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Bryan Crabb - GW Solar Symposium 2012
- 3. ©
Copyright
2012,
First
Solar,
Inc.
3
Worldwide Presence
Ontario, Canada
Project Development
Tempe, Arizona
Corporate
Headquarters
Perrysburg, Ohio
Operations, R&D,
and Manufacturing
Bridgewater, New Jersey
EPC/ Systems Engineering
New York, New York
Legal, Project Finance
San Francisco
Project Development
Berlin, Germany
Government Affairs
Frankfurt (Oder), Germany
Manufacturing
Kulim, Malaysia
Manufacturing
Sydney, Australia
Sales & Marketing
Beijing, China
Project Development
Washington, D.C.
Government Affairs
Mesa, Arizona
Project Development
Cape Town, South Africa
Project Development
Ontario, Canada
Project Development
Sacramento, California
Government Affairs
Brussels, Belgium
Government Affairs
Paris, France
Sales & Marketing
Madrid, Spain
Sales & Marketing
Mainz, Germany
Sales, Marketing &
Customer Service
Rome, Italy
Sales & Marketing
- 6. ©
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Solar,
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Solar PV is Delivering as Promised
PV manufacturing costs declined from $5 watt in the 1990s to less $0.75/watt today
US Solar installations increased from a few hundred MW in 2000 to over 3,900 MW in 2011
Over 3,000 MW of solar currently under construction in the US with over 40,000MW proposed for development
Over 100,000 solar jobs per the 2010 US census
Manufacturing, supply-chain and development companies in all 50 states
US a net-exporter of solar products
Module costs declined by 30% in 2010 and 40% in 2011 – global manufacturing capacity doubled
Solar has done more with less:
Renewables accounted for 6% ($44 billion) of the $740 billion worth of Federal energy subsidies from
1960-2006
Temporary incentives versus permanent
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Crossing Over to Sustainable Markets
Conventional generation based on Lazard LCOE Analysis v 5.0; June 2011. Assumes coal price of $2.50/MMBtu and natural gas price of $5.50/MMBtu.
High end of coal and IGCC costs incorporates 90% carbon capture. Fuel sensitivity assumes +/- 25% fuel cost. Nuclear does not reflect decommissioning costs.
$0
$50
$100
$150
$200
$250
$300
Gas Peaking Coal IGCC Gas Combined
Cycle
Nuclear
Levelized
Cost
of
Electricity
($/MWh)
Conventional, Base Cost
Conventional, Fuel Sensitized Cost
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1
2
5.2 5.5
15.8
13.6
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010 2011E 2012E
Percentage
of
Historical
Max
(%)
Core Market Installation Capacity (GW), 2006-2011 -- Sustainable?
• Sources: EPIA, IREC, IMS Research, equity analysts & FSLR analysis.
Germany, France, Spain, Italy,
California, & Czech Republic
?
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What Explains the Pattern?
Market initially slow to take off
while legislation is translated into
an effective program and
bureacracy is streamlined
Once market begins to function
effectively, the incentive programs
caused an over-supplied industry to
quickly descend to develop project
backlogs.
The unexpected size and velocity of
market expansion combined with
high import volumes alarm
politicians, who worry about high
cost and economic impact
Politicians react by sharply reducing
the size of the program and in
some cases making it less
transparent
- 18. ©
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Will New Subsidized Markets Turn Out Differently?
• Sources: EPIA, IMS Research, equity analysts & FSLR analysis.
?
0
2
4
6
8
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GW/yr
ROE (ex Czech) India Australia ROAPAC USA
RO Americas Saudi Arabia Morocco Sub-Saharan Africa Thailand
- 21. ©
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Is PV Already at Grid Parity?
Retail electricity costs per kWh in US Dollars:
Australia: $0.25
Belgium: $0.29
Brazil: $0.34
Chile: $0.23
Denmark: $0.40
Germany: $0.36
Kuwait: less than one cent but…
Philippines: $0.30
Tonga: $0.58
India: Varies – net short supply
Middle East: Varies - dependent on the price of oil/gas/subsidies
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In order to thrive, the industry must:
• Continue to drive down costs to grid parity
• Increase efficiency
• Create and develop new markets
• Improve PV’s impact on the grid as an intermittent resource
• Transition away from subsidized markets and subsidy dependence
• Develop customer-focused solutions – clean, peaking energy is not enough
- 23. ©
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Challenges and Questions for the Industry:
• How to price at grid parity levels at scale and without subsidies?
• How to accommodate PV into mainstream energy generation mix?
• How to ensure priority access to transmission and distribution?
• How to promote efficient land planning/permitting approval processes
• How to build additional transmission?
• How to ensure new and continued support from policymakers, regulators
and utilities?
• How to support deep robust project financing markets and creditworthy off-
takers?
• How to transition out of subsidized markets while preserving cash and
assuring profitability