Bryan Crabb - GW Solar Symposium 2012

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Bryan Crabb - GW Solar Symposium 2012

  1. 1. Overview Largest utility-scale EPC and O&M provider in the industry Constructing the three largest PV solar power plants in the world Largest thin-film solar module manufacturer in the world © Copyright 2012, First Solar, Inc. Industries smallest carbon footprint and fastest energy payback 66 million solar modules produced, generating over 5GW of power 2
  2. 2. Worldwide Presence Washington, D.C. Berlin, Germany Government Affairs Government Affairs Ontario, Canada Ontario, Canada Frankfurt (Oder), Germany Project Development Project Development Manufacturing Perrysburg, Ohio Operations, R&D, and Manufacturing Brussels, Belgium Government AffairsSacramento, CaliforniaGovernment Affairs Paris, France Sales & Marketing San Francisco Project Development Madrid, Spain Sales & Marketing Beijing, China Mainz, Germany Project Development Tempe, Arizona Sales, Marketing & Corporate Customer Service Headquarters Mesa, Arizona © Copyright 2012, First Solar, Inc. Project Development Rome, Italy Sales & Marketing Bridgewater, New Jersey EPC/ Systems Engineering Sydney, Australia Kulim, Malaysia Sales & Marketing Manufacturing New York, New York Legal, Project Finance Cape Town, South Africa Project Development 3
  3. 3. Projects in Construction, 2012 (MWdc) © Copyright 2012, First Solar, Inc. 4
  4. 4. Solar Power Plants Completed El Dorado (Sempra) 10MW 2008 Blythe (NRG) 21MW 2009 Copper Mtn (Sempra) 48MW 2010 © Copyright 2012, First Solar, Inc. Sarnia (Enbridge) 80MW 2010 Cimarron (Southern) 30MW 2010 Tilbury (Enbridge) 5MW 2010 5
  5. 5. Solar PV is Delivering as Promised PV manufacturing costs declined from $5 watt in the 1990s to less $0.75/watt today US Solar installations increased from a few hundred MW in 2000 to over 3,900 MW in 2011 Over 3,000 MW of solar currently under construction in the US with over 40,000MW proposed for development Over 100,000 solar jobs per the 2010 US census  Manufacturing, supply-chain and development companies in all 50 states  US a net-exporter of solar products Module costs declined by 30% in 2010 and 40% in 2011 – global manufacturing capacity doubled © Copyright 2012, First Solar, Inc. Solar has done more with less:  Renewables accounted for 6% ($44 billion) of the $740 billion worth of Federal energy subsidies from 1960-2006  Temporary incentives versus permanent 6
  6. 6. 7 © Copyright 2012, First Solar, Inc.
  7. 7. Crossing Over to Sustainable MarketsConventional generation based on Lazard LCOE Analysis v 5.0; June 2011. Assumes coal price of $2.50/MMBtu and natural gas price of $5.50/MMBtu.High end of coal and IGCC costs incorporates 90% carbon capture. Fuel sensitivity assumes +/- 25% fuel cost. Nuclear does not reflect decommissioning costs. $300 Conventional, Base Cost Levelized Cost of Electricity $250 Conventional, Fuel Sensitized Cost $200 ($/MWh) $150 $100 © Copyright 2012, First Solar, Inc. $50 $0 Gas Peaking Coal IGCC Gas Combined Nuclear Cycle 8
  8. 8. Core Market Installation Capacity (GW), 2006-2011 -- Sustainable? Germany, France, Spain, Italy, California, & Czech Republic 100% 15.8 Percentage of Historical Max (%) 13.6 80% 60% 5.5 ? 40% 5.2 © Copyright 2012, First Solar, Inc. 20% 2 1 0% 2006 2007 2008 2009 2010 2011E 2012E • Sources: EPIA, IREC, IMS Research, equity analysts & FSLR analysis. 9
  9. 9. Spain PV Installation Capacity (GW), 2006-2012 2.7 100% Percentage of Historical Max (%) 80% 60% 40% 0.5 © Copyright 2012, First Solar, Inc. 0.5 0.5 20% 0.4 0.1 0.1 0% 2006 2007 2008 2009 2010 2011E 2012E • Sources: EPIA, IMS Research, equity analysts & FSLR analysis. 10
  10. 10. Czech Republic PV Installation Capacity (GW), 2006-2011 1.5 100% Percentage of Historical Max (%) 80% 60% ? 40% 0.4 © Copyright 2012, First Solar, Inc. 20% 0.1 0.1 0 0 0% 2006 2007 2008 2009 2010 2011E 2012E • Sources: EPIA, IMS Research, equity analysts & FSLR analysis. 11
  11. 11. France PV Installation Capacity (GW), 2006-2012 1.5 100% Percentage of Historical Max (%) 80% 60% 0.8 0.7 40% © Copyright 2012, First Solar, Inc. 20% 0.2 0 0 0 0% 2006 2007 2008 2009 2010 2011E 2012E • Sources: EPIA, IMS Research, equity analysts & FSLR analysis. 12
  12. 12. Italy PV Installation Capacity (GW), 2006-2011 5.6 5.5 100% Percentage of Historical Max (%) 80% 60% ? 40% © Copyright 2012, First Solar, Inc. 20% 0.7 0.3 0 0.1 0% 2006 2007 2008 2009 2010 2011E 2012E • Note: 2010 demand shown here includes plants constructed under the Salva 13 Alcoa decree.
  13. 13. German PV Installation Capacity (GW), 2006-2011 7.4 100% Percentage of Historical Max (%) 80% 5.4 60% 3.8 ? 40% 1.8 © Copyright 2012, First Solar, Inc. 1.3 20% 0.8 0% 2006 2007 2008 2009 2010 2011E 2012E • Sources: EPIA, IMS Research, equity analysts & FSLR analysis. 14
  14. 14. Includes CSPCA RPS Solar PPAs (By Year of Solicitation*) (GW), 2007-2011 4.6 100% Percentage of Historical Max (%) 80% 60% 1.8 ? 40% 1.3 © Copyright 2012, First Solar, Inc. 20% 0.6 0.6 0% 2006 2007 2008 2009 2010 2011E 2012E • Source: IOU RPS Projects Status List, November 2011. Note: 2011 Solicitation 15 still in progress.
  15. 15. CA DG PV PPAs (GW), 2007-2011 0.4 100% Percentage of Historical Max (%) 80% 60% 0.2 ? 40% 0.1 0.1 0.1 © Copyright 2012, First Solar, Inc. 20% 0% 2006 2007 2008 2009 2010 2011E 2012E • Source: CPUC, CSI , IOU websites. Incorporates CSI program, RAM program, 16
  16. 16. What Explains the Pattern? The unexpected size and velocity of market expansion combined with high import volumes alarm Once market begins to function politicians, who worry about high effectively, the incentive programs cost and economic impact caused an over-supplied industry to quickly descend to develop project backlogs. Politicians react by sharply reducing Market initially slow to take off the size of the program and in while legislation is translated into some cases making it less an effective program and transparent © Copyright 2012, First Solar, Inc. bureacracy is streamlined 17
  17. 17. Will New Subsidized Markets Turn Out Differently? GW/yr 8 6 4 ? 2 © Copyright 2012, First Solar, Inc. 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ROE (ex Czech) India Australia ROAPAC USA RO Americas Saudi Arabia Morocco Sub-Saharan Africa Thailand • Sources: EPIA, IMS Research, equity analysts & FSLR analysis. 18
  18. 18. How do we get here? (Sonnedix Thai Solar Farm) © Copyright 2012, First Solar, Inc. 19
  19. 19. PV is even more suited to non-traditional markets © Copyright 2012, First Solar, Inc. 20
  20. 20. Is PV Already at Grid Parity? Retail electricity costs per kWh in US Dollars: Australia: $0.25 Belgium: $0.29 Brazil: $0.34 Chile: $0.23 Denmark: $0.40 Germany: $0.36 Kuwait: less than one cent but… © Copyright 2012, First Solar, Inc. Philippines: $0.30 Tonga: $0.58 India: Varies – net short supply Middle East: Varies - dependent on the price of oil/gas/subsidies 21
  21. 21. In order to thrive, the industry must:• Continue to drive down costs to grid parity• Increase efficiency• Create and develop new markets• Improve PV’s impact on the grid as an intermittent resource• Transition away from subsidized markets and subsidy dependence © Copyright 2012, First Solar, Inc.• Develop customer-focused solutions – clean, peaking energy is not enough 22
  22. 22. Challenges and Questions for the Industry:• How to price at grid parity levels at scale and without subsidies?• How to accommodate PV into mainstream energy generation mix?• How to ensure priority access to transmission and distribution?• How to promote efficient land planning/permitting approval processes• How to build additional transmission?• How to ensure new and continued support from policymakers, regulators and utilities?• How to support deep robust project financing markets and creditworthy off- © Copyright 2012, First Solar, Inc. takers?• How to transition out of subsidized markets while preserving cash and assuring profitability 23
  23. 23. 24 © Copyright 2012, First Solar, Inc.

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