 Good afternoon everyone. My name is Carol Werner. I'm the executive director of the Environmental and Energy Study Institute, and I'm very very glad to welcome you to our briefing this afternoon on looking at solar power trends, German, and U.S. perspectives. There's been so much that has been happening with regard to renewable energy, and certainly solar has been in the news a lot, and there has been enormous growth on both sides of the Atlantic with regard to solar energy. Both in terms of new advances in terms of manufacturing efficiency as well as deployment of this very very important renewable and very abundant renewable resource, and therefore we wanted to take advantage of an opportunity that we had by having a guest from across the sea. We are very fortunate to have a speaker coming to us who has been working on solar in Germany for many many years, and it strikes us that this is a very important time to really look at what is really happening in on both sides of the Atlantic, and we have today two terrific experts to lead us through that whole conversation, and we are also very glad that we are co-sponsoring this briefing with the Heinrich-Bohl Stiftung of North America, the Heinrich-Bohl Foundation, and at this time I would also then like to ask the the program director of Environment and Global Dialogue with Heinrich-Bohl to come forward, Arne Young-Han, sorry, Young-Yohan, to come forward and and Arne will also be introducing our first speaker. Thanks, Arne. And the quarters are very close here. Thank you so much, Carol. Good afternoon, everyone. Glad to see such a turn out. I'm glad to see so many of you here. As said, my name is Arne Young-Yohan with the Bell Foundation here in Washington, DC. We are a global green think tank of the German Green Party and work on a variety of issues, but obviously environmental and climate change is one of our key pillars. And we just, with the beginning of this year, we kicked off another two-year program, the Climate Network, that is a dialogue program across the Atlantic to exchange best practices and ideas among legislators, opinion makers, and advocates for a low-carbon economy with a strong focus on promoting renewable energies with strengthening local economies and providing new and sustainable jobs. And this event is part of this two-year program that we do together with our office in Brussels and also in Berlin. When we talked about the event or the idea to do something on the issue of renewable energies in solar in particular and with my preparation for the event today, I realized, you know, it was in 1999 when I started working with the German Green Party back then in Berlin as a legislative assistant over there. And it was a time where in Germany there was a new government, a red-green coalition, so to say, like a center-left coalition with the German Green Party. And at that point, Germany was really not an ambitious front runner on that issue, I think. We had renewable energies, had a share of five percent, and there was mainly old hydropower. We had some successes with reductions of greenhouse gases before, but that was also a big, what we call, a wallfall profit of deindustrialization of Eastern Germany. Solar power at that time was still very expensive and was seen as something that is applied on calculators and on satellites in space, but nothing that you would have mainstream on houses everywhere. And at that time, also, Germany had 20 nuclear power plants providing 30 percent of electricity, which is just something very big and very strong. And so that was the time 13 years ago in Germany. And I think when you listen to what the speakers today say, especially our colleague from Germany, you will see that there has been a lot of changes then over these last 13 years. In the time when I remember when we were working on that agenda with this election in 1998 and this new government, this new government had also a new mandate for renewable energy economy and a mandate to shut down nuclear power. That was one of the founding issues of the German Green Party. It's in the centerpiece of their political agenda. And so over the last years, there were a couple of pillars were implemented in law that I just want to mention to give you a sense that this is not something sudden that we see in Germany happening overnight, but this has been done in the making for a decade or so. So in 1999, there was a strong effort to introduce an energy taxation reform, a pretty wide, what you would probably call a carbon tax here. That was done in 1999. In the year 2000, the feed-in tariff policy was implemented. That is the Renewable Energy Act that has been the main driver for solar and other renewables. In the year 2001, the nuclear phase-out law was implemented at the first time from that government. And in the year 2005, a European-wide cap and trade system was implemented, the carbon market. So you had these key pillars. There were other laws, but these were the key pillars towards this low-carbon economy in Germany. And it hasn't gone all very smoothly. There were bumps in the road. It was not very easy. There were strong lobbying efforts. But I think you can see that over the long run, this kind of implementation has really triggered some very interesting developments. And I'm not going to share those because that's why we have invited Volker Quaschning. He's sitting here to my left. And Volker is one of the most established experts in Germany on renewable energies. He's at a university in Berlin, the University of Applied Sciences. And he has a background in electrical engineering. And he's doing a bachelor and master's program for renewable energy. When I was studying, I knew one university offered that. He told me this morning there are 60 to 70 courses across Germany only offering renewable energy courses for bachelor or master or beyond of that. And I think with that, Volker, I turn it over to you. Thank you very much for coming. One thing I forgot to mention that I would first like to thank for the support of congressmen at Markey, his office, Sarah Butler, who helped us to get this room. Secondly, I would like to thank the EU commission who is sponsoring this two-year program that I've described before. And last but not least, a big thanks to Carol and all of her staff who helped to make this possible. Thank you. So thank you very much for the introduction and thank you very much for the invitation to be here. It's a great honor for me. And I would like to talk today about the energy transition in Germany, the way to 100% renewable electricity supplies. This is the way we would like to go in Germany. And first of all, I would like to explain why we would like to go this way. And so if you're looking, we are in Germany always facing on the climate change. So already in the 1980s, we have talked about climate change and the government in the 80s has decided to reduce the carbon dioxide emission. And here you see the problems we have at the moment. This is the impact of climate change. At that picture, we have the Arctic ice cover here on the North Pole. So this picture was done by NASA in 1980. And this is the same picture here 20 years later. You see how fast the ice already removes by due to global warming. So the ice that is swimming is not a real problem for the mankind, but we have a huge ice cover on land. You see here on the picture as well, the Greenland ice cover is on land. It's here on the upper right side. And if all the ice of Greenland will melt, we are talking about the sea level rise that can be caused in a range of seven meters in the global. So seven meters is a very huge range. And my colleagues have already calculated what this could happen or what does it mean here for a country, for example, like in the United States. This in the United States today. And this is United States with a sea level rise of about seven meters. And the Greenland ice is not the only ice here on Earth. We have also the South Pole here, the Antarctic ice cover. And if all this ice is melting, we are talking about the global sea level rise about 70 meters. So if you're looking here, this could happen here in the long term to a country like United States and even to all countries on Earth. This will not happen the next 10 or 20 years. This will not happen the century. But our generation could be responsible that the face of the Earth will change significantly during the next centuries, during the next 1,000 or 2,000 years. So if you're looking back if the Romans already had used fossil fuels as we're doing today, we won't sit here because we would be underwater. So let's see what we have to do. You see here that we have very famous institutes that doing research on climate change. And our researchers in Germany say we have to go out the use of carbon dioxide or fossil fuels and we have to emit or we have to avoid the emission of carbon dioxide emissions very fast. So the dark blue one, this is the emissions we had between 1860 and today. And this is the pathway we have to go during the next 30 years. So our climate researchers say we have to become carbon dioxide free until 2040. Otherwise we will initiate these huge problems I've shown before. So this is the way we would like to go in Germany. So one of our goals is to become carbon dioxide free in a way near future. Another problem we have in Germany, we do not like nuclear power. So it's difficult to understand for many nations why we are not not like nuclear power. And we would like to explain it with this slide here. You see Germany, Germany is in the heart of Europe. You see Germany here. And we have one event in 1986 that has a very huge impact on Germany. It was the accident in the Chernobyl nuclear power station. And you see here this was a radioactive fallout of the nuclear power station in Chernobyl. And this fallout nearly covered the whole area, the whole space of Germany. And even today there are some areas in Bavaria where you cannot collect mushrooms today. There are some areas where you cannot shoot a board and can eat it because it's still radioactive contaminated. So this is what happened with nuclear power to Germany. And we have some other problems here. For example, there was a near accident in force marks. So the cooling system failed and only five minutes were left. Then we had the same situation then in Fukushima. And this is why we would like to go out of nuclear power. We have also some other problems. For example, the storage of nuclear waste. We have here a storage underground and there's already a lot of waste. And this was put in. Now groundwater is coming in. And we have to put out all the nuclear waste again. This will cost four billion euros. Four billion euros. And this is not paid by the nuclear power companies. This will be paid by the taxpayers. And the opinion for the German people is nuclear power is expensive and nuclear power is not safe. And this is because 90 percent of the German people want us to go out of nuclear power. And the people say we would like to pay more for electricity if we can go out of nuclear power. So what goals we have here in the German policy between the different parties? So at the moment, our government is we have three parties here forming the government. And the government has now decided to go out of the use of nuclear power until 2022. The government did it after Fukushima. Before that, the policy was a little different. But now the girls are the shutdown of all nuclear power stations in Germany until 2022. And the government would like to achieve more than 80 percent of renewable power until 2050. So this is what the government at the moment wants to do. Next year, we have election. And it seems that we will have another government with another party. And so it's a good thing to look what the opposition would like to do. So the social Democrats, they say they wanted to go to 75 percent of renewables until 2030. And the Green Party, they would like to go out of nuclear power within the next five years. And they would reach 100 percent renewables until 2030. So you see here the way of all parties in Germany is the same. So we would like to go out of nuclear power. We would like to go to a high amount of renewable power. And the only division or the only difference is the speed the parties wanted to go that way. So let's look what have changed in Germany within the last 20 years. So Anna has already told. So at the beginning of the 1990, we had only 3 percent of renewable power in Germany, only 3 percent and mainly by hydropower. So in Germany, it's not possible to install more hydropower. All places that are good are used at the moment. So it's not possible to increase by the hydropower share. But we used wind power. You see here what happened for wind power during the last year, biomass power stations are also installed. And this is the way going with solar energy. So we have installed more than nearly 70,000 megawatts of renewable power station during the last 15 to 20 years. So it's a very huge number. And you see what have changed. I will explain what will change in the future. It's enormous change we already have initiated here in Germany. So our university had did some calculations how the energy transition could be. So our scenario is between that what our government and the Green Party will do. So we say 100 percent renewable electricity could be possible until 2040. And you can look what will change. You see the gray curve here. It's the amount of fossil power. So the purple one is nuclear power and the colored one are the different types of renewables. So we have here hydropower, biomass, geothermal power, wind power for the water and import. And you see if we're going to 100 percent renewable power, there are two main technologies that will cover together much more than 50 percent of the power supply that will be the wind power and and the solar power, the photovoltaic technology as well. So this is the way we would like to go. So a lot of people say it's an interesting way, but it looks silly because what would you will do if there's no sun and no wind in Germany? So you will not have no electricity. Of course, we are thinking about that problem. You see here, this is the mean monthly power generation for 100 percent renewable power supply. I will explain. We have calculated this in Germany what will happen then. And you see here the cross demand for one year. It's the mean monthly power from January to December. And you see here in wintertime, we have a higher demand for electricity than on summer. And if you're installing PV for the photovoltaics, the generation is the other way around. So during summertime we have more generation and winter it's lower. But if you combine photovoltaics to wind power, the situation is even better. Because when wind power is the other way around, we have much wind power generation during wintertime, lower generation during summer. And if we then combine it with other renewables such as biomass or geothermal, it's possible to cover the mean monthly generation directly by renewables. So we need no seasonal storage. Of course, we need storage, but the storage systems have not to be as far as you think. So we have calculated that the storage systems should cover or should be able to store about five percent of the annual electricity generation. That's all. And I would like to explain how the systems would look like. You see here, this is the generation here from solar energy and wind power. So the electricity can be used directly by the households, by the industry, and we intend to install decentralized battery storage systems directly at the consumer. That has the advantage that we can store the electricity where we need it. And this storage system will be able to store electricity for some hours, not for some days, but for the intraday storage. It's a good idea to store the electricity. If you have a very high amount of PV and wind power, there will be some excess electricity generation. So during some hours in summer and winter when there's high wind, we will generate more electricity than we need and then we can store in the decentralized battery storage. What we then would like to do with the electricity is to go to electrolysis. So with electrolysis, we can make hydrogen out of the excess generation and the advantage of hydrogen is we can store it directly into the gas grid. So we have very huge natural gas storage system in Germany. So the gas storage system we have, if we use the gas for electricity production, we can cover the electricity demand for three months with the gas stored in the storage tanks. So if we feed in hydrogen, we can feed in about 5% directly into the gas storage without any problems. If we would like to achieve a higher amount of solar-produced gas, we can go to methanization. So we can make methane out of hydrogen and this methane can directly substitute the natural gas. We have also installed some methanization units for testing purposes during the last two years and we would like to install some big units in the megawatt range during the next years and this will show that this technology will work. If we then have produced the renewable gas, we can go the gas way so we can use the gas in the natural power station, the gas power station and if there's no sun and wind available, we can produce electricity and heat and this will lead to a safe electricity supply and this will be a very good way and I think the stable electricity supply will be no problem with that technology. So the other discussion we have on the price. You have say, okay, it may be work, the electricity supply in Germany but it's too expensive. So let's have a look on this slide here. These are the electricity prices for generation and the domestic electricity price in Germany during the last 15 years. So in the year 1990, we had to pay more than one euro for a kilowatt hour produced by solar energy. So this is the dark green curve. So it's a curve for PV system installed on rooftops. So the light green curve is PV system on open spaces and if you're going more to south because Germany is not a very sunny country. So for example in northern Africa, the price is already lower, much lower than in Germany. The red curve is a domestic electricity price and you have seen we have already reached the grid parity this year. So starting from this year, it does make much more sense to generate the electricity by solar energy from the roof top than to buy domestic electricity from your utility because you can do it cheaper at home. So and what we expect for the price for solar energy, you see here we expect another significant drop in prices during the next 10 years. So then solar energy could probably compete directly to coal and nuclear power in Germany to the power plants as well. We can see another interesting development here that will cause a very evolution of solar energy. You see here the blue curve. It's the price we have to pay in Germany for domestic PV systems. So in 2004, the price for domestic PV system was in the range of 60 cent per kilowatt hour. The price fell down to 19 cent this year and the red curve is the price we have to pay for domestic fuel oil system for heating purposes. And if you're looking that way, this is the price our government intent the solar systems have to go and if we are looking on the fuel oil price, it could be stable but I think there would be at least a slight increase of the price. We will see in the next five to six year the oil parity. So then it would be cheaper to heat with solar energy than to use fuel oil for heating purposes and this will initiate a huge market for a solar system not only in Germany. If this work in Germany where we have a very low sun so Germany has a solar condition like Canada, not like California, this will be a pathway for the whole world. So what we can expect then for a global solar market. Let's look here, this is a global electricity generation. So in that year we had about 20,000 terawatt hours of electricity generation and the solar share at the moment the global solar share is 0.3 per cent. It's almost nothing. In Germany we have already reached 3.5 per cent. We would like to go to a higher share. So in the long term 20 to 30 per cent I think it's possible. Solar electricity in the United States I think we have not to talk about that. So and let's look what can happen. We had a market growth in the field of solar electricity generation between 50 and 100 per cent during the last five years. So we expect that the market growth will go down. But if we assume there's a market growth of only 30 per cent under 2025 and then the solar electricity generation the new installed systems the rate is stable then we can reach 30 to 50 per cent of solar power installed under 2045 then the 50 per cent could be possible. And all economy who's looking on that market will be a winning economy. All nations who miss the entry in that market will be losing nation and we are looking to China. China are going very strong in that market and they see they have a very huge program to install PV in their own country. They are talking to install more than 150 gigawatt by 2030 and we expect that will install even more than they are announcing today. So solar energy would be a market and I think the energy transition is a good way. I've shown it's energy transition. There can be a way to make a very reliable and safe energy supply by renewables and of course in today solar energy is in many countries a little more expensive than the conventional energy but during this decade it will become competitive. So thank you for your intention and perhaps we can discuss one or the other point later on. Thank you very much. That was very very informative and in terms of looking at this enormous transformation that is underway in Germany and how it is that the country has been doing that and I think that is also really striking in terms of the kind of consensus that exists with regard to the need to really look at how to utilize the whole host of renewable resources to really transform Germany's economy. At this time I would really like to introduce Kathy Weiss our next speaker. Kathy is the Vice President for Government Relations at First Solar and she has been with First Solar for almost five years and First Solar is a very fast growing company here in the United States which was formed in 1999 and anticipates by the by the end of 2012 to have capacity of 2.5 gigawatts of solar PV. First Solar has been extremely active in terms of bringing photovoltaic systems forward here in the United States and in terms of doing this at a utility scale, utility and industrial scale and I think that there probably is no better person to really talk about what is happening here with regard to thinking about this particular renewable resource that is very abundant here in the United States but that it is as we have looked at the changes with regard to solar in the United States. What does that mean in terms of where we are now and what does the future look like and what are the policy options or needs that come with that. Kathy? And then I put up a little agenda of what I'm going to talk through. So you know Volker really appreciated your presentation. I think what the audience is going to figure out pretty quickly as I go through these slides is you're going to be the bull on this panel and I'm going to be a little bit of the bear. So I wanted to talk through a little bit the good news story of the 2011 U.S. market but then touch really a little bit on global market trends because there really is a significant structural imbalance right now in the solar industry, the global solar industry. Talk a little bit about what needs to happen as we transition from subsidized markets to what we call sustainable markets and then I'll spend just a minute or two at the end to talk about some of the good things that my company has been able to accomplish in the last year or so. So this first couple of slides as I'm talking about the U.S. market really come from data that the solar energy industry association put together. I apologize that they are releasing their full year data later on this week. So the data that I have today is for the basically three quarters an estimate of the end of last year. So solar America is very strong in the U.S. There are more than 100,000 Americans who work in the solar industry and that number doubled since 2009 is one of the fastest growing sectors of the economy. The PV installations grew by 140% in the third quarter of last year over the same period the year earlier and solar power exceeds just shy of four megawatts. So 3,650 megawatts which is enough to power 730,000 homes. If you go to the next slide that just sort of gives you an image of sort of what's happened in terms of increased year over year since 2006 in terms of solar industry workforce in America. The next slide shows solar business locations last year. So it's not just manufacturing as typically we think of manufacturing you know the PV modules. They really took a broader look at everything from manufacturing supply chain jobs and I think what it shows is that this isn't just a California or Nevada phenomenon that you actually have folks employed in the solar supply chain all over the U.S. and you know just an anecdotal example of that you know I could look at my company. We're doing most of our installation work in the Southwest United States but we manufacture here in the U.S. and Ohio where we've got 1,200 employees and then all of our EPC work which are the folks that design procure and construct the solar power plants that's based out of our Bridgewater New Jersey office. We source inverters from Colorado, glass from Kentucky, really I can there's 21 states in the U.S. where we source a significant amount of materials from and the next slide is really more focused on manufacturing versus looking at the full supply chain and installation like the slide before that. In 2011 alone a dozen new U.S. solar manufacturing facilities came online. Almost 20 new facilities are also planned to come online in 2012 and 2013 in states such as Arizona, Colorado, Indiana, Mississippi, New York and Oregon and this final graph shows PV installations, the growth trajectory plus what was installed quarter by quarter last year and of course the price is declining which is a really significant part of the solar story. If you look at steady declines for the last couple of years and I think that the price declines in this industry have been what have been making headlines because they've been so rapid and so steep. Again this is third quarter data. I think when the full year data is shown it's going to be a lot lower and also this is an industry average. If you looked at what my company does because we are a cost leader and we do deploy significant sized systems our cost of the module is 74 cents a watt and balance of systems is under a dollar a watt. So again this is cost not price but that gets you to you know already under two dollars which is significantly less than what some of the historical data is going to show you. So I'm going to sort of switch gears now and talk a little bit about global capacity and bear with me as I sort of check notes on some of this as I go through it. So global production has effectively tripled over the last three years and two factors have enabled that to occur. First the entry barriers for manufacturing polysilicon wafers and cells evaporated several years ago when equipment suppliers effectively integrated process technology into turnkey production equipment. So this enabled relatively inexperienced operators to quickly enter the supply chain and led to an explosion of production capacity in China and elsewhere. And second silicon feedstock constraints which began around 2004 were alleviated in recent years as additional feedstock capacity was brought online by both incumbent and new suppliers. Feedstock availability brought down prices and enabled higher utilization rates for name plate production capacity that was already in place. The essential point is that polysilicon supply chain has undergone a fundamental structural change and this is not a cyclical or a seasonal phenomenon. In a supply chain without structural entry barriers several things occur and I'll go through four major drivers. First production volumes increased so long as capital is available to fund it and we've seen over the past couple of years that U.S. equity markets and more recently Chinese government entities have been willing to provide the capital needed to fund a massive production explosion in silicon in PV. Second production values eventually exceed demand and pricing declines as manufacturers attempts to sell excess product which compresses margins. Third prices and margins continue to decline until financing eventually stops and the most resilient producers remain in operation. And fourth the supply demand equilibrium that has eventually achieved is only temporary because excess production resumes as soon as capital again becomes available to fund it. So this last point is really important to the industry and what sort of where we are right now in this snapshot in time. In an industry without barriers which we believe is now the case for polysilicon PV module industry the easy reentry of competitors and expansion capacity will keep downward pressure on prices and margins potentially indefinitely. So that's the supply side of the picture and I'm going to go through a series of graphs pretty quickly here to sort of illustrate what's happening on the demand side of the picture. We've all seen industry forecasts that predict volumes well into the future by assuming that existing demand levels will continue more or less at current states and projecting various growth rates off the existing demand block. So really the slides I'm going to show now is what we think more accurately describes the future of some of these markets. Historically 80 percent or so of the industry's annual sales came from a few countries with opened transparent subsidy programs. These markets which we refer to as core markets we plotted installations annual installations in these core markets from inception until again this is as of an estimate where we might end up at the end of last year. So we'll start with Spain. Spain peaked at over 2.6 gigawatts in 2008 at which time the government took action to sharply reduce their support programs. In the next slide the Czech Republic peaked at about 1.5 gigawatts in 2010 at which time the government took action to sharply reduce their support programs. In the next slide you see France peaked at 1.5 gigawatts in 2011 at which time the government took action to reduce their support programs putting a cap in at 500 megawatts and this year being a transition year. In Italy Italy was flat last year but we expect declines to move forward based on government action to reduce their support programs. In Germany Germany I'm not sure if it peaked I think probably the end of the year last year did might have exceeded the prior year when all the final numbers are in but I think the trend is pretty evident as you've gotten really quick run-ups in installed capacity and at some point you sort of reach a turning point as governments review their and reduce their subsidies. Now while California well the U.S. doesn't have FIT programs we the solar market in the U.S. special utility scale is really largely driven by California's renewable energy standard and so on this slide we have California so much of the volume projected by analysts attributed to you know PPAs but these are PPAs that are already in place so to get a better sense of the future of California you sort of need to understand the volume solicitations for new PPAs and on this slide we can see that new PPA solicitation peaked in 2008 and we don't really expect those high level of solicitations to to to resume the next slide shows you the distributed generation you see a similar a similar profile so the question that we raised is you know what's explained this consistent inverted V pattern and we believe that the European subsidized market started slowly while legislation was translated into effective programs and bureaucracies are streamlined but then once the markets began to function effectively the incentive programs caused an oversupply to the industry which descended rapidly as as project development backlogs occurred so the unexpected size and velocity of market expansion combined with import volumes really started to alarm some of the politicians that were supporting and advocating these programs costs worries about high costs and political fallout developed in a number of these markets and political establishments reacted by sharply reducing the size of the programs and in some cases making them less transparent so the central learning from this experience is that open and transparent uncapped markets you know are unlikely to survive politically in an oversupplied industry with no entry barriers although there have not been many new subsidy programs in the past few years the new programs that have come on having have in fact been restricted to low volumes and in some cases made less open through domestic content requirements or sort of less transparent tendering processes the rps market in california which are another basically form of you know government incentive are perhaps less volatile but they reach the same result because demand is capped by the size of the program eventually exceeded when you've got an unlimited supply chain so as i as i said earlier we view the solar industry now as being sort of structurally imbalanced where production capacity is uncapped and growing and installation capacity is limited by subsidies that are declining we believe that large open transparent markets that enable the industry to achieve the current annual volumes are shrinking and that these programs will not necessarily be replaced by similar programs so that's a pretty depressing follow-up to the good news that we heard earlier but it's really not all doom and gloom because we really have to look at the price side of the equation which i think tells the different story you also have to understand global energy markets and and also consider why governments put these programs in the first place and there are myriad of reasons it's in some countries it's climate change and concerned about environmental factors and other countries it's to do with uh energy security and in other countries it's a realization that you do end up creating a new job base from some of these programs as the industries grow like we've seen here in the u.s and the data showed earlier i think i actually talked through this slide earlier um so the major challenges that we have is we've got to get to grid parity and as the previous speaker pointed out in some markets we are and that's part of the good news as well we've sort of got to rethink the policy support programs globally and in in the u.s that have been put in place to make sure that we can make this transition from small volumes to large volumes ensure access to transmission make sure that there's land and expedited and reasonable permitting processes available uh the need for new transmission if you're citing these um solar and wind assets in places where uh current transmission uh doesn't um exist and then a big part of this is robust project financing um because just the cost to finance these projects is it's it's most of its upfront so the lever of having reasonably priced financing makes a big impact on the ultimate delivered cost of the electricity so this is a really hard um slide to understand without spending some time with it so i'll just very basically what it shows is a history of electricity generation and retail cost and it starts it starts out in the 1930s and goes to the end there at 2010 so the top solid gray line is coal and it shows the increase in coal generation and then that first dotted line that's gray is the coal cost trend and so i think the the major takeaway from looking at this historical picture is you see price decline happen as you get scale and volume deployed and so the really important uh i think uh story for the solar industry is the orange generation line you really can't even see it there even in 2010 with those as much gross growth as we've seen it's pretty much still stuck to the very bottom uh part of that grid so we've seen massive deployment but if you look at electricity generation it's still at its infancy um but yet if you see that very first orange dotted line in an incredibly short period of time you've just seen enormous price declines i'm gonna talk for a little bit about subsidies and energy um because it's a popular topic here in washington these days i mean one of the things that we have to just acknowledge and move on with is americans have subsidized the growth of the power industry just about forever so there's no major energy technology that's achieved the necessary cost reduction and scale without sustained government support even well after initial maturation if you go back to the 1800s in the early 1900s the federal government supported railway construction and river dredging just to get the coal from the east coast to the west coast if you look at large scale hydro which was jumpstarted 110 years ago by the reclamation act of 1902 and then further expanded in the 1930s you see incredible public work support projects to get hydroelectric power generation in this country um domestic coal and oil extraction was specifically promoted in the revenue acts of 1916 and 18 and these laws introduced discovery value into the tax code and along with favorable expensing treatments for drilling costs so these incentives in those sectors really amount to a government investment of approximately 172 billion dollars from 1950 to 2006 the mineral leasing act of 1920 cleared regulatory hurdles for coal and oil and gas extraction on federal lands and the department of the defense invested millions of dollars per year in the development of jet engine turbines in the mid 1970s and 80s which were basically then you know handed over to the natural gas industry which were put into production in the early 90s so sometimes we talk about subsidies as they're a bad thing and certainly have to have a good discussion about budgetary priorities but to say that this country doesn't subsidize our energy is just sort of a misstatement of of history with that I'm just going to spend a minute talking about some of my company's accomplishments in the last year or so so the green box shows all of the projects that are either sold or under contract what we do is basically develop and build and sell our solar power projects and it's from 550 megawatt projects all the way down to 20 really blue chip owners that have purchased our power plants from mid-american, next era, GE, NRG, Exxalon, Sempra, Southern Company and then on the other side we've got three boxes one projects that are in development but not sold yet others that are in development but have PPAs that really were not yet at the point where we're marking it for sale and others projects that are sold delivered and construction has been completed Agua Caliente is our Arizona project 290 megawatts that's about 70 percent complete now that's about six miles around that project over I might have it a little wrong but I think there's been already five million modules deployed on site employing construction workers for three years a couple hundred on site at any given time and we're very proud that this project was named solar power project of the year by two of the industry's leading publications we hit a module efficiency record recorded by NREL of 14.4% in our labs we've begun demonstration projects in China and we're working on Australia's first utility scale project we've also done projects in India and most recently we completed a project in Thailand and I'm still waiting for someone to let me know if we actually use the elephants to help us build it but it's a pretty cool picture there with the with the monks hanging out with our solar array so thank you for your attention and thanks for coming great thanks thanks so much both Volker and Kathy have put forward a lot of information in terms of sort of looking at at trends and what's what's going on it now is a chance for you to ask any questions or offer any comments that you have just to identify yourself there is more of a pressure than happens in the city Mike thanks for the very informative presentations could you give some idea of how to project energy return or the energy adjusted values for PV and RIN in the same decade now which would make the picture you're presenting even more often this way also my second question is regarding the price of natural gas is so low in the U.S. and there's a lot of talk about how to sort of press babies on the solar and you clearly made a problem tax but I'd like your reaction to that one one more question I mean the stats have tracked and I know that what's the status of the country so about any state in Germany in the U.S., there are 500 billion dollars in this but I know the answer to that so the last question to the investment in North Africa yes okay okay um okay the desert tech okay I would like to talk about that okay first about solar energy you cannot directly compare solar energy to conventional power station because there's one difference you can install this solar energy the PV systems at the consumer directly so this is what we are doing in Germany so you have not to transport electricity so you have not to compete to a conventional power station you have to compete to the price directly at the consumer this is the advantage of solar power and therefore the market are much sooner than many people can imagine so we have already seen the first so we have three parts of the or three three stage or three pay not three points of the market the first one is the people buy the system and the price doesn't matter so these are the environmental environmentalists so and the second stage is that there's a subsidized market so we have subsidies and we see at the moment this stage of the market and we will get a third stage where we have markets without subsidies and at the moment we have the transition from the second stage to the third stage and this is because of course we have the problems at the moment we have talked to or we have seen here in the talk of KC so we have already seen the first systems in Spain and also in India where systems were installed without any subsidies so they were installed at the consumer at a industrial company that said it's much more cheaper or you have to calculate for 20 years so if you're installing in PV system you have a stable price for 20 years and so if you assume further increase in electricity price it's already today a good idea to invest in the technology and this already happens it's only a small system at the moment but I think these systems will be much more in the next 20 or 30 years the last question was the desert tech system so there was one idea to install a huge number of solar systems in North Africa and to transport electricity to Germany so if you're doing some economic calculations it does make sense because the sun we have double sun in North Africa so the electricity generation cost in North Africa are half then in Germany but you have to transport the electricity and the problem is to install the power lines you need for so you have to install power lines through whole Europe and this will need a lot of time so I'm not convinced this pathway will come very soon there is an installation they are installing a huge power station at the moment but the power station will only cover the local demand and we will see it could be that there is a transportation to Europe it could be a good idea if you're thinking that we can generate solar electricity for three or four cents within the next 10 years so it could be a good idea to transport to Germany but we can do it in Germany as well so let's see what's the better system what's the more competitive system and I would just add on the natural gas question and when we talk to our utility customers you know utility executives have a long memory and they remember the gas spikes and so I think there's an interest among Steven conservative utilities to hedge costs and one of the ways they can hedge those costs is with solar and wind because once you're paying for it then your price is set and consistent for the next 20 or 25 years how long the PPA is and then the second point is it's really we think about this as a very global market so you've got emerging markets that have very intense energy needs as their economies grow that don't have the natural gas infrastructure so it's easier faster and cheaper to put solar in some of those emerging markets okay thank you very much any other questions comments okay here first and then over here a resilient solar company yeah you mentioned that you're sort of a stage where the subsidies die off yeah on the exact date go to firstsolar.com because we issued a press release it was late last year so there'll be a press release on our website on that and I think what it means to us is having a technology and capability advantage so we've got a technology advantage in that we are the low cost producer it's an advanced technology it's thin film and we also have a capability advantage in that we've assembled this ability to design build utility scale solar projects on a scale that no one else in the industry has been and it's really taking that knowledge and bringing it so that our customers want to work with us because they know we're going to do it on time and on budget and stand by our promises Tom, I have a question for you I don't know myself oh a key part of the source solutions for the renewable energy model that you've discussed was the decentralized battery storage would that require a significant degree of infrastructure investment to bring that model to to realization? the battery system so it would be a private battery system because we are thinking so the electricity prices in Germany for the domestic households are much higher than in the United States so today it's already a good idea to to make your own solar electricity and consume it at home but you have to do it at the same time so this is a problem of solar energy you have to do it at the same time and therefore it's better in the future to install a battery system so it would be done by the private households and I think the investment will also come by from the private households there's not planned we have a research program for battery storage at the moment in Germany but we have no market introduction program I have okay Kathy did you want to add anything on the storage issue? okay all right any other questions or comments? go ahead to me okay yeah we have technology for example the the production of solar of solar systems so the technology come from Germany so we have solved the technology that the Chinese can make modules and now we are wondering that the modules come back so it's the system or the situation at the moment but if you're looking on a solar system with Chinese modules inside there's only there's already we have calculators about 70 percent of the money stays in Germany because the system have to be installed we have we need in word here other technologies to be installed we have the production technology coming from Germany so it's the same in the car industry if you're buying a German car there's 50 percent of Chinese technology inside as well because it's a globalization and this happens to solar energy than in other markets too I see no no big problem in that we have to look on China what will happen at the moment they have a 50 percent market share and at the moment the prices are going down so many countries Germany as well stop at the moment the installation of new new factories for solar systems in Chinese they invest in new factories at the moment so they see the huge market and if we are not doing anything against that in the near future 90 or 100 percent of solar technology will come from from China and you have seen the market I've shown before that is the market of 100 200 billion euros per year so the Chinese government they do not this because they would like to save the environment they do it because they see the market and so it's a good idea for us and for Europe to to compete to China and not to stop now the investment in solar electricity yeah I mean that the the market imbalance that I talked about really came from that that huge run up in production in China so I think that the big question is you know what's what's the capacity to keep funding unprofitable companies and when does the shake out happen I think the other big question that's on the demand on the supply side on the demand side is what happens and how quickly does China grow its own consumption of solar and it's and you know if you believe that when they set out a five-year plan that they stick to the five-year plan you're going to see enormous growth in the Chinese marketplace Ontario Passivas Institute what percentage of German homes have solar what percentage of German homes we have installed about one million systems in Germany and we have 50 million households so there's a capability to to increase the solar installation rate about 10 times more convert from alternating current to direct current as a result of the solar on the roof no because the distribution system is a alternating current system and it's I think it's much much more complicated to change the whole distribution system than to to convert the electricity from direct current to to alternating current perhaps if we have a storage system directly in the household so the the system in the household can change but the whole electricity system won't talk a little louder so it's difficult could you put it in that now China seems to take part in the variation in the question that the professor from Howard I believe that's earlier with respect to the period you mentioned that Germany is now at great period but as we move beyond the period and you would actually take possible are there some shocks to the debt to the rest of the world okay so the first point of China I think it's difficult to to produce solar modules here in United States or in Europe and to export it to China because this market is difficult to enter but you're looking on the global market so we have a way huge global market coming very soon and so we have to compete to China so otherwise we leave not only the Chinese market the global market to the Chinese people if we do not compete to them so it's not I think it's not the point that we have to to enter the Chinese market we have to look on the global market that is coming soon and there the Chinese people or the Chinese government investing huge rich system I've heard they want to install a five gigawatt power plant for annual production per year and very soon and with the scale-up effect they will go down by the costs and they see the markets that will come with us out any subsidy and okay so we can wait that the Chinese will get 100% or we can look that we get nearly 50% in Europe and United States but in Chinese China it would be different so you see the problems with grid parity yes we will have some problems of course there's an energy transition and in the energy transition the things will change and there will be winners and losers of course so the losers at the moment we see are the big utilities in Germany they have their old power plants they have their coal and nuclear power plants and they are not compatible to solar power because if you have a lot of wind and solar power they have fluctuating energy and you need some power plants to level it out a gas power plant is a good idea for that a nuclear power plant or a coal power plant is not so this is one thing that will change and the other thing of course if you're generating your own electricity you will take off a lot of electricity out of the market so the price will increase for the rest of the electricity of course but you cannot avoid this what will you do you can say the people you are not allowed to install PV system in your home so that will happen to a transition and you have to think about what we can do but I think it's easy to handle it's possible to handle the problems and what I can always when trying to assess this will the total power which will be somehow competing with the total generated power so I want to do what percentage will the total PV system generate power versus what we are using I actually don't have the number of power but in the U.S. it's time I mean it's still less than 1% so it's still minuscule and competition with coal well it's a lot easier to build a PV plant than it is to build a new coal plant right, but I'll read you in the second paragraph there's a condom stating that that even 20% of their secondary power and I was curious to know whether that was seeming a threat to the coal industry or oil industry again, so the amount of solar power was it maybe Arne could, did you want to comment? so okay, so the amount of solar electricity is at the moment 3.5% and at the moment the solar power plant are generating peak lower peak load power so if you're looking to the power generation so the solar power is covering peak load even in February and March in June we expect that the solar electricity will go to a part to base load as well so you have to control down already the coal power plant in Germany during summer so that will happen and if we install more power more solar power we will come to coal power plant and nuclear power plant so if you would like to go to a high amount of renewable electricity it's very important it's not no good idea to install new nuclear and coal power station at the same time we did this in Germany during the last years we have installed new coal power stations and the utilities who did this they have problems at the moment so there will be the losers there are new utilities now coming they have not the old power plants we do not need anymore and they will be the winners so there will be also a change in the who owns the new grid and the new electricity generation system I might just mention too that if you in terms of looking at US renewable power generation it will probably be very useful to just look at EIA the energy information administration's monthly outlook because it really tracks how much renewable power plants are growing not just solar but in terms of looking at all of the renewable generation and the fact that it's been growing very substantially here in the US as well so I want to thank our panelists very very much great presentations hopefully this gives everybody a lot of solid information with regard to looking at trends and the kind of growth that we're seeing is the presentations will be up on EESI's website later this afternoon and so please feel free to make those available to your colleagues as well so thank you all very very much for coming look forward to any other questions or comments and thank you very much Kathy and Volker really really appreciate it thanks for coming