Note: this article first appeared in Renewable Energy Focus July/August 2012. Click here for a free signup.
Online: Click here for part 1, and part 2.
A market-wide issue
In the current environment, even companies not making the standard crystalline silicon modules have been impacted. For most of its corporate life, going back to 1999, First Solar, based in Tempe, Arizona, was a module manufacturer. It made one product, made it well and made it very cost effectively. Indeed, the brand was the cost leader in PV modules for many years and grew fast because of it.
“First Solar doesn't use silicon. We use a different semiconductor, Cadmium Telluride (CdTe), and a totally different manufacturing methodology,” says Alan Bernheimer, the company's Public Relations Director, Americas. “Between the fact that we did not use silicon and we have a much less expensive production method to create thin film modules, we enjoyed a great price advantage over silicon PV for many years.
However he adds that over the past few years, “the steep drop in the cost of silicon, and the entry of many new manufacturers into the market, greatly reduced the cost of competitive silicon–based panels”.
After a hard look at the market, First Solar concluded there is no longer any profit in trying to sell only modules in today's commoditised market. So it had to get away from just being a module manufacturer, Bernheimer says. In 2007, it acquired Turner Renewables, an EPC company working on utility scale solar projects. “We acquired the ability to do utility scale projects ourselves in the US, and over the last few years this has expanded. Now we have a very robust, project development business here,” Bernheimer says.
In fact it has a 2.7GW pipeline of utility-scale projects at various stages of development. “This gives us a captive pipeline, with a lot of visibility into demand. We are less at the mercy of a fluctuating market, with long term contracts to build these projects that will take up a good deal of our production capacity for the next two to three years.”
He says companies need to differentiate themselves during these tough times, find their strengths and capitalise on them: “Pick your areas and do them very, very well. Don't try to do everything for everyone.”
First Solar has completely moved away from the residential solar market. “We are now focused only on utility-scale power plants. This is the key to success,” says Bernheimer. “We can't do everything and we had to pick the most valuable and profitable market and put all our efforts into making that business successful.”
For the final part click here.