Business profile

Core business

The main activity of the company is the import and sale of photovoltaic panels, heat pumps and other renewable energy components. The main source of the Issuer's profit is the margin it charges on the goods it sells. The goods are manufactured in the Netherlands, China and Japan, and the Company purchases them directly from manufacturers or sales agents. The company sells in two ways: trade to small recipients, where the buyers are individual customers (natural persons, retail model) and wholesale. Sales in the retail model take place from the Issuer's warehouse located in Macierzysz, and sales on the Hungarian market through the CONCEPT MARKET company. Retail and B2B sales also take place through specialized trading platforms, such as Allegro, OLX, MerX. Trade to large recipients, which consists of regular pallet and container sales, where the recipients are contractors of large PV installations, electrical wholesalers, installation companies or large enterprises (e.g. mushroom farms), and pallet sales: where the recipients are installers and online stores. Sales in this mode are carried out as part of deliveries directly from the warehouses of producers or trade agents to the recipient.

Description of the market on which the issuer operates, including the issuer's position on that market:

The photovoltaic market in Poland is the fastest growing of all the markets in the RES (Renewable Energy Sources) sector in Poland. The total installed capacity in photovoltaic sources at the end of 2019 was almost 1500 MW, and in 2020 it exceeded 3936 MW, which means an increase by 2463 MW year on year and translates into a 200% increase year on year. In 2020, the highest increase in new capacity is observed in the micro-installation segment, which means high activity of individual and business prosumers. In 2019, Poland achieved an increase in new capacity of approximately 0,9 GW and with a share of the capacity increase of 5,5%, it was placed in the top five countries in the European Union. In 2020, Poland maintained the growth rate of installed capacity and came fourth in the EU. IEO forecasts also indicate that the turnover on the photovoltaic market will increase to PLN 9 billion this year. Investments in 2020 were focused on individual and business prosumers, i.e. in the sector of micro and small installations. Then, in the years 2021-2022, along with the end of the deadline for the implementation of projects that won auctions in 2018-2019, most of the investments will be concentrated in the photovoltaic farm sector. In 2020, the photovoltaic market recorded the largest increase in installed capacity among all renewable energy sources. This means that this market is currently the main area of ​​investment in renewable energy. In 2025, the total installed capacity in photovoltaics may reach 7,8 GW, which means that by 2025 the power of PV sources will exceed the power demand for 2030 assumed in the National Plan for Energy and Climate (KPEiK). The observed and forecasted market growth is particularly clear in the sector of prosumers and farm developers. Thus, a market is created for installation companies as well as Polish manufacturers and suppliers of equipment, whose development provides new jobs and generates added value for the Polish economy.

Prosumer micro-installations

In 2020, 500 MW of power was installed in micro-installations. At the end of 2020, micro-installations accounted for over 77% of the total installed photovoltaic capacity. Polish photovoltaics, unlike many European countries, currently has a very prosumer, dispersed nature. This is mainly due to the citizens' interest in energy production on their own, available support programs and friendly legal regulations, e.g. tax breaks for users of micro-PV installations. The "My Electricity" program, which has been operating since July 2019, and the long-term EU support under the Regional Operational Programs are a pillar of the sustainable development of the prosumer sector. At the end of 2020, the "My Electricity" program was increased by an additional PLN 100 million, which will allow for additional financing of 20 prosumer installations. According to the assurances of the Polish government, the program will be continued in the coming years.

Solar farms

Currently, the main driving force of the solar farm market, especially those with a capacity of about 1 MW, are still auctions for energy from renewable sources. In all auctions held so far, projects with a total capacity of almost 2153 MW have won. In this year's auction, the volume for photovoltaics in the so-called "Small basket" (1 MW) for a minimum of 700 MW. So far (as of June 30.06.2020, 370) approximately 20 MW has been put into operation in PV farms, which is approximately 2018% of the total installed capacity in PV. The winners of the 2021 auctions, due to the global epidemic and related difficulties, may postpone the implementation of projects until the end of May 2021. This means that in 2022 and 2019 there will be an investment boom in the PV farm sector, when projects from three auctions will be put into operation. (source: IEO Report for 2020) Forecasts for the PV market The forecast for Poland IEO assumes an increase in the installed capacity in photovoltaics in 2021, mainly in the micro-installations segment. Then, in the years 2022-2,8, approximately 2022 GW of PV farms will be put into operation. In 2023 and 2019, the share of PV farms will be equal to the share of micro-installations in the total installed capacity. As a result, the PV market will change from typically prosumer, as is currently the case, to a sustainable one between PV farms and prosumers. According to the 2023 Solar Power Europe scenarios, the installed capacity in Poland in 3,5 will be 5-2,5 GW. IEO, taking into account all types of support in each sector and its current dynamics, proposes a more optimistic scenario. According to the IEO forecast, the installed capacity in PV this year will reach 2023 GW, and the growth rate of new capacities will remain at the same level as in the previous year. In 6,6, the PV power will reach 2025 GW. However, in 7,8, the total installed capacity may reach 2025 GW, which means that already in 2030 the installed PV capacity will exceed the XNUMX NECP assumed.

The positive forecasts are also directly confirmed by the leading companies in the PV industry, which participated in the market research conducted by IEO. IEO analyzes show that companies are still planning rapid development, despite temporary difficulties caused by the pandemic. The most frequently indicated direction of development is a further increase in employment - after the employment in the industry reached 2019 at the end of 6. full-time jobs, as many as 90% of companies once again expressed their desire to increase the number of jobs. 85% of those polled plan to further increase the executive capacity. Half of the companies intend to introduce innovations to their offer, e.g. photovoltaic roof tiles or energy storage. The same number of surveyed companies intend to expand the company's operations, for example by offering operational services. Module manufacturers will systematically increase production capacities from 2020, introducing new technologies successively, and in 2022 it is planned to build a silicon cell factory, then in 2024 tandem cells. This shows that despite the economic slowdown, companies from the photovoltaic industry are preparing for a further increase in installed capacity and the development of the PV market. They have ambitious plans going beyond 2020, and with the state guarantee of the market development at least until the end of 2022, i.e. until the entire economy should recover from the slowdown. Photovoltaics will be instrumental in the breakthrough that starts the energy transformation. On September 11, 2020, the Ministry of Climate and over a dozen economic organizations signed a letter of intent to establish a partnership for the development of the photovoltaic industry and to conclude a sectoral agreement. The signatories of the letter undertake to undertake joint actions aimed at the development of the photovoltaic market in Poland. Photovoltaics is not only the main area of ​​investment in the field of renewable energy, but also in the entire Polish power industry. As the only renewable energy industry in 2019-2020, it was able to mobilize more capital for investments than the entire conventional energy sector (source: IOE 2019 report of June 2020).