Is the Solar Glass Half Full or Half Empty?

Is the solar glass half full or half empty? The answer depends on whether you’re a manufacturer or consumer.

I’ve followed First Solar business ventures ever since the company had its IPO in 2006. I like the cadmium telluride thin film technology, probably because of its deviation from boring old silicon. I even held a few shares of First Solar, which I dumped when profits and share prices started falling across the industry.

So it was with some sadness I read about First Solar’s Dec. 14, 2011 conference call with analysts. Projected earnings are down by about 25 percent for 2011 and about 75 percent from the Wall Street consensus for 2012. That’s quite a tumble!

Then First Solar CEO Michael Ahearn made the surprising statement that First Solar was “shifting our revenue base from subsidized to sustainable markets, starting in 2012. It won’t happen overnight and we’ll have to transition out of the subsidies we currently depend on, but our goal is to shift progressively over the 2012 to 2014 timeframe so that by Q4 2014, we derive virtually all of our new revenues from sustainable markets.”

That means that First Solar is withdrawing from the subsidized panel business and focusing on utility scale applications. To compete in non-subsidized markets First Solar will need to drop its production costs by 30 percent.

So forget about much production or job creation in the U.S.

But First Solar plans indicate a conclusion being reached by many of the other 300 or so solar manufacturers around the globe. Consumer scale solar panels are now a commodity, driven by economies of production, cheap labor and materials.

Bad news for manufacturers but good news for consumers looking for a fire sale. Bad news for those expecting subsidies to create American jobs. Good news for folks rooting for increased deployment of renewable energy.

See also: Battlefield Solar: Are We Seeing a Partial Collapse of the Global PV Industry?

About the Author

Editor:

Paul Mauldin

Paul earned his B.S. and an M.S. in electrical engineering from the University of California-Berkeley and is a registered professional engineer. He has worked in the energy industry for more than 25 years, developing and implementing advanced energy technologies. As research director for Pacific Gas and Electric Co. he pioneered methodologies used in the design, maintenance and control of energy delivery systems. As a consultant he has provided guidance to utilities and the vendor community, nationally and internationally.