Aleo explains situation in Spanish solar PV market

How does aleo solar see the development of the Spanish solar PV market related to the uncertainty created by the government?

Our internationalisation strategy in southern Europe puts the focus of our expansion plans primarily on Spain. The Spanish market is continuing to grow. At the beginning of October, the National Energy Commission (CNE) announced that it was already 85% of the way towards reaching the 400 MW planned for 2010. However, the Minister for Industry, Tourism and Commerce, Joan Clos, stated that the government had set a target of reaching 1,200 MW of installed solar energy in Spain by 2010, a threefold increase in the previous target of 400 MW. Mr Clos also announced that the future model would be based on the current German system of providing incentives, which is seen as the most successful in the European Union.

How will aleo solar handle the situation?

We expect a lot of orders especially in the first half of 2008. But it is necessary that Mr. Clos announcement will be led into binding laws. If the Spanish market will shift into a market for roof-top applications – we are well prepared, because we have some years of experience with such a market in Germany.

What new products will the company launch in the coming months?

aleo holds a stake in the largest CIGS fab worldwide, Johanna Solar Technology, in Brandenburg (Germany), which will produce thin film modules, which are silicon free. Regular production start is scheduled for 2008. aleo will have access to large volumes of CIGS panels and the right to distribute up to 80% of the production under “aleo” brand name.

How has Aleo solar grown in Spain? What challenges has the company found in Spain?

The optimum local conditions and a good political environment on account of feed-in legislation that is similar to that in Germany make Spain the photovoltaic powerhouse of the European market. Because on the one hand we apply the high German quality standards, but want to be perceived as a Spanish market player on the other, we decided to build a factory near Barcelona in 2006. The total capacity of the new production facility is 10 MW. 21 Spanish staff were employed here at the end of 2006. The factory was completed on schedule in December and was inaugurated in May 2007. At the end of September we had 64 employees and will have a workforce of around 100 people in 2008.

We were able to acquire large Spanish utitlities as also important project developers like Solartia. Gamesa and Endesa, two of the largest Spanish utilities, as prominent customers signed contracts worth more than EUR 20 million. The contracts will run until well into 2008. In the middle of 2007 aleo modules with a total value of a good €30 million were ordered by several Spanish project developers. They will be used primarily to build solar farms as facilities on open land, which attract high feed-in tariffs in Spain. These contracts from project developers allow aleo solar to expand its customer base significantly and have increased aleo solar's total international contract volume for 2007 to around €50 million.

Up to the end of September 2007 we produced approx. 5 MWp and in 2008 we will produce in Santa Maria de Palautordera at least 10 MWp.

Please let us know about the company profile at global level.

aleo solar AG, with manufacturing facilities in Prenzlau (Brandenburg) and sales operations in Oldenburg (Lower Saxony), was formed in September 2001 and produces solar modules using silicon cells. The facility in Prenzlau has an annual capacity of 90 megawatts, making it one of the largest production plants for solar modules. To date, total capacity has consisted of 90 MWp from the company’s Prenzlau location and 10 MWp from its Spanish facility near Barcelona. With the planned 80 MWp expansion in Prenzlau, aleo solar AG will have a total of 180 MWp available in 2008. A new state-of-the-art logistics centre is also to be built. Since July 2006, aleo solar AG (DE000A0JM634) has been listed in the Frankfurt Stock Exchange’s Prime Standard. The Company’s acquisition of an equity interest in the Brandenburg-based technology enterprise Johanna Solar Technology GmbH has given it access to the promising future thin-film technology. aleo solar is also present in Italy and Greece with a own sales force. At the end of September 2007 the workforce was about 480 and aleo will achieve revenue of at least EUR 200 million in 2007 accompanied by a continued solid EBIT margin. The proportion of revenue generated abroad will amount to some 30%.

What are the company's most representative projects?

Spanish company SOLARTIA, a project developer and solar farm operator, has awarded a contract to aleo solar AG to supply 24,000 modules, corresponding to an output of approximately four megawatts, for a new solar farm in Viana in the northern Spanish province of Navarre. This means that almost half of all the solar modules needed for the solar farm were supplied by the German solar specialist. The solar farm covers an area of 253,000 square metres and has started feeding electricity into the grid in June 2007. With an output of around nine megawatts, it supplies enough electricity to power more than 2,500 households, making it one of the largest solar farms in Spain. SOLARTIA invests a total of EUR 54.8 million in the project.

In Manresa, just one hour away from our factory, we delivered modules for an industrial rooftop (237 kW) and we also provided approximately 68 kW of solar modules for the Expo Zaragoza 2008. Our business in Spain is proving itself and we will systematically expand it further.

For additional information:

www.aleo-solar.com