Solar Future II: Thin Film PV 
Bruce Sohn, President
           ,
June 8, 2010
Forward‐Looking Statement

           During the course of this presentation the company will make projections and other 
...
Our Mission
                   Our Mission
                   To create enduring value by enabling a world 
              ...
Environmental Responsibility
           First Solar's Environmental Plan




                                             ...
Life Cycle Assessment for PV

        M/Q                           M/Q                M/Q              M/Q             M/...
LCA: Global Warming Potential

                                                                      CO2‐eq (g/kWh)
      ...
Energy Payback Time

           • EPBT: The Amount of Time a System Must Operate to Produce The Amount 
             of El...
Cash Pay Back Time
                                         D ll
                                         Dollars




    ...
Energy Payback Time
                                                           kWh




                                   ...
Leadership Across the Value Chain: Delivering Energy
                                                                  VAL...
Development
Systems Project Cost Structure 




                                                              Module

    ...
Manufacturing Cost per Watt Trend

             $1.59

$1.50
                                  $
                         ...
Module Cost Reduction Roadmap 
   $2.94/W
   $2 94/W                            Q1 2010 cost per watt = $0.81
            ...
Production Capacity Growth
Total current and announced capacity grows by 780MW to 2.1GW
Total current and announced capaci...
Balance of System* Cost Reduction Roadmap 


         ~$1.40 /W
              100%                    2%
                 ...
BOS Costs Inverse to Velocity and Constructability




             Site:      Blythe, CA           Site:   Sarnia, Ontari...
Copper Mountain: 48MWs




© Copyright 2010, First Solar, Inc.   17
Cost Reduction – Solar Electricity (LCOE) 

                     Medium Resource – 1400 hours                             ...
Our Strategy

                                        Leading           Business 
                                      Sh...
The Migration from Existing Subsidy to Transition Markets  


                                            Sustainable  
  ...
Growth opportunities
Potential PV Capacity by Region (GW) – Assuming Regulatory Targets and Macro Factor Growth
          ...
Crossing Over to Sustainable Markets
                                          $0.40

                                    ...
Industry Demand – Estimates1 as of 4/16/10
                     9.9 GW in 2010, with a 30% CAGR% 2009‐2012
               ...
Good Policy Makes Strong Markets




Source: Meteotest
© Copyright 2010, First Solar, Inc.   24
Solar is still a small portion of total energy production 
Solar represents a small percentage of total energy production,...
…enabling a world powered
  enabling
by clean, affordable solar electricity
   clean,
     © Copyright 2010, First Solar, ...
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The Solar Future DE - Bruce Sohn "By 2013, will it have been possible to achieve the mission of module production cost at $0.70/Wp?"

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Bruce Sohn; President, First Solar

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The Solar Future DE - Bruce Sohn "By 2013, will it have been possible to achieve the mission of module production cost at $0.70/Wp?"

  1. 1. Solar Future II: Thin Film PV  Bruce Sohn, President , June 8, 2010
  2. 2. Forward‐Looking Statement 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  g p 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. 3. Our Mission Our Mission To create enduring value by enabling a world  powered by clean, affordable solar electricity. db l ff d bl l l t i it © Copyright 2010, First Solar, Inc. First Solar Confidential & Proprietary 3
  4. 4. Environmental Responsibility First Solar's Environmental Plan 2 1 3 Procure, Produce, Convert Reduce Use And Mining Byproducts  Emissions By Recycle Solar Modules Recycle Solar Modules To Clean, Substituting Solar In A Perpetual, Renewable Energy For Environmentally Energy Fossil Fuels Safe Life Cycle © Copyright 2010, First Solar, Inc. 4
  5. 5. Life Cycle Assessment for PV M/Q M/Q M/Q M/Q M/Q M/Q Raw Material  Material  De‐ Treatment Manufacturing Use Acquisition Processing commissioning & Disposal M/Q E E E E E E Recycling M/Q: Material and Energy Inputs E: Effluents (air, water, solid) E © Copyright 2010, First Solar, Inc. 5
  6. 6. LCA: Global Warming Potential CO2‐eq (g/kWh) 1000 900 850 800 600 400 400 200 45 24 15 11 0 Coal Oil Gas CC BioMass  Nuclear  PV CdTe Gas CC BioMass Nuclear PV CdTe Wind CHP USA Source: ExternE project, 2003; Kim and Dale, 2005; Fthenakis and Kim, 2006: Fthenakis and Alsema, 2006; Fthenakis and Kim, in press. , ; , p de Wild-Scholten & Schottler, 2009. Assumptions: PV CdTe based on 9% efficiency at insolation of 1700 kWh/m2 © Copyright 2010, First Solar, Inc. 6
  7. 7. Energy Payback Time • EPBT: The Amount of Time a System Must Operate to Produce The Amount  of Electricity That Was Required to Fabricate the System 1.0 EPBT (Years) • Objective: Minimize EPBT – Supports Rapid Scalability 0.8 BOS 0.6 0.4 Module 0.2 0.0 CdT CdTe Source: de Wild-Scholten & Schottler, 2009. © Copyright 2010, First Solar, Inc. 7
  8. 8. Cash Pay Back Time D ll Dollars Investment Payback Time © Copyright 2010, First Solar, Inc. First Solar Confidential & Proprietary 8
  9. 9. Energy Payback Time kWh EPBT Months ‐15 ‐12 ‐9 ‐6 ‐3 0 3 6 9 12 15 18 21 24 Raw Materials   EPC/BOS Production and O&M ort Mfg M Transpo © Copyright 2010, First Solar, Inc. First Solar Confidential & Proprietary 9
  10. 10. Leadership Across the Value Chain: Delivering Energy VALUE CHAIN Module Development EPC O&M Financing INDUSTRY CONSTRAINTS Turnkey Solution  T k S l ti Long Development  L D l t High Balance of  Hi h B l f Module Lifecycle &  M d l Lif l & High Cost of Capital Pricing too High Lead Times System Costs Performance • OptiSolar (2009) • Balance Sheet • Low Module Cost • Turner (2007) •Positioned for Near  • Proven Track  • Aggressive Cost  • EPC Velocity • Data Monitoring  Term Execution Record Reduction Roadmap • BoS Cost  • O&M Program • Strategic  • Leading Strategic  • Scale Optimization Partnerships p Partners FIRST SOLAR INJECTIONS © Copyright 2010, First Solar, Inc. 10
  11. 11. Development Systems Project Cost Structure  Module EPC Standard2 1 IDC = interest during construction IDC = interest during construction 2 EPC Standard Costs= balance of system costs (inverters, electrical, mounting hardware, project  management and engineering, and installation labor) © Copyright 2010, First Solar, Inc. 11
  12. 12. Manufacturing Cost per Watt Trend $1.59 $1.50 $ $1.40 $1.23 $1.08 $1.00 $0.93 $0.87 $0.85 $0.84 $0.81 $0.50 FY05 FY06 FY07 FY08 Q109 Q209 Q309 Q409 Q110 Core SBC Ramp © Copyright 2010, First Solar, Inc. 12
  13. 13. Module Cost Reduction Roadmap  $2.94/W $2 94/W Q1 2010 cost per watt = $0.81 Q1 2010 cost per watt = $0 81 $0.93/W 100%  18‐25% 4‐6% 4‐6% 3 4% 3‐4% $0.52 ‐ 0.63/W $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. 14. Production Capacity Growth Total current and announced capacity grows by 780MW to 2.1GW Total current and announced capacity grows by 780MW to 2.1GW 2,117 MW 2,005 MW 111 France Plant  5 & 6 1,337MW 1,228 MW Malaysia 1337 1337 891 716 MW 854 382 Plant 2 308 MW Germany 223 446 446 176 191 214 100 MW 100 MW 223 223 223 Ohio Capacity 25 MW 132 143 160 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 based on Q409 run rate,  © Copyright 2010, First Solar, Inc. 2010‐2012 based on Q1 2010 run‐rate 14
  15. 15. Balance of System* Cost Reduction Roadmap  ~$1.40 /W 100% 2% 8% 7% $0.91‐0.98/W  1% 12% Target T 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. 15
  16. 16. BOS Costs Inverse to Velocity and Constructability Site: Blythe, CA Site: Sarnia, Ontario Site: Boulder City, NV System Size: 21MW System Size: 20MW => 80 MW in ‘10 System Size: 10MW => 58 MW in ‘10 Project  Project  Project  First Solar Developer: First Solar Sempra Developer: Developer: Owner: NRG Energy Owner: Enbridge Owner: Sempra (All MW AC) © Copyright 2010, First Solar, Inc. 16
  17. 17. Copper Mountain: 48MWs © Copyright 2010, First Solar, Inc. 17
  18. 18. 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 2014 10 10 FSLR 2 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, 10% ITC, 2.5% electricity power price escalator, 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. 18
  19. 19. Our Strategy Leading  Business  Shares in the  Model that  Sustainable  Sustainable   Enduring  Solar Markets Most  Drives Superior  Competitive  Business Value Attractive Attractive  Returns on Returns on  Advantages Markets  Capital • Reduce solar electricity costs to sustainable levels through  technology  development, operational excellence and scale • Use price adaptive business models and partnerships to expand markets Use price, adaptive business models and partnerships to expand markets   • 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  f ld l h d l © Copyright 2010, First Solar, Inc. 19
  20. 20. The Migration from Existing Subsidy to Transition Markets   Sustainable   Markets  Markets Transition  Markets  Markets Existing Subsidy  Constraints Markets  Markets © 2009 First Solar, Inc. 20
  21. 21. Growth opportunities Potential PV Capacity by Region (GW) – Assuming Regulatory Targets and Macro Factor Growth Sustainable  Markets Other Australia l GCC Transition  Rest of U.S. 1,7001 Markets India China California C lif i Other Ontario Italy 105 105 Existing  g Spain S i Markets 105 France Japan 65 Germany Existing  Transition  Sustainable  Markets Markets Markets Markets  2020 ‐ 2050  1) Assumes potential solar capacity equal to 6% of total electricity consumption in identified solar markets Source: Market analyst estimates; First Solar analysis. Assumes base case scenario. © Copyright 2010, First Solar, Inc. 21
  22. 22. Crossing Over to Sustainable Markets $0.40 $0.35 /kWh) Carbon emissions  $0 30 $0.30 Electricity ($/ cost adder Price parity with  conventional generation  Conventional, $0.25 drives inflection in price  base cost elastic demand  $0.20 $0 20 Conventional, , ized Cost of E fuel sensitized cost $0.15 PV cost roadmap $0.10 Global PV demand Global PV demand Leveli $0.05 $0.00 Gas Peaking Coal Gas Combined Cycle Nuclear Note: Conventional generation LCOE, Lazard 2008. Carbon emissions cost assumes $30/ton CO2.  High end of coal costs incorporates 90% carbon capture – emissions adder does not apply. © Copyright 2010, First Solar, Inc. 22
  23. 23. Industry Demand – Estimates1 as of 4/16/10 9.9 GW in 2010, with a 30% CAGR% 2009‐2012 9 9 GW in 2010 with a 30% CAGR% 2009‐2012 16 16,000  15.3 14 14,000  12.1 12 12,000  9.9 10 10,000  GW 8 8,000  7.0 6 6,000  5.9 4 4,000  4 000 2.7 2 2,000  1.7 0 ‐ 2006 2007 2008 2009 2010 2011 2012 Germany Spain France Italy ROE North America Japan China ROW 1 Forecasts from  Auriga, Barclays, Collins Stewart, Credit Suisse, Deutsche Bank, JP Morgan, Lazard, Morgan Stanley, Raymond  James, Think Equity, UBS, and Wedbush.  2009 Germany demand from Bundesnetzagentur registration data © Copyright 2010, First Solar, Inc. 23
  24. 24. Good Policy Makes Strong Markets Source: Meteotest © Copyright 2010, First Solar, Inc. 24
  25. 25. Solar is still a small portion of total energy production  Solar represents a small percentage of total energy production, even in the most  p p g gy p , mature solar markets, but the growth potential is significant. Percent of Total Electricity Production* 2.13% 1.11% 0.27% 0.04% 0.04% 0.03% 100% 90% 80% 97.87% 98.89% 99.73% 99.96% 99.96% 99.97% 70% 60% 50% Spain Germany Italy France ROEU US % of Total Electricity Production from All Other Sources % of Total Electricity Production from Solar Note: *Solar includes both Solar PV & Solar Thermal generation.  2009 data for EU; 2009 US estimate extrapolated from 2008 EIA data based solar capacity added in 2009. Source: Eurostat: Electricity Estatistics, Provisional Data 2009; EIA; Marketbuzz. © Copyright 2010, First Solar, Inc. 25
  26. 26. …enabling a world powered enabling by clean, affordable solar electricity clean, © Copyright 2010, First Solar, Inc. 26 1.4MW · Dimbach, Germany · Beck Energy

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