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29 Oct 2010
Leading supplier of solar modules has just completed the largest PV facility in the world, and will shortly embark on some much larger projects.
First Solar says that US demand for solar photovoltaics could double to 2 GW in 2011. The company, which is the world’s largest supplier of PV panels, made the prediction as it reported third-quarter sales of nearly $800 million – up more than 25 per cent sequentially as the global PV boom continues.
That sharp increase was due in no small way to the recognition of a 60 MW (AC) expansion of the Sarnia project in Canada, which currently represents the world’s largest operating PV plant. But with a number of much larger utility-scale projects in the pipeline, First is confident of a strong market in 2011 – particularly in the US.
Those larger projects include the 290 MW Agua Caliente facility in Arizona, which First has recently begun working on and which will represent the industry’s first billion-dollar installation. With a number of other, similar-sized projects in California recently given the go-ahead thanks to renewable energy generation targets, and wider financial incentives in the US, First is expecting North American demand for solar panels to jump from around 1 GW this year to 2 GW next and 3 GW in 2012.
Of the US market specifically, First CEO Rob Gillette told investors, “Utilities are beginning to adopt solar photovoltaic technology, and realize large-scale plants.” Recent agreements include a 250 MW and 300 MW facility for Southern California Electric and a 300 MW deal with Pacific Gas & Electric, for example.
Diversifying market
That US momentum is crucial for both First and the rest of the solar industry, which has been largely reliant on the heavily-subsidized German market thus far. In 2009, Germany accounted for more than half of the 7.2 GW worth of global panel demand. This year’s market has been characterized by a rush to install PV ahead of Germany’s cut in feed-in tariff scheduled for the end of 2010, and the country will again represent half of global demand, which First now estimates at 13.5 GW.
From 2011, the market should become far less reliant on German installations – as should First Solar’s revenues. As recently as 2008, some 80 per cent of the company’s output ended up deployed in Germany. But Gillette now expects that German demand will account for 45 per cent of the company’s sales in 2010, and this proportion should drop to between 25 per cent and 30 per cent in 2011, as German demand softens and the wider PV market catches up.
Illustrating First’s leading position among panel makers, Gillette pointed out that the company’s cumulative production has just tipped past the 3 GW mark. For 2010, expected production is just over 1.4 GW, which would represent more than 10 per cent of global installations, according to consensus forecasts and the European Photovoltaics Industry Association.
One of the keys to First’s success has been the low price point that it has been able to achieve. Its CdTe modules are currently being produced with an average conversion efficiency of 11.3 per cent, and in the latest quarter the company began implementing new manufacturing processes to further improve that figure. First’s average module manufacturing cost increased slightly in Q3 to $0.77/W as a result of disruption caused by those process changes, but the figure is still a significant improvement on the $0.85/W cost level in Q3 of 2009, and First anticipates further reductions as a result of the latest process alterations.
Gillette added that the company has adjusted its pricing strategy in response to forthcoming feed-in tariff changes, and First’s expectations for market growth as it further pushes costs down are perhaps best illustrated by its recently-announced plans to expand module production significantly with new manufacturing sites in the US and Vietnam. Both sites are set to come on-line in 2012, by which time First expects to have near-doubled its current annual production capacity to more than 2.7 GW.
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