Inverters for Energy Supply from Photovoltaics: Technology and Challenges

AGH University, Krakow, 6th Dec. 2011

SMA Solar Technology AG

Dr. Edwin Kiel, Corporate Technology Center

Disclaimer IMPORTANT LEGAL NOTICE This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of SMA Solar Technology AG (the “Company”) or any present or future subsidiary of the Company (together with the Company, the “SMA Group”) nor should it or any part of it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for any securities in the Company or any member of the SMA Group or commitment whatsoever.

All information contained herein has been carefully prepared. Nevertheless, we do not guarantee its accuracy or completeness and nothing herein shall be construed to be a representation of such guarantee. The information contained in this presentation is subject to amendment, revision and updating. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on the management‟s current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements as a result of, among others, factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements which speak only as of the date of this presentation. This presentation is for information purposes only and may not be further distributed or passed on to any party which is not the addressee of this presentation. No part of this presentation must be copied, reproduced or cited by the addressees hereof other than for the purpose for which it has been provided to the addressee. This document is not an offer of securities for sale in the United States of America. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933 as amended.

SMA Solar Technology AG

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SMA Solar Technology – Our Vision

>>Renewable energy will become

more and more important worldwide. Decentralized electrical energy supply from photovoltaics will play a major role here.
Short presentation of SMA > System concepts > String inverters > Power grid integration > Home energy management > Summary

SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Energy for our future Fossil energy sources:

• Motor of the industrial revolution • Central systems • Are limited • Harmful to earth„s CO2 household Solar power plants:

• Unlimited ressource sun • Energy supply at point of demand • Decentral and linked

 By its decentral character photovoltaics has the highest public acceptance and the lowest invest hurdles from all kinds of renewable energy supply

 Main topics: costs and volatile energy supply SMA Solar Technology AG

1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Why Renewable Energies? > Fossil fuels are limited (50-200 more years) and discharge emissions harmful to the climate. > Renewable energies provide unlimited resources while avoiding harmful emissions. > Solar energy alone could cover the world„s energy demand 3.8 times. Possible global energy supply

Hydro power: 0.15x

Bio power: 0.4x

Wind power: 0.5x

Annual global energy consumption

Geothermal energy: 1.0x

Solar power: 3.8x

 Several times the world's energy demand could be covered using renewable energy sources alone. SMA Solar Technology AG

Source: German Solar Industry Association (BSW)

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Renewable Energies will gain More and More Importance > Centralized power generation is being increasingly replaced by the decentralized grid feeding of renewable energy sources. > Renewable energy sources and energy efficiency are the key for an environmentally sound and secure power supply. Other 6%

Wind power 25%

Wind power 6,2% Bio power 5,5% Hydro power 3,3% Other 5%

Photovoltaics 2%

Natural gas 13%

Nuclear power 22%

Bio power 9% Natural gas 11%

Hydro power 5%

Photovoltaics 7% Geothermal Power 1%

Hard coal 19% Brown coal 23%

German Power Mix 2010 Renewable energies make up more than 17%1

Hard coal 19%

Brown coal 17%

Nuclear Power 1%

German Power Mix 2020 Renewable energies make up nearly 50%2

 Photovoltaics will become a major pillar in the energy supply of the future. SMA Solar Technology AG

1Source:

Renewable Energies Agency, Germany; as at 08/11

2Renewable

Energies Agency, Germany; as at 01/09

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Correlation between supply and demand Energy generation in Germany on Sunday, 12.06.2011 12:00 0,52 GW

11,6 GW

26,4 GW  30% PV

 Energy from photo voltaics already covers in Germany the daily peak demand  Increase from today 20 GWp to more than >50 GWp by 2020 is planned SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Further development of the PV market worldwide

 After doubling in 2010 stagnation in 2011 and more moderate growth in the following years  Increase of photo voltaics will keep a complicated interaction of cost reduction, politic targets, incentives and investments Quelle: Global SMA Solar Technology AGMarket Outlook for Photovoltaics until 2015, EPIA, 2011.

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SMA Solar Technology – Our Mission

>> By continuous further developments and innovations in system technology, we will make the installation and operation of photovoltaic power plants even simpler, more reliable, safer, and above all, more cost-effective. We want to increase technical progress and the worldwide spread of photovoltaics with our work.
2010 turnover of 1,9 Mrd. Euro > 7,8 Gigawatt annual production (2010) > More than 6.500 employees worldwide, including ca. 360 trainees

> Active in 18 countries on four continents > Production capacity of 11,5 GW

 SMA is world market leader for solar inverters (market share 35…40%)

SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

20 gigawatts installed SMA inverter power worldwide SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

SMA is Represented in 19 Markets all Over the Globe

 In the first half of 2011, we achieved over 50 % in sales abroad. SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

USA Italy

Poland France

Well positioned in

Japan

19 key markets

Spain China

Australia

Great Britain

Czech Republic

United Arab Emirates SMA Solar Technology AG

Korea

Greece

on 4 continents

Canada

Germany

Thailand Benelux

Portugal

India 14

1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

SMA Serves all Market Segments Worldwide All performance ranges

All PV applications On-grid

Residential < 2 kW

All module types Crystalline modules

Residential Off-grid

2 kW to 30 kW

Thin film

Commercial Back-up

30 kW to 500 kW

Concentrator modules

Industrial

To >1 MW

 Every market segment has different product requirements. SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Successful with 6 product families SMA product families

Market segments

Residential

System control and monitoring

>

Maximum Power Point (MPP)-Tracking

>

Grid monitoring and services

Modules produce DC current

Inverter converts DC current into AC current

Energy is used directly or fed into the public grid

 The PV system produces energy at the point of consumption; therefore, energy management is of great importance. SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

SMA is the Global Technology Leader Selected innovations 2011 SUNNY TRIPOWER 20000TL High Efficiency

TL Grounding Solution

SUNNY BOY 240

SUNNY VIEW

Customer Value

> 99 % efficiency > Lower specific price

> Higher system efficiency (up to + 3%) > Lower specific system cost due to transformerless technology

> High reliability due to lower number of components > Ease of installation > Panel level monitoring

> Convenient monitoring > Colorful touch display > Social media functions

Target market

> Commercial / Industrial

> Commercial / Industrial (Thin-film modules)

> Residential < 2 kW

> Residential

 We invest up to € 100 million in research & development in 2011. SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

An engine of innovation

with

1.000 professionals in research and

development SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

System concepts for grid-connected solar inverters > System approaches > Central string concepts > Decentral string concepts > Module oriented- /integrated-concepts > Main criterial for system choice are the Total Cost of Ownership (TCO)

 Maximum earnings at lowest cost Maximum earnings:

Minimum system costs:

> Output power from PV generator

> Initial costs

> Efficiency of inverter

> Installation, maintanance, reliability

SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

TCO benchmark of system concepts AC

Parallel String

Multi String

1.000 €

Class II

Class I

Class III

Profit vs. Multi String

500 € 0€ Parallel String -500 €

Multi String AC Module DC/DC Module

-1.000 € -1.500 € -2.000 € -2.500 € -3.000 €

0

10

20

30

40

50

60

70

80

90

100 110 120 130 140 150

sorted scenario

 String oriented inverters have in most applications advantages compared to module oriented inverters based on TCO calculations Quelle: “Benchmarking the different PV System concepts focussing on their total cost of ownership”, Bettenwort, Bülo, …, PVSEC2010, Valencia SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Flexible dimensioning  Extension of input voltage range > Configuration and ratings of the modules > High temperature dependency of the PV characteristics

 High DC input voltage range of more than 2:1 is necessary  This leads to two-stage concepts: step-up chopper for extenting the input voltage range + DC-to-AC inverter SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Power electronics in solar inverters > Power semiconductors: > Today Silicon-based devices (IGBT, CoolMOS) + SiC-diodes

> In future also SiC switches (lower losses, higher switching frequencies) > Topology of power electronics: > Are determing the efficiency and input voltage range of the solar inverters > Many different topologies are in active use > Magnetic components: > Are determing weight, size and costs of the inverters to a high degree > Using higher switching frequency these components can be reduced significantly > Main technologies: core materials (iron-based/ferrite, laminates or powder based) and winding materials (copper, aluminum), core geometries, type of winding

 General path towards cost reduction: Faster Switching smaller magnetics SMA Solar Technology AG

smaller devices 23

1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Topologies for single-phase inverters with high efficiency

> Inverter topologies for the „98%-class“:

> H5

> HERIC

 H5 and HERIC achieve higher efficiencies compared to the classical H4 bridge

SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Topologies for 3-phase inverters with high efficiency

NPC – Topology

„Refu“

(Schaltung für negative Halbwelle ausgeblendet !)

The usage of transformerless multi-level topologies allows efficiencies of >98% 25

SMA Solar Technology AG

1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Energy Management is the Current Topic in the Solar Industry Fundamental concept

Application

> PV is generated near to the point of consumption at the time of the day with the highest energy need. > Solar energy feeds into the low voltage grid. > A growing number of installations require the management of decentralized power plants for grid stability. > Less investment in high voltage lines and distribution grid infrastructure due to higher self-consumption.

 On a sunny day solar power already contributes up to 25 % of the power consumption at lunch time in Germany. SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Integration of photovoltaics into the power-grid structure > Typical infeed of photovoltaics: > approx. 85 % low-voltage level (230 V/400 V)

> approx. 15 % medium voltage level (10 - 30 kV) > Only few on the high-voltage level (110 kV) > Dr. Staschus (GL BDEW) 26.06.2008 in Erfurt: „The power flow is put from feed to head.“ > Change of paradigma necessary for the power grid: > From top-down structures to fluctuating bidirectional power flows > Distribution networks have to be converted to „collecting networks“.

 Renewable energies have to provide services in the power distribution network! SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Services for grid integration > Increasing share of decentral energy requests their contribution to net support and stablilization > In Germany and on international level the standards for medium- and low-power grid have been adopted appropriately

SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Intelligent Energy Management with SMA System Technology Modules produce direct current

Sunny Boy converts direct current into alternating current Sunny Home Manager controls consumers and Sunny Back-up System

Solar energy may be used in the home, stored temporarily for later consumption, Bluetooth radio-controlled socket with measuring function provides for the activation of appliances via the Sunny Home Manager

or fed into the public grid. The Sunny Home Manager controls system Sunny Back-up System provides for temporary storage and offers a grid-quality power supply with protection against outages

components and appliances.

Additionally, in the event of grid outage the home is supplied with solar energy from the PV system and the battery.

 The PV system produces energy at the point of consumption; therefore, energy management is of great importance. SMA Solar Technology AG

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> Market of photovoltaics

> Short presentation of SMA > System concepts > String inverters > Power grid integration > Home energy management > Summary SMA Solar Technology AG

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1 PV market | 2 SMA | 3 System concepts| 4 String inverters | 5 Grid integration & energy management| 6 Summary

Summary > Photovoltaics has an increasing relevance for the renewable energy supply > SMA is technology and market leader for solar inverters > String inverters are the the most efficient solution for residential and commercial applications > Main challenges: efficiency and costs > Main impacts for the costs: new power semiconductors and cost-reduced magnetics and housings > Solar inverters take over additional tasks: > Grid integration services

> System monitoring > Load management > Energy storage

SMA Solar Technology AG

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Thank you for your interest!

SMA Solar Technology AG

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SMA Solar Technology AG

Entry-level opportunities

SMA Solar Technology AG

Anne Schuster, 06.12.2011

1. Renewable Energy | 2. Company Story | 3. Technology | 4. Markets | 5. Outlook

SMA has an Award-winning Corporate Culture > Involvement of employees with their minds, their hearts and their wallets:

> „Open door policy“ > Participation in information and decision processes

> Bonuses based on the company's success for all employees

Great Place to Work Award 2011

Fairness Award 2008

> Structural personnel development trough continued targeted training

> Same wages for temporary and permanent employees in the production area

Life Long Learning Award 2010

Top Employer for Engineers 2009

 Our corporate culture fosters flexibility and innovation. SMA Solar Technology AG

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1. Renewable Energy | 2. Company Story | 3. Technology | 4. Markets | 5. Outlook

SMA has been Awarded Repeatetly for its Innovative Strength

> Best Innovator Award 2010/11

> Photon inverter test „sehr gut +“ for Sunny Tripower 17000

> INTERSOLAR Award 2010 for Sunny Central 800CP

 Continued technological innovation is one of the main drivers of our success. SMA Solar Technology AG

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Internship / Thesis project Duties / Topics in the following areas: » Power Engineering/Power Electronics » Metrology and control engineering » Communication technology » Software development » Commercial and other areas » Time period: 3 - 6 month » Combination of internship and thesis is welcomed

SMA Solar Technology AG

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SMA product families

SMA Solar Technology AG

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Continuous internationalization in order to take over key positions in all future solar markets

 SMA is Represented in 19 Markets all over the Globe SMA Solar Technology AG

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Interested? We are looking forward to receive your application:

jobs.SMA-Solar.com SMA Solar Technology AG

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