Dipl.-Ing. Frank H. Asbeck
CEO of SolarWorld AG

Letter by the Chairman 

Dear Customers, Shareholders, Employees and Friends of SolarWorld AG,

A challenging and not always easy year 2009 lies behind the solar industry. The SolarWorld AG felt this, too. The industry-wide decline in prices, the increasing competitive pressure mainly from the Chinese mass marketers, the uncertainties caused by the upcoming amendment of the law on renewable energies in our core market Germany – all that together has exerted noticeable pressure on us as well.

Yet, the question is: What are we actually talking about? Against the industry trend SolarWorld again generated healthy earnings and a sound return in investment in 2009. We are writing black figures. We boosted our sales revenues to more than one billion Euro. Ten years ago we started as a pioneer. Today we are a world leader in the industry. We have always been able to measure ourselves against our objectives.

This is plenty of evidence that the strategic approach we adopted is the right one. And: We are operating in a market supported by a megatrend – the increasing demand for energy. In the next 20 years the global demand for electricity will shoot up by 66 per cent. The sales market for energy alternatives is therefore bound to increase due to the finiteness of conventional energy sources and the need to find climate-friendly answers. It is therefore unavoidable that there will be a shift in demand towards alternative technologies in power generation. Conventional energy sources will become increasingly more expensive; solar energy will become increasingly less expensive through intensive technological development and economies of scale. The time of grid parity – i.e. the moment when power from the wall socket costs more than power from your own solar power plant on the roof – is coming closer and closer. Depending on the number of hours of sunshine and the country concerned as soon as in 2013. Companies that now manage to successfully establish their market position will benefit to a large extent from the demand that will then grow significantly. Our business model ensures us precisely today our growth into the future.

This year we are faced by further challenges: We must find answers to the massive cuts in the feed-in tariffs in Germany. I am against over-subsidizing the solar industry because we need the acceptance of the people who pay for this. It is only in this way that we can manage the energy turnaround. Still, in the first instance this means strong pressure that we need to cushion.

We will continue to invest in the strengths of SolarWorld with an appropriate investment speed and good investment tactics. We will again “step on the accelerator” and intensively work on the cost structures along the entire solar value chain. New and highly advanced production plants installed in the context of our current expansion measures will again increase our productivity.

Our supreme credo will remain: The SolarWorld brand stands for top quality. Our products distinguish themselves in competitive comparisons by the highest yields and the best performance warranties. And that is also our quality promise for the future: We will place a major strategic emphasis on our innovative power. With high quality products “Made by SolarWorld” we will continue to convince our customers and open up new growth markets.

Let me summarize it this way: With our tried and tested integrated business model – just recently once again strengthened at the raw material base in the sunny state of Qatar – we secure our independence and our sustainability claim, guarantee consistent SolarWorld quality and, on the cost side, find answers to the need for competitive prices. We are economically successful, have a good liquidity framework and can thus achieve the investment targets we have set ourselves.

And so we are self-confidently looking into the future! In 2010 we will maintain our speed of growth and increase our production volume as planned by more than 30 per cent. Our SolarWorld is marked by team spirit and a strong will to perform, which in turn is based on the commitment of our employees. At this point it is they who again deserve my heartfelt thanks and my trust for reaching the targets we set ourselves. And we will face the challenges of such a rapidly growing company: We will consistently strengthen our processes because we know about the need for optimization. For us the satisfaction of our customers is the highest measure. We must gain this with top quality in logistics and service and with a perfect product in typical SolarWorld quality.

Our performance is driven by the power of the sun: Sun at work!

I thank you for your trust and I promise you: The future will remain exciting and we, the SolarWorld, will have a hand in shaping it. That’s what I am looking forward to together with you.

Sunny regards,

Dipl.-Ing. Frank H. Asbeck

CEO of SolarWorld AG