Press release BoxID: 110462 (Bosch Solar Energy AG)
  • Bosch Solar Energy AG
  • August-Broemel-Strasse 6
  • 99310 Arnstadt

ersol intensifies its cost reduction efforts – grid parity within sight

(PresseBox) (Erfurt, ) - “Warm-up phase” in 2006 and 2007 prior to a major leap in 2008
- Plans to enter module production in the medium-term
- Confirmed 2006 results form a good basis for further development

Over the past two years, ersol Solar Energy AG (ersol) has systematically laid the groundwork to allow it to take a major step in 2008 towards reducing costs in the area of crystalline silicon PV products. The following key elements of ersol’s strategy contributed to this: Thanks to the acquisition of the wafer manufacturer ASi Industries and of the silicon recycling operation SRS, the Company was able to close off the crystalline value chain from silicon through to the solar cell and develop an integrated business. Within the ersol Group, cost-effective, internally-produced wafers currently account for around 80% of supply. Furthermore, ersol has been able to conclude long-term supply agreements with leading manufacturers of polysilicon. From a technological point of view, the ersol Group has succeeded in continually improving the yield and performance of its monocrystalline solar cells while at the same time reducing the wafer thickness. This development will be constantly pressed forward in the years ahead. Finally, the rapid capacity expansion is also attributable to the fact that ersol achieves economies of scale through mass production. ersol expects that cost savings in crystalline technology of around 25% at module level by 2008, and of about 40% by 2010 can be achieved, compared with 2006 values.

ersol begins crystalline solar module production ersol’s CEO Dr. Claus Beneking explains the Group's plans as follows: “To achieve our 2010 cost goals, ersol has also resolved to consistently pursue the path towards a fully-integrated PV company and, in the medium-term, to also partially integrate the module manufacturing stage”. This step will allow the ersol Group to directly access the market and thereby secure its own sales channels with an independent brand. ersol believes that in the future, it will only be possible to reach important submarkets by joining a cost-controlled, technologically integrated module production system to the cell production stage. “Our trading segment has already allowed us to establish contacts with the future’s most promising target markets. We have already proven our know-how in the area of module production with our joint venture in Shanghai. All of this is now standing to us,” says Beneking. However, the Company is also continuing to sell solar cells based on the existing agreements and is continuing its solid cooperation with its cell customers. Crystalline silicon technology will continue to form the main focus of the Company’s activities in the future. By the end of 2007, production capacity for crystalline solar cells at the Erfurt and Arnstadt sites will be boosted to 180 MWp, and this will increase to 220 MWp by the end of 2008. ersol currently expects a further expansion of its capacity in the crystalline segment of up to approximately 500 MWp in 2012. Its capacity in crystalline module production should be around 50 MWp by 2009. It could subsequently expand to 100 MWp. ersol's concept may also include partnerships with established module manufacturers. Current deliberations will take more shape in the next few weeks.

ersol has invested in the development of silicon thin-film technology as an additive technology path. “We again expect substantial cost-reduction potential in this area,” says Beneking. Since ersol also operates the thin-film product line through to the module level, in the future it will be able to offer two module technologies to its customers.

In the course of its future commencement of crystalline module production, ersol will amend its segment reporting. As from the first quarter of 2007, the Group will present the following four segments: ersol Silicon, ersol Wafers, ersol Solar Cells and ersol Modules. The new ersol Modules division will initially comprise the areas Thin Film and Trading and will later also incorporate the production of crystalline modules.

“Grid parity” in submarkets already expected for 2008 ersol firmly believes that the cost savings that can be achieved based on this business model represent a breakthrough in the competitiveness of PV electricity. “In 2008 we already expect to see solar power gradually assert its competitiveness against grid prices delivered from conventional sources, the so called grid parity, in important submarkets, particularly in sunnier regions such as in the southern states of the USA. By 2010 we should achieve this competitiveness on a broader scale, which will put us within reach of having a self-supporting market,” Beneking argues. As a result, ersol estimates that the market volume that will be possible to reach without requiring any further subsidies will grow strongly from 3 to 5 GWp. ersol expects a market volume in the PV industry overall of 4 to 5 GWp in 2008 and 8 to 10 GWp in 2010.

Outlook for 2008 During 2008, ersol wants to achieve capacities reaching a nominal 220 MWp for crystalline solar cells and of 40 MWp in the thin-film area. The targeted output of 140 MWp and 24 MWp has already almost been sold. ersol believes that this development will lead to sales of between € 320 and € 330 million, while the operating result will more than triple and is expected to reach between € 70 and € 80 million. Sales abroad, in particular, are expected to grow, allowing the Company a greater independence from the German photovoltaics market: currently foreign sales still account for 43% of total sales. This figure should rise to 50% in the medium-term.

Group operating result for 2006 confirmed at € 20.3 million Following publication of its audited operating figures for 2006, ersol AG confirms its provisional sales figures (2006: € 127.8 million, previous year: € 64.4 million) and reports more than a doubling of its earnings after taxes (2006: € 12.3 million, previous year: € 5.9 million). The operating result (EBIT) also grew by more than 100% to € 20.3 million (previous year: € 9.5 million). The EBIT margin also expanded: It reached 15.9%, following 14.7% the previous year, despite the start-up costs incurred by the new divisions. Overall, this growth positively reflects the continued integration and the Company’s capacity enhancements, which open up economies of scale. Earnings per share increased to € 1.25 (prior year: € 0.93).

In the Group as a whole, ersol AG employed 130 women and 318 men at the end of last year. During 2006, the Group created almost 160 new jobs and employed 448 staff by year-end. The 500-threshold had already been crossed by the beginning of March.

For more detailed information on the Company's operating figures for 2006, please refer to ersol's Annual Report 2006, which is being published online today at: