Solar Energy Business Developments Tatsumi Maeda Director & - PowerPoint PPT Presentation

Solar Energy Business Developments Tatsumi Maeda Director & Senior Managing Executive Officer General Manager of Corporate Solar Energy Group September 18, 2008 KYOCERA CORPORATION

Forward-Looking Statements Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to: general economic conditions in our markets, which are primarily Japan, North America, Europe and Asia, particularly China; unexpected changes in economic, political and legal conditions in China; our ability to develop, launch and produce innovative products, including meeting quality and delivery standards, and our ability to otherwise meet the advancing technological requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; manufacturing delays or defects resulting from outsourcing or internal manufacturing processes which may adversely affect our production yields and operating results; factors that may affect our exports, including a strong yen, political and economic instability, difficulties in collection of accounts receivable, decrease in cost competitiveness of our products, increases in shipping and handling costs, difficulty in staffing and managing international operations and inadequate protection of our intellectual property; changes in exchange rates, particularly between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; inability to secure skilled employees, particularly engineering and technical personnel; insufficient protection of our trade secrets and patents; our continuing to hold licenses to manufacture and sell certain of our products; the possibility that future initiatives and in- process research and development may not produce the desired results; the possibility that companies or assets acquired by us may require more cost than expected for integration, and may not produce the returns or benefits, or bring in business opportunities, which we expect; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of disease; the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located; the possibility of future tightening of environmental laws and regulations in Japan and other countries which may increase our environmental liability and compliance obligations; fluctuations in the value of, and impairment losses on, securities and other assets held by us; and changes in accounting principles. Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward- looking statements included in this document. 1

PV Global PV Global Global Market Trend Market Trend Market Trend PV PV Global Market Trend PV Global PV Global Market Trend Market Trend 2

Contribution of Subsidies to Expansion of European and U.S. Markets Europe USA Feed-in Tariff Incentives Net Metering RPS Feed-in Tariff Incentives + RPS + Net Metering Spreading Feed-in Tariffs Growing Incentives ⇒ 22 countries ⇒ 38 states 3 RPS: Renewables Portfolio Standard Please refer to accompanying note on page 1.

Toward the Realization of Low-Carbon Society of Japan Photovoltaics Ｍｋｌ Public 14 40 × & Industrial 13 3,000MW to VS. 2005: Public Around 53.1 GW 12 10 × & Industrial Residential for PV 300MW 3,200k homes 10 Equivalent to 70% of new houses Residential 8 6.69 320k homes Around 14.3 GW 6 for PV Around 1.42 GW 3.5 4 for PV 1.4 2 0.35 0 CY 2005 CY 2020 CY 2030 Output conversion Forecast Current Ongoing effort Best scenario CF: 4kW/kl 4 Please refer to accompanying note on page 1. Long term perspective for growth in use of photovoltaic energy / Estimate by Kyocera Corp.

Principal Market Outlook 3.6 × EU EU Japan Japan 4.7 GW 0.9 GW USA USA 10.4 × 4.5 × 2.6 GW 3.6 3.2 0.5 GW 0.4 1.8 GW 0.3 2.4 GW 2.3 0.2 0.2 0.2 2.0 1.4 1.3 FY3/08 09(E) 11(E) 13(E) FY08 FY09 FY11 FY13 1.0 0.4 0.35 India Korea India Korea 0.25 0.9 GW 0.25 FY3/08 09(E) 11(E) 13(E) 30 × FY08 FY09 FY11 FY13 8.3 × 0.7 GW GW FY3/08 09(E) 11(E) 13(E) FY08 FY09 FY11 FY13 0.5 0.13 0.4 0.15 Left: Policy driven 0.05 0.1 0.03 0.03 Right: Conservative 5.2 × 10.9 GW FY3/08 FY08 FY09 09(E) FY11 11(E) FY13 13(E) FY3/08 FY08 FY09 09(E) 11(E) FY11 13(E) FY13 3.3 × 3.4 × 8.7 7.0 GW 7.2 GW 2.2 × 5.8 World 5.2 World 4.7 GW 3.7 3.6 2.9 Market Market 2.1 Size Size FY3/08 FY09 FY10 FY11 FY12 FY13 Estimate by Kyocera Corp. Forecast 5 Please refer to accompanying note on page 1.

Comparison between Expansion Plans of Material Manufacturers and Market Requirements Kton 200 Required Amount of Material for Semiconductors + Solar Products Requirement for 150 Solar Products GRAY New material manufacturers 100 Requirement for Semiconductors Material 原料不足 Shortage 50 YELLOW Existing material manufactures 0 FY3/05 FY05 06 07 08 09 10 11 12 13 14 15 16 17 18 Estimate by Kyocera Corp. Forecast 6 Please refer to accompanying note on page 1.

Demand Forecast in Four Principal Markets GW 25 Large Power Plants 20 15 Public & Industrial 10 Residential 5 Stand Alone 0 FY3/07 FY07 08 09 10 11 12 13 14 15 16 17 Forecast Estimate by Kyocera Corp. 7 Please refer to accompanying note on page 1.

Overseas Solar Photovoltaic (PV) System Manufacturers Cell / Module Maker ● Major ● ● Solon ★ ★ ★ ★ ★ ★ ★ ★ ★ New ★ ★ ● ● ★ Q-Cells ★★★ ★★★ ● ● ★ ★ ★ ★ ★ ★ ★ ★ ★ ● Conergy ★ ★ ● ● ● ★ ★ ★ ★ ★ ★ ● ● ★ ★ ★ ★ ★ ★ ★ ● EverQ ● ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ Ersol ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ● ● ● ● ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ● ● SolarWorld SCHOTT ● ● ★● ★● Wurth ★ ● Wacker ★ ★ ● ● ● ★ ★ ★ ★ ★ ★ ★ ● ●★ ★ ★ ★ ● ★ ★ ★ ★ ★ ★ ★ ★ ● ★ ★ ★ ● ● ★ ★ ★ ★ ★ ● ★ ● ★ ★ ★ ● ★ ★ ★ ★ ● ★ ★ ★ ● ★ ★ ★ ★ ★ ★ ★ ★ ★ ● ★ ★ ★ ★ 8 Please refer to accompanying note on page 1.

Market Conditions: Overview Europe, US, Korea, etc. Expansion of subsidy policies ⇒ Continuous market growth ＋ Increase in production volume by Increase in production of material existing manufacturers + new entrants ＝ ⇒ Stabilization of supply and price Rapid increase in number of ＞ 300 Companies manufacturers EEG* in Germany: reexamination of buyback price of feed-in tariff annual decrease rate 5% ⇒ 8 ～ 10% *EEG= Erneuerbare-Energien-Gesetz Beginning of "intense competition era" Beginning of "intense competition era" Gain comprehensive competitive advantages: Gain comprehensive competitive advantages: "cost competitiveness, technologies for development and quality" "cost competitiveness, technologies for development and quality" 9 Please refer to accompanying note on page 1.

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Technology Market Trend GW T/F Si CIGS CdTe Multi c-Si (kyocera) 12 100% Current Module Efficiency (%) 10.9GW 16 GW 14.1% Kyocera 90% 14 10 G company 80% F company 8.7 11.0% 12 10.9% C company A company D company 70% 8.6% 8.5% B company 9.6% 8 Market Expansion 10 8.3% 7.0 H company 60% E company 10.4% 8 8.1% 50% 6 5.2 40% 28.0% 3.6 4 2.2 30% 1.6 1.5 10.0% 1.1 20% Thin Film Production Share 6.9% 2 5.4% 5.1% 10% 0 0% FY3/05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Forecast ・・・ tern reliability ・・・ Multi c- -Si or Thin Si or Thin- -film ? Total cost, long film ? Total cost, long- -tern reliability Multi c 11 Please refer to accompanying note on page 1. SOURCE ： PV News, Lux Research

Influence of conversion efficiency on Solar System Costs 8 % 14 % construction cost Up significantly 100% Construction Mounting racks cost approx. 1.7 times Rack, etc. 80% Inverter Inverter 60% 40% Solar cells No. of cells approx. 1.7 times 20% 0% Residential Multi c-Si or Thin Film 勝者は？ トータルコスト、長期信頼性・・・ ・・・ tern reliability ・・・ Multi c- -Si or Thin Si or Thin- -film ? Total cost, long film ? Total cost, long- -tern reliability Multi c 12 Please refer to accompanying note on page 1. SOURCE ： PV News, Lux Research