Thinfilm PV:
Cost Reduction and Market Development
Climate Parliament Forum – Thursday 26 May 2011
Lettemieke Mulder – Director NGO & Community Relations,
EMEA Public Affairs, First Solar
© Copyright 2011, First Solar, Inc.
First Solar: Clean, Affordable Solar Electricity
Founded in 1999, a market leader in utility scale commercial and industrial PV systems
World’s lowest-cost solar module
manufacturer
 $0.75/W (as of Q4 2010)
 Aggressive cost reduction roadmap
 Sustainable competitive advantage
World’s largest solar PV module
manufacturer
 > 2 GW of annual capacity
 Expected to increase to > 2.8
GW by end of 2012
 Produced over 48 million solar
modules
 2010 net sales of US$ 2,6 bio,
6000+ associates globally
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$
Bankable Performance
 ~3 GW of projects financed and
installed
 Consistent performance and
execution track record
 Nasdaq listed (“FSLR”)
 S&P 500 company
Environmental leadership
 Lowest carbon footprint
 Fastest energy payback time of
current PV technologies
 PV industry’s first pre-funded
collection and recycling program
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Narbonne, France
Project Profile
System Size:
Commisioned
:
Developer:
Module Type:
Inverter:
7MW (DC)
December, 2008
EDF Energies Nouvelles
FS-272, 275
SMA SC500MV, SC700MV,
SC1000MV
An environmental success story, this project
transformed a former wasteland into a site that
will generate clean, solar energy for the next 25
years. Built on land located within the commune
of Narbonne, this solar facility is currently the
largest in operation in mainland France.
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Verona, Italy
Project Profile
System Size:
Commisioned:
Developer:
Module Type:
Inverters Used:
1MW (DC)
December, 2009
juwi Solar GmbH
FS-275
SMA SMC 7000HV
This rooftop project installed by juwi Solar on the
Bentegodi Stadium generates about one million
kilowatt-hours of emission-free electricity per year,
and uses over 13,000 First Solar modules.
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Our Strategic Objectives
• Reduce solar electricity costs to sustainable levels through technology development,
operational excellence, and scale
• Use price, adaptive business models, and partnerships to expand markets
• Migrate from subsidized markets to non-subsidized markets by leveraging economies
of scale—become “subsidy independent”
• Own and develop the technologies necessary to be the low-cost provider of solar
electricity
• Maintain financial discipline that assures superior returns on invested capital
• Reduce dependence on scarce natural resources and curtail greenhouse gas emissions
to improve our environment
Our Mission: To create enduring value by enabling a world powered by
clean, affordable solar electricity.
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PV Module and Manufacturing Technology
First Solar Fully Integrated, Automated and Continuous Thin Film Process
Glass In

< 2.5 Hours

Module Out
• 98-99% reduction in
semiconductor material
Semiconductor
Deposition
Cell
Definition
Final Assembly
and Test
• Fully integrated, continuous
process vs. batch processing
• Large 60 x 120cm (2' x 4')
substrate vs. 6" wafers
Conventional Crystalline Silicon Batch Technology
Polysilicon
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Ingot
Wafer
Solar Cell
Solar Module
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Carbon Footprint – Comparison for Rooftop PV
CdTe PV has the lowest
carbon footprint of
current PV technologies.
Note: Southern Europe 1700 kWh/m2/year irradiance. Excludes impact of NF3, a greenhouse gas potentially released in the production of some silicon-based PV.
Sources: CIGS, ribbon and CdTe data from de Wild-Scholten, M., ‘Life Cycle Assessment of Photovoltaics: from cradle to cradle,’ presented at the 1st International
Conference on PV Module Recycling, Berlin, January, 2010.
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First Solar’s Energy Payback Time (EPBT) < 1 year
EPBT:
The amount of time a system
must operate to recover the
energy that was required to
fabricate the system.
EPBT = Einput/(Eoutput/yr)
Objective:
• Minimize EPBT
– Supports rapid scalability
Note: Southern Europe 1700 kWh/m2/year irradiance.
Source: de Wild-Scholten, M., ‘Life Cycle Assessment of Photovoltaics: from cradle to cradle,’ presented at the 1st International Conference on PV Module Recycling,
Berlin, January, 2010.
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Proven Energy Yield Advantage
Data from the Field: juwi Project Survey
Thin Film Performance: Project Survey
Survey of 88 juwi projects
• 37 thin film (CdTe)
• 51 Crystalline Silicon (c-Si)
• Mix of roof top and free-field projects
• Over 70MW of projects installed from 2002-2009
• Located throughout Europe
On average thin films achieve a 5.4% higher
annual performance ratio
• Greater for rooftop applications
• Greatest during summer months
Intersolar North America
“Data from existing juwi projects has shown, depending on the location and system design, a 3.2-5.7% increase
in annual generation using CdTe thin film modules when compared to similar crystalline installations.”
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Module Manufacturing Cost Reduction Roadmap
$2.94/W
Q1 2011 cost per watt = $0.75
$0.93/W
100%
18-25%
4-6%
4-6%
3-4%
2%
$0.52 - 0.63/W
56-68%
2004
Cost/Watt
Q1 09
Cost/Watt
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Efficiency
Throughput
Spending
Low Cost
Location
Plant Scale
2014
Cost/Watt Goal
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Balance of System* Cost Reduction Roadmap
~$1.40/W
100%
2%
8%
7%
1%
12%
$0.91– 0.98/W
Goal
65-70%
Q1 09 BOS
Engr. and
Proj. Mgmt.
Mounting
Hardware
Inverter
Transformer
Other
Electrical
Installation
2014 BOS
* Includes standard EPC costs; excludes site-specific and development costs, as well as interest during construction.
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11
Cost Reduction Potential - Components
Levelized Cost of Electricity (LCOE) Breakdown
Cost of Capital: Huge Impact… 40% of CAPEX component within LCOE
Assumptions: 20 years, 2,5% infl.rate, radiation =1400 kWh/m2·year, PR = 80%, WACC incl. 33.3% Corp Tax, 30/70 Equity/debt at 10% resp. 6,5%
Source: First Solar analysis
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Commitment to Environmental Sustainability
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13
Collection & Recycling Program
Module Collection
• Anyone in possession of First Solar module can request
Modules take back… at any time
• Modules labeled with web site and telephone contact
• First Solar manages take back logistics, provides packaging and
transportation to recycling center
Module Recycling
• Approximately 90% (by mass) recovered
– 95% of semiconductor material for new modules
– 90% of glass for new glass products
• First Solar pre-funds estimated future collection and recycling
costs for 100% of modules sold
– Restricted account used solely for collection and recycling
• Results audited for continuous improvement
Unconditional.
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Convenient.
Free.
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Market Outlook Industry – More Diversification
Advanced PV technologies expected to gain market shares  CdTe PV will make
up significant part of future PV technology mix.
Market Share Development in %
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Sources: EPIA, Solar Generation 6, 2011
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2011 Consensus PV Market Demand as of 2/18/2011
GW
• 2011 demand 17-18 GW, up 10% y/y; markets diversifying globally and by segments
• 2011-2012 market risk due to contemplated subsidy changes
High
22
20
18
16.0
16
17.6
18.3
Low
ROW
China
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Japan
12
North America
10
ROE
6.3
8
7.2
Italy
France
6
4
2
1.6
2.4
Spain
Germany
0
2006
2007
2008
2009
2010
2011
2012
*Forecasts from Barclays, BofA/ML, Citi, Collins Stewart, Cowen, CLSA, Credit Suisse, Gleacher, Goldman Sachs, Jefferies,
JP Morgan, Lazard, Macquarie, Morgan Stanley, RW Baird, UBS, and Wedbush; 2006 through 2009 historical data from EPIA.
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Proactive Capacity Expansion Roadmap
Proactive production expansion allows for rapid market development
Capacity in MW
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Representation of year-end capacity. 2005 & 2006 based on Q406 run rate; 2007 based on Q407 run rate;
2008 based on Q408 run rate; 2009 based on Q409 run rate, 2010 based on Q4 2010 run-rate, 2011-2012
based on Q1 2011 run rate. * Line run rate based on actual production days in each quarter.
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Solar transition requires…
Sustainable
Markets
Transition
Markets
Existing
Subsidy
Markets
© Copyright 2011, First Solar, Inc.
•
•
•
•
Sustainable market economics
Scale to globally relevant capacity
Sustainable environmental product life cycle
CONSISTENT Regulatory & Policy Framework
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What is needed – Key Drivers
• Stability & Continuous improvement in regulatory/incentive framework
– Market attractiveness and stability drives investments, supports development of a robust local
value chain and creates sustainable growth
– Legislative frameworks that allow industry cost digressions to filter through into lower FiTs
– Provide financing conditions that allow industry to mature and become sustainable quickly
– Reduced permitting time, increased availability of grid capacity/interconnection
• Strong Industry /government partnership in achieving sustainable markets
– industry needs to actively work with policy makers to ensure regulatory regimes create long-term
sustainable markets
– Regional and local taxation regimes should be shaped on same national level targets supported by
FiT programs or stable tax incentives
• Modules and balance of system cost reduction cannot drive to grid parity
without cost of capital optimization
• Recycling programs key to environmental sustainability… Industry-wide
Continuity, Commitment, Financing Optimization… ALL REQUIRED
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