Oerlikon Solar Solutions for a Solar Powered World

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1 Oerlikon Solar Solutions for a Solar Powered World Jeannine Sargent, CEO Oerlikon Solar Oerlikon Capital Market Days 2008 Zurich, September 25-26, 2008

2 Disclaimer This presentation is based on information currently available to management. The forward-looking statements contained herein could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary materially from those anticipated, expected or projected. Page 2 Capital Market Days 2008

3 Oerlikon Textile Oerlikon Coating Oerlikon Oerlikon Solar Solar Oerlikon Vacuum Oerlikon Drive Systems Oerlikon Components Page 3 Capital Market Days 2008

4 Solutions for a solar powered world Oerlikon Solar Solar Market Technology Strategy Operational Initiatives & Financials Summary & Outlook Page 4 Capital Market Days 2008

5 Oerlikon Solar at a glance CHF 309m sales in employees worldwide 250 global support 280 scientist and engineers 20 locations in 11 countries > CHF 23m R&D investment in 2007 Over 350 living patents Page 5 Capital Market Days 2008

6 Global footprint and growing Oerlikon Textile Oerlikon Coating Oerlikon Oerlikon Solar Solar Oerlikon Vacuum Oerlikon Drive Systems Oerlikon Components North America Sales Customer Support Operations (est. 2009) Page 6 Capital Market Days 2008 Europe Solar HQ Operations Pilot Line Advanced R&D Product Development Manufacturing Customer Support & Training Asia Sales Operations Pilot Line Technology Center Customer Support & Training

7 First mover Milestones R&D PV lab at IMT by Prof. Arvind Shah VHF PECVD deposition technology Micromorph solar cell (Tandem amorphous, microcrystalline) Light trapping by TCO & intermediate reflector Oerlikon founds own R&D lab and enters thin film silicon PV Oerlikon displays first functional 1.4 m2 a-si module Oerlikon presents first micromorph Tandem module ~126W First R&D equipment delivered to Schott Solar Cooperation with Schott Solar on thin film silicon development First 40 MWp front end line contract with Ersol 40 MWp equipment contract with Schott Solar First micromorph production line contract Contracts for end to end solutions CMC ramps first Asia line CMC SOP on Asian line Products Page 7 Capital Market Days 2008

8 Our mission To make solar power economically viable. Page 8 Capital Market Days 2008

9 Solutions for a solar powered world Oerlikon Solar Solar Market Technology Strategy Operational Initiatives & Financials Summary & Outlook Page 9 Capital Market Days 2008

10 Fast growing global energy demand Global Energy Demand Total Electricity Production Mix** China and US/Canada have the greatest growth in demand US & Canada NW Europe Japan China Middle East Other Europe Russia Rest Hydro 18.9% Over 2/3rds of electricity generated today is from fossil fuels today Gas Oil 7.8% 2.6% 23.2% Other 47.5% Coal *Quadrillion British Thermal Units ** for 2005 Source:Credit Suisse and McKinsey & Co Page 10 Capital Market Days 2008

11 Electricity world market size 15,000 Electricity Market GW 8, TW 9.3 TW TW TW TW ~150 GW Growth per Year! Source: Credit Suisse, November 2007; International Energy outlook 2007, 5/2007, Energy Information Administration, U.S. department of Energy. Page 11 Capital Market Days 2008

12 Fossil fuel price development Oil USD Oil over $100/Barrel Source: International Energy outlook 2007, 5/2007, Energy Information Administration, U.S. department of Energy, The Council of the European Union. bbl=barrel Coal As Fossil Fuels/Equipment Costs Rise, Solar Energy/Equipment Costs are Decreasing! USD/metric ton Coal over USD 120/ton Source: Photon Consulting, 3/2008; Wall Street Journal; USD Fossil Natural Gas Estimated plant construction cost, MBTU* Natural Gas over USD 12/MBTU in USD m 1, ,800 1,250 1,300 2,250 1,700 2, ,100 2,000 CCGT Wind Source: Bernstein Research Coal IGCC Nuclear Page 12 Capital Market Days 2008 *MBTU: Metric British Thermal Units ** CCGT:combined cycle gas turbine ***IGCC:Integrated Gasification Combined Cycle

13 Drivers for new energy sources Renewable primary energy supply (Exajoule) Increased Energy Demand Rising Costs Diminishing Fossil Fuel Resources Environmental Concern and Regulations National Security CAGR 78% 2000A 2010E 2020E 2030E 2040E Source: IEA, Shell, BMU, EREC Page 13 Capital Market Days 2008

14 Solar market application growth Off-Grid Projected Growth of Grid-Tied PV Installations (GW) accumulated Commercial 53 Residential Utility Commercial 25 Residential Utility Grid-Connected Applications are >85% of the PV market Source: Engineering and Science, Prometheus Institute Page 14 Capital Market Days 2008

15 Solar market size Total = USD 1bn Total = USD 150bn CSP 10% 2% Thin-film PV csi PV 33% 15% CSP csi PV 88% 52% Thin-film PV CSP= Concentrated solar power, csi = Crystaline silicon Thin-film PV = a-si, ucsi, CdTe, CGIS, CIS Source:Navigant, Greenpeace, SolarBuzz, Oerlikon Page 15 Capital Market Days 2008

16 Wide ranging growth scenarios PV Module Production Forecasts (GW) Oerlikon is well positioned for rapid industry scale-up LBBW 3/08 Oerlikon SolarBuzz/optimistic 2/08 SolarBuzz/realistic 2/08 EPIA-12-07/policy driven SolarBuzz/pessimistic 2/08 EPIA-12-07/pessimistic Page 16 Capital Market Days 2008

17 Thin-Film is fastest growing PV segment Accumulated Installed Capacity Thin Film Drivers GWp CAGR Thin-Film csi Total Market 101% 69% 73% T-F c-si Cost advantage Thin Film reduces the amount of light absorbing material, leading to a reduction of CoO while technology increases efficiency Shorter energy payback period Production of thin film modules is less energy intensive Temperature coefficient Energy harvest: thin-film modules show superior performance at high temperature and in diffuse light conditions Source: Oerlikon Page 17 Capital Market Days 2008

18 PV thin-film installed equipment opportunity (in USD m) 14,000 12,000 10,000 8,000 6,000 4,000 2, % Growth from USD 1.3bn in 2006 to USD 13bn by 2011 Source: LBBW, SolarBuzz, Navigant, EPIA and Oerlikon Page 18 Capital Market Days 2008

19 Market conditions optimism for a-si on glass a-si will continue to be the preferred technology GW Historical and Projected Thin-Film Production CdTe CIGS a-si 3rd Generation GW 10 Projected Use of Substrate in T-F Industry Plastic (flex) Metal (flex) Glass (rigid) E 2009E 2010E 2011E Glass will continue to be the dominate substrate 2012E Source: Prometheus Institute Page 19 Capital Market Days 2008

20 Solutions for a solar powered world Oerlikon Solar Solar Market Technology Strategy Operational Initiatives & Financials Summary & Outlook Page 20 Capital Market Days 2008

21 Two primary production technologies for solar cells Technology Substrate Cell Issues Crystalline Silicon Cost Silicon Supply Thin-Films Large Scale Mfg. Efficiency Page 21 Capital Market Days 2008

22 Thin-Film solar cell basics Thin-Film Solar Modules Thin-Film Cell Structure Manufacturing Order Glass Amorph Micromorph Tandem Front Contact PV Layers Back Contact White Reflector Thin Films Lamination Glass Page 22 Capital Market Days 2008

23 Key process elements needed for scalable thin-film silicon PV manufacturing LPCVD (TCO) Deposit Contacts PECVD (KAI) Deposit PV Material Laser Scribers (LSS) Define Cells Page 23 Capital Market Days 2008

24 Micromorph process technology Up to 50% more efficiency The principle of light trapping to deliver high performance Best Commercial TCO TCO a- Si:H µc-si:h Oerlikon TCO Visible Amorph Near IR Micromorph Tandem Integral to Micromorph process -High transmission in visible and near IR light a-si/ spectrums µ-si The goal is to optimize the haze to better the performance Page 24 Capital Market Days 2008

25 Oerlikon technology End-to-end Advanced Manufacturing Lines Advanced process integration Systems and support TCO 1200 KAI 1200 LSS 1200 Clean TCO Laser PECVD Laser TCO Laser Assembly a-si/ µ-si Advanced process solutions plus high performance cell technology deliver lowest cost per watt Page 25 Capital Market Days 2008

26 The Oerlikon difference: End-to-end support Equipment Move-in System Installation Testing & System Quantification Process Integration Production Ramp-up Fab Optimization Delivering fastest time to money Coordinated Maintenance Uptime Improvement Quarterly Preventative Maintenance Equipment top condition PM adapt to the production Page 26 Capital Market Days 2008

27 Solutions for a solar powered world Oerlikon Solar Solar Market Technology Strategy Operational Initiatives & Financials Summary & Outlook Page 27 Capital Market Days 2008

28 The long term impact of grid parity Source: Deutsche Bank Page 28 Capital Market Days 2008 * Levelized Cost of Electricity is calculated using typical financial considerations and power output de-raters

29 Achieving grid parity Lowering the cost per watt Oerlikon Advantage = x End-to-End Manufacturing lines Micromorph High Efficiency Tandem Solar Cells Page 29 Capital Market Days 2008

30 Path to grid parity Oerlikon leading technology Fab nominal capacity Module efficiency Capacity GW/p % 10% 5% Amorph Micromorph Tandem Next Generation Thin-Film % CapExper Watt $/W GigaCampus Cost of ownership $/Wp for 20 MWp fabs < 1.5 $/Wp (<1.12 */Wp) 2007 Grid party for GWpfabs < 0.7 $/Wp (<0.52 */Wp) Source: (Calculated with an exchange rate of 1.00 =$1.34) Page 30 Capital Market Days 2008

31 System cost - The module is important, but not the sole consideration Module + Balance of System (BOS) = System Cost Page 31 Capital Market Days 2008

32 Balance of system (BOS) Structures for mounting the PV arrays or modules Power-conditioning equipment that adjusts and converts the DC electricity to the proper form and magnitude required by an alternating-current (AC) load. The BOS can also include: storage devices, such as batteries, so PV-generated electricity can be used during cloudy days or at night. BOS consists of: Mounting Structure Inverter Cabling Land Other Page 32 Capital Market Days 2008

33 BOS vs. panel size Total System Cost* USD 5.00 BOS Cost* Page 33 Capital Market Days 2008

34 Module price development $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.5. c-si (average CE) c-si (hi CE / low cost) c-si (high CE) uc-si a-si CIGS CdTe c-si Historically the dominant technology (GEN 1 technology) but will remain high cost module manufacturer Will shift long term to a space constraint niche player. a-si and uc-si Currently beginning production (GEN 2 technology) Expected to become long term standard Best cost-performance profile CIS / CIGS Challenge to scale into production Best prospects for flexible substrates and small BIPV Still in R&D line $ Source: Deutsche Bank, Oerlikon Solar *BIPV: Building Integrated Photovoltaics Page 34 Capital Market Days 2008 CdTe Limited expansion due to vertical integration of few providers

35 Solutions for a solar powered world Oerlikon Solar Solar Market Technology Strategy Operational Initiatives & Financials Summary & Outlook Page 35 Capital Market Days 2008

36 Significant business expansion Sales* (in CHF m) Highlights % EBIT margin in 1HY >480 >1,000 Strong sales and order momentum important global customer wins Introduction and first contracts signed for Micromorph technology Development of internal and external supply chain Formation of solar segment within Oerlikon and strengthening of management team Outlook 1HY 07 2HY 07 1HY 08 2HY 08p 2009p Order Intake* (in CHF m) 2007 > p > 1000 * Solar Sales 07 reported within in Coating Segment Accelerated ramp-up of global operations and supply chain to match substantial demand growth Continuous improvement/innovation of key components Focused completion of offering along the value chain Page 36 Capital Market Days 2008

37 Solar capacity ramp-up to accelerate Truebbach expansion according to plan Pilot line in operation Hiring of additional staff ongoing Additional PECVD manufacturing capacity to be installed in 2HY 2008 Booked 2007/ 2008 Pipeline 2008/ 2009 Expansion plans Singapore ramp-up on target Management on site, staffing in progress Supply chain qualification ongoing Europe Asia / RoW >200 MW >350 MW > 1,0 GW > 1,5 GW > 3 GW > 5 GW Further expansion plans Partnership with Flextronics achieved Decision on 3rd location in preparation Total > 8 GW Page 37 Capital Market Days 2008

38 Oerlikon primary customer status Customer Technology Contract Signed Move-In SOP MW Schott Amorphous 40 Ersol Amorphous 40 Sunwell Amorphous 50 Inventux Micromorph 30 Auria Solar Micromorph 60 Sunwell (2) Micromorph 60 Sunwell (3) Micromorph 120 Pramac Micromorph 30 Next Solar Micromorph 30 Tianwei Micromorph 46 Gadir Amorphous 40 Chint Micromorph 40 Page 38 Capital Market Days 2008

39 Solutions for a solar powered world Oerlikon Solar Solar Market Technology Strategy Operational Initiatives & Financials Summary & Outlook Page 39 Capital Market Days 2008

40 Growing solar customer base l Page 40 Capital Market Days 2008

41 Solutions for a solar powered world Thin Film is Solar s fastest growing segment creating a USD 150bn total Solar Market opportunity by 2015 On track to achieve grid parity by 2010 Proven thin film solutions for high volume solar cell module production Page 41 Capital Market Days 2008