Wessels - Solar Photovoltaic Electricity

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Maja Wessels, EVP of Public Affairs for First Solar, presented at the GW Solar Institute Symposium on April 19, 2010. More information at solar.gwu.edu/Symposium.html

Maja Wessels, EVP of Public Affairs for First Solar, presented at the GW Solar Institute Symposium on April 19, 2010. More information at solar.gwu.edu/Symposium.html

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  • 1. Solar PV Electricity George Washington University Solar Institute April 19 2010
  • 2. Forward-Looking Statements During the course of this presentation the company will make projections and other statements that are forward-looking statements within the meaning of the federal securities laws. The forward-looking statements in this presentation are based on current information and expectations, are subject to uncertainties and changes in circumstances, and do not constitute guarantees of future performance. Those statements involve a number of factors that could cause actual results to differ materially from those statements, including the risks as described in the company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and other filings with the Securities and Exchange Commission. First Solar assumes no obligation to update any forward-looking information contained in this presentation or with respect to the announcements described herein. © Copyright 2010, First Solar, Inc. 2
  • 3. Why we care about solar Source: International Energy Agency, Energy Technology Perspectives, 2008, p. 366. The figure is based on National Petroleum Council, 2007 after Craig, Cunningham and Saigo. © Copyright 2010, First Solar, Inc. 3
  • 4. First Solar Overview © First Solar, Inc. 4
  • 5. Our Mission To create enduring value by enabling a world powered by clean, affordable solar electricity. © Copyright 2010, First Solar, Inc. 5
  • 6. First Solar: Clean, Affordable Solar Electricity Founded in 1999, a market leader in Proven performance and reliability utility scale commercial and industrial  10 year track record PV systems  >1 GW of annual manufacturing capacity World’s largest and lowest cost solar Financial strength module manufacturer  NASDAQ (FSLR)  $0.84/W (as of Q4 09)  Added to the S&P 500 Index  Aggressive cost reduction roadmap  Strong balance sheet  Sustainable competitive advantage Environmental leadership Bankability of projects  Lowest carbon footprint and $  >1 Giga Watt (GW) of projects fastest energy payback time of financed and in the ground current PV technologies  Consistent performance and  PV industry’s first pre-funded execution attract investment collection and recycling program © Copyright 2010, First Solar, Inc. 6
  • 7. Company Overview Global Presence: > 4,500 Associates Amsterdam, Holland Berlin, Germany Business Development Government Affairs Frankfurt Oder, Germany Manufacturing Brussels, Belgium Government Affairs Perrysburg, Ohio Operations, R&D and Manufacturing Paris, France Sales & Marketing Hayward, California Project Development Madrid, Spain Sales & Marketing Tempe, Arizona Corporate Headquarters Bridgewater, New Jersey Project Development Kulim, Malaysia Manufacturing Mainz, Germany New York, New York Sales, Marketing & Legal, Government & Customer Service Public Affairs, Marketing © Copyright 2010, First Solar, Inc. 7
  • 8. Technology & Manufacturing Fully Integrated, Automated and Continuous Thin Film Process Glass In  < 2.5 Hours  Module Out • 99% reduction in high-cost semiconductor material Semiconductor Cell Final Assembly • Fully integrated, continuous Deposition Definition & Test process vs. batch processing • Large 60 x 120cm (2' x 4') substrate vs. 6" wafers Conventional Crystalline Silicon Batch Technology Polysilicon Ingot Wafer Solar Cell Solar Module © Copyright 2010, First Solar, Inc. 8
  • 9. "Copy Smart" Production Capacity Growth Driven by increasing efficiency, run rate, and yields 1,816 MW 1,709 MW 107 France Plant 5&6 1,282 MW 1,228 MW 1282 1282 Malaysia 716 MW 854 854 382 308 MW 214 214 214 Germany 191 214 176 100 MW Capacity 25 MW 99 132 143 160 214 214 214 Ohio 2005 2006 2007 2008 2009 2010 2011 2012 2005 & 2006 based on Q406 run rate; 2007 based on Q407 run rate; 2008 based on Q408 run rate; 2009 – 2012 based on Q409 run rate © Copyright 2010, First Solar, Inc. 9
  • 10. Environmental Responsibility First Solar's Commitment to Extended Producer Responsibility Extended Producer Responsibility requires companies to take responsibility for the impacts of their products: from the materials used in manufacturing to product recycling. © Copyright 2010, First Solar, Inc. 10
  • 11. Cost reductions and scale © First Solar, Inc. 11
  • 12. Cost Reductions Achieved Through Scale 1,200 $3.50 1,228 MW $2.94 $3.00 1,000 First Solar Manufacturing Capacity First Solar Module Cost per Watt $2.50 800 716 MW $2.00 600 $1.59 $1.40 $1.50 $1.23 $1.08 400 $0.84 308 MW $1.00 200 $0.50 100MW 10 MW 25 MW 0 $0.00 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008E 2009 2009E © Copyright 2010, First Solar, Inc. 12
  • 13. Module Manufacturing Cost Reduction Roadmap $2.94/W Q4 2009 cost per watt = $0.84 $0.93/W 100% 18-25% 4-6% 4-6% 3-4% $0.52 - 0.63/W 2% 56-68% 2004 Q1 09 Efficiency Throughput Spending Low Cost Plant Scale 2014 Cost/Watt Cost/Watt Location Cost/Watt Target © Copyright 2010, First Solar, Inc. 13
  • 14. Balance of System* Cost Reduction Roadmap ~$1.40 /W 100% 2% 8% 7% $0.91-0.98/W 1% 12% Target 65-70% Q1’09 BOS Engr. , Mounting Inverter Other Installation 2014 BOS Proj. Mgmt. Hardware Transformer Electrical * Includes standard EPC costs; excludes site-specific and development costs, as well as interest during construction © Copyright 2010, First Solar, Inc. 14
  • 15. Cost Reduction – Solar Electricity (LCOE) Medium Resource – 1400 hours High Resource – 1800 hours U.S. ¢/kWh U.S. ¢/kWh 35 35 30 30 25 25 20 20 Transition Transition 15 15 Sustainable Sustainable FSLR 2014 FSLR 2014 10 10 5 5 0 0 $6.00 $5.00 $4.00 $3.00 $2.00 $6.00 $5.00 $4.00 $3.00 $2.00 Note: Assumes 7.5% unlevered IRR, 30% ITC, FSLR panels, utility scale plant, install labor and site specific cost estimates. Includes owner development costs, financing costs and O&M. © Copyright 2010, First Solar, Inc. 15
  • 16. First Solar Project Profiles © First Solar, Inc. 16
  • 17. First Solar Installations: Large, Diverse, Global • 1,800 MW rooftop and ground mount solar panels installed worldwide – Installed 50% rooftop and 50% ground mount in Germany – Partnership with Solar City commercial rooftop • 1,500 MW ground mount utility-scale projects contracted in California and Southwest Site: Duisburg, Germany Site: Fontana, CA, USA Site: Blythe, CA, USA Site: San Rafael, CA, USA System System System System Size: 1.2MW Size: 2 MW Size: 21 MW Size: 9 kW © Copyright 2010, First Solar, Inc. 17
  • 18. North American Solar Project Locations © Copyright 2010, First Solar, Inc. 18
  • 19. 1.65 GW of PPA, EPC and RESOP North American Systems Business Pipeline Small/medium (< 100 MW) Large (> 100 MW) Project/Location MW PPA Owner Project/ MW PPA Owner AC Location AC Sarnia, Ontario 60 OPA Enbridge Sunlight, California 550 SCE TBD and Copper Mt, Nevada 48 PGE1 Sempra PGE Cimarron, New Mexico 30 Tri- Southern. Topaz, California 550 PGE TBD State Turner Ren Stateline, California 300 SCE TBD PNM/ New Mexico 22 UOG2 PNM Tilbury, Ontario 5 OPA TBD Total 1,400 St Clair, Ontario 40 OPA TBD Walpole, Ontario 20 OPA TBD Belmont, Ontario 20 OPA TBD 1 EPC contract 2 UOG = Utility-owned generation Amherstburg, Ontario 10 OPA TBD Total 255 © Copyright 2010, First Solar, Inc. 19
  • 20. Economic Impacts of First Solar Project Portfolio • 1,421 MW announced projects in Riverside, San Bernardino and San Luis Obispo Counties – Blythe: 21 MW now online – Sunlight: 550 MW; Topaz: 550 MW; Stateline: 300 MW under development • Additional projects in pipeline • Will generate approximately 1,800 construction jobs over 3-4 year construction period • Jobs include skilled and unskilled labor including electricians, engineers, equipment operators, biologists, construction, etc. • Will work with subcontractors to provide jobs to local community – Blythe 21MW (CA) and Copper Mountain 48 MW (NV) employed both union and non-union labor, including workers from the local community. • Will generate sales and property tax revenues for state and counties – Topaz (CA) $16M sales/property tax; Sunlight (CA) $100M sales tax to CA/$10M to county © Copyright 2010, First Solar, Inc. 20
  • 21. Development Utility Scale Projects in North America – Sold in Q4 Module EPC Standard Sarnia Canada Blythe California 20 MW (AC) 21 MW (AC) Buyer: Enbridge Buyer: NRG Energy Ontario Power RESOP PPA with SCE Completed Q4’09 Completed Q4’09 © Copyright 2010, First Solar, Inc. 21
  • 22. Blythe Solar Project Size: 21 MW Location: Blythe, Riverside County Power Purchaser: Southern California Edison Sold to NRG • Provides clean, affordable, sustainable s energy for 6,000 average California homes • Displaces approx. 12,000 metric tons of CO₂ greenhouse gas emissions per year – the equivalent of taking almost 2,200 cars off the road • Requires no panel washing and no water use during operation • Created 300 jobs during construction © Copyright 2010, First Solar, Inc. 22
  • 23. Desert Sunlight Solar Project Size: 550 MW Location: Chuckawalla Valley, Riverside County Power Purchasers: SCE and PG&E • Provides clean, affordable, sustainable energy for 160,000 average California homes • Displaces over 300,000 metric tons of CO₂ greenhouse gas emissions per year – the equivalent of taking almost 60,000 cars off the road • Creates approximately 430 jobs during construction, 15 ongoing jobs • $100M sales tax to CA, $10M to county © Copyright 2010, First Solar, Inc. 23
  • 24. Topaz Solar Farm Size: 550 MW Location: Eastern San Luis Obispo County Power Purchaser: Pacific Gas & Electric • Provides clean, affordable, sustainable energy for tens of thousands of California homes • Displaces approx. 290,000 metric tons of CO₂ greenhouse gas emissions per year • Creates approximately 400 jobs during construction, 12 permanent jobs • $16M sales and property tax © Copyright 2010, First Solar, Inc. 24
  • 25. Stateline Solar Project Size: 300MW Location: Northeastern San Bernardino County Power Purchaser: Southern California Edison • Provides clean, affordable, sustainable energy for approx. 90,000 average California homes • Displaces over 165,000 metric tons of CO₂ greenhouse gas emissions per year – the equivalent of taking over 32,000 cars off the road • Requires no panel washing and no water use during operation • Creates approximately 400 jobs during construction. 12 ongoing jobs © Copyright 2010, First Solar, Inc. 25
  • 26. Sempra - El Dorado 10 2008 © Copyright 2010, First Solar, Inc. 26
  • 27. NRG - Blythe 21 2009 © Copyright 2010, First Solar, Inc. 27
  • 28. Enbridge - Sarnia 60 2010 © Copyright 2010, First Solar, Inc. 28
  • 29. Sempra - Copper 48 2010 © Copyright 2010, First Solar, Inc. 29
  • 30. Southern - Cimarron 30 2010 © Copyright 2010, First Solar, Inc. 30
  • 31. Sustainable Solar © First Solar, Inc. 31
  • 32. The Migration from Existing Subsidy to Transition Markets Sustainable Markets Transition Markets Existing Subsidy Constraints Markets Large Scale Solar Requires Modification of Existing: • Physical Infrastructures • Institutional Frameworks © 2009 First Solar, Inc. • Business Models 32
  • 33. Subsidized vs. Transition Market Economics Long-term economics are superior in transition markets Subsidized Market economics decline with feed-in tariff reductions Subsidized Markets Sustainable Markets Transition Markets Transition Market economics improve as: 1. Costs decline 2. Energy prices rise over time © Copyright 2010, First Solar, Inc. 33
  • 34. Treasury Grant Program for Solar Generation • The 2009 American Recovery and Reinvestment Act included a grant in lieu of the investment tax credit for solar generation, which could have a very positive impact on the US solar market and related US job creation. • However, the grant program will expire at the end of this year, just as it is critically needed to bring projects on line and attract investors for new developing projects. • It is vital that the grant be extended for two year – through Dec. 31, 2012. • Tax equity financing is still very scarce. • Due to the continuing financial crises a big gap still persists between what developers need and what money is available. • One of the solar industry’s most significant constraints is efficient access to capital. © Copyright 2010, First Solar, Inc. 34
  • 35. Loan Guarantee Program for Commercial Technology • The Department of Energy loan guarantee program can play a key role in supporting industry growth by reducing financing costs and fostering the development of robust private capital markets to finance large solar projects. • Approximately 85 percent of the power price received from a large-scale solar power plant goes to repay the capital invested to build the project. • Even though we are the leading solar power plant developer in the US, with over 1,500 megawatts of projects in development, First Solar has only one project that can meet the deadline for this program. • Due to the 2011 sunset date, permitting redundancy, and complexity of the program, we anticipate having to seek private sector loans for the other projects in our portfolio. The result is more expensive financing and higher-cost solar electricity. • The program’s lifespan should be extended to 2016, making it coterminous with the investment tax credit, and synchronized to the long development timelines of the projects it is intended to support. © Copyright 2010, First Solar, Inc. 35
  • 36. First Solar…Enabling a World Powered by Clean, Affordable Solar Electricity © Copyright 2010, First Solar, Inc. 36