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DnB NOR Markets Solar SeminarOslo, 6 June 2006

Cost reduction strategies in solar cell productionDr. Claus Beneking, CEO ErSol Solar Energy AG

erwicon congress Erfurt 08 June 2006

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Disclaimer

Certain statements made in this presentation may constitute “forward-looking statements” within the meaning of the U.S. federal securities law. Forward-looking information is subject to various known and unknown risks and uncertainties. These include statements concerning our expectations and other statements that are not historical facts.

The Company believes any such statements are based on reasonableassumptions and reflect the judgement of ErSol’s management based on factors currently known by it.

No assurance can be given that these forward-looking statements will prove accurate and correct, or that anticipated, projected future results will be achieved.

For additional information regarding risks, investors are referred to ErSol’s IPO prospectus and the annual report 2005.

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PV market development and characteristics

4

Development of PV market 2004-2010 (optimistic growth scenario)

Total 10 GW by 2010

Total solar sector cell/module productionGigawatts

ROUGH ESTIMATE

0.1 0.20.3

0.7

1.1

1.5

2.0

0

2

4

6

8

10

12

2004 2005 2006 2007 2008 2009 2010

Non-siliconc-Si

10

7.5

53

2.41.71.2

Source: M. Rogol, 3rd Photon Silicon Conference, 3 April 2006 (Munich)

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Price experience curve of photovoltaic modules

Sources: Fraunhofer Institut Solare Energiesysteme (ISE), EPIA, ErSol

100

[€/Wp]

10

1

Cumulative installed PV Peak Power [GWP]

10-4 10-3 10-2 10-1 1 10 102 103

1980

1990

20002004

2010

Barrier to partialcost competitiveness in

sunny regions

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1. “Grow or die”

2. Reduce production cost faster than price degression curve

Conclusions from PV market characteristics

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Positioning and strategy of ErSol Solar Energy AG

8

Value chain of crystalline silicon photovoltaics

Sun and sand… → → → → … electricity

9

New company structure

ErSol Solar Energy AGProduction and distribution of solar cells (Erfurt, Germany)

100% 100%100%100%

ASi Industries GmbH

Shanghai Electric

Solar Energy Co. Ltd.

aimex-solarGmbH

ErSol New Technologies

GmbH

SRS Silicon Recycling

Services, Inc.

35%

Camarillo/California,USA

Recyclingof silicon

Arnstadt,Germany

Solar moduleproduction

Mono-crystallineingots and wafers

(prod. & distribution)

Marketing of solar modules

Shanghai, P.R. China

Erfurt, Germany

Erfurt, Germany

Development of newphotovoltaic technologies

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Products of ErSol: Ingots and wafers

Mono-crystalline silicon ingots / wafers

Outstanding quality

Each wafer is tested in 5,000 measuring points to ensure highestlevel of quality

Strict documentation of testing process

Key characteristics

Ingots with a diameter of up to 230mm

45 MWp wafer production capacity in 2006

Large wafer size 156x156mm

Product

Production expertise

More than 30 years of pulling experience ensures high productivity

Optimised production process results in high silicon conversion rate

Ongoing reduction of cost structure

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Products of ErSol: PV cells

Black PowerBlue Power

Multi-crystalline solar cell

Ca. 50% of ErSol sales in 2006

High efficiencies of up to 16%

Mono-crystalline solar cell

Ca. 50% of ErSol sales in 2006

High efficiencies of up to 17%

60 MWp call production capacity in 2006

Extensive experience in cell manufacturing results in high productivity

Constant introduction of larger and thinner cell sizes

ErSol’s cells offer high degrees of efficiency, especially in dim and diffuse light

Low breakage rate and high cell stability

Outstanding quality

Key characteristics

Product

Production expertise

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ErSol enters into thin-film module production

ErSol plans to develop production capacity of 40 MWp p.a., medium-term annual capacity target of >100 MWp as a second growth option

Approx. 80 m€ investment (40 m€ in 2006 and 2007 each)

Less than 1% of silicon consumption compared with conventional wafer technology

Efficiency of approx. 6% on glass substrate

Project developed within ENT – ErSol New Technologies

Thin-film module production to be built in Erfurt, Thuringia

Approx. 100 new permanent jobs

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1. “Integrated company” covering the most important segments of the value chain (Silicon, Wafers, Solar cells)

2. “Two-product strategy”: High-end monocrystalline silicon and low-cost thin-film silicon products

=> Ensuring higher than proportional growth with faster than market cost degression

Characteristics of ErSol’s company strategy

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Elements of growth strategy

Increased integration of ASi

Increased silicon procurement

Advancements of technology

Entry into low-silicon-consumption technologies

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>20% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008

ASi wafers to ErSol ASi wafers to customers EBIT margin ErSol Group

Increased integration of ASi

Integration of the wafer business into the ErSol Group

Full margin addition effect from 2008 onwards

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More silicon secured through SRS acquisition in February 2006

Important addition to the upstream sector of the value chain

Additional quantities of approx. 75 tons of scarce solar silicon for production in 2006

Feedstock material of at least 15 MWp

Positive impact on margins due to higher utilisation of raw material

Price of approx. 19 million euros paid from equity

Silicon Recycling Services Inc. (SRS)

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Roadmap for mono-crystalline cell technology

2005 2006 2007 2008 2009 2010Year

Optimized Back Contact Cell: 22,0% 100 µm

Higher effic

iency

Reduced Wafer T

hickness

Current Production: 16,5% 280 µmCurrent Production: 16,5% 280 µm

Shallow Emitter Diffusion: 17,5% 220 µmShallow Emitter Diffusion: 17,5% 220 µm

Back Contact: 18,5% 180 µm

Back Contact: 20,0% 150 µmNew Front Side Structure

Back Contact Cell: 21,0% 120 µm

Instalment of ~8 million € technology program

Advancements of technology

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Development of mono-crystalline cell technology within 2005

We’re on track !

15,50

16,10

16,50

16,8316,70

16,6016,40

15,70

16,0015,80

220

260

14,50

15,00

15,50

16,00

16,50

17,00

Jan05

Feb05

Mar05

Apr05

May05

Jun05

Jul Aug05

Sep05

Oct05

Nov05

Dec05

Jan06

Ave

rage

cell

effic

ienc

yin

%

200

210

220

230

240

250

260

270

Cel

lthi

ckne

ssin

µm

Average cell efficiency in % Cell thickness in µm

05

19

Expected breakthrough in cost reduction for high-end mono c-Si

Integrated production of ingots-wafers-solar cells

Technological advancements (silicon yield, wafer thickness, cell efficiencies …)

Economy of scale on the >100 MWp level

Accelerated achievement of cost reduction targets

New dimension of PV production cost

Grid equality in important key markets expected achievableon 2008 time scale

Higher margins at given price levels

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ErSol sets new growth targets for 2008

Wafer production capacity quadrupled to 100 MWp by end 2007

Crystalline cell production capacity tripled to 180 MWp by end 2007

Additional growth through new and increasing thin-film cell technology contribution

220 MWp total cell capacity by 2008

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Expected capital expenditure per business segment

0

20

40

60

80

100

120

140

2006 2007

in m

illio

neu

ros

Thin-filmSolar cellsWafers

Expected total investment >190 million euros within 2006-2007 …… and several 100 new jobs in Thuringia !

40

40

25

16

30

48

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Customers and Target Markets 2006 – from Erfurt to the world !

Customers

Target Markets

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World PV Cell/Module Production from 2001-2010

ErSol Solar Energy AG

1,0

10,0

100,0

1000,0

10000,020

00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

PV M

arke

t, Pr

oduc

tion

[MW

p]

BAU Annual Worldwide M arket in M Wp (EPIA 22nd Dec. 05)

ACC. Annual Worldwide M arket in M Wp (EPIA 22nd Dec. 05)

Solar Generation II, Annual Installed Capacity (Greenpeace & EPIA Oct. 04)

Development of PV World M arket (Dr. A.Räuber)

D.A. Davidson & Co. Technology Conference (Applied Films 02/06)

Development of PV World M arket (CLSA 07/05)

PV Status Report 2005 (EU Commission, ILS)

Development of PV World M arket (Photon 03/2006)

Weltweite Solarzellenproduktion (Sarasin Studie Solarenergie 2005)

M ichael Rogol3rd Silicon Solar Conference, M unich 04/2006

Overview of ErSol’s expected positioning in the global PV market 2001-2010

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Cost reduction potential for different technologies

Source: Renewable Energy World May/June 2005

Thin-filmCrystalline siliconDye cell and single pin amorphous silicon

Module efficiency (%)

Mod

ule

pric

e/ W

p (r

elat

ive

units

)

0

1

2

32000+

2010+

2020+

0 5 10 15 20 25

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Summary on cost reduction strategies

Cost reduction in silicon wafer-based technology through- efficiency increase of monocrystalline silicon solar cell- higher wafer yield from silicon through decreasing wafer thickness- integrated production from wafer to solar cell- economy of scale at >100 MWp/a production volume level

Additional growth option and cost reduction potential through new thin-film cell technology

=> Competitiveness with both crystalline and thin film PV !!

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Thank you for your attention!

For further informationplease contact

Sonja TeurezbacherInvestor Relations Managerphone:+49-361-2195-130fax: +49-361-2195-133e-mail: sonja.teurezbacher@ersol.de