Sharp Energy Solution Europe (SESE)

1. Sharp Energy Solution Europe (SESE) Sharp Energy Solution Europe (SESE) March 29th, Ukraine, Kyiv

2. 16.4 GW • High growth again in Germany despites reduced profitabilities • High profitability markets: Italy, CZ, SK, BE, FR… • PV as an alternative investment with guaranteed cash flows • National RE action plans (EU27) • Growing competition • World economic growth is back • Electricity demand is growing • USD / € eveolution, weak USD against € (20% change in the exchange rate) 1 USD 84 €Ct – 1 USD 72 €Ct)

3. 1. The PV market 2. Photovoltaic in Ukraine 3. Ways to success

4. The market in 2010 16.4 +132% +17% +145% 7.20 6.17 +59% 2.51 1.44 1.58 1.12 0.58 0.47 0.33 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

5. World split in 2010 ROW

6. Market in 2010 in Europe Germany: 7.4 GW Italy: 2.3 GW Rest of Europe: 86 MW Bulgaria: 11 MW Czech Rep: 1.4 GW France: 0.7 GW UK: 40 MW Spain: 367 MW Portugal: 45 MW Belgium: 361 MW Austria: 50 MW Greece: 150 MW Slovakia: 145 MW

7. Cumulated worldwide installed capacity until 2010 39.3 GW

8. Cumulative installed capacity 2010 GW countries: Germany Italy Spain Japan USA Czech Republic France China in 2011 ?

9. Our position in 2010… installed capacity EU27

10. An outlook to 2011 Europe 21.3 GW 14 GW

11. World Forecasts until 2015

12. The Ukraine frame conditions for the PV Industry

13. Ukraine offers better natural conditions for solar energy use than Germany Source: JRC PV GIS, http://re.jrc.ec.europa.eu/pvgis/ (2011) EnvironmentalAnalysis • Average solar yields of 1,5-3,7 kWh/m²/Day 13

14. FrameworkAnalysis • Ukraine offers good natural conditions & space for PV systems. • Government V. Yanukovich has enabled certain steps to “Green Tariff Law” effective. • “Local Content Rule” to promote a Ukrainian PV industry from 2012 challening. • Apart from the centralised procedures to obtain electricity generation license & accreditation for the green tariff, administrative procedures for PV projects are not defined and tested yet. • Foreign developers require support from local consultants to navigate the non-transparent processes for site acquisition, grid connection & permitting on regional/local levels. • MW plants may be developed within < 12 months. 14

15. Market Analysis • Ukraine has a certain solar history with a well developed upstream Industry. • Until 2009 PV market was minimal, (approx. 3 MW) • The Green Tariff Law has triggered demand in grid-tied PV systems. • In 2010 the first projects (Crimea area) on behalf of Ukrainian investors, were announced. • Ukrainian government approved of expedited licensing conditions for 185 MW (12 projects) in total over the next year. • Bottlenecks are: • limited grid infrastructure, • lack of local supply structures, • high country risk and maybe resulting financing problems for projects. • This will slow down the implementation of projects. 15

16. Ways to success

17. Overview incentives and feed in tariffs Best case EEG (German feed in law) • 20 European countries with feed in tariffs according to EEG model: • Germany, France, • Spain, Portugal, • Italy, Bulgaria • Luxemburg, Denmark, • Czech Republic, Austria, • Hungary, Slovenia, • Estonia, Lithuania, • Latvia, Malta, Slovakia • Greece, Cyprus, UK Source: German Environmental Department 2008

18. Successful Feed in Tariffs or Green Tariffs When is a FIT scheme successful? Pre conditions of a successful FIT or Green Tariffs • Priority access to the grid for renewable Energies • Less administration procedure “red tape” • No local content rule • Promotion of the tariffs • Awareness of the population • Stable and reliable commitment to the tariffs, just regular changes: Investors must have investment security. Source: German Environmental Department 2008

19. 17.400 MW in Germany in total 2010 7400 Development of the German PV market 9134 PV Market Data 2010 Newly installed power 7400 MWp Total installed power 17400 MWp Generated electricity 12000 GWH Savings CO2 emissions 7,5 Mio t System price Dez 2010 3038€/kW 2489 €/kW Tax income 2010 1,5 Bln € Employees 150000 Enterprises 15000 Total installed PV power in MWp Milestones 1991-1995: 1,000 roofs program (grants) 1999-2003: 100,000 roofs program (loans) 2000: Renewable Energy Sources Act (EEG) (FIT) 2004: Amendment of EEG (FIT) 2010

20. The European perspective The SET Plan • EU PV Industry: Target of max. 12% PV electricity share by 2020 what it is about: a study prepared on the request of the EU commission “scenario for PV e-share until 2020” 4%, 6% and 12% scenario 130 GW, 195 GW, 390 GW (155, 182, 235 billion € allocation cost) 1) Assumes 1,200 TWh p.a. per GWp 2) Based on installed based 2007: 4,5 GWp http://ec.europa.eu/energy/res/setplan/communication_2006_en.htm

21. Main Recommendations for accelerating market growth • no ad hoc changes of Green tariffs, no local content in order to attract foreign investors. • In the context of the new Ukraine Financial law PV investments can create income for communities (local profit is not part of the federal financial balance.) • Communities (responsible for real estate) can run estates more cost efficient. • PV FIT will push Ukraine development of the local industry and creates jobs, income and taxes. • Communities must take over promotion responsibility and regulation support like: Clarification of local net issues and land licensing • Trainings must be established as fast as possible organized by centralized Kyiv institutions. • There should be a more ambitious target to replace a certain share of conventionals via RE. The current energy strategy 2030 is not ambitious enough with 40 Mio toe Renewable energies. • Investigations Feb 2011 showing the electricity price increases (up to 30%) will lead in an dept increase because of the higher prices. Over 50% of the population said that. But this helps achieving grid parity faster.

22. Evolution is on it’s way !