8/12/2019 REC Factory Tour Presentation 12th June
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FACTORY
TOURPRESENTATION
12 June 2014
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2 2013 REC All rights reserved.
Disclaimer
This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks
and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current
expectations, estimates and projections about global economic conditions, the economic conditions of the regions andindustries that are major markets for REC Solar ASA and REC Solar ASAs (including subsidiaries and affiliates) lines of
business. These expectations, estimates and projections are generally identifiable by statements containing words such as
expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materia lly
from those expectations include, among others, economic and market conditions in the geographic areas and industries that
are or will be major markets for REC Solar ASAs businesses, energy prices, market acceptance of new products and
services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors
as may be discussed from time to time in the Presentation. Although REC Solar ASA believes that its expectations and the
Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or
that the actual results will be as set out in the Presentation. REC Solar ASA is making no representation or warranty,expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither REC Solar ASA nor any
of its directors, officers or employees will have any liability to you or any other persons resulting from your use.
The presentation was prepared for a factory tour on June 12, 2014. Information contained within will not be updated. The
following slides should be read and considered in connection with the information given orally during the presentation.
The REC Solar ASA shares have not been registered under the U.S. Securities Act of 1933, as amended (the Act), and
may not be offered or sold in the United States absent registration or an applicable exemption from the registration
requirements of the Act.
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Agenda
Introduction to REC
Solar fundamentals and technology
introduction
State-of-the-art manufacturing
Factory tour and Q&A
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Listed on Oslo Stock Exchange (RECSOL) with equity market cap. of ~USD 700m
REC is an integrated solar panel manufacturer
Wafer Cell Module System
Silicon wafers Cells PV modules Project development
Fully automated
production facility
Casting and sawing
640 MW capacity*
Automated
production facility
Surface treatment
770 MW capacity*
Fully automated
production facility
Assembly
910 MW capacity*
Partnering with top-
tier project
developers
Limit resource
requirements and
risk exposure in newprojects
*As of 31.12.2013
State of the art production facility
one factory at one site
REC leverages high-quality solar panel manufacturing, R&D and trusted brand to
develop leading market positions in Europe, Asia and the US
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REC has a strong financial position
Strong balance sheet and returned to profitability (1)
1Q 13 2Q 13 3Q 13 4Q 13 1Q 141 1 1 1
181
153
122
0
50
100
150
200
-20
-15
-10
-5
0
5
10
15
170159
EBITDA margin Revenues
1
Module
EBITDA
margin (%)
Module
revenues
87
127
434
Assets
220
96
87
251
Liabilities & equity
434
Other current
assets
Cash
Non-current
assets
Current
liabilities
Provisions
Shareholders
equity
(1) Figures for REC Solar ASAs module business
Figures in USDm* As of 30. March 2014
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2014 Q1 solar panel cash cost up 3
USD cents to 67 USD cents/W due to
Lower production volumes due to module
debottlenecking of existing production lines
Higher volume and price of external silicon
blocks (related to furnace upgrade)
The fire at the cell plant
The fire in our plant in Tuas,Singapore in March 2014 resulted in
a temporary close down of 2(out of 8)
cell lines for 6 weeks
REC maintains target of 812%
reduction in solar panel cash costs in
2014. Cost reduction more likely to bein the lower part of the range
Target cost reductions through;
Increased furnace and module output
Qualification of new suppliers
Cell efficiency improvements
Solar panel cash costs target for 2014 remains firm
Solar panel cash cost (USD cents/W)
7 7 6 7
51 5149 49 50
11 1010 8 8
6
-2%
Q1 14
67
3
Q4 13
64
Q3 13
65
Q2 13
68
Q1 13
69
Exceptional items
SG&A
Cash conv. Cost
Silicon
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Agenda
Introduction to REC
Solar fundamentals and technology
introduction
State-of-the-art manufacturing
Factory tour and Q&A
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Introduction to solar energy
The primary energy consumption globallyin 2013 was 0.015% of the yearly energy
received from the sun
Sunlight is filtered by the atmosphere
1 kW/m2irradiance with clear sky when
the sun is at a zenith angle of
48
(AM1.5 conditions).
Irradiation is often expressed in
sun hours.
Sun hours is the average irradiance
expressed as the equivalent time in
hours at an irradiance level of 1 kW/m2
Oslo: 900 sun hours/year
Germany: 1100-1400 sun hours/year
Spain: 1700-1900 sun hours/year
Hawaii: 2100 sun hours/year
Photovoltaic electricity potential worldwide
Equ
iva
len
ts
toc
ko
fenergysource
Uranium
Natural gas
Oil
Coal
Annual energy
demand
Solar power
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The working principle of a silicon solar cell
Creation of voltage difference
Silicon doped with
Phosphorus
(n-type)
Silicon doped withBoron
(p-type)
Emitter (-)
Base (+)
Absorbed light peels off electronsfrom the silicon atoms.
The electrons leave holes. The electronsand holesare mobile.
The electric field at the base-to-emitter border pulls in the electrons.
This generates voltage difference between negative emitter and positive base.
Si+
Si
Mobile electron
Mobile hole
-
+
Bound electrons
-
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0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
0 500 1000 1500 2000 2500
Sp
ec
tra
lirra
diance(
Wm
-2nm-1)
Wavelength (nm)
Why is the efficiency of a silicon solar cell not 100%?
Long wavelengths does not
have enough energy to
peel of electrons.
Short wavelengths haveextra energy above that
needed to peel of electrons.
100%
75%
45%
Fundamental limits to
voltage by laws of physics
Material quality and
cell design
Practical silicon solar cells:17-25%
29%
Silicon is not sensitive to
the whole solar spectrum.
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Optical and electrical losses in solar cells
11
-+ -
+
Reflection
Back surface
recombination
Bulk recombination
Shadow
SiNxARC
Emitter
p-Si
Al
Ag
AgAl
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Main components of a solar panel
Anti-reflective Glass Protects cells from the environment Offers mechanical strength
Anti-reflective coating improves light absorption
EVA Bonds back sheet, glass and cells into one
laminated structure
Protects cells from moisture
Cell Converts sunlight to electricity
Back sheet Protects rear side of panel from moisture ingress
Frame
Offers mechanical strength and protection of thelaminate edge
Provides mounting options
Junction box Connection point between the cells and external
cables
Contains bypass diodes to avoid electrical damage
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Main photovoltaic technology platforms
REC has a leading position in p-type multicrystalline cells
62%
6%
24%
8%
Photovoltaic technology platforms*P-type Multicrystalline cells
The most widely used PV
technology in the industry
REC has a leading position in p-
type multi cells and high
performance module designs
REC will continue to develop its p-
type multi platform by
implementing commercially viable
technologies
* Forecasted market share in year 2014 for different technology
platforms in the PV industry. Source: SolarBuzz,Oct 2013
p-type
multicrystalline cells
Thin filmn-type
monocrystalline
cells
p-type monocrystalline
cells
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Agenda
Introduction to REC
Solar fundamentals and technology
introduction
State-of-the-art manufacturing
Factory tour and Q&A
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State-of-the-art integrated manufacturing facility
Wafer Module
Slurry recovery Compressed air plant
Waste water treatment Chiller
Utility center
Cell
US 2.0bn invested into the worlds
largest integrated manufacturing
facility in Tuas, Singapore
Automated Toyota lean manufacturing
methodology
Wafer design capacity of 640MW*; 2
p-type multi crystalline wafer factories
Cell capacity of 770MW*; 6 fully-
automated cell lines
Module capacity of 910MW*; 4 highly
automated module lines
Pre-invested in capacity on utilities
and infrastructure, allowing for
increased production without furtherinfrastructure investment and lead
time
Transport costs avoided through
integrated manufacturing and
production line proximity resulting in
cost saving
Overview of production facility Description
*As of 31.12.2013
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REC BUSINESSSYSTEMDRIVESCULTUREOFCONTINUOUS
IMPROVEMENTANDLEANMANUFACTURINGTECHNIQUES
RBS principles
1. Understand your business case
2. Organize your people
3. Design and improve your system using our rules inuse:
a. Standardize all activities
b. Establish a customer-supplier connection
c. Optimize flow
d. Improvements & problem solving
(continuously improving the system)
Man
Method
Machine
Material
Safety
Quality
Delivery
Cost
Input Output
HSE & Quality
RBS Principles
Responsible Experienced Collaborative Straight forward
Perfect FlowWaste
Reduction 0 Defects
Customer Satisfaction
Best Safety Best Quality
Shortest Lead TimeLowest Cost
Stability & continuous
improvements
Source: REC Solar
Impact (Selected examples)
Example Impact Industry
Direct manufacturing employees per MW
in module factory0.51 -
Total recorded injuries (incidents per
million working hours)
0.4 -
2013 Customer claims (parts per million) 62 -
2013 cost improvement projects 245 -
Wafer yield 94.0% 92%
Cell yield 98.6% 97-98%
Module yield 99.2% 98%
REC Business System (RBS)
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RBS- ICCM (In-Control, Capable and Maintain) methodology
to understand and realize the potential of current technology
In the ICCM methodology, each of the wafer, cell and module process step are
further breakdown into sub-processes Process transformation is done on each sub-processes for detail
understanding of the purpose of each steps, interaction with upstream and
downstream processes and the critical process parameters
These details understanding are mapped in Focus Diagram for establishing
the control plan
Process Flow Mapping Process Transformation Focus Diagram
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RBS- ICCM (In-Control, Capable and Maintain) methodology
to understand and realize the potential of current technology
8-Steps ICCM was used to ensure new technology is understood and
documented in the REC Product Development Framework
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REC quality policy
ero defects
Supplier
Quality / IQA
In-Process
Quality /
OQC
Quality
Mgmt
System
Customer
Quality
Supplier
Qual
Supplier
Audit
IQA
IPQC
PCRB
MRB
SPC
Champion
Doc Control
ISO Cert
Calibration /
GR&R
Customer
Complaint
Reliability
SRS
OQC
Change
Mgmt
FA Analysis
MMS
REC has continuousfocus on quality and
improvement in order to
ensure competitive
advantages
Key focus on the Group's
goals on cost reduction,profitable growth,
technological advances,
market and customer
focus and organizational
development
REC aim to build acommon set of
methodologies, practices
and know-how that every
employees can relate and
communicate effectively
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Product qualification process above industry standard
Major design changes undergo an extended qualification process, where panels are
tested beyond normal industry standards
This extreme testing ensures panels can perform in the most severe environments,
ensuring increased reliability
x 2
2 x Test
Flash
MechanicalLoad
Damp Heat
Thermal Cycle
HumidityFreeze
Flash
Combined Cycle Test
x 2
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Product quality ensured through extensive in-line controls
Automation
PLC-1:
Tab & String
PLC-3:
LaminationPLC-5:
Framing
PLC-2:
LayupPLC-4:
Box
PLC-6:
Inspection
NeuroCheck 1 & 2
(Cell quality)NeuroCheck 3
(Layup quality) Dark IV Check
Intego (Post-Lam
physical attributes) SunFlasher
Hi-Pot Test (JB)
Manual
EL Image Visiting StationLay-up Check JB Install Quality
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REC product quality
Field studies confirm low degradation of REC panels
Field degradation study shows
RECs degradation to be clearlylower than warranty rate
The quality of RECs production
is also demonstrated by
excellent performance under
LID conditions compared to
comparable modules from other
leading manufacturers
RECs unique anti-PID
treatment is further confirmation
of the benefits of a high quality
manufacturer
RECs quality design and
production mean increased
yield over time compared to
comparable modules from other
leading manufacturers
-1.81%
-4.40% -4.88%-3.93%
-2.06%
0.00% 0.00%
-5.51%
-49.99%-51.25%
-55%
-45%
-35%
-25%
-15%
-5%
RECComp APanel 2
Comp BPanel 2
Comp CPanel 2
Comp DPanel 2
Power loss LID Power loss PID
Power
loss
Comparative results of degradation testing
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REC product quality
High quality demonstrated by low product claim rates
53
127
39
25
4937
939875
1.000
100
100.000
10.000
10
4.3003.500
10.100
4.500
8.800
1.800
16.300
2.000
14.500
3.300
Q4 12
18.000
2.900
Q3 12
28.800
3.400
Q2 12
11.400
3.800
Q1 12
11.500
1.900
Q1 13 Q4 13Q2 13 Q3 13 Q1 14
Comp #2REC Comp #1
Source: REC internal data, external data from Warranty Week (http://www.warrantyweek.com)
Claims rates (PPM) ; parts per million
Dedicated team handles claims from the field
Analysis of claims helps improve product quality
Parallel feedback process in place to handle non-claim issues
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Field information is fed back into design loop
Snow loadresistant frame
Introduced:
December2011
Standardizedconnectors
Introduced:
February2013
New cell fingerprint design
Introduced:
December2013
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MM has formed a very positive opinion of the facility
Report available under NDA (within restrictions)
Mott McDonald (UK)
Many topics considered to be industry leading andbest practice
Report available under NDA (within restrictions)
Black & Veatch (USA)
Overall rating of Green (Good) which is the top ratingof SolarBuyer
Zero critical findings
Report contents not available externally
SolarBuyer (USA)
REC quality is confirmed through third party audits
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REC has an extensive field monitoring program
REC opened its Energy Monitoring &
Control Centre at its Singapore
production facility in April 2013
REC invested in the same hardware
for a number of key sites across a
range of climates
Over 100 MW of sites monitored inEurope, US and SE Asia
Data used to assess performance
against warranty, facilitate
continuous product improvement
and enhance RECs reputation forstrong energy yield
Dedicated personnel constantly
monitor the systems involved
Durrants, UK
4.9 MWp
Richelbach, DE
5.7 MWp
2 x Singapore
150 KWp
Sandy Cross, NC, USA
1.5 MWpKlikov, CZ
1.3 MWp
Kapaa, HI, USA
1.2 MWp
Thailand
1.4 MWp
Locations with
sufficient data amount
of min. 6 mths
Locations under
observation collecting
sufficient data
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Solar parks with REC panels perform above expectations
Germany 5.7 MW UK5 MW
US 1.5 MW
76
78
80
82
84
86
88
PR(%)
Month
Actual PVsyst
2013 2014
Singapore 150 kW
0
20
40
60
80
100
PR(%)
Month
Actual PVsyst
2013 2014
88.0 88.4
86.8
90.6
84.1
85.584.6
88.7
75
80
85
90
95
2011 2012 2013 2014
PR(%)
Actual PVsyst
91.7 91.9
88.1
75
80
85
90
95
Feb '14 Mar '14 Apr '14
Past 3 Months
80.4
86.2 86.4 86.4
79.2
81.8
84.3 84.4
75
80
85
90
95
2011 2012 2013 2014
PR(%)
Actual PVsyst
92.7
91.090.4
75
80
85
90
95
Feb '14 Mar '14 Apr '14
Past 3 Months
Note: (1) PVsyst is an industry standard simulation software for predicting solar energy production(2) Non-operational periods are not considered in yearly data
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REC cell efficiency and module power steadily improving
Improving avg. cell efficiency (%) Improving avg. module power (W)
17,0
18,5
18,0
19,0
17,5
1,0
17,0
2012
17,4
17,4
2011
17,8
Dec-13 Dec 15EDec 14E
18,3
17,6
17,8
17,0
18,3
17,6
0
270
265
260
250
255
275
271
Dec15E
262
2012
258
2011
247
Dec14EDec-13
254
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Capacity expansion on schedule for 1.3 GW by 2015
The module debottlenecking projectto increase capacity to ~1.0 GW is
on track and expected to be
completed by Q3 2014
Decision taken to proceed with
investment of ~USD 30m to increase
module production to ~1.2 GW in2015 and a module capacity of ~1.3
GW by end 2015
Annual Module Production (MW)
900
0
700
800
1,100
1,000
1,500
1,400
1,300
1,200
647
2015E2013
940
2014E
1,200
2015
Year
End
820
2012
721
1,300
2011
annualcapacity
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Investment in new module lines will coincide with introducing
technologies to improve product performance further
WATT class distribution in 2015
REC will increase module productioncapacity by ~300 MW in 2H 2015
through installing two additional lines in
the module factory
The investment in additional module
production capacity will coincide with
introducing new and proven
technologies
REC is expected to improve its premium
quality and realize next generation REC
module with lower cost, higher power
and improved reliability
250
290
New LinesCurrent Lines
300 MW
Capability
1,000 MW
Capability
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Agenda
Introduction to REC
Solar fundamentals and technology
introduction
State-of-the-art manufacturing
Factory tour and Q&A