Strategy and action

SolarWorld Corporate Strategy 2009/2010+

In line with our “BUILD A SOLARWORLD” vision, our strategy is based on the manufacture of products for decentralized power supply. The future belongs to the use of solar power technology on people’s own roofs as this is feasible on an almost unlimited, worldwide basis. That is why our products are not complicated niche products but are instead geared to universal application in a large, worldwide market. They can be enhanced in their functionality and are therefore also easy to integrate into a decentralized combination of other supply units. This is SolarWorld’s way to an independent, reliable and environmentally friendly energy supply.

Quality leader with a strong brand – this is the strategic course we already successfully adopted ten years ago. Our motto is to produce the products that we offer as a fully integrated solar technology group along the entire solar value chain. With respect to suppliers, we bank on quality and environmental standards that are in line with our group specifications.

Through consistent quality assurance from the wafer to the solar system, this is the way we offer our customers on all continents uniform quality and the brand promise: “Made by SolarWorld”. And that provides us with the necessary business flexibility to respond promptly and in a way that improves profitability to any changes in market parameters. Take 2009 as an example: The increased global supply of wafers and a simultaneous decline in prices caused us to invest even more intensively in the group’s own value creation. With enhanced module capacities in the solar core markets of Europe, North America, and Asia, we will again strengthen our engagement in the retail market from 2010 onwards and expand our global market position.

Corporate Structure 2010+. SolarWorld is among the largest solar groups worldwide and operates sites in the most important economic regions. Of strategic relevance to our investment decisions at the production sites are infrastructure factors that guarantee the high demands placed on process and product quality as well as with respect to environmental and social standards. The group’s own production sites are therefore located in Freiberg, Germany, as well as in Hillsboro and Camarillo, USA. Here, we create employment at scientific and economic locations and thus cut our complexity costs. With the objective of strategically securing our logistic proximity to the important future market of Asia, we additionally expanded our global production network by adding another module production facility in the form of a joint venture. Through the cooperation with our South Korean partner, we benefit from that company’s cultural, regional and technical know-how in the complex Asian market.

The sales offices of SolarWorld AG are located in the major solar growth regions.  Worldwide locations of the group World Map

The representation of our strategic management view is also reflected in the adjustment of the segmental structure of the group in the 2009 reporting period, during which regionally connected and fully integrated production and functional areas were pooled. Segment structure and stages of the value chain Segmental structure adjusted

Corporate Technology 2010+. Our group-wide and integrated production concept – applying across the value chain and across locations as it does – is based on the most advanced technology. Our objectives: to tap synergy and efficiency potentials throughout the group and to uniformly secure cost, quality, and environmentally relevant competitive advantages worldwide for the “solar module” as the end product. Research and development successes are being brought to bear from the raw material through to the system. For example, in 2009 an increase in cell efficiency and reduction of the wafer thickness helped to cut silicon consumption per watt peak.

Our internal minimum target for 2009 was to compensate for the reduction pursuant to the German Renewable Energy Sources Act (EEG) on an annual average by way of technical progress in the internal cost structure. We attained this target in the year under review. With the additional reduction step as at July 1st, 2010, the necessary progress in photovoltaic efficiency is to be accelerated at the the will of the legislator. EEG amended The resulting feed-in tariff reduction cannot be compensated for immediately to that extent by cost reductions in 2010. Nevertheless, SolarWorld will redouble its efforts to cut costs. Processes and technologies relating to the expansion steps completed in 2009 and planned for 2010, which have meanwhile once again been improved, will favor SolarWorld’s technical progress and will again clearly improve cost structures. The factor of size will lead to economies of scale and cost effects via numbers of units and shipments that will provide a competitive edge.

In this way we will shoulder the pressure of additional cuts of feed-in tariffs in the lead market of Germany. On balance we will offer our customers a sophisticated supply of standardized solar power products of the SolarWorld brand.

Corporate Brand 2010+. Our brand is one of our most important corporate assets. It enables us to obtain a competitive price for our quality products and to grow in a sustainable fashion. In contrast to established industries, the young solar industry continues to be subject to higher technological, economic and political risks. With an increasing supply, customers tend to look towards quality parameters like yields, stability and longevity. In the capital market, investors also “demand” additional security in order to compensate for the risks. A strong brand not only communicates appropriate product properties to the customer, it also reduces the risk involved in purchasing a solar power plant that constitutes an investment of more than 25 years.

The quality promise that we support with our “Corporate Technology” is additionally backed up by our strong sales function. The SolarWorld sales motto is: To be close to, and grow with the customer. However, we will still have to continue to invest in logistics processes in 2010 in order to be able to handle the increased volumes, and especially to cope with the temporary demand peaks caused by funding deadlines in the interest of our customers. Through investments in our brand communication, we will carry this comprehensive quality promise to potential customers and thus secure our worldwide market shares.