OVERVIEW OF THE SOLAR POWER MARKET IN THE GCC

DR. RAED BKAYRATVP BUSINESS DEVELOPMENT –MIDDLE EAST

PLASTICON 2017, Dubai

April 10th, 2017

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“UAE beats renewables cost hurdle with world’s cheapest price for solar energy”

The National, Jan 18, 2015

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GLOBAL DEMAND FOR SOLAR PV

GTM Research Graph

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• GTM forecasts a slowdown in total global demand from 2016-17, while IHS and BNEF both see growth; all forecast growth resuming into 2018, driven notably by India and other emerging markets

Source: GTM, “Q4 2016 Global Demand Monitor” (November 2016); IHS, “PV Demand Market Tracker Q4 2016“ (December 2016); IHS, “Emerging PV Markets Tracker Q4 2016” (December 2016); and BNEF, “Q4 2016 Global PV Market Outlook” (November 2016).

10.9

3.9

14.1

17.5

BNEF

87.6

31.3

8.9

6.0

12.5

19.5

IHS

82.1

24.6

10.9

7.5

13.4

20.9

GTM

72.9

22.3

10.1

6.3

21.2

18.1

GTM

6.0

14.1

32.0

97.3

IHS

-7.0%

+2.5%

+6.4%

+3.6%

IHS

23.5

9.48.9

17.0

75.2

8.0

16.0

16.8

6.5

GTM

11.1

68.6

19.3

BNEF

25.3

8.4

9.9

12.0

79.3

19.0

30.5

14.612.6

26.5

IHS

8.7

5.8

12.9

77.3

13.7

17.0

BNEF

11.6

4.5

12.9

69.7

93.2

34.8

3.0

17.0

18.2

IHS

90.5

28.0

12.4

6.711.6

21.1

GTM

81.1

27.0

11.8

73.7

GTM

+7.9%

13.9

5.8

9.5

+16.5%

28.3

8.9

Chile

Rest of World

Mexico

Brazil

Germany

UK

China

United States

Japan

India

Annual Global PV Installations (GW)

2016 2017 2018 2019 2020

Higher than expected demand in India –

most firms revised forecasts upwards

GLOBAL PV DEMAND FORECASTS

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GCC: RECORD BREAKING GROWTH

Egypt1800 | 250

2 GW = in progress

2 GW = tendered in 2017

Jordan320 | 250

Kuwait80 | 1200

Saudi Arabia62 | 300

UAE2000 | 500

MESIA Annual Report 2016

MIDDLE EAST: REGIONAL PRESENCE

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FIRST SOLAR: A TRACK RECORD OF EXCELLENCE

2009 2010 2011 2012 2013 2014 2015 2016

1st to break $1/watt cost barrier

1st to produce 1GW in single year

First Solar the 1st to produce 1GW per year

First Solar selected to supply 5MWdc

modules for the pilot Masdar City PV

power plant in Abu Dhabi, UAE

Developed world’s largest contracted solar project pipeline ( 3GW+) | Facilitated financing for ~2GW (representing ~$9bn)

First Solar contracted to build the

13MWac first phase of the

Mohammed bin Rashid Al Maktoum

Solar Park in Dubai, UAE

First Solar completes the 13MWdc first

phase of the Mohammed bin Rashid Al

Maktoum Solar Park in Dubai, UAE

First Solar selected to supply modules

for the 260MWdc second phase of the

Mohammed bin Rashid Al Maktoum

Solar Park in Dubai, UAE

21.5% cell efficiency record

18.2% module efficiency record

First Solar selected to build the

52.5MWac Shams Ma’an project in

Ma’an, Jordan

First Solar completes a 800kWdc

pilot diesel-hybrid plant in Al Jouf,

Saudi Arabia

10GW of global installed capacity

GLOBAL TRACK RECORD

9

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TOPAZ SOLAR FARM

Largest investment grade renewable bond in history

10

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COPPER MOUNTAIN 1

Co-located with existing gas combined cycle power plant

11

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DEWA SOLAR PLANT

1st phase of landmark 1GW Solar Park in the UAE

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SHAMS MA’AN

Accounts for 1% of Jordan’s electricity generation capacity.

PATH TO SUSTAINABLE CHEMISTRY

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RENEWABLY POWER MULTIPLE FACILITIES WITH A SINGLE SOLAR PROJECT USING A “VIRTUAL” PPA

“Virtual PPA”

overview

• Corporate covers difference between

fixed-price from solar plant and

variable price in the wholesale market,

enabling the solar plant to get long-

term financing

• Corporate continues to buy retail power

from the utility at their facilities

Key benefits

• Efficient: single transaction gets all

facilities to 100% renewably powered

• Economies of scale: large solar plant =

low cost

• Energy hedge: Fixed-price solar power

may act as a hedge against future

power cost volatility. 16 facilities

consuming:

1 solar power

plant generating

500 GWh/year180 MW

500 GWh/year

Example of a Virtual PPA:

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151. Gigawatts of large-scale, off-site corporate PPAs

USA

• 5 – 6 GW1 to date

• Largest market currently

• Multiple contracting options,

depending on region

Mexico

• ~0.5 GW1 to date

• Previous self-consumption tariff

enabled corporate PPAs

• New direct access tariff expected

Q4 2016

South America

• Limited GW1 to date

• Brazil, Chile and Argentina all

have, or will release soon, tariffs

enabling bilateral contracts

Europe

• 1.5 GW1 to date (mostly wind in UK and

Scandinavia)

• Solar historically supported by FiT; several

countries transitioning to auction-based

PPAs

Rest of World

• Limited GW1 to date

• Mostly vertically-integrated utilities, limited

contracting mechanisms

• Custom solutions negotiated with utility

Japan

• Limited GW1 to date

• Lucrative FiT supports solar

• Corporate opportunity as investor

in FiT facilities

India

• Limited GW1 to date

• Bilateral PPAs possible through

Open Access mechanism

• Tariffs/costs vary by state

Australia

• Limited GW1 to date

• Offsite opportunities structured

through retail energy providers

GET TO 100% RENEWABLY POWERED GLOBALLYLarge-scale, off-site renewable energy corporate procurement market

snapshot

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MITIGATE ENERGY COST VOLATILITY

2013 2018 2023 2028

Historical electricity price Net electricity price, with solar hedge

• Electricity prices can be volatile

o Driven by fuel commodity volatility and supply/demand imbalances

o Extent of volatility seen by customer depends on market exposure of retail tariff

• A long-term renewable PPA can hedge electricity price volatility

o Effectiveness of hedge depends on correlation between wholesale prices at solar plant location and retail prices at corporate facilities locations

o Retail tariff can be structured with utility to provide an effective hedge

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17Source: “Clicking Clean: A Guide to Building the Green Internet”, Greenpeace, May 2015; http://www.imore.com/tim-cook-goldman-sachs-conference

CREATE VALUE WITH A LONG-TERM PPA, NET METERING OR WHEELING SCHEMES

2018 2023 2028 2033

Power price forecast -

High scenario

Power price forecast -

Low scenario

Solar PPA price

Quite frankly, we are doing this because it is right to do, but you may also be interested to know that it’s good financially to do it.

We expect to have a very significant savings because we have a fixed price for the renewable energy, and there’s quite a

difference between that price and the price of the brown energy. - Tim Cook, Apple CEO

• Though uncertain, power prices are generally forecast to increase

• A long-term renewable PPA can save on energy costs when future power prices increase

Savings – High scenario

Savings – Low scenario

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REGULATIONS AND BUSINESS MODELS VARY

Renewable generation side Corporate facility load side

“Virtual” PPA /

Contract for

Differences

(CfD)

Wheeling

model

Net meteringCo-located with load

Solar plantWholesale

market Utility load

Spot power salesor QF PPA

“Contract for differences” so solar plant gets fixed $/MWh revenue

Solar plant Utility load

Solar plant load

Retail tariff

Energy X Energy Y

Self Consumption

PV MODULE MANUFACTURING

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PV MODULE AND MANUFACTURING TECHNOLOGY

First Solar Fully Integrated, Automated and Continuous Thin Film Process

• 98-99% reduction insemiconductor material

• Fully integrated, continuous process vs. batch processing

• Large 60 x 120cm (2' x 4')substrate vs. 6" wafers

Polysilicon Ingot Solar ModuleSolar CellWafer

Conventional Crystalline Silicon Batch Technology

Glass In < 2.5 Hours Module Out

Semiconductor Deposition

CellDefinition

Final Assembly and Test

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• Semiconductor layer is encapsulated between two protective sheets of glass

— Remains encapsulated when breakage or melting occurs

• Each module contains less than 14 grams CdTe

• CdTe is a stable and safe compound

— Melting point of 1041ºC

— Insoluble in water

— Will not chemically decompose

COMPOSITION OF FIRST SOLAR MODULES

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COMPOSITION OF SI PV MODULES

Sinovoltaics Group

ORGANIC PHOTOVOLTAICS (PLASTIC SOLAR CELLS)

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STRUCTURE OF ORGANIC PV CELLS

Trans-polyacetylene (t-PA) Polythiophene (PT) Polypyrrole (PPY)

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WHY ORGANIC PV CELLS

Intrinsic Advantages:

Ultra-low manufacturing Cost (Roll-to-Roll Productions, printing etc.)

Bifacial & can be inverted.

OPV absorbs light in a bulk, not at a discrete interface.

Light Weight, flexible and rugged

Color –tunable & Semi -transparent

Can be integrated into Roofs, Facades, Windows & Cars.

Safer Environment

Compatibility (thin cells)

Organic Photovoltaics (OPV) Market 2017:

Global Companies – e.g. HELIATEK, MITSUBISHI Chemical,

INFINITY PV, ARMOR Group & BELECTRIC (OPVIUS)

HELIATEK sets

new OPV world

record

efficiency of

13.2%

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FLEXIBLE INTEGRATION OPTIONS FOR FACADES

“HELIATEK” Successfully Implements Second Phase of BIOPV Pilot Project in Singapore

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IDEAL BIPV SOLUTION

Taisei Corp’s ‘Zero Energy’ Building Walls mounted with Organic Solar cells.

OPV Supplier- “Mitsubishi Chemical Corp.”