Size distribution of installed photovoltaic systems in Germany in 2009
Number of installations
1.666 MWp
140,000
140.000 New installations in 2009:
3,809 MWp
120,000
120.000
100.000
100,000
80.000
80,000
60.000
60,000
40,000
40.000
869 MWp
20.000
20,000
445 MWp 192 MWp 637 MWp
0 0
0…30 30...100 100…500 500…1000 >1,000
>1.000
Performance category (in kWp)
Sources: German Telecommunications Network Agency
 The German photovoltaics market is a rooftop installation market
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12. 2.6 Global photovoltaic power installed by end of 2009
Power (in GWp)
25.000
25
3.1 20.6
20.000
20
1.7
0.6 15.8
0.5
15 1.2 0.3
15.000
3.4
10
10.000 9.8
5
5.000
00
Germany Spain Italy France Czech Rest of EU Total USA Rest of Total
Republic EU world
Source. EPIA, Global market outlook forfor photovoltaics until 2014
Source: EPIA, Global Market Outlook photovoltaics up to 2014
 Germany is the largest photovoltaics market worldwide to date
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13. 3. The Costs of Photovoltaics for the German Economy
Electricity tariffs for private consumers continue to rise
FIT allocation less than 5 % of electricity tariff
Decreasing FIT keeps cost for EEG within limits
Economic costs of photovoltaics are low
Photovoltaics are foreseeable an alternative
© S.A.G.
Ground-mounted system Location: Stribro, Pilsen, Czech Republic
Performance: 13.6 MWp Year of grid connection: 2009 13

14. 3.1 The electricity tariff trend in Germany (private consumers)
Price (in €cent/kWh)
30
28
26
24
22
20
18
16
14
12
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 e 2011e 2012 e 2013 e
Source: BDEW (German Federal Association for Energy and Water)
 The electricity tariff for private consumers will continue to rise
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15. 3.2 Composition of electricity tariff (private consumers) in Germany 2009
5%
8%
3%
3% Support of renewable energies
Förderung EE durch das
by EEG1
EEG¹
1%
9% Messung
Measurement
Vertrieb
Sales
KWK-Umlage² 2
KWK allocation
Erzeugung
Generation
16 %
29 %
Netzentgelt
Network charges
Sales tax
Mehrwertsteuer
Stromsteuer
Electricity tax
License fee3
Konzessionsabgabe³
26 % ¹ Renewable Energy Act
² Act on Combined Heat and Power Generation
³ Fee that a public utility company has to pay to a local authority for the use of the lines and cables located in
public places
Source: Agency for Renewable Energies, 2009
 The support for renewable energies has a share of less than 5 % of the electricity tariff
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16. 3.3 Feed-in tariff paid for solar electricity from 2002 to 2009
Support for solar electricity
(in billion €)
8
2.48 6.79
7
6
5
1.67
4
1.18
3
2
0.81
0.44
1
0.01 0.05 0.15
0
2002 2003 2004 2005 2006 2007 2008 2009 Total
Sources: EEG and own calculations
 Total economic cost of the PV success story less than 7 billion € up to 2009
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17. 3.4 Economic costs of power production have to be taken into account
Total electricity costs in 2009
(in €cent/kWh)
50
45
40
35
Economic costs
30
25
20
Economic costs for coal
15
and nuclear power:
10 0.20 €/kWh & around
5 100 billion EUR per year
0
Solar electricity Conventional electricity European Energy Exchange
private households trade prices
Sources: German Federal Association for Energy and Water, German Federal
Environmental Agency and Greenpeace as well as own calculations
 Today, photovoltaic electricity is less expensive than coal and nuclear power
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18. 3.5 Grid-parity is determined by radiation intensity and manufacturing costs
Manufacturing costs/kWp (in thousand €)
7
6
5
Specific yield: 1,100 kWh/kWp
4
3
850 kWh/kWp
2
1
0,23 € / kWh
0
0,10
0.10 0,15
0.15 0,20
0.20 0,25
0.25 0,30
0.30 0,35
0.35 0,40
0.40 0,45
0.45
Electricity tariff for private consumers (in €/kWh)
Source: S.A.G. Solarstrom AG
 Grid parity in Germany can be achieved at system prices between 3,200 and 2,500 EUR
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19. 4. The Future of the Photovoltaics Market in Germany
Renewable energy’s share continues to increase
Germany can remain the most significant PV market
System prices need to decline in order to adapt to the market
Cost for FIT payments will decrease
© S.A.G.
Rooftop system Location: Rain am Lech, Germany
Performance: 4.6 MWp Year of grid connection: 2009 19

20. 4.1 Share of renewable energies in energy generation up to 2020
6.6 % 14.4 %
8.9 %
Photovoltaics
Gross power Biomass
production renewable
16.2 % Wind energy
energies:
278 TWh Hydraulic power
Geothermal energy
53.9 %
Source: Agency for Renewable Energies, March 2010
 In 2020, renewable energies will provide around 50 % of the total power consumption
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21. 4.2 Forecast photovoltaic power installed by 2013
Power (in GWp)
90000
90 84.3
19.9
80
80000
70000
70
14.6
60
60000
2.5 5.4 49.8
50
50000
4.9
40000 7.8
40
5.9
30000
30 23.3
20
20000
10
10000
2009: 9.8 GWp
00
Sources: own assumptions, EPIA, Photon Consulting, LBBW and EuPD
 According to estimates, Germany will remain the strongest PV market worldwide
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22. 4.3 Ratio of ground-mounted systems to rooftop systems in Germany
Installed capacity
(in %)
100%
Ground-mounted systems
80%
Rooftop systems
60%
40%
20%
0%
2009 2010e 2011e 2012e 2013e
Source: own calculations
 S.A.G. foresee a market-share of ground-mounted systems of less than 3 %
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23. 4.4 System prices have to decrease in line with FIT tariffs
Manufacturing costs (in %)
100%
90%
crystalline modules 2012e:
thin-film modules Modules < 1,000 € / kWp
80% < 800 € / kWp
Inverters < 160 € / kWp
Precondition: < 160 € / kWp
Reasonable
70%
profitability for
investors and
system integrators
60%
50%
2009 2010e 2011e 2012e
Source: own calculations
 Still a long way from reaching system prices which enable profitability
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24. 4.5 Forecast feed-in tariff paid for solar electricity (2010 to 2020)
Support for solar electricity (in billion €)
70
Economic costs of conventional energy production: Promotion for PV:
around 100 billion € per year 57 billion € within 20 years
60
50
40
30
20
10
0
2009 2010e 2011e 2012e 2013e 2014e 2015e 2016e 2017e 2018e 2019e 2020e
Sources: EEG, Federal Government and own calculations
 Decreasing FIT will flatten cost growth curve for new installations
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25. 4.6 Conclusions
 IRRs of rooftop systems will be reduced significantly unless system costs will decline
massively and/or changes to EEG are only moderate
 Ground-mounted systems on arable land in Germany are becoming economically
unattractive. IRRs for systems on other land will be considerably reduced
 Only limited capacities for conversion land, “other” land (e.g. parallel to the German Autobahn
or railway tracks)
 Germany can remain one of the leading photovoltaic markets depending on system cost +
FIT development
 Grid-parity can be achieved in the coming 5 years, depending on system cost development
and the cost of private consumer electricity tariff
 In our opinion, ground-mounted systems will decline to less than 3% of the market (installed
capacity
 Politicians should reconsider planned reduction, suppliers should adapt pricing policy
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26. 5. Future Strategy of the S.A.G. Solarstrom Group
 International footprint to allocate individual market risks
 Unique value chain offers opportunities in mature markets such as Germany:
 Full service value chain over the complete lifetime of PV systems guarantees a high
profitability
 Germany is a rooftop market – one of S.A.G.‟s strengths in project planning and development
 Strong exclusive sales partner system enables easier market access and market coverage
 The S.A.G. Solarstrom Group is very well equipped for a changing market environment
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27. Contact
Public Relations / Investor Relations
S.A.G. Solarstrom AG
Sasbacher Straße 5
79111 Freiburg i. Br.
Germany
Telephone: +49 761 4770 - 311
Fax: +49 761 4770 - 44 142
pr@solarstromag.com / ir@solarstromag.com
This presentation contains statements concerning future developments (or “forward-looking statements“). They are based on current expectations and
forecasts of future events as made by the management body of S.A.G. Solarstrom AG, as well as on certain assumptions – many of which are beyond
the influence of said management body. These statements thus involve a number of risks and uncertainties that could cause the company„s actual results
to deviate significantly from those the statements indicate. The assumptions that could lead to such deviations due to unforeseeable developments
include, but are not limited to: demand for our products and services; the competitive environment; the development, propagation, and technical
performance of photovoltaic technology, as well as the price thereof; changes in legislation, price, and the timely availability of the products and advance
financing required; our ability to expand existing sales and marketing agreements and conclude new such agreements; our ability to secure further
financing; and the availability of sufficiently qualified technical personnel.
© S.A.G. Solarstrom AG. This presentation and the graphics it contains are – when no source is cited – protected by copyright. Any unauthorized
reproduction, whether electronically or by some other means, is forbidden. Both commercial and non-commercial use is subject to the prior written
consent of S.A.G. Solarstrom AG. All rights reserved.
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