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Bruce Sohn; President, First Solar
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Bruce Sohn, President
Solar Future II: Thin Film PV Solar Future II: Thin Film PV ,
June 8, 2010
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 pcurrent 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
Our MissionOur MissionTo create enduring value by enabling a world
d b l ff d bl l l t i itpowered by clean, affordable solar electricity.
© Copyright 2010, First Solar, Inc. 3First Solar Confidential & Proprietary© Copyright 2010, First Solar, Inc. 3First Solar Confidential & Proprietary
Environmental ResponsibilityFirst Solar's Environmental Plan
2Procure, Produce,
Use AndRecycle Solar Modules
1Convert
Mining Byproducts
3Reduce
Emissions ByRecycle Solar Modules
In A Perpetual,EnvironmentallySafe Life Cycle
To Clean,RenewableEnergy
Substituting SolarEnergy ForFossil Fuels
© Copyright 2010, First Solar, Inc. 4
Life Cycle Assessment for PV
M/Q M/Q M/Q M/Q M/Q M/Q
Raw Material AcquisitionRaw Material Acquisition
Material ProcessingMaterial Processing ManufacturingManufacturing UseUse De‐
commissioningDe‐
commissioningTreatment& DisposalTreatment& Disposal
E E E E E EM/Q
RecyclingRecycling
M/Q: Material and Energy Inputs
© Copyright 2010, First Solar, Inc. 5
E
M/Q: Material and Energy InputsE: Effluents (air, water, solid)
LCA: Global Warming Potential
900 8501000
CO2‐eq (g/kWh)
400400600800
45 24 15 110
200
Coal Oil Gas CC BioMass Nuclear PV CdTe WindCoal Oil Gas CC BioMass CHP
Nuclear USA
PV CdTe Wind
Source: ExternE project, 2003; Kim and Dale, 2005; Fthenakis and Kim, 2006: Fthenakis and Alsema, 2006; Fthenakis and Kim, in press.
© Copyright 2010, First Solar, Inc. 6
, ; , pde Wild-Scholten & Schottler, 2009.
Assumptions: PV CdTe based on 9% efficiency at insolation of 1700 kWh/m2
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
• Objective: Minimize EPBT– Supports Rapid Scalability
BOS0.8
1.0 EPBT (Years)
Module
BOS
0.4
0.6
Module
0.0
0.2
CdT
© Copyright 2010, First Solar, Inc. 7
CdTeSource: de Wild-Scholten & Schottler, 2009.
Cash Pay Back TimeD llD llDollarsDollars
Time
PaybackPaybackInvestmentInvestmentTime
© Copyright 2010, First Solar, Inc. 8First Solar Confidential & Proprietary© Copyright 2010, First Solar, Inc. 8First Solar Confidential & Proprietary
Energy Payback TimekWhkWh
Months
EPBTEPBT
‐15 ‐12 ‐9 ‐6 ‐3 0 3 6 9 12 15 18 21 24
Months
Raw Materials ort EPC/BOS
Mfg Production and O&M
© Copyright 2010, First Solar, Inc. 9First Solar Confidential & Proprietary© Copyright 2010, First Solar, Inc. 9First Solar Confidential & Proprietary
Tran
spoM
Leadership Across the Value Chain: Delivering Energy
Module
VALUE CHAIN
EPCDevelopment O&M Financing
T k S l ti
INDUSTRY CONSTRAINTS
Hi h B l fL D l t M d l Lif l &Turnkey Solution Pricing too High
High Balance of System Costs
Long Development Lead Times
Module Lifecycle & Performance High Cost of Capital
• Low Module Cost• Aggressive Cost
Reduction Roadmap• Scale
• Turner (2007)• EPC Velocity
• BoS Cost Optimization
• OptiSolar (2009)•Positioned for Near Term Execution
• Strategic Partnerships
• Data Monitoring • O&M Program
• Balance Sheet• Proven Track
Record• Leading Strategic
Partners
© Copyright 2010, First Solar, Inc. 10
FIRST SOLAR INJECTIONS
p
Systems Project Cost Structure Development
Module
EPC Standard2
1 IDC = interest during construction
© Copyright 2010, First Solar, Inc. 11
1 IDC = interest during construction2 EPC Standard Costs= balance of system costs (inverters, electrical, mounting hardware, project
management and engineering, and installation labor)
Manufacturing Cost per Watt Trend
$1.50
$1.59
$1.40$
$1.08
$1.23
$1.00$0.93
$0.87 $0.85 $0.84 $0.81
$0.50
FY05 FY06 FY07 FY08 Q109 Q209 Q309 Q409 Q110
© Copyright 2010, First Solar, Inc. 12
Core SBC Ramp
Module Cost Reduction Roadmap
$2 94/W Q1 2010 cost per watt = $0 81
18‐25%100% $0.93/W
$2.94/W Q1 2010 cost per watt = $0.81
4‐6%
4‐6%3‐4% $0 52 0 63/W
56‐68%
3 4%2%
$0.52 ‐ 0.63/W
© Copyright 2010, First Solar, Inc. 13
ThroughputQ1 09Cost/Watt
Plant ScaleEfficiency Low CostLocation
Spending 2014Cost/Watt Target
2004Cost/Watt
Production Capacity Growth
Total current and announced capacity grows by 780MW to 2.1GW
111
Total current and announced capacity grows by 780MW to 2.1GW
France2,005 MW2,117 MW
Plant Plant
1337 13371,228 MW Malaysia
1,337MW
5 & 65 & 6
854891
1337 1337
716 MW
223 223 223176 191 214 223 446 446
382
100 MW
308 MW
Ohio
GermanyPlant 2Plant 2
© Copyright 2010, First Solar, Inc. 14
132 143 160 223 223 22325 MW100 MW
2005 2006 2007 2008 20092005 & 2006 based on Q406 run rate; 2007 based on Q407 run rate; 2008 based on Q408 run rate; 2009 based on Q409 run rate, 2010‐2012 based on Q1 2010 run‐rate
2010 2011 2012
OhioCapacity
Balance of System* Cost Reduction Roadmap
~$1.40 /W
$0.91‐0.98/W T
100% 2%
7%8%
1% 12% Target1% 12%
65‐70%
© Copyright 2010, First Solar, Inc. 15* Includes standard EPC costs; excludes site‐specific and development costs, as well as interest during construction
Q1’09 BOS Engr. , Proj. Mgmt.
MountingHardware
InverterTransformer
OtherElectrical
Installation 2014 BOS
BOS Costs Inverse to Velocity and Constructability
Site: Blythe, CA
System Size: 21MW
Site: Sarnia, Ontario
System Size: 20MW => 80 MW in ‘10
Site: Boulder City, NV
System Size: 10MW => 58 MW in ‘10
Project Developer: First Solar
Owner: NRG Energy
Project Developer: First Solar
Owner: Enbridge
Project Developer: Sempra
Owner: Sempra
© Copyright 2010, First Solar, Inc. 16
(All MW AC)
Copper Mountain: 48MWs
© Copyright 2010, First Solar, Inc. 17
Cost Reduction – Solar Electricity (LCOE)
35U.S. ¢/kWh
Medium Resource – 1400 hours
35U.S. ¢/kWh
High Resource – 1800 hours
25
30
35
25
30
35
Transition
Sustainable
Transition
Sustainable10
15
20
10
15
20
2014
2014
0
5
$6.00 $5.00 $4.00 $3.00 $2.00 0
5
$6.00 $5.00 $4.00 $3.00 $2.00
FSLR
FSLR
2
© Copyright 2010, First Solar, Inc. 18
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.
Our Strategy
Leading Shares in the
Most Attractive
Sustainable Solar Markets
Business Model that
Drives Superior Returns on
Sustainable Competitive Advantages
Enduring Business ValueAttractive
Markets Returns on Capital
Advantages
• Reduce solar electricity costs to sustainable levels through technology development, operational excellence and scale
• Use price adaptive business models and partnerships to expand markets
• 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 f l d l h d l
• 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 f l d l h d l
© Copyright 2010, First Solar, Inc. 19
• Maintain financial discipline that assures superior returns on invested capital • Maintain financial discipline that assures superior returns on invested capital
The Migration from Existing Subsidy to Transition Markets
Sustainable MarketsMarkets
Transition Markets
ConstraintsExisting Subsidy Markets
Markets
Markets
© 2009 First Solar, Inc. 20
Growth opportunitiesPotential PV Capacity by Region (GW) – Assuming Regulatory Targets and Macro Factor Growth
Sustainable Markets
lOther
1,7001Transition Markets
ChinaC lif i
IndiaRest of U.S.GCCAustralia
105 105Existing ItalyS i
OntarioOther
California
Sustainable Markets
Transition Markets
Existing Markets
105
65
gMarketsSpain
FranceJapanGermany
© Copyright 2010, First Solar, Inc. 21
Markets 2020 ‐ 2050
MarketsMarkets
1) Assumes potential solar capacity equal to 6% of total electricity consumption in identified solar marketsSource: Market analyst estimates; First Solar analysis. Assumes base case scenario.
Crossing Over to Sustainable Markets
$0 30
$0.35
$0.40
/kWh)
Carbon emissions
$0 20
$0.25
$0.30
Electricity
($/ cost adder
Conventional,base costConventional,
Price parity with conventional generation drives inflection in price
elastic demand
$0.10
$0.15
$0.20
izedCo
st of E
,fuel sensitized costPV cost roadmap
Global PV demand
$0.00
$0.05Leveli Global PV demand
© Copyright 2010, First Solar, Inc. 22
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.
Industry Demand – Estimates1 as of 4/16/109 9 GW in 2010 with a 30% CAGR% 2009‐2012
14,000
16,000
12.1
15.3
14
9.9 GW in 2010, with a 30% CAGR% 2009‐201216
10,000
12,000
9.910
GW
12
4 000
6,000
8,000 7.05.9
8
4
6
‐
2,000
4,000 2.7
1.72
4
0
© Copyright 2010, First Solar, Inc. 23
2006 2007 2008 2009 2010 2011 2012Germany 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
Good Policy Makes Strong Markets
© Copyright 2010, First Solar, Inc. 24
Source: Meteotest
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%
90%
100%
97.87% 98.89% 99.73% 99.96% 99.96% 99.97%
60%
70%
80%
50%
60%
Spain Germany Italy France ROEU US
© Copyright 2010, First Solar, Inc. 25
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.
% of Total Electricity Production from All Other Sources % of Total Electricity Production from Solar
enablingenabling aa world poweredworld powered© Copyright 2010, First Solar, Inc. 26
…enabling …enabling a a world powered world powered by by cleanclean, , affordable solar electricityaffordable solar electricity
1.4MW · Dimbach, Germany · Beck Energy