Wednesday 13 February 2013

First Solar

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First Solar, Inc.
Type Public company (NASDAQ: FSLR)
S&P 500 Component
Founded 1999 (as First Solar Holdings, LLC)
Headquarters Tempe, Arizona, U.S.
Key people Michael J. Ahearn, Chairman of Supervisory Board, James Hughes, CEO
Revenue Increase US$2.77 billion (FY 2011)[1]
Operating income Decrease –US$68.6 million (FY 2011)[1]
Net income Decrease –US$39.5 million (FY 2011)[1]
Total assets Increase US$5.77 billion (FY 2011)[1]
Total equity Increase US$3.64 billion (FY 2011)[1]
Employees Increase 7,000 (2011)[1]
Website www.firstsolar.com
First Solar, Inc. is an American manufacturer of thin film photovoltaic (PV) modules, or solar panels, and a provider of PV power plants and supporting services that include finance, construction, maintenance and end-of-life panel recycling. First Solar uses cadmium telluride (CdTe) as a semiconductor to produce panels that are less expensive than those manufactured from crystalline silicon.[2] In 2009, First Solar became the first solar panel manufacturing company to lower its manufacturing cost to $1 per watt[3] (since reduced to 73 cents per watt).[4]
The company was founded in 1990 by inventor Harold McMaster as Solar Cells, Inc. In 1999 it was purchased by True North Partners, LLC, who rebranded it as First Solar, Inc. The company went public in 2006, trading on the NASDAQ. Its current chief executive is James Hughes, who succeeded interim CEO Mike Ahearn on May 3, 2012.[5] First Solar is based in Tempe, Arizona. As of 2010, First Solar was considered the second-largest maker of PV modules worldwide[6] and ranked sixth in Fast Company’s list of the world's 50 most innovative companies.[7] In 2011, it ranked first on Forbes’s list of America’s 25 fastest-growing technology companies.[8]

Contents

Technology

First Solar manufactures cadmium telluride (CdTe)-based photovoltaic (PV) modules, which produce electricity with a thin CdTe film on glass.[9] In July 2011, the company reached 17.3 percent efficiency, breaking the record set by the National Renewable Energy Laboratory (NREL).[10]

Corporate history

In 1984, inventor and entrepreneur Harold McMaster founded Glasstech Solar. McMaster foresaw the opportunity to manufacture low-cost, thin film cells on a large scale. After trying amorphous silicon, he shifted to CdTe at the urging of Jim Nolan and founded Solar Cells, Inc., (SCI) in 1990.[11] In February 1999, McMaster sold the company to True North Partners, an investment arm of the Walton family, owners of Wal-Mart.[12] John T. Walton joined the Board of the new company, and Mike Ahearn of True North became the CEO of the newly minted First Solar. In its early years, First Solar module efficiencies were modest, about 7 percent.
First Solar launched production of commercial products in 2002 and reached an annual production of 25 megawatts (MW) in 2005.[13] At the end of 2009, First Solar had surpassed an annual production rate of one gigawatt (GW)[14] and was the largest PV module manufacturer in the world.[15]
The company is headquartered in Tempe, Arizona and has manufacturing facilities in Perrysburg, Ohio and Kulim, Malaysia.[16] Additionally, First Solar partnered with natural gas provider Enbridge to build the largest PV solar energy farm in the world,[17] located in Sarnia, Ontario, near the U.S.-Canadian border.
In July 2010, First Solar formed a utility systems business group to address the large-scale PV systems solutions market. While continuing to provide modules sales and turnkey solar projects, as well as engineering, procurement, construction, and operations and maintenance services to its various customer segments, the new unit would support utility customers with an integrated, portfolio-based business model.[18] In December 2011, First Solar announced that beginning in 2012, its core business would focus on its utility systems.[19]
On October 25, 2011 the company announced that Rob Gillette would no longer serve as chief executive officer and was replaced, effective immediately by the founder, Mike Ahearn.[20]
On April 17, 2012, First Solar announced it would restructure operations worldwide, partly in response to changing market conditions in Europe. The company will phase out operations in Frankfurt (Oder), Germany by October 2012, and idle four production lines in Kulim, Malaysia, beginning on May 1, 2012.[21] As a result, it announced that it would lay off 30% of its workforce. This came as a result of consistent market volatility as well as reduced demand, and may be linked to a U.S. Commerce Department investigation about whether or not China has illegally flooded the market with imports.[22] Mark Widmar, the CFO of First Solar, said, "We need to resize our business to a level of demand that is highly reliable and predictable. We do not see a business case for continuing manufacturing operations in Germany."[23] The restructuring is expected to reduce costs 30 to 60 million dollars the first year and 100 to 120 million annually thereafter.[24]
On May 3, 2012 First Solar announced that James Hughes replaced Mike Ahearn as CEO. Hughes joined First Solar as Chief Commercial Officer. Ahearn remains Chairman of the Board.[5]

Market history

Historically, First Solar has sold its products to solar project developers, system integrators, and independent power producers. Early sales were primarily in Germany because of strong incentives for solar enacted in the German Renewable Energy Sources Act (EEG) of 2000 (cp. Solar power in Germany).[citation needed] Declines and uncertainty in feed-in-tariff subsidies for solar power in European markets, including Germany, France, Italy and Spain,[25] prompted major PV manufacturers, such as First Solar, to accelerate their expansion into other markets, including the U.S., India and China.[26]
In December 2011, First Solar announced a change to its existing business strategy, stating it would shift away from existing markets that are heavily dependent on government subsidies and toward providing utility-scale PV systems in sustainable markets with immediate need.[27] In making this strategic shift, First Solar will aim to compete against conventional power generators.[28] This shift in the company's strategy also means it will reduce its focus on the rooftop and off-grid market and focus primarily on serving the utility market instead.[19]
First Solar’s manufacturing cost per watt reached $1.23 in 2007 and $1.08 in 2008.[citation needed]On February 24, 2009, cost per watt broke the $1 barrier, reaching $0.98. By November 2012, its production cost had fallen to $0.67 per watt.[29]

Production history

In 2011, the company had 36 production lines with 2,376 megawatts of annual manufacturing capacity. Each line had a 66-megawatt capacity. The first factory was built in Ohio, followed by a four-line manufacturing plant in Frankfurt (Oder), Germany. In April 2007, the firm announced the construction of a plant in Kulim Hi-Tech Park, Malaysia, which was expanded to six plants in 2010. In October 2008, the firm began an expansion of its facility in Perrysburg, Ohio, completed in 2010,[30] which brought First Solar's global annual production capacity to 1,228 MW.
In the summer of 2009, the company announced plans to build its fourth production plant in France. In October 2010, First Solar announced it would build two new four-line manufacturing plants, one each in Vietnam and the United States. In November 2011 it postponed commissioning the Vietnam plant.[31] In February 2012, it postponed commissioning of the new U.S. plant in Mesa, AZ until demand develops. In May 2012, four lines in Malaysia were shut down indefinitely and plans to shutter the facility in Germany were announced.
Country 2005 Capacity 2006 Capacity 2007 Capacity 2008 Capacity 2009 Capacity 2010 Capacity 2011 Capacity 2012 Capacity
Line capacity 25 MW 33 MW 44 MW 48 MW 53 MW 62.6 MW 66 MW 70 MW (est)
USA 25 MW 100 MW 132 MW 143 MW 160 MW 250 MW 264 MW 280 MW
Germany – – 176 MW 191 MW 214 MW 250 MW 528 MW 220 MW (est)
Malaysia – – – 382 MW 854 MW 1002 MW 1584 MW 1400 MW
Total Capacity 25 MW 100 MW 308 MW 716 MW 1228 MW 1502 MW 2376 MW 1900 MW*
(Source: First Solar Financial Report for Quarter 1 2012 Earnings Call; "First Solar to Boost Production as Profit, Sales Climb," Wall Street Journal, August 1, 2012)
  • First Solar increased its estimate for 2012 production to between 1,800 and 1,900 MWs in its Financial Report for Quarter 2. [32]

Market performance

First Solar lost $449 million, or $5.20 per share, in Q1 2012, primarily due to costs related to the restructuring efforts it announced in April 2012.[33] However, by the third quarter of 2012, it posted a profit of $87.9 million, or $1.00 per share. [34]
Historically, the low cost of First Solar’s modules has been the key to its market performance. The use of cadmium telluride instead of silicon has allowed it to achieve a significantly lower module cost ($0.67 per watt),[35] compared to crystalline-silicon PV, which averaged $1.85 per watt in 2010.[36]
In December 2011, the company's stock value dropped 20%,[37] for a total reduction of 76% in 2011.[38] The rapidly falling prices for solar modules,[39] higher costs, and uncertainty over European subsidies for renewable energy,[40] are thought to be key factors in the company’s drop in profits. In December 2011, citing a "structural imbalance" of the solar market and volatility in government subsidies of the industry, First Solar announced that in 2012 it would shift its focus away from selling modules in subsidized markets and to providing utility-scale PV systems[27].
As the company shifts its focus away from module sales to utility-scale projects, it will need to become price competitive with non-solar power sources, a move which its executives say will require the company to reduce manufacturing costs and optimize efficiency.[41]

Grid parity

Main article: Grid parity
In November 2012, First Solar announced that its manufacturing cost had fallen to 67 cents per watt, a 6-cent decrease from February 2012.[42] By 2015, it expects to drive down cost per watt to make solar modules to between 52 and 54 cents. The biggest driver of the lower costs is better efficiency.[41]

Installations

Below is a partial list of First Solar’s solar installations and development projects:

Europe and North Africa

  • Stadtwerke Trier (SWT) in Trier, Germany, is one of the world’s largest thin-film solar plants. As of February 2009, it was estimated the facility would produce over 9 GWh per year, which would supply power to more than 2,400 homes each year. Additionally, it is estimated the facility will conserve 100,000 tons of CO2 over 20 years.[43]
  • Walkdpolenz Solar Park near Leipzig, Germany, is the largest thin-film PV power system in the world. Built and developed by Juwi Group, it has a capacity of 40MW. The facility became fully operational in 2008.
  • In December 2009, the Lieberose Solar Park, Germany’s biggest conversion land project (126 hectares) on a former military training area, was opened with an output of 53MW. The solar park uses 700,000 solar modules.[44]

North America

  • 290 MW Agua Caliente Project in Yuma County, AZ, being constructed for NRG Energy and MidAmerican Renewables.[46]
  • 550 MW Topaz Solar Farm in San Luis Obipso County, CA, under a construction and acquired by MidAmerican Energy Holdings.[47]
  • 550 MW Desert Sunlight Solar Farm in Riverside County, CA, under construction and acquired by NextEra Energy and GE Energy Financial Services.[48]
  • 230 MW AV Solar Ranch One in Los Angeles, CA, under construction and acquired by Exelon Corp.[49]

Asia and Australia

  • 10 MW Greenough River Solar Farm in Western Australia, being constructed for Verve Energy and GE Energy Financial Services.[50]
  • 159 MW AGL Energy projects, to be constructed in Nyngan and Broken Hill, New South Wales.[51]

See also

References

  1. ^ a b c d e f [1], First Solar Annual Report for FY2011
  2. ^ Matthew Lynley (May 16, 2011). "Are solar panel manufacturing component prices falling fast enough?". GreenBeat. Retrieved July 26, 2011.
  3. ^ Alex Hutchinson (February 26, 2009). "Solar Panel Drops to $1 per Watt: Is this a Milestone or the Bottom for Silicon-Based Panels?". Popular Mechanics. Retrieved July 26, 2011.
  4. ^ "Solar power: A painful eclipse". The Economist. October 15, 2011.
  5. ^ a b "First Solar Appoints James Hughes CEO". Retrieved May 4, 2012.
  6. ^ "PVinsights announces worldwide 2010 top 10 ranking of PV module makers". PVinsights.com. 2010. Retrieved July 26, 2011.
  7. ^ Anya Kamenetz (February 17, 2010). "Most Innovative Companies". Fast Company. Retrieved July 26, 2011.
  8. ^ John J. Ray (February 16, 2011). "America's 25 Fastest-Growing Tech Companies". Forbes. Retrieved July 26, 2011.
  9. ^ Kanellos, Michael (November 6, 2007). "Fast-growing First Solar announces deals and plants | Green Tech – CNET News". News.cnet.com. Retrieved March 23, 2012.
  10. ^ Greentechmedia. First Solar Sets Efficiency Record: 17.3 Percent."
  11. ^ http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20080429/COLUMNIST02/804290323
  12. ^ D. H. Rose, October 1999, p. Viii (preface)
  13. ^ "First Solar annual manufacturing levels". FirstSolar.com. 2008.
  14. ^ "First Solar Top Module Supplier, Ships 1-GW in 2009 | Renewable Energy News Article". Renewableenergyworld.com. May 6, 2010. Retrieved March 23, 2012.
  15. ^ "First Solar to Produce Twice as Much as Leading Crystalline Solar Module Suppliers in 2009 – The IHS iSuppli®’s Photovoltaics portal offers the leading edge in solar research technology in addition to keeping you updated with the latest solar industry news. at iSuppli". Isuppli.com. September 4, 2009. Retrieved March 23, 2012.
  16. ^ Nelson, Gary (March 18, 2011). "First Solar plans major manufacturing plant in SE Mesa". Arizona Republic.
  17. ^ "Enbridge and First Solar complete Sarnia Solar Project". Istockanalyst.com. October 5, 2010. Retrieved March 23, 2012.
  18. ^ [2][dead link]
  19. ^ a b "First Solar slashes forecast, staff & plans to flee subsidized markets". GigaOM. December 14, 2011.
  20. ^ First Solar CEO Gillette Leaving, Chairman Takes Reins, October 25, 2011
  21. ^ "First Solar Restructures Operations to Align With Sustainable Market Opportunities". Retrieved April 17, 2012.
  22. ^ "First Solar to cut 2,000 jobs and close factory in Germany". Retrieved April 18, 2012.
  23. ^ "First Solar to Write off $150 Million as it Pulls Out of German Market". Retrieved April 18, 2012.
  24. ^ "First Solar Restructures Operations to Align With Sustainable Market Opportunities". Retrieved April 18, 2012.
  25. ^ "Slashed Subsidies Send Shivers Through European Solar Industry". The New York Times. March 31, 2010.
  26. ^ [3][dead link]
  27. ^ a b Sweet, Cassandra; Chernova, Yuliya (December 15, 2011). "First Solar Revamps Amid Weak Market". The Wall Street Journal.
  28. ^ Sweet, Cassandra; Chernova, Yuliya (December 15, 2011). "First Solar Revamps Amid Weak Market". The Wall Street Journal.
  29. ^ "First Solar Q3 Earnings Presentation". First Solar. November 1, 2012.
  30. ^ [4][dead link]
  31. ^ Patrick O'Grady (November 3, 2011). "First Solar continues with Mesa facility, delays Vietnam production". Phoenix Business Journal.
  32. ^ http://www.renewindians.com/2012/08/first-solar-to-increase-module.html
  33. ^ http://news.yahoo.com/first-solar-restructuring-leads-loss-449m-202418468--finance.html
  34. ^ http://www.reuters.com/article/2012/11/01/firstsolar-results-idUSL1E8LT9Y720121101?type=companyNews
  35. ^ Matt Daily and Nichola Groom (August 4, 2011). "First Solar profit falls, cuts 2011 forecast". Reuters. "First Solar Q3 Earnings Presentation". First Solar. November 1, 2012.
  36. ^ Michael Kanellos (August 6, 2011). "Suntech Abandons Thin Film, Wafer Experiments". GreenTechSolar.
  37. ^ Steve Hargreaves (December 14, 2011). "First Solar stock plunges 20%". Money. Retrieved December 20, 2011.
  38. ^ Tara Lachapelle, Christopher Martin and Richard Weiss (December 22, 2011). "First Solar Never So Cheap in Takeover Boon for Energy: Real M&A". San Francisco Chronicle. Retrieved December 20, 2011.
  39. ^ Martin, Christopher (August 4, 2011). "First Solar Second-Quarter Profit Drops as Module Prices Decline". Bloomberg.
  40. ^ Larry Dignan (May 4, 2011). "Europe uncertainty casts pall over First Solar, solar industry". Smart Planet.
  41. ^ a b First Solar Investors Conference Call, December 15, 2011
  42. ^ "First Solar Q3 Earnings Presentation". First Solar. November 1, 2012.
  43. ^ [5][dead link]
  44. ^ "Leaders In Alternative Energy: Germany Turns On World's Biggest Solar Power Project – SPIEGEL ONLINE – News – International". Der Spiegel. Retrieved March 23, 2012.
  45. ^ "juwi rüstet Stadion in Verona mit Photovoltaik-Anlage aus; bis 2012 PV-Anlagen mit insgesamt 2.500 Megawatt geplant". Solarserver.de. September 21, 2009. Retrieved March 23, 2012.
  46. ^ "NRG Energy and MidAmerican Renewables: Agua Caliente Project Win Solar Project of the Year Awards – Power Engineering". Power-eng.com. February 23, 2012. Retrieved March 23, 2012.
  47. ^ "MidAmerican Renewables buys 550 MW Topaz Solar Farm from First Solar – POWERGRID International/Electric Light & Power". Elp.com. Retrieved March 23, 2012.
  48. ^ "Semiconductor Today". Semiconductor Today. October 4, 2011. Retrieved March 23, 2012.
  49. ^ "Semiconductor Today". Semiconductor Today. October 4, 2011. Retrieved March 23, 2012.
  50. ^ http://www.climatespectator.com.au/news/installation-begins-australia-s-largest-solar-pv-project
  51. ^ http://www.ibtimes.co.uk/articles/20120613/first-solar-provide-159-solar-power-projects-agl-energy-under-australia-039solar-flagships-program.htm

External links

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