Organization of our innovation activities

Holistic innovation approach boosts market position. SolarWorld’s technological innovation contributes substantially to the group’s competitiveness in a market environment characterized by oversupply and price pressure.  Corporate Technology 2010+ Our technology and product development is based on understanding the causes and effects all the way from silicon to the finished system. This gives SolarWorld a crucial competitive edge in terms of exploiting our cost saving potential while securing and enhancing quality. Innovation can also be implemented more precisely by adjusting individual parameters. Our development mandate is based on market requirements and hence on our customers’ needs. We follow our innovation motto “Setting benchmarks”: We seek to set industry standards in crystalline solar power technology including PV systems technology.

SolarWorld Innovations – Group development “from lab to fab”. Our innovation management has been centralized within SolarWorld Innovations GmbH at our German production site in Freiberg, Saxony. This region, a center of science and research, offers us favorable conditions for our own R&D activities and for cooperation schemes. In the year under review, we expanded our local innovation infrastructure: In March 2009 we commissioned our wafer pilot plant with an annual rated capacity of 20 MW. Our new cell and module pilot plant, which also has an annual rated capacity of 20 MW, was almost completed in the period under review. In the first quarter of 2010, our development teams launched their activities at that plant.

Our pilot plants play a major strategic role for our group and are the centerpiece of our development activities. We thus increase productivity in production by shifting development activities to our pilot plants, where we develop new process variants and automation solutions under conditions that are very close to actual production conditions. We also optimize the use of consumables on a pilot scale. This core knowledge developed on the basis of near-production conditions is an asset which neither we nor any other company can buy from institutes or suppliers – and giving SolarWorld a competitive edge. The results will only be transferred to production when they have reached a level permitting series production. We thus create standards for all international sites: our Corporate Technology.

Bundling our R&D activities centrally at SolarWorld Innovations provides us with a further benefit: We deliver synergies in quality assurance through our development and test laboratories, further expanded in 2009, but also in patent and literature administration, project management, the coordination of state-funded development projects and central Intellectual Property management (IP management). Considerable rise in registered inventions

Product management creates innovation close to the customer. We organize regular forums and workshops to engage in a transfer of knowledge and an exchange of information with our production sites. Moreover, employees from the individual production areas work closely with their SolarWorld Innovations colleagues on our production technology teams. Discussion about the Future  Customer-centered innovation in systems engineering is created by our product management unit at SolarWorld AG in Bonn, where our engineers cooperate closely with distribution and customer service.

Increase in R&D headcount. Our employees are a crucial factor for the success of our R&D activities. We therefore attach a great deal of importance to winning and retaining skilled technical and management staff. In 2009 we again increased the headcount of our R&D subsidiary, SolarWorld Innovations. The number of employees rose by 13.8 (previous year: 42.9) per cent. They accounted for around 4.5 (previous year: 4.4) per cent of the total group headcount.

Since our segment reporting was adjusted this year Segment structure adjusted the indicated headcount numbers relate exclusively to SolarWorld Innovations GmbH, i.e. permanent employees including student staff, e.g. working or PhD students. SolarWorld Innovations launched its business operations on 1 January 2008.

Apart from employees of SolarWorld Innovations, many other employees from other group areas and our joint ventures also performed R&D activities. In 2009, for instance, 69 (previous year: 121) employees from our production plants in Freiberg were involved in research projects implemented in the wake of state-sponsored operational trials. At SolarWorld AG we increased our headcount in systems engineering. We thus had eleven (previous year: 7) employees in product management, seven (previous year: 5) in construction development and three (previous year: 2) in software development.

High percentage of skilled technical staff. Due to the large variety of R&D activities required, our HR policy takes care to ensure a balanced relationship between engineers and scientists from different disciplines. In addition, the establishment of our new pilot plants and the associated development activities implemented in close relationship with production also leads to a high percentage of skilled workers in SolarWorld Innovations.  Development of our R&D head count We attach great importance to training and promoting highly qualified junior staff within our group, Inspiring, gaining and retaining employees with a strong employer brand as reflected by a large number of student staff.

Cooperation schemes strengthen knowledge base. In the period under review, we expanded our in-house know-how through cooperation projects with universities, institutes and other external centers of competence. In 2009 we cooperated with a total of 25 international research institutes (previous year: 21), an increase of 19 per cent year-on-year.

Our R&D teams at our Freiberg site cooperate and network closely with scientific institutions on a joint technology campus, above all with the Technical University and Mining Academy Freiberg (TUBA), and the Fraunhofer Technology Center for Semiconductor Materials (THM) as well as start-up companies in the neighboring Start-Up and Innovation Center, Freiberg (GIZeF).

We also support basic research and development and the German photovoltaic research community through cluster projects such as SolarFocus, LOANA, PV Reliability. Examples of successful cooperation with external partners include a project between SolarWorld and the Fraunhofer THM Freiberg, the Fraunhofer Institute for Integrated Systems and Component Technology (IISB) Erlangen. Cooperating closely, researchers found out how to avoid special materials faults in the industrial production of silicon crystals and thus considerably cut costs. The teams received the Georg Waeber Innovation Award 2009 of the Sponsorship Association for Microelectronics e.V.

External know-how complets in-house development. In the framework of close cooperation to develop an innovative metallization process for solar cells, we secured an exclusive option concerning the basic know-how of our development partner. Should the process prove ready for production in 2010, as scheduled, we will be able to draw on this option. We will thus optimally complete our in-house innovation in this area, and are seeking to achieve a unique product feature.

Other than that, we did not purchase any essential know-how in the period under review, nor in previous years. Nevertheless, SolarWorld had of course access to additional external know-how through contracts or cooperation schemes, in particular with equipment manufacturers and research institutes.

Considerable rise in registered inventions. Protecting intellectual property is a top priority for SolarWorld, not least due to the tightening of the competitive situation in the solar industry, and it is secured through our central IP management. Group-wide, our staff registered 28 (previous year: 18) inventions in 2009, a considerable increase of 55.6 per cent year-on-year. The IP ratio at our German sites and the ratio of registered inventions to our R&D headcount, also rose substantially to 31 per cent (previous year: 23 per cent) in 2009.

Another task of our IP management is to continually monitor the economic efficiency of our patent portfolio. In 2009, activities included removing old patents with a low cost-benefit ratio from our stock of property rights and property rights families so that its number declined year-on-year.

Efficiency target achieved. Cost reductions form the benchmark used to measure our research efficiency. Our minimum target for 2009 was to offset the decline as at 1 January 2010 established by the German Renewable Energies Sources Act. Last year, the group succeeded in reducing costs in line with that target corridor – through continuous improvement, based in particular on the increase in module output and the efficiency of our solar cells.  Targets Achievement 2009 and targets 2010+