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Table of Contents
Global Energy Markets .......................................................................................................................................... 1
First Solar Company Overview ............................................................................................................................. 2
History ......................................................................................................................................................................................... 4
Leadership Team........................................................................................................................................................................ 4
Business Strategy ....................................................................................................................................................................... 5
Business Segments .................................................................................................................................................................... 6
Components Segment ........................................................................................................................................................... 6
Systems Segment .................................................................................................................................................................. 7
Product / Service Offerings ........................................................................................................................................................ 8
Component Technologies ...................................................................................................................................................... 8
Systems Solutions .................................................................................................................................................................. 9
Customer Segments ................................................................................................................................................................. 10
Components ......................................................................................................................................................................... 10
Systems ................................................................................................................................................................................ 10
Geographic Footprint................................................................................................................................................................ 10
The Americas........................................................................................................................................................................ 11
Europe, Middle East, and Africa .......................................................................................................................................... 11
Asia-Pacific and India ........................................................................................................................................................... 11
Research & Development ........................................................................................................................................................ 12
Financial Performance......................................................................................................................................... 13
Competition .......................................................................................................................................................... 14
Business Model Analysis ..................................................................................................................................... 15
Porters Four Corners Analysis ........................................................................................................................... 16
Future Outlook ..................................................................................................................................................... 17
Appendix .............................................................................................................................................................. 17
First Solar Offerings ............................................................................................................................................................. 17
Exercise Strategic SWOT ................................................................................................................................................. 19
Exercise Strategy Diamond .............................................................................................................................................. 20
Key Sources / References ................................................................................................................................................... 20
ii
Solar
Oil
Wind
Natural gas
Hydropower
Coal
Geothermal
Nuclear
Biomass
Tidal
Energy reform in major emerging economies (e.g., China, India, and Brazil) is a major factor when estimating the future
demand (and, therefore, supply) in global energy markets because these emerging market economies will be responsible
for the majority share of future energy consumption. The policies these countries implement will be critical to the
development of the global energy markets and the ability to solve the sustainability challenges facing the world.
The cost of renewable energy has declined dramatically in recent years. With respect to solar energy, the cost of solar
photovoltaic (PV) modules overall are estimated to have dropped by 70% between 2008 and 2013. This has made solar
power more competitive with fossil-fired power and is driving accelerated adoption rates. By the end of 2014, the global
photovoltaic (PV) industry consisted of more than 164 manufacturers of solar modules and cells and the leveled cost of
energy (LCOE) for utility scale solar power was in parity range, even on an unsubsidized basis.
Leveled Cost
of Energy (LCOE)
Electricity Generation
(% of US Total)
Subsidies
(% of US Total)
$72 86
1%
8%
Wind
$37 81
2%
42%
Nuclear
$92 132
20%
21%
Natural Gas
$61 87
25%
6%
Coal
$66 151
45%
10%
-----
8%
13%
2013
Other Alternatives
Solar manufactured solar module. The company also manufactures crystalline silicon solar modules with proprietary highpower density, mono-crystalline technology, and provides single-axis mounting systems with proprietary tracking
capabilities.
Services provided by First Solar include operations and maintenance (O&M) services to plant owners that use solar
modules manufactured by the firm or by other third-party manufacturers. First Solar has substantial, ongoing research and
development efforts focused on both module and systems level innovations. The company is the worlds largest thin-film
PV solar module manufacturer and one of the worlds largest PV solar module manufacturers.
First Solar Inc.s mission is to create enduring value by enabling a world powered by clean, affordable solar energy. The
key strategic objective is to create product, technology and system innovations to reduce the cost of solar electricity to
levels that compete on a non-subsidized basis with the price of retail electricity in key markets throughout the world. First
Solar Inc. integrates solar power into the global energy mix by providing PV energy solutions to address energy issues;
including, fuel cost volatility and supply reliability.
First Solar was founded in 1999 and is headquartered in Tempe, AZ. The firm operates 16 offices: 4 in the U.S., 3 in South
America, 3 in Europe, 2 in the Middle East and Africa and 4 in Asia/Pacific. Two manufacturing locations are located in
Malaysia and the United States.
Net income
$0.4B
Employees
6,060 Total
Product Categories
Key Customers
Southern Co
NextEra Energy
MidAmerican Energy
Manufacturing Sites
Perrysburg, Ohio
Kulim, Malaysia
Units of Power
When referring to manufacturing capacity, total sales and solar module sales, the unit of electricity in watts for megawatts (MW)
and gigawatts (GW) is direct current (DC), unless otherwise noted.
When referring to PV solar power systems, the unit of electricity in watts for MW and GW is alternating current (AC), unless
otherwise noted.
History
Leadership Team
James Hughes, CEO
Age: 52
Education:
In 2012, for two months, he was Chief Commercial Officer at First Solar.
2007 - 2011, was CEO and Director of AEI Services LLC
2004 to 2007, he engaged in principal investing with a privately held company based in Houston, Texas that focused on micro-cap
investments in North American distressed manufacturing assets
2002 until March 2004, as President and Chief Operating Officer of Prisma Energy International
Enron Corporation (President and COO, Global Assets, President and COO of Enron Asia, Pacific Africa and China, Assistant
General Counsel of Enron International)
Juris doctor degree from the University of Texas at Austin School of Law, a Certificate of Completion in international business law
from Queen Marys College, University of London, and a bachelors degree in business administration from Southern Methodist
University.
Age: 49
2006 2011 he served as Chief Financial Officer of GrafTech International Ltd., a leading global
manufacturer of advanced carbon and graphite materials
2005-2006 he served as Corporate Controller of NCR Inc.
Was a Business Unit Chief Financial Officer for NCR from November 2002 to his appointment as Controller, served as a Division
Controller at Dell, Inc. from August 2000 to November 2002
Sr. positions with Lucent Technologies Inc., Allied Signal, Inc., and Bristol Myers/Squibb, Inc.
B.S. in Business Accounting and a Masters of Business Administration from Indiana University.
Education:
Age: 52
Former roles:
Education:
Age: 50
Former roles:
Education:
Business Strategy
First Solar is pursuing the following strategies: differentiation, sustainable growth and financial viability.
Differentiation
First Solar systems deliver solar energy that is cost competitive with certain conventional energy sources today, depending on the
location and application.
Solar energy offers a long-term fixed price with relatively low operating costs (at utility scale), reliable energy and no risk of fuel
price volatility and the absence of commodity price risk (e.g., oil, gas and/or related hedging costs and risks).
First Solar is vertically integrated across substantially the entire solar value chain. Many of the efficiencies, cost reductions and
capabilities that the firm delivers to customers are not easily replicable for other industry participants that are not similarly vertically
integrated.
Competitive capabilities include: Project development; Engineering and plant optimization; Grid integration and Plant control
systems; Project Finance; Advanced PV modules; Trackers and fixed mounting systems; Procurement and construction Consulting;
Operations and maintenance; Energy forecasting; and Warranties and performance guarantees.
First Solars solutions diversify the energy portfolio and reduce the risk of fuel-price volatility, while delivering a LCOE (levelized
cost of electricity) that is cost competitive in some circumstances with electricity generated from fossil fuels.
First Solars R&D model has improved efficiency on average more than half a percent every year for the last 10 years, on average.
First Solar CdTe PV modules are manufactured in a high-throughput, automated environment that integrates all manufacturing
steps into a continuous flow line. With 30 manufacturing lines worldwide and 2.7 GW of annual manufacturing capacity, each line
is currently capable of producing approximately 2,500 modules per day; totaling approximately 70,000 modules each day across
30 lines.
First Solars advanced grid integration technology provides PV plants the ability to actively stabilize the electricity grid and operate
more like traditional electricity generation plants; including the ability to provide accurate energy forecasts, regulate voltage, curtail
active power when necessary, limit the rate of change of power, prevent trips during faults and disturbances, and react to changes
in grid frequency.
First Solar leverages their extensive experience in plant optimization and advanced diagnostics and delivers one of the most
advanced O&M programs in the industry. With more than 2.5 GW AC of utility-scale PV plants under the O&M program, we
maintain average system availability greater than 99.5%.
First Solar products and services are engineered to maximize energy output and revenue for our customers while significantly
reducing their unplanned maintenance costs. Plant owners benefit from predictable expenses and reduced risk of energy loss.
First Solar BoS components optimize the entire PV power plant and reduce lifecycle costs. First Solar has installed monitoring and
control systems in more than 600 PV plants across Europe with a total peak 5 GW portfolio capacity of monitored assets and
worldwide O&M capabilities. First Solars O&M expertise is a significant differentiator, as it is difficult for many competitors to
replicate this experience.
Sustainable Growth
First Solar provides solar PV generation solutions to sustainable geographic markets that have a compelling need for mass-scale
PV electricity, including markets throughout the Americas, Asia, Australia, the Middle East, and Africa.
First Solar PV generation solutions can compete directly with fossil fuel offerings on an LCOE or similar basis, or complement such
fossil fuel electricity generations.
The company sells solar power solutions directly to end customers, including independent power producers, utilities, retail
electricity providers, and commercial and industrial customers. Depending on the market opportunity, sales offerings range from
module only sales, to module sales with a range of development, engineering, procurement, and construction (EPC) services and
solutions, to full turn-key PV solar power system sales.
First Solar has, and intends to continue to, dedicate significant capital and human resources to reduce the total installed cost of
solar PV generation, to optimize the design and logistics around our solar PV generation solutions, and to ensure that the firms
solutions integrate well into the overall electricity ecosystem of each specific market.
Joint ventures or other business arrangements with strategic partners are a key part of First Solars strategic plan, and such
arrangements expedite the companys penetration of various markets and enable them to establish relationships with potential
customers and policymakers.
First Solar continues to develop relationships with policymakers, regulators, and end customers in each of these markets with a
view to developing markets for utility scale PV solar power systems.
Financial Viability
First Solars commitment is to create long-term shareholder value and generate returns on invested capital in excess of its
weighted average cost of capital over that time horizon. Despite substantial downward pressure on the price of solar modules due
to significant excess capacity in the industry, First Solar has delivered strong financial performance and liquidity.
Business Segments
First Solar is structured into two business units: Components and Systems.
Components Segment
Business unit scope includes the design, manufacture, and sale of solar modules which convert sunlight into electricity.
First Solar manufactures cadmium telluride (CdTe) modules and high-efficiency crystalline silicon modules (manufacturing
as of Q4 2014). First Solars thin-film PV uses CdTe as a semiconductor material and the firm is the world leader in thin-film
technology. Third-party customers of the components segment include project developers, system integrators, and owners
and operators of PV solar power systems.
2015 SCIP Game Changers Conference
The firms cost reduction initiatives focus on reducing PV solar power system costs in five primary areas:
1.
2.
3.
4.
5.
Module manufacturing
Balance of System (BoS) costs1
Project development costs
The cost of capital
The operating expenses of a PV solar system
Systems Segment
Fully integrated systems that provide complete turn-key PV solar power systems, or solar solutions which draw upon key
capabilities: (i) project development, (ii) EPC services, (iii) O&M services and (iv) Project finance expertise. All products
and services are for PV solar power systems that primarily use First Solars modules. The products and services are sold
directly to investor owned utilities, independent power developers and producers, commercial and industrial companies, and
other PV solar power system owners.
Key First Solar services include solar power plant design, construction and plant maintenance as well as financing. The
company also owns and operates solar power plants. First Solar has installed over 10 gigawatts (or GW) of solar panels,
including the worlds largest; the Topaz Solar Farm in California, with a capacity of 550 megawatts.
Through the systems business unit, First Solar provides complete turn-key solar power system solutions, or any
combination of systems solutions. The systems business has grown over the past several years through a combination of
business acquisitions and organic growth. In January 2013, Solar Chile, a Santiago-based solar development company,
was acquired. Solar Chile has a portfolio of utility-scale PV power projects in varying stages of development (currently
totaling approximately 1 GW in northern Chile, including the Atacama Desert region, which offers the highest solar
irradiance in the world). In August 2013, First Solar acquired a pipeline of U.S. and Mexico development assets from
Element Power. Included in that 1.5 GW pipeline are diverse projects in various stages of development in California,
Arizona, Texas, Georgia, North Carolina, Colorado, Louisiana, Illinois and Mexico.
Capabilities
First Solar is focusing their resources in markets and on energy applications wherein solar power can be a least-cost, bestfit energy solution, particularly in regions with high solar resources, significant current or projected electricity demand
and/or relatively high existing electricity prices.
Product offerings are differentiated for each geographic market and solutions are localized as needed. The firms
consultative approach to their customers solar energy needs results in customized solutions to meet their economic goals.
The First Solar model offers PV energy solutions with superior value and less risk due to the firms expertise across the
entire solar value chain, including2:
Project Development
EPC Services
O&M Services
Project Finance
Consists of the costs of the components of a solar power system other than the solar modules, such as inverters, mounting hardware, trackers, grid interconnection equipment, wiring
and other devices installation labor costs
1
Asset Management
AC Power Block
Fuel Displacement
Community Solar
Advanced PV Modules
First solar has product segments that fall under modules and components, systems solutions, or structured energy.
Products features capitalize on First Solars ability to product thin-film solar modules.
Component Technologies
Module Plus
Module Plus features the reliability of First Solars advanced PV modules, paired with a range of specially-designed
mounting systems that are optimized for accelerated installation and maximum energy return. Benefits:
Accelerated installation
Streamlined processes, risks and warranty management with single-source supply chain
Simplified logistics
Backed by an exceptional module warranty (25-year output/10-year limited materials and workmanship)
Advanced PV Modules
Designed for applications where space is at a premium or customers prefer a high-power density solution.
Lower temperature coefficient (-0.3%/ C) results in superior energy production compared to standard crystalline technologies (typical
-0.45%/C)
No light-induced degradation
No potential-induced degradation
Proven energy yield advantage in humid climates due to superior spectral response and in hot climates due to superior temperature
coefficient (-0.25%/C)
Systems Solutions
First Solar AC Power Block
The AC Power Block is a configurable power generation unit that enables construction of a fully integrated First Solar
utility scale power plant
Utilizes the core of First Solars proven PV power plant design for maximum reliability
Maximizes energy output and grid stability through proven plant technologies and service
Guaranteed performance that proves the energy model and provides assurance of lifetime energy generation
Backed by a 25-year aggregate module capacity warranty and guaranteed 1st year energy performance
Maximum project value with our engineering & plant optimization services
Superior energy yield with integrated and optimized technologies throughout the plant
Industry-leading system availability with our operations and maintenance (O&M) services
Technologies proven to deliver reliable energy yield and stable grid integration
systems and provides 25-year plant-level energy degradation protection. The system level module performance warranty is
typically calculated as a percentage of a systems expected energy production, adjusted for certain actual site conditions,
with the warranted level of performance declining each year in a linear fashion, but never falling below 80% during the term
of the warranty.
Customer Segments
Components
The majority of First Solars solar modules sold in 2014 were purchased by solar power system project developers, system
integrators and operators that were headquartered in Germany, India and the United States. These customers either resell
their solar modules to end-users or integrate them into solar power plants that they own, operate or sell. Third-party
customers of our components segment include project developers, system integrators, and owners and operators of PV
solar power systems.
During 2014, NextEra Energy, Inc., Southern Company and MidAmerican Energy Company individually accounted for more
than 10% of First Solars components segment net sales; including the solar modules used in systems projects. The firm is
investing in sustainable market development, particularly in areas with abundant solar resources and sizable electricity
demand, and as part of such efforts, is seeking to develop additional customer relationships in sustainable markets and
regions; ultimately reducing the firms customer and geographic concentration and dependence.
Systems
Customers consist of investor owned utilities, independent power developers and producers, commercial and industrial
companies, and other system owners who may purchase from completed solar power plants, any combination of EPC
services, and O&M services for the plants they build. During 2014, the majority of the systems business sales were
generated in North America.
Geographic Footprint
First Solars business is evolving worldwide and shaped by the various ways PV solar solutions are compelling and
economically viable solutions to energy needs for different regional markets and applications.
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The Americas
The United States accounts for 90% of First Solars net sales in 2014 and exemplifies numerous criteria for the solar
market: sizeable electricity demand3, high prices for power and abundant solar resources. First Solar has significant
experience and a market leadership position in the development, financing, engineering, constructing and maintaining of
utility-scale power plants, particularly in California and other southwestern states.
The firms US solar projects account for a majority of the 1.5 GW AC advanced-stage pipeline of projects that are currently
constructing or expected to construct soon. Other countries included in First Solars scope of The Americas include Brazil,
Mexico and other Central American countries.
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Japans electricity market is evolving and the characteristics that make it an attractive market for PV solar include the fact
that the country has few domestic fossil fuel resources and, as a result of the shutdown of its nuclear reactors, has become
more dependent on fossil fuel imports to cover the generation shortfall. Japan is also the largest importer of liquefied
natural gas globally. The Japanese government is motivated to drive the adoption of alternative and renewable energy
sources and has announced a long-term goal to dramatically increase the installed solar power capacity in the country.
The India market holds significant potential for PV due to fast growing energy needs, substantial population centers and a
lack of electrification to many parts of the country. Other demand drivers include high competing energy costs, high levels
of irradiance and aggressive renewable energy targets set by the government. Various Indian states have also incented the
development solar power programs at the state level. First Solar India is seeking to develop utility scale solar PV projects,
address the energy/RPO needs of the utilities and target open access industrial and commercial power demand. Options
include partnering with local entrepreneurs to develop solutions for certain segments in the energy access market and
creative solutions that combine solar PV with other modes of generation to ultimately reduce dependence on liquid fuels.
2014 YTD*
2013
2012
$0.14
$0.13
$0.13
% of Net Sales
4.2%
4.1%
3.9%
The increase in R&D expenses from 2012 to 2013 was primarily a result of the costs related to the improvement of current
generation modules, integration of module BoS technology into PV power plants and due to the development of next
generation CdTe and crystalline silicon solar cells. Increases from 2013 to 2014 were primarily a result of additional costs
related to the development of next-generation CdTe solar modules, the joint collaboration agreement with GE to further
advance the CdTe solar technology and higher employee compensation costs.
12
With regards to the systems business, R&D activities focus on lowering the LCOE through reductions in BoS costs,
improved systems design, and energy yield enhancements associated with PV systems that use our solar modules. These
R&D efforts are also focused on continuing to improve their systems in terms of grid stabilization.
Research and development activities are conducted for the systems business primarily in the United States. Innovations
related to system design, hardware platforms, inverters, trackers, and installation techniques and know how, among other
topics, are expected to continue to reduce BoS costs, which can represent a significant portion of the costs associated with
the construction of a typical utility-scale PV solar power system.
First Solars R&D spending historically has been closely tied to new product introductions but also emphasizes the
development of lower cost processing. Spend levels will continue to at currently high levels for several more years.
Financial Performance
Net sales in 2014 increased by 3%, to $3.4 billion.
Components Segment a 6% decrease in net sales, or $71.3 million (including solar modules used in systems projects and
price/volume mix: a 12% decrease in average selling prices and a 7% increase in volume of watts sold)
2014
2013
2012
$1.1
$2.3
$3.4
$0.8
24.4%
$1.2
$2.1
$3.3
$0.9
26.1%
$1.2
$2.2
$3.4
$0.9
25.3%
Gross profit as a percentage of net sales decreased by 1.7 percentage points during 2014 compared with 2013 primarily
due to project mix; a higher volume of lower gross profit projects was sold and/or under construction in 2014.
As of Dec. 31, 2014 First Solar had 30 installed production lines with an annual global manufacturing capacity of approximately 2.7
GW at manufacturing facilities in Perrysburg, Ohio and Kulim, Malaysia.
The company produced 1.8 GW DC of solar modules during 2014, representing a 13% increase from 2013. The increase in
production was primarily driven by higher module efficiency.
Manufacturing facilities were run at approximately 81% capacity utilization in 2014; a 4 percentage point increase over 2013.
The average conversion efficiency of modules was 14.0% in 2014; an improvement of 0.8 percentage points from the average
conversion efficiency of 13.2% in 2013.
Product Revenue
Solar Module revenue includes sales to third parties. Solar Power System revenue includes sales of PV solar power
systems and related services and solutions, including solar modules installed in the PV solar power systems and revenue
from the solar power they generate.
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2014
2013
2012
$0.2
$3.2
$3.4
$0.4
$2.9
$3.3
$0.3
$3.1
$3.4
Third party module net sales were down due to both a 26% reduction in the volume of watts sold and a 19% decrease in the
average selling price per watt.
Competition
The renewable energy, solar energy, and solar module sectors are highly competitive and continually evolving as
participants in these sectors strive to distinguish themselves within their markets and applications as they compete within
the overall electric power industry. First Solar faces intense competition for sales of solar modules, which has resulted in
and may continue to result in reduced margins and loss of market share.
With respect to the Components Business, First Solars primary sources of competition are crystalline silicon solar module
manufacturers, as well as other thin-film module manufacturers and companies developing solar thermal and concentrated
PV technologies. Certain competitors are part of larger corporations that have greater financial resources and greater brand
name recognition than First Solar and, as a result, may be better positioned to adapt to changes in the industry or the
economy as a whole. Certain competitors may have direct or indirect access to sovereign capital, which could enable such
competitors to operate at minimal or negative operating margins for sustained periods of time.
Among PV module and cell manufacturers, the principal methods of competition include:
Conversion efficiency
Reliability
Warranty terms
If competitors reduce module pricing to levels near or below their manufacturing costs, or are able to operate at minimal or
negative operating margins for sustained periods of time, First Solars results of operations could be adversely affected. In
addition, future entrants to the PV industry that offer new technological solutions will present challenges.
Companies that offer or are developing other renewable energy technologies (including wind, hydropower, geothermal,
biomass, and tidal technologies) and other power generation sources that employ conventional fossil fuels are competitors.
First Solar also faces competition from semiconductor manufacturers and semiconductor equipment manufacturers or their
customers that produce PV cells, solar modules, or turn-key production lines.
With respect to the Systems Business, First Solar faces competition from other providers of renewable energy solutions,
including developers of PV, solar thermal and concentrated solar power systems, and developers of other forms of
renewable energy projects, including wind, hydropower, geothermal, biomass, and tidal projects.
To the extent other solar module manufacturers become more vertically integrated, competition will increase from such
companies. Current or potential future competitors may have a low cost of capital and/or access to foreign capital.
The decline in PV modules prices over the last several years has increased interest in solar electricity worldwide. There are
limited barriers of entry in many parts of the PV solar value chain, depending on the geographic market. Accordingly,
competition at the systems level can be intense and exert downward pressure on systems level profit margins industry-wide.
2015 SCIP Game Changers Conference
14
Key Partners
GE Energy
TetraSun
Solar Chile
SG2 Holdings, LLC
Clean Energy Collective
SunPower
Key Activities
Value Proposition
Cost Structure
Industry Segments
Renewable energy
Energy suppliers
Cost parity with fossil fuels Energy distributors
and competitive pricing
Manufacturers
Global provider of the most Governments
innovative and advanced
Consumers
PV modules (thin film)
High-efficiency crystalline
silicon modules
Industry-leading tracker
technology
Advanced operations
Center for customer
support
Wide range of product and
service offerings direct or
Channels
through partnerships that
increases value and
Direct (B2B)
decreases risk for
o Power plants
customers and partners
o Operating and Monitoring
services
The most bankable solar
energy solutions in the
Direct / Indirect (B2B, B2C)
world
o Commercial and industrial
developers
o System integrators (PV
modules)
o Residential / Consumers
Components
Revenue Streams
Systems, $2.3B, 68% of sales
Components, $1.1B, 32% of sales
Solar Power, $3.2B, 94% of sale
Solar Modules, $0.2B, 6% of sales
NextEra Energy, Inc., Southern Company and MidAmerican Energy accounted for more than 10% of First Solars components segments net sales, including solar modules used in
systems projects
4
15
Actions / Investments
enable? Why? What are our market / competition / suppliers / buyers assumptions?)
What does the firms history in this area tell us about their
ability to execute?
What capabilities does the firm need to build to credibly
execute?
16
Future Outlook
First Solars long term strategic plan focuses on opportunities in which the solar PV generation solutions can compete
directly with fossil fuel offerings on an LCOE or similar basis, or complement such fossil fuel electricity generations. The
leadership plans to reallocate resources around the globe, in particular, dedicating resources to regions such as Latin
America, Asia, the Middle East, and Africa.
There will be a focus on resources in those markets and energy applications in which solar power can be a least-cost, bestfit energy solution, particularly in regions with high solar resources, significant current or projected electricity demand, and/or
relatively high existing electricity prices. First Solar will continue to expand resources globally in order to establish a
localized business presence in other high-opportunity regions. Plans to partake in other business arrangements, including
joint ventures and strategic partnerships, may involve large investments. Through these arrangements, First Solar intends
to provide access to a lower cost of capital and optimize the value of their projects.
The firm may also elect to construct and retain ownership interests in power plants for which there is no PPA (power
purchase agreement) with a contractual buyer of production (an off taker), such as a utility, but rather with the intent to sell
the electricity produced by the plant in a competitive wholesale market.
During 2015, First Solar expects to spend between $225 million to $275 million on capital expenditures, including
expenditures for upgrades to existing machinery and equipment with the intent to increase solar module efficiencies.
Appendix
First Solar Offerings
Utility-Scale Power Plant. First Solar has extensive, proven experience in delivering reliable grid-connected bulk
power systems for utility scale generation. First Solars grid-connected PV power plants diversify the energy
portfolio, reduce fossil-fuel consumption, reduce the risk of fuel price volatility, and save costs, proving that
centralized solar generation can deliver reliable and affordable solar electricity to the grid in many places around the
world. Benefits of our grid-connected bulk power system solutions include reduction of fuel imports and
improvements in energy security; diversification of the energy portfolio and reductions of risk related to fuel-price
volatility; enhanced peaking generation and faster time-to-power; improved grid reliability and stability with
advanced PV plant controls and managed PV variability through accurate forecasting.
AC Power Block. First Solars AC Power Block is a pre-engineered system solution with guaranteed performance,
consisting of First Solar modules, mounting solutions, third-party inverters, a power block warranty and certain
related services and is available in modular units ranging from 800 kilowatts to 3.8 MW. Building on the core of PV
plant technology, the AC Power Block enables our local EPC partners to develop PV power plants in diverse
regions. By utilizing technologies optimized by First Solar, the AC Power Block is designed to provide verification of
the power plant energy model ensuring that delivered performance equals predicted performance.
The AC Power Block is designed to (i) feature execution by a local partner with First Solar technology and training;
(ii) provide a bankable revenue stream; (iii) streamline development, financing, permitting, installation, and
commissioning; (iv) reduce LCOE and (v) ensure predictable energy performance. As a result of First Solars
experience in utility-scale generation, First Solar power plants can deliver an accurate energy profile, cost structure
and be optimized for project-specific economics. By applying our knowledge and technical expertise to the AC
17
Power Block solution, we are able to predict the energy model and guarantee the first year revenues. The AC
Power block performance guarantee is expected to result in a high level of bankable revenue stream for project
owners.
Fuel Displacement. First Solars hybrid power plant solutions, currently in development, are expected to reduce
fuel consumption and save costs for certain energy customers using liquid fuel as their primary energy source.
Today, solar electricity is cheaper than diesel generated electricity in certain markets. With fixed pricing and no fuelprice volatility, solar can provide a meaningful value proposition for energy customers burning liquid fuel as their
primary energy source.
First Solars innovative hybrid system solutions can provide cost-competitive solar energy as an alternative source
of fuel, reducing fuel consumption and variable costs with reliable and affordable solar electricity. Benefits of our
fuel displacement offerings include the reduction of fuel consumption and cost savings; an increase in fuel reserves
or exports at market prices; a smaller impact from fuel price volatility; greater energy independence; reduction of
CO 2 emissions and generator operating time.
Commercial and Industrial (C&I) - Distributed Generation. First Solar is in the process of developing system
solutions, both ground mounted and roof-top, for commercial and industrial applications, using both CdTe PV
technology and the firms high efficiency crystalline silicon technology. Distributed solar generation can be deployed
rapidly and because the energy generated is consumed locally, less energy is lost in transmission from the point of
production.
While First Solars CdTe PV modules have been used in many C&I systems worldwide, the high-power density,
mono-crystalline solar modules are particularly attractive in restricted spaces, enabling First Solar customers to
pack more power and energy production into each location and improve performance in site-constrained locations.
Off-Grid and Energy Access. First Solars off-grid and energy access offerings, currently in development, can
address underserved energy markets and bring power solutions to some of the approximately 1.3 billion people
without access to a modern energy grid. First Solars offerings are expected to provide a practical and affordable
option for underserved off-grid energy markets across the globe. The mini-grid capabilities under development can
provide aggregate surplus supply for village electrification in remote locations to power homes, schools, hospitals,
telecommunication systems, and many other modern applications.
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http://www.firstsolar.com/en/solutions/utility-scale-generation
http://www.firstsolar.com/
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