Is Solar Power Economically Sustainable by mks15185

VIEWS: 15 PAGES: 9

									                                                       Agenda


                                                         Intro to Evergreen Solar

                                                         The PV value proposition

                                                         Today’s vibrant PV market

                                                         Economic drivers
  Is Solar Power Economically Sustainable?



                              Mark Farber
                  VP, Strategic Planning; Co-Founder


ESLR062 11 / 06
                                                                                     2
Evergreen Solar, Inc. (Nasdaq: ELSR)                                                        String Ribbon production


     Integrated manufacturer of photovoltaic (PV)
     wafers, cells, and modules
                                                           White House, Washington DC


     Patented technology to lower
     manufacturing costs to expand markets
         Core technology invented by MIT Prof. Ely Sachs

     Evergreen’s sales growing faster than
     market: 153% CAGR 2000-2005

     Currently increasing capacity through JV
     in Germany – from 15 to 105MW in 2 years
                                                                      IBEW, Boston




                                                                                        3                              4
Agenda                            The world wants and needs solar


                                     No air pollution
  Intro to Evergreen Solar
                                     No water use or pollution
  The PV value proposition
                                     Generally benign solid waste
  Today’s vibrant PV market
                                     No noise

  Economic drivers
                                     Sitable




                                                                    Source: Kawasaki Heavy Industries




                                     Source: Sun Farm Network




                              5                                                                         6
Energy trends support solar growth                                       Agenda


   Increasing energy demand, particularly in developing world              Intro to Evergreen Solar

   Environmental awareness and pressures                                   The PV value proposition
       An Inconvenient Truth: Al Gore as climate change movie star
                                                                           Today’s vibrant PV market
   National security concerns / supply disruptions
                                                                           Economic drivers
   Oil / gas / electricity price increases

   Regional power shortages

   Challenging siting of new energy infrastructure




                                                                     7                                 8
Solar in perspective                                                                                                                     Rapid market growth


              PV is 0.1% world market share of electric utility capacity                                                                                                        World Shipments (MW)
                                                                                                                                             2000

                                                                                                                                                                  $15 billion market
                                                 Global Electricity Generating Capacity, GW                                                                       CAGR:
                                                          (2003, excluding buildings and transportation)
                                                                                                                                                                  23% 20-year
                                0          500          1,000     1,500       2,000        2,500       3,000     3,500       4,000
                                                                                                                                                                  44% 5-year
            Nuclear, coal,                                                                                                                                        47% in 2005
               oil, gas
                                                                2826
                                                                                                                                             1000
                       Hydro                                                                               786

                        W ind                                                                                       40

                   Biomass                                                                                           35

               Geothermal                                                                                                9
                                                                                                                                                0




                                                                                                                                                    1990

                                                                                                                                                           1991

                                                                                                                                                                  1992

                                                                                                                                                                         1993

                                                                                                                                                                                1994

                                                                                                                                                                                       1995

                                                                                                                                                                                              1996

                                                                                                                                                                                                     1997

                                                                                                                                                                                                            1998

                                                                                                                                                                                                                   1999

                                                                                                                                                                                                                          2000

                                                                                                                                                                                                                                 2001

                                                                                                                                                                                                                                        2002

                                                                                                                                                                                                                                               2003

                                                                                                                                                                                                                                                      2004

                                                                                                                                                                                                                                                             2005
            Photovoltaics                                                                                                6


 Source: Eric Martinot, World Bank; PV Energy Systems                                                                                           Source: PV News
                                                                                                                                     9                                                                                                                              10
Applications                                                       Market geography


                                                   On-grid
                     Applications (MW)
                                                                        100%
  1600
                                                                                                                 Rest of World
  1400                                                                   80%
                 Off grid
  1200
                                                                         60%
                                                                                                                 USA
                 On grid
  1000

                                                                         40%                                     Japan
   800

   600
                                                                         20%                                     Europe
                                                   Off-grid
   400


   200                                                                    0%

     0                                                                         demand   production
         1998 1999 2000 2001 2002 2003 2004 2005




 Source: Solarbuzz
                                                                                             Source: Solarbuzz
                                                              11                                                                 12
Agenda                             How does the market see it?


  Intro to Evergreen Solar
                                    Best Silicon Utilization
                                    Best Silicon Utilization                                        Fast Growth
                                                                                                    Fast Growth                                   Stock Price
                                                                                                                                                  Stock Price
  The PV value proposition
                                                                                                   Product Revenue
                                                                                                      ($ millions)
  Today’s vibrant PV market                                    Silicon Use
                                                                                      110                                   17.50
                                                                                                                                                   Nasdaq: ESLR
                                                14
                                                                                      100
                                                12                                                                          15.00
  Economic drivers                                                                    90

                                                10                                    80                                    12.50
                                                                                      70
                                                 8




                                    gm / watt
                                                                                                                            10.00
                                                                                      60
                                                 6                                    50
                                                                                                                             7.50
                                                 4                                    40

                                                                                      30                                     5.00
                                                 2
                                                                                      20
                                                                                                                             2.50
                                                 0                                    10
                                                        2004       2005      2006
                                                                                       0
                                                                                                                              -
                                                     Industry             Evergreen         2000      2002    2004   2006




                                                                                                                                    N-00


                                                                                                                                           N-01


                                                                                                                                                   N-02


                                                                                                                                                          N-03


                                                                                                                                                                 N-04


                                                                                                                                                                        N-05
                              13                                                                                                                                               14
Cost parity inevitable                                                                                                                                              Technology and scale drivers


                                                                                                                                                                        Costs declining (15-year trend)
                                                                                                                                                                            80% manufacturing experience curve
                                               0.35
                                                                                                                                                                            5% annual price decline
     Increasing cost                                                                                   California
     of conventional                           0.30
                                                                                                                                                                        Technology advances
                                                                                                                                                                            Old technology still improving
     Decreasing cost                           0.25
                                                                                                                                                                            New technologies coming to market
     of solar                                                                                                                                                               Advanced technologies in the wings   Evergreen Solar Factory
                                                                                                                                                                                                                 Evergreen Solar Factory
                                               0.20                                                                                                                                                                Thalheim, Germany
                                                                                                                                                                                                                   Thalheim, Germany
                                     $ / kWh




     Subsidies
     bridge the gap                            0.15

                                                                           Solar, pre-subsidy
                                               0.10                        Solar, post-subsidy

                                                                           Retail electricity

                                               0.05



                                                -
                                                      2006

                                                             2007

                                                                    2008

                                                                           2009

                                                                                  2010

                                                                                         2011

                                                                                                2012

                                                                                                       2013

                                                                                                              2014

                                                                                                                     2015

                                                                                                                            2016

                                                                                                                                   2017

                                                                                                                                          2018

                                                                                                                                                 2019

                                                                                                                                                        2020




  Source: Evergreen Solar analysis
                                                                                                                                                               15                                                                          16
Market and product drivers                                                                                   PV is economically sustainable


                                                    Comparative System Costs

    Global markets lower hardware cost;
    Local markets lower local costs                                                                             World needs and want solar

    Despite higher hardware costs, German                                               M&S                     Mature products; vibrant
    system costs are lower than US
                                                                                                                market
                                                                                        installation,
    Nearly half of total PV cost is “local”                                             other direct
                                                                                        BOS                     Costs declining with
                                                                                                                technology, scale, and
                                              $/W




                                                                                        inverters               market maturity
                                                                                        modules




                                                     Germany                  US


                                                     Source: Evergreen Solar analysis                   17                                    18

								
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