A Conversation With Utility Solar Contractor First Solar

 

First Solar (1 market/1 overall)

What’s the thing you enjoy most about being in the solar industry?

In my role, I’ve had an opportunity to travel the world, advancing the message of solar power. I have gained a real appreciation of the effects which are beginning to materialize. In several regions, solar PV is already at price parity with fossil-fuel-based energy sources without national or local subsidies. Solar PV has passed that tipping point. Now it is simply a matter of time — through continued innovation in energy density, construction methodology and financial engineering — before other high-solar insolation regions to also achieve parity. The story of solar PV is really just beginning, as one of the critical ways to reduce CO2 emissions while satisfying the demand curves for new energy sources. Being at the forefront of this trend is truly exciting. We are making a difference.

What do you enjoy least about being in the solar industry?
As with any emerging industry, growth and decline cycles are inevitable. The industry as a whole has entered the first significant trough in its short history and will likely be in it for at least two more years. During this period of consolidation, downsizing, bankruptcy, etc., many hard working people will find themselves out of jobs, losing benefits or taking pay cuts. The solar industry is still relatively small. I have many friends in other solar companies who have already felt these effects. This is the toughest thing in any cyclical industry. People want security and stability, and their losses are very disturbing.

What’s the most important piece of technical advice you would offer your peers?
LCOE (Levelized Cost of Energy) rules. Energy doesn’t come in different colors, shapes and sizes. The cost per kWhr is what matters — period. The number of interacting variables that make up LCOE is exceedingly complicated. As a vertically integrated company, First Solar is in a unique position to fully understand the entire value chain on a global scale. The hype from one supplier or another with respect to module efficiency or cost per watt or the next big thing in string-level monitoring is naturally dressed up to highlight their advantages and underplay their disadvantages. But the reality is that the largest single driver of LCOE is the cost of capital. A change in debt rate of 1% is roughly equivalent to $0.20/Wdc. If it’s not a bankable, proven, reliable technology that provides for 25 years of steady cash flows with minimum risk to the debt provider, then they will increase their cost of debt, which increases LCOE. The bottom line is this: Do your diligence to get to the root of bankability and risk. So the most important piece of technical advice is actually financial.