SolarWorld used the growth of the international solar markets in the first half of 2010 in order to sustainably expand its international business. In the first six months of the year we increased our group-wide shipments (wafers and modules) by 58 percent to 377 (H1 2009: 239) MW.

The main sales market was Germany. As an established quality manufacturer with a high awareness level we benefited from the persistently high demand there. We expanded our network of specialist partners and intensified our marketing activities. In the process we continued our tried and tested Push&Pull strategy by simultaneously appealing to trade audiences and to final consumers. We also presented ourselves in television commercials with our testimonial Lukas Podolski and as a partner in the Saturday evening popular TV show “Wetten, dass..?”. In the period under review we were able to double our sales in Germany in comparison with the same period of the previous year.

In other European markets we also succeeded in substantiating our position by way of sales promotion measures. We used the strong demand boom in Italy to place our products successfully both in the roof systems segment and in the large-scale project business. Our Italian distribution channels built up over the last few years as well as the installation of the solar power plant on the roof of the Papal audience hall in the Vatican aided us considerably in this context. Especially our well established relations to systems integrators and to the specialist wholesale trade turned out to be important competitive advantages. In this market SolarWorld was able to multiply its sales of solar modules and solar kits.

We also expanded our business in the French market. In April 2010 we converted our liaison office in Grenoble into the wholly owned subsidiary SolarWorld France SAS. New group structure as of 30 June 2010 There, our employees support our customers with technical advice and training as well as selling our products to installers. With this measure we are reconfirming our commitment to this growing solar market in which traditionally integrated roof-top solutions like our Energyroof® are much in demand.

An important step into another European market of the future – Great Britain – was successfully completed by getting our products certified according to the UK Microgeneration Certification Scheme (MCS). Only modules carrying that certificate will be funded according to the law that came into force on 1 April 2010. In the second quarter of the year we could already ship our first orders to Great Britain.

The US market picked up noticeably in the first half of 2010. SolarWorld was able to more than double its sales compared with the previous year. We intensified our marketing activities with the objective of gaining additional market shares and establishing the SolarWorld brand more firmly than before Supplementary report One emphasis in this context will be on the specific appeal to final customers via the Internet and social media, which are much more established as communications and distribution channels in the U.S. than in other markets. Furthermore, we intensively advertised to and expanded our network of specialist partners “Authorized Installer Network”.

Our US sales subsidiary SolarWorld California increased its personnel capacities forming a team of highly qualified specialists. A regional organization and a differentiated set of sales tools increase our selling power in the US and on the entire continent. Thus, we can better serve these regional solar markets with different conditions and target groups.

Our production capacities were fully utilized throughout the entire first half of 2010. At the same time we are pushing ahead the capacity expansion at all locations. Future business development

On 31 May 2010 the German Federal Environment Minister Dr. Norbert Röttgen inaugurated our new 250 MW wafer production facility in the Industrial Park East at the German location of Freiberg. In the future we will therefore produce at clearly lower unit costs, among others because all manufacturing steps are fully automated and integrated in one building. Through this capacity increase SolarWorld will not only strengthen its international market position as an integrated provider but also meet the rising demand from its own module production. For the second stage of capacity expansion by another 250 MW the necessary infrastructure is already in place.

Our US location in Hillsboro was also characterized by expansion activities in the first half of the year. The quick and smooth expansion was ensured by our Corporate Technology: In the second quarter we built large parts of a new module line in Hillsboro following the example of the German Solar Factory II. As early as in the beginning of September the first modules are scheduled to come off the production line to start the ramp-up. The planned year-end capacity is 350 MW. We also increased the capacity of our cell production in the first half of the year by 35 percent. Wafer expansion has also progressed. The equipment for the scheduled increase to 250 MW is in place by now.

In the period under review we successfully completed the certification of our sites in South Korea and the U.S.. This means that all our sites are now certified according to ISO 9001 and 14001.

Our product strategy – high quality solar power solutions that we flexibly adapt to customer wishes and market requirements – has been consistently implemented in the first half of 2010 and has helped us to successfully differentiate ourselves from our competitors.

Thus, at Intersolar in Munich we were able to present a new, complete, energy-smart solution for the supply of solar power to households: In the future our Sunkit^® in conjunction with modern control and regulatory technology as well as our battery system SunPac® will make it possible for our customers to substantially increase their self-consumption rate. Both, new and existing SolarWorld power plants, can be retrofitted with this system. This is our answer to the changing market situation in Germany as a consequence of the EEG amendment. Expected development of the solar power market In the first half of the year we also presented our SunCarport^®. This can serve as a “filling station” for electric and hybrid vehicles and can be integrated into the energy supply system of a household. Group Annual Report 2009/Up on the rooftops of the world In addition, we underlined our claim of being the leading provider of complete, high quality solar power solutions with new products like the flexibly usable in-roof system Sundeck^® and with further developments of SolarWorld’s established rack system.

The quality of our products has also been confirmed by external experts. Our modules not only achieved first place for the second time in the comparative test organized by the Photon trade magazine but were also rated to be “very good” by ÖkoTest. In addition, the Deutsche Landwirtschafts-Gesellschaft e.V. (German Agricultural Association) provided evidence for the ammonia resistance of our modules. In the tests it was proven that SolarWorld modules can withstand the influence of ammonia, which occurs in agricultural facilities in larger ambient air concentrations, for a utilization period of at least 20 years.

We are continuously working on further improving the quality of our products and on cutting costs at the same time. In doing so we cover with our Research and Development activities the entire value chain from silicon all the way to the finished module – a distinct competitive advantage over other manufacturers. For our current research priorities as well as individual projects please refer to Group Annual Report 2009/Innovation report 2009