Potential for High Volume PV Manufacture in Australia Dr. Peter Fath, CTO, centrotherm th photovoltaics AG UNSW, Sydney, May 21 st 2009
Disclaimer We have exercised utmost care in the preparation of this presentation. It contains forecasts and/or information relating to forecasts. Forecasts are based on facts, expectations, and/or past figures. As with all forward-looking statements, forecasts are connected with known and unknown uncertainties, which may mean the actual result deviates significantly from the forecast. Forecasts prepared by third parties, or data or evaluations used by third parties and mentioned in this communication, may be inappropriate, incomplete, or falsified. We cannot assess whether information, evaluations, or forecasts made by third parties are appropriate, complete, and not misleading. To the extent that information in this presentation has been taken from third parties, or these provide the basis of our own evaluations, such use is made known in this report. As a result of the above-mentioned circumstances, we can provide no warranty regarding the correctness, completeness, and up-to-date nature of information taken, and declared as being taken, from third parties, as well as for forward-looking statements, irrespective of whether these derive from third parties or ourselves. Rounding differences may arise. 2
centrotherm photovoltaics at a glance centrotherm photovoltaics: Focus on innovation & technology leadership Technology and equipment supplier for PV industry Leading market player of turnkey crystalline solar cell production lines Unique supplier of turnkey solutions over full crystalline solar cell value chain and leading thin film technology Business Divisions Silicon Solar cell Thin film Semiconductor Technology & Equipment Turnkey production plants Turnkey lines Key equipment Services Key Figures 2007 2008 Employees: 178 1,050 Sales: 166 M 375 M EBIT: 21 M 56 M * 3 * excluding effects from purchase price allocation
Diversification along PV value chain Portfolio: Major Equipment and Technology Solar Silicon Solar Crystalline Solar Cell Technology competence & key equipment 2,500 t silicon production plant Equipment (Reactor & Converter for silicon deposition) Crystallization furnace for multi ingoting Fab design Facility design Thin Film CIGS* Technology Technology Equipment Turnkey solutions & Single Equipment Equipment Module 30/50/100 MW solar cell production plant 30/50 MW CIGS-thin film modules production line Sputtering equipment 5/10/30 MW module production lines 4 5 *CIGS = Copper Indium Gallium Diselenide
Outline Is there a potential for high volume PV manufacturing in Australia? For an answer, the following major topics are considered: Is there a market for PV modules/systems? (World Australia) What technologies are available for investors and can the products be manufactured in a competitive way in Australia? Is skilled personnel available? What is the technology expertise? 5
Outline Is there a potential for high volume PV manufacturing in Australia? Is there a market for PV modules/systems? (World Australia) What technologies are available for investors and can the products be manufactured in a competitive way in Australia? Is skilled personnel available? What is the technology expertise? 6
Non-subsidized Market Generation by Reducing PV System Cost production vo olume PV market development Generation of non- subsidized markets to generate future growth of PV market non-subsidy subsidy driven When and at what PV system price? - off-grid markets - utility grid parity - customer grid parity PV competitiveness PV competitiveness against household electricity prices? Calculation using assumptions: 20 years depreciation 1% operating cost 4% interest rate Output degradation 0,5%/a PV Different conditions for - local irradtion level - electricity prices 2002 2004 2006 2008 2010 2012 2014 2016 7
PV Market: Bright Outlook, but Clouds Ahead 110 100 GW production volume centrotherm photovoltaics AG Market & Technology Research 90 80 bright future consolidation 70 phase 60 sunny take-off wave of start-ups 50 40 start of mass production silicon shortage high margins industry consolidation price decline grid parity utility take-off PV = established industry reduced cost 30 20 10 grid parity consumer take-off 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 subsidy driven consumer grid parity off-grid utility grid parity 8
Customer Retail Price Grid Parity @ 3 /W p Grid parity in near future /kwh(bubblesize= 040 0,40 market size) 0,35 Installed System Price 3 / Wp 0,30 0,25 Italy Hawaii Grid Parity 0,20 Germany California Portugal 0,15 France 0,10 Greece Spain Australia Texas 0,05 Average household 0,00 electricity price Sun Irradiation [kwh/m²/year] 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 India 9
Customer Retail Price Grid Parity @ 2,50 /W p Grid parity in near future /kwh (bubble size = market size) 0,40 0,35 0,30 Installed System Price 2.50 / Wp 025 0,25 Italy Hawaii Grid Parity 0,20 Germany Portugal 0,15 California 0,10 France Spain Australia Greece Texas 0,05 India Average household electricity yprice 0,00 Sun Irradiation [kwh/m²/year] 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 10
How to Achieve PV System Price < 3 /W p? Estimate of maximum module manufacturing cost to achieve PV system price of <3 /W p system price /W p 3,0 2,5 Ins tallation profit 0,27 /Wp Labour cost 0,10 /Wp module price 2,0 Inverter 0,25 /Wp module manufact. cost 1,5 10 1,0 0,5 Target: module manufacturing cost S upporting s truc ture, cables 0,20 020 /Wp Module trading 0,10 /Wp Margin 25%, 0,51 /Wp Overhead 10%, 0,14 /Wp 0,0 < 1,40 /W p Manufacturing cost 1,40 /Wp Note: The target module manufacturing depends on the module efficiency. Modules with lower efficiency require lower manufacturing costs ( BOS-penalty ). The calculation is based on crystalline silicon with a cell efficiency of 15,8%. 11
PV Market: Australia MW Installed per yea r 200 180 160 140 120 100 80 60 40 Australian PV Market Forecast Historical Data Historical Data Spark C onservative Spark Aggressive Spark Aggressive plus Solar Farms Barclays C apital R esearch 20 0 1 2 3 4 5 6 7 8 9 10 11 12 Source: Spark Solar 12
Outline Is there a potential for high volume PV manufacturing in Australia? Is there a market for PV modules/systems? (World Australia) What technologies are available for investors and can the products be manufactured in a competitive way in Australia? Is skilled personnel available? What is the technology expertise? 13
Value Chain [c-si Thin Film] c-si: Feedstock Wafer Solar Cell Module System CIGS Feedstock Substrate Solar Cell / Module System centrotherm photovoltaics centrotherm photovoltaics (new) 14
Schematics of CIGS Solar Cell 15
Centrotherm ThinFilm CIGS Turnkey production line 50 MW / 100 MW Flexible Fab-design Scalable Fab-size production floor space < 8000 m² @ 100 MWp 16
Thin Film Module Factory Factory Layout and Processes sputtering TCO edge deletion mech cut P3 contacts t application jv measure mech cut P2 sealing chemical bath Se annealing lamination Se deposition junction box & frame glass washing sputtering Cu, Ga, In sputtering Mo laser cut P1 jv measure classification 17
Cost Structure CIGS Module Manufacturing Total Cost: 1,23/ Wp (conservative assumptions) Electric Power; 7,6% Other costs (spares etc.); 6,3% Yieldloss costs; 4,7% Depreciation Production Equipment; 24,3% Other materials; 13,7% Depreciation Facilities&Building; 4,8% ZnO; 5,8% Labor; 9,9% Indium; 2,3% Copper/Gallium; 6,2% Molybdenium; 1,9% Glass (front + back); 12,6% 18
Achieving Grid Parity by an Integrated Fabrication (Crystalline Si) Integrated Cost advantages of integrated fabrication: fabrication as way to achieve grid parity Reduced cost due to enhanced overall product yield (e.g. omission of long distance shipment of wafers and cells) Fast feedback loops and significant ifi optimization i potential ti over the entire value chain results in better product quality and yield Reduced overhead cost (QC, purchasing, sales ) Reduced working capital No long term purchasing contracts and down payments Fast response to changes in the market (along complete value chain) 19
Integrated Factory: Overview Key figures of integrated fabrication in Canada and Germany Module manufacturing cost 1,26 < 1,40 /W p possible MG Si Plant (optional) PV Power Plant (optional) Administration Solar Academy Example layout at one location Silicon Canada PolySi Plant Ingot Plant Module manufacturing cost Ingot Wafer Germany Cell Wafer Fab Solar Cell Fab Solar Module Fab Module Example: Grid Parity factory in Germany/Canada Integrated factory consisting of 5 single factories using state of the art technology available today Poly Si (TCS / "Siemens"): 2.500 t/a Multi ingot: 2.270 t/a Multi wafer: 97 million wafer /a Cell: 361 MW p /a Module: 347 MW p /a Calculated scenario includes poly silicon factory using lower electricity costs in Canada + wafer, cell & module production in Germany CAPEX 718 Mio (accuracy +/- 10%) 0,21 /Wp 0,45 0,14 /Wp 0,18 /Wp 0,28 //Wp 0,45 /Wp 1,26 /W p * * Accuracy of all figures +/- 10% 20
Key figures of 2.500 t Poly-Si production in Canada S Integrated Factory: Polysilicon Production Plant Vent Gas Recovery MG Si Milling Silicon TCS Synthesis Ingot Wafer Distillation Columns PolySi Deposition and TCS Conversion o l a r C e l M o d u l e TCS / Siemens l technology 18 Siemens type deposition reactors Capacity 2.500 t/a 80.000 m² Production cost 28,5 /kg (0,21 /W p ) Total Costs: 71 Mio. /a Poly Si Labour Costs 17% Depriciation Equipment/ Technology 31% Equipment: 227,0 Mio. Building: 85,0 Mio. Production goods: MG Si 1,60 t/t Poly-Si HCl 0,48 t/t Poly-Si Running Costs Running Cost: Electr. 165 kwh/kg Depriciation Utilities 1,6 /kg 32% Depriciation Building & Facility Production 8% Workforce: 239 persons Goods 12% 21
Key figures of 2.270 t ingot manufacturing in Canada Integrated Factory: Ingot Manufacturing Crucible preparation Silicon Bricking Crucible removal Ingot Wafer Crystallization furnaces S o l a r C e l M o d u l e Crystallization of ingots and bricking l 28.000 8000m² 53 Crystallization furnaces Capacity 2.270 t ingots / a Production costs 20,7 /kg (0,14 /W p ) Crucible Loading Total Costs: 47 Mio. /a Equipment: 80,5 Mio. Building: 16,0 Mio. Production goods: Crucibles 2,2 pcs./t Running Cost: Electr. 25,9 kwh/kg Utilities 110 /k 1,10 /kg Workforce: 358 persons Labour Costs 36% Running Costs 21% Ingot Depriciation Equipment/ Technology 24% Depriciation Building & Facility 2% Production Goods 17% 22
Key figures of 97 Mio. wafer manufacturing in Germany Integrated Factory: Wafer Manufacturing Silicon Ingot Wafer S o l a r C e Sawing of bricks to wafer l l 18.500 m² 55 wafer saws Production of 97 Mio. wafer / a Wafer thickness 180 µm M o d u l e Production costs 0,63 /wafer (0,18 /W p ) Total Costs: 61 Mio. /a Equipment: 76,8 Mio. Building: 13,0 Mio. Production goods: Slurry, Wire Running Cost: Electr. 0,20 kwh/w p Utilities Transport. Workforce: 198 persons 0,023 /W p 0,005 /W p Labour Costs 15% Running Costs 32% Wafer Depriciation Equipment/ Technology 25% Depriciation Building & Facility 1% Production Goods 27% 23
Key figures of 361 MW p cell manufacturing in Germany S Integrated Factory: Solar Cell Manufacturing Texturing Wafer Inspection System Silicon Diffusion Ingot Wafer Firing Classification and Sorting PECVD Printing o l a r C e l M o d u l e 7 centrotherm l solar cell turnkey lines (>50MW p each) 18.000 m² Efficiency 15,8% on multi wafer Production of 361 MW p / a Production costs 1,02 /wafer (0,28 /W p ) Total Costs: 96 Mio. /a p Equipment: 110,0 Mio. Building: 16,3 Mio. Production goods: Paste front 0,047 g/w p Paste rear Ag 0,042 g/w p Paste rear Al 0,42 g/w p Labour Costs 17% Running Costs 18% Cell Depriciation Equipment/ Technology 23% Depriciation Building & Facility 1% Running Cost: Electr. 0,21 kwh/w p Utilities Workforce: 323 persons 0,024 /W p Production Goods 41% 24
Key figures of 347 MW p module manufacturing in Germany S Integrated Factory: Solar Module Manufacturing Stringing g Silicon Glass Washing Layup Testing and Sorting Ingot Wafer Interconnection Trimming, Framing, Junction Box Lamination o l a r C e Module design: l - 60 cells per l module, 220 W p - glass / backsheet laminate -framed 20 lamination lines 20.000 m² M o d u l e Production 347 MW p / a Production cost 98 /module (0,45 /W p ) Equipment: 73,5 Mio. Building: 20,0 Mio. Labour Costs Production goods: Glass 1,6 m 2 /module Running Costs EVA 3,2 m 2 /module 9% Backsheet 1,6 m 2 /module Frame 5,2 m/module Junction box 1 pcs/module Running Cost: Utilities 0,025 /W p Workforce: 305 persons Total Costs: 157 Mio. /a Module Depriciation Equipment/ Technology 9% 9% Depriciation Building & Facility 1% Production Goods 72% 25
Integrated factory: Summary CAPEX CAPEX and key figures of integrated fabrication Solar Module 93 Mio. Investment Solar Cell 126 Mio. Poly-Si 312 Mio. Wafer 90 Mio. Multi Ingot 97 Mio. Further figures Capacity Machinery Building & Infrastructure Workforce Poly-Si 2.500 t 227 Mio. 85 Mio. 239 Multi Ingot 2.270 t 80 Mio. 16 Mio. 358 Wafer 374 MW 77 Mio. 13 Mio. 198 Solar Cell 361 MW 110 Mio. 16 Mio. 323 Solar Module 347 MW 74 Mio. 20 Mio. 305 Total 568 Mio. 150 Mio. 1423 26
Integrated Factory: Different Production Location Production costs for four different locations: - Canada/Germany - USA - Australia - China. Major differences are the price of electricity it and labour. /Wp 1,40 1,26 /Wp 1,23 /Wp 1,19 /Wp 1,20 107 /Wp 1,07 0,45 1,00 0,45 0,44 Module 041 0,41 0,80 Cell 060 0,60 0,28 0,26 0,25 0,23 Wafer Multi Ingot 0,40 0,18 0,16 0,16 0,14 Poly-Si 0,20 0,14 014 0,14 0,13 0,10 0,21 0,22 0,21 0,19 - Canada / Germany USA Australia China 27
Smart Integrated Factory Further cost reduction potential in Smart Integrated Factory Smart integrated factory: Processes at the interface between the different factories are merged leading to a truly integrated factory Major factors for cost reduction in smart integrated factories: 1. Investment Reduced d investment t at interfaces: no packaging, integrated t manufacturing equipment, reduced effort in QC (outgoing/incoming inspection) 2. Lower work force number Reduced packaging, storage, QC 3. Decreased overall material loss No material loss by shipment/packaging Optimized process flow over the full value chain Potential for reduction in manufacturing cost: 6 to 10% 28
Grid parity can be achieved with crystalline silicon or high efficiency thin film technology. How to Achieve Grid Parity? Target PV system cost: < 3 /Wp technology Option 1: crystalline silicon technology Option 2: (integrated fab) thin film technology (CIGS fab) 26 /WpPVsystemcost 2,6 2,7 /Wp PV system cost BOS (invert., ins tall., etc.) 0,9 /Wp BOS (invert., ins tall., etc.) 1,0 /Wp margin 25%, 0,35 /Wp margin 25%, 0,34 /Wp overhead 10%, 013 /Wp 0,13 overhead 10%, 012 /W 0,12 /Wp module 0.45 /Wp other 0,10 /Wp 1,26 /Wp module m manufacturi ng cost cell 0.28 /Wp wafer 0.18 018 /Wp ingot 0.14 /Wp polys i 0.21 /Wp 1,23 /Wp module manufacturin ng cost labor 0,12 /Wp glass 0,14 /Wp materials 0,50 /Wp depreciation 0,37 /Wp integrated c Si fab CIGS Thin film fab 29
Specific factors for PV manufacturing in Australia It s not necessary to invest in complete value chain for c-si, also smaller capacities are economically feasible Poly-Si Requires minimum capacity of 1.250 t/year. Manufacturing in a cost-competitive way (low electricity) possible For domestic use and world market Multi ingots Manufacturing in a cost-competitive way possible For domestic use and world market Multi wafers Manufacturing in a cost-competitive titi way possible Manufacturing costs are determined by production goods (slurry, wire) and running costs For domestic use and world market 30
Specific factors for PV manufacturing in Australia Solar cell Manufacturing is the most technologically advanced and important process in the value chain, since it determines major product factors (e.g. efficiency) Excellent technologist are necessary to achieve high efficiencies and quality (available in Australia) For domestic use and world market Solar module Manufacturing favored close to the end-consumer market Capacity could be matched to growing demand Absence of a module manufacturer and growing demand represent a good time to start investment now Domestic modules have an advantage over imported ones Modules can be optimized with respect to the specific conditions of Australia (e.g. high irradiation, high temperature) Domestic manufacturers have an advantage due to deeper market insight and more direct distribution channels 31
Outline Is there a potential for high volume PV manufacturing in Australia? Is there a market for PV modules/systems? (World Australia) What technologies are available for investors and can the products be manufactured in a competitive way in Australia? Is skilled personnel available? What is the technology expertise? 32
Research at Institutes and Industry Photovoltaics Centre of Excellence, UNSW - Research in first-generation generation c-si wafer technology, medium-term second-generation generation thin film module technology and long-term third-generation solar cells Centre for Sustainable Energy Systems, ANU - Research focuses on Si-PV, especially on technology, material properties and processing. Further topics include Sliver and other new cell concepts Murdoch University - Research on a-si, using a combination of nanocrystalline and amorphous silicon alloys; research on methods for upgraded metallurgical grade silicon (direct refinement) Industry Research e.g. at Origin Energy (SLIVER cells), CSG Solar (crystalline silicon on glass) and Dyesol (dye solar cells) Several important patents with Australian origin e.g. Laser grooved buried grid (Green, Wenham; BP Solar); SLIVER (Blakers, Weber; Origin), crystalline silicon on glass (Green, Wenham, CSG Solar) Australia has a high level of expertise in R&D and education in PV In Australia, exceptionally skilled personnel is available, an important factor for producing high quality PV products 33
Conclusion There is a potential for high volume PV manufacturing in Australia Is there a market for PV modules/systems? (World Australia) What technologies are available for investors and can the products be manufactured in a competitive way in Australia? Is skilled personnel available? What is the technology expertise? 34
Summary There is potential for high volume PV manufacturing in Australia. The occurrence of grid parity will further stimulate market demand, in the world as well as in Australia. Grid parity can be achieved in several locations at system prices below 3 /W p. This requires module manufacturing costs below 1,40 /W p. Example of integrated c-si factory in Australia: 2.500 t of Poly-Si result in 347 MW p of solar modules Manufacturing costs of 1,20 /W p using conservative assumptions Example of CIGS factory: Typical factory size of 50 MW / 100 MW (flexible and scalable) Manufacturing costs of 1,23 /Wp using conservative assumptions The manufacturing in Australia is cost-competitive. Australia has a high level of expertise in R&D and education, highly skilled personnel is available. This makes it a good location to manufacture PV products. 35
Thank you for your attention! 36
Company Location and Contact Details I centrotherm photovoltaics AG Johannes-Schmid-Straße 8 89143 Blaubeuren Germany Phone: +49(0)7344-9188 803 Fax: +49(0)7344-9188 388 info@centrotherm-pv.de www.centrotherm-pv.de 37