Trinasolar

THE POWER OF SUN

Solar energy, power from the sun, is free and inexhaustible. This enormous, reliable and clean energy resource represents a viable alternative to the fossil fuels that currently pollute our air and water, threaten our public health, and contribute to global warming. The amount of energy from the sun that falls on Earth's surface is enormous. All the energy stored in Earth's reserves of oil, coal, and natural gas is matched by the energy from just 20 days of sunshine. Outside Earth's atmosphere, the sun's energy contains about 1,300 watts per square meter. About one-third of this light is reflected back into space, and some is absorbed by the atmosphere. Trina Solar's modules capture a portion of that immense energy source and convert it directly into electricity.

INDUSTRY OUTLOOK

Solar energy generation systems use interconnected solar cells to generate electricity from sunlight through a process known as the photovoltaic effect. Solar power is a rapidly growing renewable energy source, and the solar power market has grown significantly over the past decade. According to Solarbuzz, an independent solar energy research firm, the global solar power market, as measured by annual solar power system installed capacity, grew at a CAGR of 47.4% from 598 MW in 2003 to 2,826 MW in 2007. According to a Solarbuzz forecast named "Green World," in one of several possible scenarios, annual solar power system installed capacity may further increase to 9,917 MW in 2012, and solar power industry revenue may increase from $17.2 billion in 2007 to $39.5 billion in 2012, which we believe will be driven largely by surging market demand, rising grid prices and government initiatives. The scope of the government incentives for solar power depends, to a large extent, on political and policy developments relating to environmental concerns in a given country, which could lead to a significant reduction in or a discontinuation of the support for renewable energies in such country. Federal, state and local governmental bodies in many of our key markets, most notably Germany, Italy, Spain, the United States, France and South Korea have provided subsidies and economic incentives in the form of rebates, tax credits and other incentives to end users, distributors, system integrators and manufacturers of solar power products to promote the use of solar energy in on-grid applications and to reduce dependency on other forms of energy. These government economic incentives could be reduced or eliminated altogether. In particular, political changes in a particular country could result in significant reductions or eliminations of subsidies or economic incentives. Electric utility companies that have significant political lobbying powers may also seek changes in the relevant legislation in their markets that may adversely affect the development and commercial acceptance of solar energy. While the challenges are enormous, so are the opportunities.

THE SOLAR SOLUTION

Over the next 50 years mankind has two big challenges to face: meeting the global energy demand and limiting the effects of global warming. With economies around the world developing rapidly and a population that is constantly growing, the demand for energy is growing. Solar energy is one solution to this problem. With supplies of fossil fuels diminishing daily, more and more people are turning to solar. In fact, it is estimated that by 2100, solar energy will account for 80% of the total energy produced around the world. Global warming is a danger unlike anything we have faced before. Every day we see the initial threats that global warming is causing. Turning to alternative energy sources, like solar, is one way to help. With every solar system we install, Trina Solar is reducing the amount of greenhouse gases that are produced from fossil fuels. It is a struggle we are proud to take a part in.

INDUSTRY KEY DRIVERS

We believe the following factors have driven and will continue to drive the growth of the solar energy industry.

Growing Electricity Demand and Supply Constraints:

Worldwide demand for electricity is expected to increase from 16.1 trillion kilowatt hours in 2002 to 31.7 trillion kilowatt hours by 2030, according to the International Energy Agency, or IEA. The IEA also estimates that over 66% of the world's electricity is generated from fossil fuels such as coal, natural gas and oil. Declining fossil fuel reserves and escalating electricity consumption are driving up wholesale electricity prices, resulting in higher electricity costs for consumers and highlighting the need to develop technologies for reliable and sustainable electricity generation. In addition to generation challenges, the electric grid infrastructure in many parts of the world is in need of substantial upgrades. The IEA estimates that the transmission and distribution infrastructure in North America requires over $900 billion in investments between 2003 and 2030 to meet the anticipated electricity demand. During the same period, in China almost $1.2 trillion in additional investments for electricity transmission and distribution may be needed.

Government Incentives for Solar Power: 

Many governments are attempting to reduce their dependence on foreign sources of energy because of the political and economic instability in many oil and gas producing regions of the world. Solar power offers an attractive means of power generation without relying extensively on foreign energy resources. In addition, increasing environmental concerns and climate change risks associated with fossil fuel-based power generation have created political momentum to implement greenhouse gas reduction strategies aimed at the reduction of emissions of carbon dioxide and other gases. Solar power and other renewable energy sources help address these environmental concerns.

Governments around the world have implemented a variety of policy initiatives to accelerate the development and adoption of solar power and other renewable energy sources. Renewable energy policies are in place in many European countries, certain Asian countries, many of the states and provinces in Australia, Canada and the United States and in certain Latin American countries. Examples of customer-focused financial incentives include capital cost rebates, feed-in tariffs and tax credits. Capital cost rebates provide money to partially offset the consumer's upfront investment in a solar system. Feed-in tariffs require utilities to pay customers for the electricity they generate with solar systems based on kilowatt-hours produced, at a rate generally guaranteed for a period of time.

SOLAR ENERGY BENEFITS

Solar power has several advantages over both conventional and other forms of renewable energy.