Market Overview. Tim Rebhorn Executive Vice President Strategic Marketing

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Osborne Wood
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1 Market Overview Tim Rebhorn Executive Vice President Strategic Marketing

2 GWs GLOBAL SOLAR MARKET Demand Growing as Installed System Cost Falls Utility C&I Residential System Cost (Utility-Scale Fixed Tilt) 100% 90% 80% 70% Demand Source: GTM Global Demand Model (Q1 2016); Installed cost source: BNEF PV Market Outlook Q Represents benchmark cost for fixed tilt utility scale installation not market specific 2 Copyright 2016, FIRST SOLAR

4 GWs INGOT/WAFER CAPACITY EXPANSION Technical and Investment Constraints Process Step CAPEX Use For Mono & Multi Wafers? 130 Module $0.09/W Yes Cell $0.23/W Yes, with some changes Ingot/Wafer $0.33/W No, different equipment $7.8B Capital Requirement 94 $5.4B Capital Requirement Year-End Si Wafer Capacity January 2016 Year-End Si Wafer Capacity March 2016 Wafer capacity a potential constraint in high demand scenario Source: Global PV Installations (MW): GTM Global Demand Model (Q1 2016) Total Year-End Wafer/Ingot Capacity (MW): GTM PV Pulse March C-Si Capex: GTM Upstream Value Chain Capex (Dec 2015) 4 Copyright 2016, FIRST SOLAR

5 THE VALUE OF ENERGY DENSITY First Solar Modules vs. Standard Silicon Modules ENERGY YIELD BETTER SPECIFIC ANNUAL ENERGY YIELD CAPACITY MORE INSTALLED CAPACITY FIRST SOLAR ENERGY DENSITY ADVANTAGE 5 Copyright 2016, FIRST SOLAR

6 VALUE OF ENERGY DENSITY Customer View ILLUSTRATIVE EXAMPLE Developer Considerations Bid lowest PPA price to win project, which requires: Achieving maximum energy from site Minimum capex and opex cost How to optimize energy delivered from specific site? Standard industry tools: PVsyst, etc. Select the right configuration Bottom-line: Maximize return on project at the most competitive PPA price Assumptions Florida 2019 RFP PPA Price = $0.055/kWh Installed Cpw = $1.00/W Discount rate = 7% 6 Copyright 2016, FIRST SOLAR

7 VALUE OF ENERGY DENSITY Customer View ILLUSTRATIVE EXAMPLE 11% higher efficiency Benefits of CdTe 10% higher watts per module for same form factor CdTe 375w module vs mc-si 340w module 11% more installed capacity for site selected CdTe: 100MW DC vs mc-si: 90MW DC Results in 23% more energy produced for same site 173GWh vs 140GWh in Year Assumptions Florida 2019 RFP PPA Price = $0.055/kWh Installed Cpw = $1.00/W Discount rate = 7% 7 Copyright 2016, FIRST SOLAR

8 VALUE OF ENERGY DENSITY Price Premium Against c-si ILLUSTRATIVE EXAMPLE C-Si FSLR CdTe Relative Difference Watts per Module 340w 375w 10% more watts Installed Capacity (MW DC) % more capacity Total Capex (no interconnect) ($M) $90M $100M $10M more capex Year 1 Energy (GWh) % higher total energy PPA Revenue ($M) 30 year NPV $95.6 $118.0 $22 (+23%) Additional Value ($M) $12 Value per 1% Energy Density Advantage $0.005/W FS creates additional value of $ $0.007/W for each 1% higher density 8 Copyright 2016, FIRST SOLAR

9 ENERGY DENSITY ADVANTAGE 2013 Represents lead line efficiency for both First Solar and multi-crystalline silicon. Multi-crystalline silicon based on ITRPV roadmap dated July Copyright 2016, FIRST SOLAR

10 ENERGY DENSITY ADVANTAGE 2016 Represents lead line efficiency for both First Solar and multi-crystalline silicon. Multi-crystalline silicon based on ITRPV roadmap dated July Copyright 2016, FIRST SOLAR

11 ENERGY DENSITY ADVANTAGE 2019 Represents lead line efficiency for both First Solar and multi-crystalline silicon. Multi-crystalline silicon based on ITRPV roadmap dated July Copyright 2016, FIRST SOLAR

12 ENERGY DENSITY ADVANTAGE 2019, 10%+ Advantage Represents lead line efficiency for both First Solar and multi-crystalline silicon. Multi-crystalline silicon based on ITRPV roadmap dated July Copyright 2016, FIRST SOLAR

13 ENERGY DENSITY ADVANTAGE 2019 Represents lead line efficiency for both First Solar and multi-crystalline silicon. Multi-crystalline silicon based on ITRPV roadmap dated July Copyright 2016, FIRST SOLAR

14 CAPITALIZING ON TECHNOLOGY FSLR Differentiating factors with customers Established Global Accounts group in Q3 15 Developers price today & execute in 2-4 years Establishing framework agreements for volume purchases over multi-year periods Lower LCOE creates opportunities to expand addressable market Example: Caterpillar partnership. Addresses small, off-grid, DG in >180 countries Challenges: 1. Customers want to share the benefit 2. Capacity tools not always intuitive around evaluating FS technology (PVsyst customer base is rooftop developers) 3. Science moving faster than the tools 14 Copyright 2016, FIRST SOLAR