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First Solar is the world's leading manufacturer of cadmium telluride solar panels, with over 1 GW of annual production capacity. It was founded in 1984 as a glass company and entered the solar industry in 1990. Today it is a public company headquartered in Tempe, Arizona, with $2.56 billion in revenue and 5,200 employees. While it currently commands 13% of the solar panel market, it faces competition from other manufacturers and the potential threat of new technologies achieving commercial scale.
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- 1. First Solarworld’sleadingmanufacturer of solar panels- > 1 GW in terms of annualsolar module production capacityconvert sunlight to electricityat a lowercost (< $1 cost/W) thanother types of modulesUse cadmium telluride (CdTe) crystallinesilicon
- 2. BriefcompanyhistoryStarted as a glass company1948: foundedPermaglass (shatters in smallpieceswhenbroken) automotiveindustry
- 3. 1984: Solarindustry GlasstechSolar ( importance of costcompetitiveness) 1990: FoundSolarCells (use of CdTe) 1999: acquired by TrueNorthPartners and renamed First Solar
- 4. BriefcompanyoverviewType: Public (NASDAQ: FSLR)Founded in 1999 (as First Solar Holdings, LLC)Headquarters: Tempe, Arizona, U.S.Key people: Robert J. Gillette= CEO, Michael J. Ahearn= Chairman of Supervisory BoardRevenue: US$ 2.56 Billion (FY 2010)Operating income: US$ 748.9 Million (FY 2010)Net income: US$ 664.2 Million (FY 2010)Total assets: US$ 4.38 Billion (FY 2010)Total equity: US$ 3.45 Billion (FY 2010)Employees: 5,200 (2010)
- 5. History of the solar panel1883: Charles Fritt1954: Bell Labs- Semiconductor wafer diodes1980’s: silicon p-n junctionsolarcellsBy large semiconductorcompanies
- 6. But: small-scale & low-power consumer device90’s: photovoltaics in large-scale power:peak-loadreductionReduce transmission & disributionlosses2009: solar power= fastest-growingenergytechnology-demand: growingat an average of 48%/yearsince 2002Worldwidedriven by energyprices & governmentpolicies
- 7. Sources of InnovationPorter’sdiamondFactor conditions
- 8. Firmstrategy, structure and rivalry
- 10. Related and supporting industriesValue chainTechnology pushSolar panels
- 11. Timing of entry patternsThe liquidation GlasstechSolarSolar power isstill not in his mature phaseWithout subsidies the business isstill not viable
- 12. Market forces of First solarGood Solar Resource to have highannualinsulationFavorable High electricityprices as theyreduced the costhurdle for substitution by PVLarge area needed in close proximity to maximize the amount of geneartionAccess to development land to support the buliding of solarfacilities
- 13. BuyersIn 2009, 10-K: First Solar’s largest seven systems integration customers in Europe were responsible for more than 90 percent of its revenueSystem integrators in Germany & SpainIn U.S. at the start, only Residential customers using net metering & ITCsBy 2010, Sempra, PG&E and Southern California Edison became largest customers
- 14. FIRST SOLAR’s mission“ To Create enduring value by enabling a world powered by clean, affordable solar electricity”SUSTAINABLITY Remark “ The real thing to notice with renewable is not necessarily how they stack up against each other, but rather that they are all orders of magnitude better than the use of fossil fuels”
- 15. THREAT OF ENTRY & SUBSTITUTESFIRST SOLAR commands only 13 percent of the marketMajor competitors: Suntech, Sharp, Yingli and QcellsSolundra and Nanosolar represents potential future threats if their technology could achieve commercial scaleLife Cycle Analysis(LCA) is being performed on c-Si, CdTe to evaluate the environmental modulesKrueger hopes that “One day it might be a critical consideration”
- 16. SOLAR INDUSTRY MARKET SHARE