2010 is well underway and already promises to become an exciting year. We would like to continue to foster an intensive information exchange with you. To accomplish that, we will extend our channels of communication, which also means change for the newsletter. You are receiving the first edition of the redesigned “COLEXON NewsBreaker” with which we will keep you up to date each month. In the future, it will give you a glance into the company’s operational developments as well as providing a broader perspective into the photovoltaic sector. The COLEXON Glossary section of the newsletter presents relevant and valuable topics concerning COLEXON.
We would like to initiate the COLEXON NewsBreaker by announcing the company’s latest effort of facilitating active, mutual communication; COLEXON has set up a public telephone hotline (0800-COLEXON) that will allow you to call to have your questions answered and suggestions and comments listened to by providing you with the opportunity to personally engage in discussion about the company.
We look forward to sharing a successful 2010 with you.
Kind regards
Thorsten Preugschas
CEO - COLEXON Energy AG
Overview of the photovoltaic sector
Current debate about the Renewable Energy Act (Erneuerbare Energiengesetz EEG)
2010 will be a notable year for the German solar sector. The current political and medial debate is already providing strong indications of change on the horizon. The latest proposal by the German minister of the environment, Norbert Röttgen (CDU), is to reduce the feed-in tariff for rooftop plants by an additional 15% beginning from April 1st, 2010, and for free field plants on arable land by an additional 25% beginning from July 1st, 2010. The FDP, CSU and the Green parties criticize this proposal. Regardless of how it will be decided in the end, the planned reductions in tariffs will have an influence on the development of the German solar market. At present, pre-eminently the current political state of uncertainty is particularly problematic to the whole sector.
COLEXON’s position: incentives instead of restrictions
In order to establish clarity in this process as soon as possible and to re-establish planning security for the German solar industry, COLEXON has gotten involved in the current EEG debate through the Bundesverband Deutscher Solarwirtschaft (BSW). Since COLEXON considers the additional reductions proposed by Mr. Röttgen (CDU) as being counterproductive to the German solar industry, the COLEXON board of management has presented to the political decision-makers a document containing proposals for an appropriate adjustment of the EEG. COLEXON has taken the following position to create positive momentum and to limit state spending at the same time:
The incentive to consume privately contained in the current EEG provides important momentum and is considered to be a significant drive behind expansion of the sector. This argument provides significant resistance against reduction of the EEG subsidized tariffs.
Regional variation of tariffs (dependent on insolation, such as is currently done in France) would be an incentive for to build installations over the whole federal republic including in Northern Germany. Moreover, this would also reduce the current problem of exhausted grid capacities.
Increased incentives for dual use of land (e.g. increased tariff for noise barriers), of large roof areas and of already sealed areas (e.g. elimination of 1MW limit, roof tariff for car-park canopy/roofing) should be provided.
The free field tariff should be regulated depending on the use of area.
COLEXON sees its position supported by the critical opinions of the FDP, CSU and Green parties against Mr. Röttgen's proposals.
Inside COLEXON
Expectations for 2010
At the beginning of the year 2010, the solar industry was confronted with radical changes. The current debate about upcoming changes of the German EEG and the associated uncertainties present German solar companies with special challenges – this also refers to COLEXON. On the other hand, the reductions were not completely unexpected by COLEXON. COLEXON has already been adjusting its corporate structure and business model for some time in order to be able to operate without government subsidies and to continue to successfully place its products in the market. COLEXON would like to emphasize five points about its corporate structure:
Profitability: COLEXON is one of the most profitable companies of the sector with a predicted EBIT of 18 million Euros for 2009 while employing 100 staff.
Liquidity: By establishing its own operation of solar power plants, COLEXON has secured a steady cash flow with state-guaranteed feed-in tariffs.
Internationality: In 2009, COLEXON concentrated in building up a strong, international project pipeline for the second half of the year 2010.
Continuity: Due to its three business segments, wholetrade, projects and plant operation, COLEXON is demand-oriented and able to react to market changes ensuing constant growth.
Flexibility: COLEXON does not have binding contracts with crystalline manufacturers and is, consequently, able to operate flexibly in the buying market.
The current debate on level and timing of the reductions in feed-in tariff has led to a considerable uncertainty in the capital markets. The Photon Photovoltaik Index declined by about 15 percent in the month of January and finished at € 23.20. The COLEXON share fell by 11.4 percent to € 3,68 in this period of time and was above the general sectoral trend. The average daily volume of trade of the COLEXON share increased strongly to approximately 40,000 shares per day (XETRA). The volume of trade of the COLEXON share has more than tripled since the takeover. The sharp increase in trading volume reflects a radical change in the shareholder structure that stems back to the takeover of the Danish IPP Renewagy. COLEXON started a new offensive in the capital markets in 2010 in order to accelerate this process. This includes increased participation in capital market conferences and an increased presence at road shows.
Also in 2010 COLEXON will take part at various international conferences and exhibitions. COLEXON has published the new press calendar for 2010 in January. You can find all information about upcoming events at a glance here. The calendar will be updated continously.
COLEXON Glossary
B: Bulgaria
Bulgaria is regarded as one of the future markets in the solar industry. The country is importing about 70 percent of the necessary primary energy at present. The Bulgarian government is planning to further extend the use of renewable energies in order to secure its energy supply from own resources on a long-term basis. As solar insolation levels are between 1,450 and 1,650 kWh/m2, in Bulgaria energy yields lie about 30% above the Central European average levels. Therefore, solar energy is particularly interesting for the Bulgarian economy since such high energy yields are possible to achieve. In addition, the relatively low real-estate prices as well as the very high prices of electricity boost the establishment of alternative energy forms. The feed-in tariff in Bulgaria is around 39 ct./kWh and guaranteed for 25 years (in 2009). Currency risks, missing infrastructure and improperly planned licensing processes (connection to the grid) as well as legal uncertainties that might deter potential investors are substantially impeding growth of the Bulgarian solar market. COLEXON has a current project pipeline in Bulgaria at its disposal and regards the market as one of its markets of the future.
F: France
Experts consider the French solar market as one of the European future markets in the solar industry. The French government’s attractive feed-in compensation model provides a promising framework for a sustainably positive development of the French solar market. Furthermore, the market shows good natural and infrastructural requirements. Partly complicated licensing procedures for grid connection and the feed-in contract are still substantially impeding growth of the French solar market. However, financial and administrative processes have been simplified, substantially improving basic conditions in the third quarter of 2009. According to the EPIA, the total market volume will reach 3 GW by 2013, making France one of the world’s leading PV markets in the medium term. COLEXON reacted early to this positive outlook and founded its French subsidiary COLEXON France SASU in December 2008. COLEXON has currently a project pipeline in France at its disposal, both for own and third party operations.
COLEXON Contact
Do you have comments or suggestions regarding the COLEXON NewsBreaker or questions regarding the company? Personal contact is important to us. Get in contact with our PR / IR team.
