First Solar Posts Record Sales, Receives Substantial Contracts and Announces New Manufacturing Capacity

Producer of CdTe thin-film PV solar modules, First Solar, Inc. (Nasdaq:FSLR) announced its financial results for the third quarter ended September 29, 2007. Quarterly revenues were $159.0 million, up from $77.2 million in the second quarter of fiscal 2007 and up from $40.8 million in the third quarter of fiscal 2006. Net income for the three months ended Sept. 30 rose about ten times to $46 million, or 58 cents a share, from an adjusted year-ago profit of $4.3 million, or 6 cents a share.

Analysts surveyed by Thomson Financial forecast earnings of 19 cents a share and revenue of $120 million, on average.

Based on these results First Solar rallied 34% on Thursday to a new closing high of 230 after increasing from about $125 to $150 in the month of October, but retreated to $207 on Friday.

This is real evidence that Wall Street is taking Solar seriously. Their manufacturing capacity for a non-silicon solar cell producer must be among the highest, if not the highest.  Thin-film technology is where the action is going to be. See Nanomarkets Reports on TFPV for another opinion.

Additionally it announced that it has entered into new long term module supply agreements with a subsidiary of international investment and funds and asset manager Babcock & Brown, and Ecostream Switzerland GmbH, a subsidiary of Econcern BV.The new agreements expand contracted module volume by a total of 557MW, allowing for additional sales of approximately $1 billion at an assumed exchange rate of $1.30/E1.00 over the period of 2008 to 2012.

To meet the demand expected from the sales contracts, First Solar's board of directors approved, on Nov 5, the construction of a fourth manufacturing plant in Malaysia with four production lines with an annual nameplate production capacity of 120 Megawatts, bringing the total number of production lines to 16 for the Malaysian Manufacturing Center. The new plant is scheduled to start production in the second half of 2009 and will be built adjacent to the three previously announced plants currently under construction in Malaysia.

First Solar operates manufacturing plants in the U.S. and Germany with total annual nameplate production capacity of 210MW and is currently constructing three additional manufacturing plants in Malaysia with total annual nameplate production capacity of 360MW. Apparently this newest announcement is in addition to the 120MW announced on Sept 27. This expansion will bring the company's total annual nameplate production capacity to 690MW upon completion of all announced projects by the end of 2009.

The following is taken from First Solar's website regarding their technology:

While the theoretical benefits of CdTe and other thin film technologies have long been recognized, First Solar’s successful scale up demonstrates the actual production of high performance CdTe modules in volume, transitioning the technology from the “development” to “growth” phase. Multiple years of field data are now available to demonstrate First Solar’s efficiencies, high energy yields and excellent system performance ratios. CdTe module production facilities are today, even at the early stages of commercial production, achieving levels that required many years of production experience to achieve with traditional technology. Repeatable production processes have been fully demonstrated, enabling large scale expansion of CdTe module production.

• CdTe is uniquely capable of producing low cost solar modules, making widespread, cost-effective solar electricity a reality. Its physical properties are optimal for converting sunlight into electricity, resulting in highly efficient photovoltaics with thin (< 3 micron) semiconductor layers. CdTe is a robust material with the demonstrated capacity for high volume, low cost production.
• CdTe is a semiconductor made by transforming cadmium and tellurium from their elemental forms into a stable semiconductor. The cadmium in First Solar's CdTe is derived from zinc smelting waste. The “up-cycling” of cadmium into safe, cost effective solar electricity not only reduces the toxic effects of fossil fuel generation but prevents potentially dangerous elemental cadmium from entering the environment.

These attributes have lead the National Renewable Energy Laboratory in Golden, Colorado to recognize CdTe’s potential for achieving the lowest production costs among current thin film technologies. (Photon International, November 2004, page 50). CdTe module costs well below $1.00/Wp have been predicted by NREL and others.

Comments

[Kit P]

“Multiple years of field data are now available to demonstrate First Solar’s efficiencies, high energy yields and excellent system performance ratios.”

Of course First Solar does not provide this data on their web site. First Solar does provide a LCA that does a good job of discussing Cd in the environment. Basically Cd would be a beneficial use of a heavy metal that is a byproduct of other production. If you like reading LCA, make the effort.

The solar industry again demonstrates that the goal is selling solar panels not producing electricity. There is no social benefit of solar if it does not produce electricity when we need it.

The environmental benefit is entirely based on offsetting fossil fuels. If you are considering investing in solar, keep in mind that the fossil industry is not standing still.

[marcus]

"keep in mind that the fossil industry is not standing still."

Please explain what you mean by this.

[Kit P]

Marcus, the coal industry has made huge improvements in reducing the environmental impact of making electricity. Think about the air quality in China and the US. We use the same amount coal and most places have very clean air. I can not find a place where coal is the cause of poor air quality. There is no shortage of finger pointers, however.

[marcus]

Yes but you know as well as I that people who want to offset fossil fuels with solar are maiinly doing it to reduce CO2 emissions.

[TheFuture.YouHelpBuild.com]

Ok... so solar power & wind generators might not save the world or REPLACE fossil fuels in our lives, but think about this... how far out of your way will you go to save 2 or 3 cents per gallon for gas? 10 gallons might save you $.30... a solar cell panel or two or a single wind generator might save you $100 's on your monthly electric bill! visit http://theFuture.YouHelpBuild.com for great alternative power gift ideas for Christmas and super DIY solar/wind systems for your home.

[Clee]

Eh? I won't go more than a mile out of my way to save 2 or 3 cents per gallon with my car that gets 27 mpg. I don't see what your point is. I didn't spend tens of thousands of dollars on solar panels until I knew the savings on my electricity bill would be would be greater than the loan payments for the PV system. I don't personally know too many people who could get that kind of savings, so I don't recommend to them to get PV panels. If they want to pay more to help save the planet, then that's fine, as long as they know what they're getting into.

You could argue that I'm an idiot to travel even 1 mile to save 3 cents per gallon since that means I'm wasting gasoline just to save a few pennies.

[Kit P]

Marcus, you are confused between what people want, what the solar industry is claiming, and what the solar industry delivers.

If Clee carefully invested in solar PV and they are producing electricity; then he has a valid claim about reducing ghg. What will Clee do if his smoke emitting diode fails after the five year warranty period, and it cost more to replace the components to convert electricity that the value of the electricity?

The solar industry only makes claims about expected reductions in ghg. When well planned projects get 25% of what is expected and the exception is 70%, what should we expect the outcome will for average investors?

[Clee]

When an inverter dies, I'll just buy a new one, perhaps one with a longer warranty. I'm saving enough on my electricity bills to cover that cost. It's true though, that when the installers show case studies and give estimates, they don't include the cost of replacing the inverters. In the unlikely case that a PV panel dies, I'll get a in-warranty replacement.

[Kit P]

Clee, please provide more information.

What is the rating of the your system?

How much electricity is produced?

What is the rate that you pay for electricity?

What is your subsidy from the state?

What is the interest rate and period of your loan?

[Kit P]

I found a web site yesterday that provided the carbon intensity of your local utility by entering your zip code. My utility is always on the top of the list for biggest polluters. My electricity is 99.2% coal. My air quality is always good. So what pollution are they talking about?

Assuming Clee lives in California, his solar panels are reducing a the use of expensive fossil fuels in very polluted areas. Providing incentives to Clee may be a good policy.

While I have cheap electricity and no pollution, some are calling for regulations to make my electricity more expensive to reduce AGW. Is this good policy?

The web site said the the carbon intensity of my coal plants was 1800. The biggest polluters are in China and India at 2700.

Good policy is helping inefficient countries with huge reserves of coal reduce the carbon intensity and cleanup their air.

[Clee]

7.4KWp
10,000 KWH/yr 62% of that during summer season.
PG&E E-7 Time-of-Use Rate, which goes up to 52 cents/KWH summer peak and 34cents/KWH winter peak.
$4.00/Wp rebate + 15% CA tax credit (I got the system in 2003)
5.00% 30-year fixed-rate mortgage (interest is tax deductible)

Rebates and tax credits have decreased since 2003, and interest rates have gone up, which is why my friend in SF who recently got a quotation for a PV system couldn't make the PV pay for itself.

I assume my PV is offsetting natural gas usage, possibly the more polluting peaking plants, since they are the most likely plants to be turned off when demand decreases during daylight hours. Hopefully this will lessen the import of LNG.

[Clee]

Not saying that NG is more polluting than coal. Rather that, of the many types of natural gas plants they might have running, they would most likely to turn down or turn off the ones with the more expensive running costs, which would be the ones that are less efficient, which would be the ones that pollute more than other NG plants.

Back on the subject of this thread, I wonder what will happen to the Cd when the First Solar thin film reaches end-of-life. Will First Solar accept it back for recycling? Will it go into a landfill? Will we have to treat it like electronic waste?

[Kit P]

Clee, IIRC 1st solar has a take back program and Cd is discussed in the LCA (see my fist post). I do not see a problem with Cd getting into the environment from the PV panels.

Thanks for the info on your system. Clee, is the first person to answer my questions who has a PV system and is knowledgeable about its operation and benefit with respect to offsetting sources of energy. His system has a 15% capacity factor which is pretty good since the max is 20%. This tells me where he does not live. Seattle gets more solar energy that some places in California.

Starting from a modern well insulated house with new energy star appliances, I have reduced my usage 12,000 KWH/yr and may only get a $20 rebate from the feds. Since I pay 5.5 cents/KWH, the investment, in a new more efficient heat pump before the 10-year old one stopped working, may not pay for itself.

The main point I want to make here is that informed choices should be made based on locations.

[marcus]

"My electricity is 99.2% coal. My air quality is always good. So what pollution are they talking about?"

Well Dah. Just because a gas doesn't effect your lungs directly and is invisible doesn't mean it has no biological effect. I thought this was kind of elementary but I guess some people still don't get it.

Regarding putting a price on carbon and its effect on AGW, argue with yourself KitP. Who is correct, KitP (a) or KitP (b)??

KitP (a): "In most parts of the US, coal is still the cheapest new source of base load electricity. This is why generators have been selecting coal project ten to one over nuclear. Those places that were counting on a new coal plants on line by 2013 are screwed. New nukes will not start coming on line until 2014 at the earliest."

KitP (b): "Marcus, it would appear that you neither understand Bush policy or how to reduce AGW. Therefore, you come to the wrong conclusion. Making ghg emissions more expensive will not work because there is no alternatives. Taxing something that you depend on will not help unless there is a cleaner choice."

How about an explanation KitP or do I just keep posting this ad naurseam?

[marcus]

ps Remember KitP increasing carbon intensity while allowing GHG concentrations to rise will not solve AGW. This is why a cap is needed. Global warming 101.

[Kit P]

Marcus, do still beat your wife? The reason I am ignoring Marcus' questions is that I do not believe that he is really interested in the answer. The loaded question (do still beat your wife?) is intended to undermine the position of the person answering the question. Other tactics that Marcus likes is the negative question:

“...doesn't mean it has no biological effect.”

It does not mean there is a biological effect either or that the biological effect is not a positive environmental impact. When I say my air quality is good it is based on measurement made by the EPA who generally only bother measuring things that are harmful.

Marcus is also good with misdirection:

“Remember KitP increasing carbon intensity while allowing GHG concentrations to rise will not solve AGW. This is why a cap is needed. Global warming 101.”

Who is talking about increasing carbon intensity? Not me, I am advocating decreasing carbon intensity as the US has been doing for many years. The Law of Diminishing Returns is is Global warming 501.

If you are really interested in protecting the environment, go back to college and work on your masters in environmental engineering.

I will restate my position. The reason we do not need to regulate carbon is that the Bush administration has provided incentives to promote the development of energy technology for decreasing carbon intensity. Furthermore, it is working. We are building solar, wind, biomass, and nukes as fast as we can.

Marcus your economic theory regulate carbon is not very well thought out.

[marcus]

There is no loaded question here. People can see this for themselves since it is so obvious. I have merely put together two quotes from your posts. You spent a long time arguing with me that carbon pricing wouldn't work because no alternatives were available. I find this wonderful quote of yours directly contradicting this. What this tells me is that you will make up any story you can to support a pro-coal line whether you believe it or not. I am guessing you must either work in the coal industry or the Republican Party. Can you tell us your occupation?

Regarding carbon intensity, I accidentally wrote increasing instead of decreasing carbon intensity. The obvious point I am making is that none of your policy suggestions (which are remarkably in line with Bush and Co.) necessarily limit GHG emissions. Decreasing carbon intensity while allowing emissions to rise will continue to make climate change worse. This is why cap and trade is required. This still is global warming 101.

If you want to argue the biological effect of warming the planet are positive or neutral then take a look at the latest IPCC report. This position is absurd. Yours and the EPAs argument that air quality doesn't include CO2 emissions was rejected by the Supreme Court remember?

If anyone has sly arguing tactics it is you to the extreme.

[Kit P]

We interrupt this informative discussion about solar PV so that Marcus can point out that he does not understand difference between meeting demand for making electricity and good policy to mitigate AGW. There is no contradiction in my position when taken in context.

“If you want to argue the biological effect of warming the planet ...”

No Marcus, I do not want to argue that point; you brought it up. Marcus read your own post. Clee provided an example of reducing the use of fossil fuel, I provided another of the same magnitude. It is possible to discuss meeting demand for making electricity and good policy to mitigate AGW without debating AGW.

[marcus]

I gather kitP you are simply unable to explain yourself. Again, this backs up my accusation that you are a paid propagandist. You have said nothing to counter this.

[Paul F. Dietz]

Think about the air quality in China and the US. We use the same amount coal and most places have very clean air.

China uses more coal than the US, EU, and Japan combined.

[Kit P]

Paul, you are right. I am in shock because not too long ago my numbers were right. China's growth in burning coal is the equivalent of adding a new United States to the coal market. While this was predicted when Kyoto was being debated, I did not expect it to happen this fast.

[DL]

"Think about the air quality in China and the US. We use the same amount coal and most places have very clean air."

Did you ever think about where most of the US coal fired electric utilities air pollution goes? It doesn't magically disappear, the prevailing winds carry it Northeastward along the Eastern Seaboard to Nova Scotia where we have the highest rate of Asthma in North America.

Hurry up with more solar and wind energy development, don't be shy step up to the plate. There is nothing clean about burning coal, and yes we burn too much coal for generation of electricity as well.

[Kit P]

DL, I do not know much about air quality in Nova Scotia. Maybe you could provide some evidence. It is not like I have not checked out some of the claims. I have seen some very interesting diffusion and transport models. Maybe E-P can explain them. I can not really think of physical reason why emissions seem to be attracted to liberal governments.

While air quality is getting better, Asthma is getting worse. The other thing, I did not think we knew what caused Asthma.

That make it nice excuse for stupid people to blame other people for whatever their problems are. You would not want to do anything smart like find the root cause of your own problem and fix them.

I think it is a perfect opportunity for Nova Scotia to show the US how much electricity can be produced by wind and solar. Hurry up.

[DiegoY]

The Legislators have been laying the smack down on the payday loan industry in South Carolina lately. However, today it appears they might be willing to ease up a bit. The regulations moving through the Senate included a provision that limits the total amount of a payday loan to 25 percent of the person’s income. South Carolina, along with California, Michigan, and Rhode Island, has the doubtful distinction of having over 10% unemployment. The Palmetto State is also in the midst of a battle over payday loan regulations, as they are trying to define the payday loan limit. The limit was already capped at $500, but an additional limit of 25% of a person's monthly income (gross or net pay going undefined) is a proposed addition to the bill. The payday lending industry has argued that it is placing too many restrictions on their business. Legislators insist more work will be done on their part for regulating legitimate business in South Carolina. Let’s just hope that we can survive this crisis for a long time.

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I don't personally know too many people who could get that kind of savings, so I don't recommend to them to get PV panels. If they want to pay more to help save the planet, then that's fine.

[Denny]

Making solar and wind technology more efficient and less costly is entirely doable AND a solid strategy that makes a lot of sense.