COMPETITIVE position And MaIN SALES mArkETS

Position maintained in tougher competition. In the year under review competitive pressure on the international solar market rose significantly. It was mainly Chinese competitors who put pressure on the entire industry with their very low product prices. Due to their substantially lower personnel and energy costs as well as their lower interest rates for credits, they were able to produce at much lower overall costs than European manufacurers, for example. Average prices for solar modules dropped by about one third industry-wide in 2009 and pushed down margins at the same time so that many solar companies made losses. Crystalline solar power technology – which is what SolarWorld has specialized in – holds a position of market dominance with a market share of some 80 per cent in the total solar market.

Based on its strategic alignment, SolarWorld was able to stand its ground successfully in the tougher competitive environment.  Strategy and action   Sales strategy proves its worth Despite declining margins we managed to generate a sound result.  Revenues and earnings development  In the year under review we succeeded in increasing our market shares.  Market position maintained

The solar wafer market – our second most important sales activity – was also characterized by declining prices and increasing competitive pressure in 2009. Thanks to our integrated production strategy, in contrast to competitors, we were able to upgrade wafer volumes that had not been called off into our own solar cells and modules and place them on the market. Some 50 per cent of our SOLSIX^® brand wafers were sold to external customers in 2009 while the rest went into our own production.

Our growth on the main sales markets in 2009 closely mirrored the market development. In the year under review we therefore succeeded in increasing our share of group-wide revenue (wafer, module and solar kit business) in Germany to 71 (previous year: 46) per cent. The second strongest sales region for SolarWorld was the rest of Europe, with a share of 18 (previous year: 33) per cent, followed by Asia with a share in total group revenue of 7 (previous year: 12) per cent, and the USA with a share of 3 (previous year: 8) per cent.