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On the Rise -- First Solar Ramps Up for Large-Scale Projects

Jan. 13, 2010
The industry leader predicts continued growth in 2010 but market faces overcapacity.

For much of 2009, the forecast was anything but sunny for the solar industry. After enjoying a stellar year in 2008, the solar industry fell victim to the global recession. A report by research firm iSuppli warned last August that the supply of solar panels exceeded demand by 92%.

Despite these issues, First Solar Inc. had plenty of good news in 2009. First Solar manufactures solar modules using a thin film of cadmium telluride (CdTe) as a semiconductor material, which converts sunlight to electricity more efficiently than traditional crystalline silicon semiconductor material. At press time, the company expected to finish 2009 with sales of approximately $2 billion, up from $1.2 billion in 2008.

Last March, the company acquired OptiSolar's solar project pipeline, boosting the company's ability to build and sell utility-scale solar power plants to regulated utilities, energy companies and independent power producers.

In September, First Solar announced a memorandum of understanding with the Chinese government to build a 2-gigawatt (GW) solar power plant in Ordos City, Inner Mongolia, China. The project is expected to be built in stages, starting with a 30-megawatt demonstration project that will begin construction by June 10. Stages two and three will involve 100-megawatt and 870-megawatt installations to be completed in 2014 and a 1,000-megawatt plant to be completed by 2019.

First Solar achieved a significant milestone in 2009, becoming the first company to manufacture and ship more than 1 GW of photovoltaic solar modules in 2009. The company noted that a gigawatt of solar modules produces enough electricity to serve the needs of 145,000 homes and saves approximately 1 million tons of carbon dioxide emissions annually.

This year and next, First Solar plans to add eight production lines in two plants at its manufacturing facility in Kulim, Malaysia. The company also is adding a two-line factory in France and will complete an expansion of its Perrysburg, Ohio, facility in the first half of this year. The Perrysburg expansion adds a fourth production line and boosts manufacturing capacity to more than 200 megawatts per year. The expansion creates 200 jobs at the plant.

First Solar's manufacturing facility in Frankfurt, Germany.

With these new facilities, First Solar plans to increase manufacturing capacity by 48% to 1.8 GW per year. "First Solar is expanding capacity to satisfy a global contracted and advanced pipeline of over six gigawatts from 2010-2012," said Rob Gillette, who joined the company as CEO last October after senior management roles at Honeywell and General Electric. "In 2009, we increased our contracted North American pipeline by approximately 1.5GW, expanding our penetration in transition markets. This drives further capacity needs around a demand pool that is less volatile and more predictable than the traditional feed in tariff-based markets."

In its 2010 guidance, First Solar acknowledges that the industry will continue to experience overcapacity and pricing pressure on solar modules. Despite this environment, it expects net sales to grow up to $2.9 billion. The company is projecting that global demand for photovoltaic modules will grow from 5.2 GW in 2009 to 7.5 GW this year and should reach 12.1 GW in 2012. Gillette says the company will continue to ramp up capacity and lower the cost of solar modules, so it can move over time from existing subsidized markets to sustainable markets where solar power must compete with gas-fired or coal-fired technologies.

About the Author

Steve Minter | Steve Minter, Executive Editor

Focus: Leadership, Global Economy, Energy

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An award-winning editor, Executive Editor Steve Minter covers leadership, global economic and trade issues and energy, tackling subject matter ranging from CEO profiles and leadership theories to economic trends and energy policy. As well, he supervises content development for editorial products including the magazine, IndustryWeek.com, research and information products, and conferences.

Before joining the IW staff, Steve was publisher and editorial director of Penton Media’s EHS Today, where he was instrumental in the development of the Champions of Safety and America’s Safest Companies recognition programs.

Steve received his B.A. in English from Oberlin College. He is married and has two adult children.

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