How to be a start-up company in the solar...

Strictly Private and Confidential

“How to be a start-up company in the solar industry”

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2 Strictly Private and Confidential

Table of Contents

Introduction

• Vetro Solar in brief

• Vetro Solar Management and Board of directors

• Annual worldwide installed PV capacity from 2000 to 2010

• European Markets

• Evolution of global cumulative installed capacity worldwide

• The Solar industry needs high quality glass

• The flat glass industry

• The Vetro Solar concept and core business

Vetro Solar Phase I, Germany

• Value chains. Glass processing

• Glass processing

• Line#1 and Line#2 setups

• Project funding

Vetro Solar Phase II, Germany

• Value chain. Primary glass production

• State of the art solar glass production and processing

• This is why we will succeed

•Concluding remarks and summary


Introduction


• Norwegian idea, concept, founders, business development, vision and ambition

• Vetro Solar will produce customized glass especially designed to optimize solar energy

transmission for PV modules

• Founded in Q4 2006, located in Kristiansand, Norway. Daughter company; Vetro Solar GmbH

established in Sandersdorf-Brehna/Solar Valley, Germany in 2008

• NOK 75 mill invested

• Strong wish to maintain company holding and business development in Norway

• Desired listing at Oslo Stock exchange

• Knowledgeable board and management in place.

• Site and building Phase 1 finished 30.th June. Financed through a 12,4 mill € leasing arrangement

with the community of Sandersdorf-Brehna

• Will start up one processing line with a capacity of ~ 5 million sqm per year in Q4 2011

• Continuous dialogue with customers to phase in supplies in accordance with our scheduled ramp

up/productions start-up. MOU’s and supply agreement frame works in place.

• Subsidies and grants Phase 1 of 10,6 mill € confirmed.

• Entitled to subsidies and grants Phase 2, 30% of Capex

Vetro Solar in brief

Introduction


Vetro Solar Management and Board of directors

Morten Hansen, CEO

Bjørn Glenn Hansen, EVP Commercial Affairs

Tor Helge Midtbø, CFO

Dr. Jan Vedde, R&D manager

- Teknova/Dr. Thomas Meyer, R&D program manager

Dr. Christin Püttmann, Man.director Germany

Management team with proven trackrecord

Board of directors with extensive experience and network

• Roy M. Slettvold, Chairman

• Arvid Grundekjøn

• Eivind Brøvig

• Synne Syrrist

• Øyvind Aske

• Gabriel Smith (observer) Roy Slettvold, Chairman of the board

Morten Hansen, CEO

Dr. Christin Püttmann,

Man.director Germany


Annual worldwide installed PV capacity

from 2000 to 2010 in the World (in MW)

Source: EPIA

PV markets have never performed

so well in their entire history.

While the awareness about the PV’s

capabilities grows in the public

opinion, it now appears on the

energy map of several countries. The

total of newly installed capacity added

in 2010 represents in average the

electricity production of two large

coal-fired power plants. In several

countries, grid parity for residential

systems is reachable in the coming

years. In some specific cases in

countries or regions with very high

electricity prices, PV could already

become competitive soon with net-

metering only.

.

The global PV market in 2010: approx 16 GW

Introduction


European MarketsAt least 3 ”GW markets” in 2010

Transformed to Watt the Vetro Solar glass processig capacity at Phase 1

represents approx ”just” 1 GW

Germany retains its

leadership for the second

year in a row.

In 2010, Europe alone added

between 11.6 and 13.3 GW of

new PV installed capacities.

Source: EPIA

Introduction


Evolution of global cumulative installed capacity worldwide (MW)

Solar PV generates electricity

in well over 100 countries and

continues to be the fastest

growing power-generation

technology in the world.

Between 2004 and 2009, grid-

connected PV capacity

increased at an annual average

rate of 60 percent.

The increase of the capacity from

2009 to 2010 is the most

impressively represented in

absolute values.

The total installed capacity

reached at least the 37 GW mark

and can be possibly almost 40

GW.

Source: EPIA

Introduction


The Solar industry needs high quality glass

- to improve efficiency and output

Glass as carrier in a thin-film solar cell1)

Glass as carrier in a wafer based module

Introduction

All solar modules require glass, which

is the only material that combines the

functionalities of protecting the

cells/modules and allows enough light

transmittance.

Thin film’s share of the global market

increased from 14 percent in 2008 to 19

percent in 2009 for cells, and from 16 to 22

percent for modules

In 2008 the glass demand for these

purposes represented approx 100 mill m2

glass

In 2010 the demand was approx 160 mill

m2

The 2020 scenario with a capacity of 100

GW would demand approx 1 billion m2

glass. In 2010 the global total primary

glass production was approx 6.6 billion

m2.

Vetro Solar at full scale Phase 2 would

represent 1-2% out of such a demand.

Establishing a 1GW plant (like Vetro Solar)

including primary glass production and

glass processing takes about 24 months

Glass is projected to be the next

bottleneck in this industry.


The flat glass industry 2010

Global market structure

• 70% consumed in windows for buildings

• 10% consumed in glazing products for automotive applications

• 20% used in furniture , interior and other applications

• Solar PV applications represent approx 2% out of ”other applications”

What does 70/10/18/2 % mean?

• The global players’ focus and core business are in Architectural and Automotive segments

• Obligations and commitments upon present customers in these segments represent 98% of tonnage distribution

• The float glass lines and the glass processing lines are designed to meet these demands

• Float lines and Processing lines are mostly de-centralized from primary glass production

• The PV sector, calling for highly sofisticated glass products is treated unfairly

Vetro Solar has a 100% PV focus

• Primary glass production involving only 2-3 glass thicknesses

• Ultimately with only one glass body tint, optimized for highest possible light transmittance and superior glass surfaces allowing depositions of 1- or 2- sided

PV customized coatings for Anti reflection, self-cleaning and conductivity

• Centralized primary glass manufacturing and processing

• Potential of consuming 100% of own primary glass production directly conveyed into own glass processing and value adding

70 %

10 %

18 %

2 %

Glass applications

Architectural

Automotive

Furniture/interior

Solar

Introduction


Float glass lines, market shares and demand 2010

Demand

• The global market for flat glass in 2009 was approximately 53 million metric tonnes (~6.6 billon m2. On average 1 tonne is approximately 125 m2).

• At current price levels, this represents a value at the level of primary manufacture of around € 22 billion.

• World demand for flat glass is forecast to rise 6.0 percent per year through 2014 to 8.1 billion square meters. Maintaining the trend seen over the 1999-2010

period, demand will easily outpace real (i.e., inflation-adjusted) gains in the global economy.

• Projected global demand requiring up to 120 additional float lines (230 t/d) thru 2014

Europe 69

Asean 20

Japan 10US/Canada 31

South America 9

China 47

FSU 16

202 float glass lines globally

16 %

23 %

16 %

15 %

30 %

Market shares

NSG

AGC

STG

Guardian

Others

Introduction


MF

module

assembly

Primary glass

production

Feedstock PV Modules

2

PV

systems

Vetro Solar core business Vetro Solar’s customers

Silicon

feedstockIngot Wafer Solar cell

PV

Modules

PV

Systems

Raw materials Glass

processing

Building

installation

Building

architecture

& design

End

user

1

2

Where glass enters PV value chains

Where solar cells enter multi function (MF) value chain

1

2

1

Vetro Solar core business -Primary glass production and glass processing

Introduction

Value chains

PV cSI(Crystaline

Silicone)

Glass(Float glass

and

Cast glass)

PV TF(Thin Film)


Investment highlights

Vetro Solar is positioned as the leading dedicated supplier of glass optimised for the PV industry

• Sales and R&D approach appreciated by PV customers

• Project development well progressed (engineering, securing of property, EU grants, etc.)

• Positioning confirmed by leading global glass producers

Vetro Solar will produce and process glass customized and dedicated to the PV industry

• Glass is projected to become the next bottleneck in the PV indutstry

Vetro Solar has secured access to critical raw materials

• Limited availablility in Europe

Vetro Solar is in negotiations with regard to off take agreements and R&D collaboration

• Contracts under negotiation. Several LOIs in place

• R&D programs in place with focus on glass surface optimization and next generation PV modules with thin glass/glass compounds

Vetro Solar has secured attractive location in Solar Valley (Sandersdorf-Brehna) in Germany for first site and is ready

to break ground for Phase II

• Optimized location with regards to logistics, a region with a significant share of world solar module production

Introduction


Investment highlights, cont.

Highly experienced managment team and knowledgable board of directors in place

Robust business model

• Targeting PV industry with optimized and customised glass and technological solutions,

Attractive financials

• 1 float line in full operational mode including belonging processing: approx 100 MEUR MEUR revenue , EBITDA of approx 30-40 MEUR .

Significant expansion potential in Europe, Asia, Asean, South America, Middle East and US

Introduction


Vetro Solar Phase I


MF

module

assembly

Phase II

Primary glass

production


2

PV

systems


Silicon


PV

Modules

PV

Systems

Raw materials

Phase I

Glass

processing

Building

installation

Building

architecture

& design

End

user

1

2

Where glass enters PV value chains


1

2

1

Value chainsGlass processing

Vetro Solar Phase I

Glass(Float glass

and

Cast glass)

PV cSI(Crystaline

Silicone)

PV TF(Thin Film)


Holes

• High precision and

accuracy

• High trough put

• Fully automated, no

hand touch

• High precision and

accuracy

• High trough put

• Superior edge quality

• Reduced tension in

glass

• Edge working down to

1.6 mm glass

thicknesses

• Fully automated no

hand touch

• Non-circular holes /

cut-outs reducing

tension in the glass

• Holes and cut-outs in

thin glass

• High accuracy

• High trough put

• Fully automated, no

hand touch

• Inline cleaning systems

• High trough put

• Fully automated,

no hand touch

PV demands strongly considered by processing line configurations and technology choice, such as :

Toughening Cleaning Separation

• Air cushioned inclined

toughening process

enabling:

- Higher strength

- Superior glass

surfaces

- Toughening / heat

strengthening of

glass thicknesses

1.6-8 mm

- High trough put

- Fully automated, no

hand touch

• Flexible inline systems

enabling powdering,

papering or stringing

• High trough put

• Fully automated,

no hand touch

Edge grindingCut to size

Vetro Solar Phase I

Glass processing

Phase I

Glass

processing


Line #1 and #2 setups

1

43

2 576

8

1. Cutting 3. Rotating2. Handling 5. Drilling4. Grinding 6. Cleaning

7. Buffer/Unloading/Sheets separation

9

9. Unloading/Sheet separation8. Tempering

Processing lines prepared for pre- and/or post glass surface treatments

Vetro Solar Phase I


Guarantees:

• 2,0 mill € bank guarantee from CTH

towards NORDEA

• 0,7 mill € guarantees from MH/BGH

towards IB & GoodVent

• 15 mill NOK guarantee from

Kristiansand based investorgroup

• Buy back guarantee from Lisec; 35%,

30, 25, 20, 10 of the gross purchase

value of hardware 6,9 mill €

Funding VS GmbH€ ’000

Equity (registered share capital) 33,0

Additional paid-in equity per 31.12.2010 3 054,0

Additional funding from parent company 2 051,3

Total Equity 5 138,3

Mietkauf/leasing Sandersdorf Brehna (5 year) 12 400,0

Goodvent IBG Loan (3 year) 2 991,7

Investitionsbank Sachsen-Anhalt Loan IMPULS (10 year) 2 500,0

Investitionsbank Sachsen-Anhalt Loan MUT (10 year) 500,0

Bridge loan (1 year) 2 000,0

Total additional finance sources 20 391,7

Total equity and loans / funding 25 529,9

Subsidies 7 694,3

Grants 2 818,6

10 512,9

Vetro Solar Phase I - How to be a start up company in a “ nut shell” Project funding


Vetro Solar Phase II


MF

module

assembly

Phase II

Primary glass

production


2

PV

systems


Silicon


PV

Modules

PV

Systems

Raw materials

Phase I

Glass

processing

Building

installation

Building

architecture

& design

End

user

1

2

Where float glass enters PV value chains


1

2

Glass(Float glass

and

Cast glass)

PV cSI(Crystaline

Silicone)

PV TF(Thin Film)

1

Value chainsPrimary glass production



Solar roof 1 MWp, connected to grid in June 2010

State of the art solar glass production and processing

Vetro Solar GmbH, Phase 1

Solar Valley, Sandersdorf-Brehna, Germany

• 13 000 m2 Factory and offices in place

• Glass processing customized for PV

• Glass processing capacity 10 mill m2

• Line#1, SOP Q4/2011

• Line#2, planned SOP Q1/2012

Area available for further PV installation

Vetro Solar GmbH Phase 1+2 at full scale

• Fully integrated primary glass production and glass processing

• Key pre-engineering and local allowances in place for the primary glass

production.

• Key raw material supplies pre-negotiated

• Construction periode approx 24 months

• Capacity 230 t/d, annualy 10 mill m2 (3 mm glass thickness)

15 mill m2 (2 mm glass thickness)

• In full operational mode the Vetro Solar float line will generate additional

42 MEUR in revenues with corresponding EBITDA of

22 MEUR ( 50%)

• Possible first glass production Q2 2013 (assuming start of project Q2/2011)

• Work force:

- Direct jobs 122

- Indirect jobs ̴ 160


Phase II

Primary glass

production

Phase I

Glass

processing


This is why we will succeed

Thin Glass Technology is the future

• Vetro Solar will be able to provide thinner glass solutions enabling higher module efficiencies and reduced cost

• Reduced weight

• Stronger module construction

• R&D programs are ongoing in order to develop a new glass-glass panel replacing film as back plate on wafer modules with thin front and back

glass. Test results already document very promising module performances.

Development of customized coating for Thin Film and Wafer Modules

• Vetro Solar will develop and patent customized coating solutions to our customers with focus on higher module efficiency and module

quality.

• R&D programs in place and ongoing with PV customers and Norwegian institutions and expertice

Development of Thin Film will require increased need for glass

• The Thin Film segment is expected to grow strongly as the technology improves by obtaining higher efficiency combined with its attractive

competitive manufacturing cost

• The need for both front and back glass increases the need for glass into the Thin Film segment of the PV market

The entire PV value chain is dependent on glass

• Glass is a strategic material carrier for all different thin film and wafer technologies

•. Without glass, no PV industry.



THIS IS WHY WE WILL SUCCEED

Dedication of our organization to the PV industry

• Our strategy is founded on being dedicated to the PV market only.

Fully integrated glass production and glass processing set up for solar glass purposes

• One of a kind business set-up

• One of a kind market and customer approach

• Yield maiximization

• Maximum cost efficiency

Location in customer clusters or proximity

• Industry cluster general business development advantages

• “Fence-to-fence” in day-to-day business

• Significant logistical effects in cost efficiency and safety

• Enviromental friendly



THANK YOU !

As a startup company – financial strategy a must !

Share holder list a challenge – stronger share holders / industrial partner a necessity for long term development

Focus on key commercial requirements when establishing new business

People & Competence

Customers & Markets

Cost of operation

Political stability and predictability

Incentive schemes

Cluster opportunities

Vetro Solar

Concluding remarks Summary

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