the solar future de - bruce sohn "by 2013, will it have been possible to achieve the mission of...

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


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


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.


, ; , 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


CdTeSource: de Wild-Scholten & Schottler, 2009.

Cash Pay Back TimeD llD llDollarsDollars

Time

PaybackPaybackInvestmentInvestmentTime


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


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


FIRST SOLAR INJECTIONS

p

Systems Project Cost Structure Development

Module

EPC Standard2

1 IDC = interest during construction


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


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


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


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


(All MW AC)

Copper Mountain: 48MWs


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


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


• 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


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


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


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


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


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

the solar future de - bruce sohn "by 2013, will it have been possible to achieve the mission of...

Technology

firstsolar sempra developer

wildscholten schottler

bos proj

ca site

ontario site

enbridge owner

cdtcdte source

nv systemsize