First Solar (Nasdaq:FSLR), despite some recent body blows to its stock price and morale, remains the standard-bearer of the American and perhaps global solar industry. No solar company has grown as fast as First Solar with as much continual progress in execution and technology. The next few years will be a challenge for the company, as for every firm in the solar industry, but despite short-sellers and politicians with suspect agendas, First Solar remains the thin-film module technology leader and the world leader in terms of price per watt.
News for First Solar, both good and bad, has been coming at a fast pace lately. Here's a roundup of news and recent coverage:
President Obama Visits Copper Mountain
Obama visited the largest operational U.S. photovoltaic plant -- the 55-megawatt (DC) Sempra Copper Mountain solar facility in Boulder City, Nevada, which uses more than 775,000 First Solar solar panels. First Solar also served as the engineering, procurement and construction (EPC) contractor. Here are extracts from his energy-focused speech.
For a novel take on this project, here's Fox News likening this plant to Solyndra -- as they will everything related to solar from now on. Note that Copper Mountain is privately financed and did not receive any DOE loans.
First Solar's "Manufacturing Excursion"
An estimated 4 percent to 8 percent of the cadmium telluride (CdTe) thin-film modules manufactured by First Solar between June 2008 and June 2009 had a “process control” issue which resulted in a potential “premature power loss once in the field,” according to First Solar Chair and Interim CEO Mike Ahearn.
The process control issue, which the company has been dealing with in financials since 2010, involved global production and all three of First Solar’s CdTe manufacturing facilities at the time (in Ohio, Germany, and Malaysia). The issue was identified in June 2009 and the process factor was “addressed.” Subsequently, First Solar has been fulfilling its warranty obligations with its customers. “The vast majority were in Europe,” said First Solar’s Vice President of Communications Ted Meyer. Most were in Germany, where the bulk of First Solar’s modules were being sold at the time.
First Solar’s remediation program includes module removal, testing, replacement and logistical services and additional compensation payments to customers under certain circumstances. First Solar has now “processed over 95 percent of the total claims submitted” and, to date, “the total cost of remediating the manufacturing excursion is $215.7 million,” said Ahearn. That includes, he added, “$145.6 million above and beyond our standard warranty.”
For First Solar, the issue is largely resolved, and “while the cost of the program has been much higher than we would’ve liked,” Ahearn said, “we believe we have done the right thing in demonstrating our commitment to our customers beyond our product warranty.”
Panel Power Degradation
In a separate issue, Credit Suisse's Kumar cited a National Renewable Energy Labs (NREL) report finding “high temperature degradation of CdTe panels” an issue.
According to First Solar, panel underperformance “was unrelated to climate” and First Solar has no concern about the performance of the panels it has subsequently installed and is installing in its solar power plants. The company, he said, has tests showing that CdTe thin-film modules get better “energy yields” and “performance ratios” than silicon modules.
But, Meyer pointed out, because the company is now building in the U.S. desert Southwest, the Middle East and other places much hotter than Europe, its Q4 financials included a 1 percent higher set-aside in the event of warranty-related expenses. The set-aside, a completely separate matter from the manufacturing excursion, is listed as a “warranty rate change” of $37.8 million. That $37.8 million, Meyer said, “covers all of the 5-plus gigawatts we have in the field going forward.”
“Our experience has shown that our warranty rates for hot climates are slightly higher than the return rates for temperate climates,” explained First Solar Chief Financial and Accounting Officer Mark Widmar. The 1 percent extra set-aside will “account for potential returns going forward.”
More on Degradation
In a rare and likely reluctant release of actual data, First Solar presented some NREL degradation test results of CdTe panels. NREL found a 0.53 percent per year long-term and linear degradation rate over 16.5 years -- a degradation rate comparable to other established photovoltaic technology. This data was presented by Raffi Garabedian, First Solar Vice President of Advanced Technology, at a recent IEEE PV Silicon Valley event at PARC.
Enbridge Purchases First Solar’s 50-Megawatt Silver State North Power Plant
Enbridge bought the 50-megawatt Silver State Power Plant in Nevada in what a representative of First Solar called "continued momentum in realizing our project pipeline, getting projects built, [and] selling them to top tier players." Enbridge is Canada’s largest oil-pipeline operator. The project, to be operational in May of this year, is built on federal land. Pricing was not disclosed.
Silver State North Solar Project at a glance:
- Location: Clark County, Nevada, near the community of Primm
- Net Peak Capacity: 50 megawatts (AC)
- Project Area: About 600 acres (on Bureau of Land Management lands)
- Approximate number of solar modules: Over 800,000
- Annual yield: 122,000 megawatt-hours (corresponding to the annual consumption of about 9,000 homes)
- Energy Purchaser: NV Energy (25-year PPA)
Making Solar Power Plants Better Grid Citizens
Robert Jenkins, First Solar's Director of Utility Interconnection, works on plant performance requirements and utility requirements. Greentech Media spoke with him on Thursday. In an effort to be a good grid citizen, First Solar has begun to add low voltage ride-through (LVRT) and dynamic voltage support to the Antelope Valley Solar Ranch and the Agua Caliente solar power plants.
"LVRT is is the ability of a PV plant to stay connected to the grid during voltage and frequency excursions and return to the pre-disturbance power levels once the disturbance has been cleared," explained Jenkins. As soon as the fault is cleared, the plant goes back to producing power.
"Dynamic voltage support is the ability of the plant to monitor the grid voltage and match the reactive output to a prescribed band, added Jenkins. If voltage starts starts to sag or rise, reactive power is used to inject or withdraw the variations.
These functions are performed at or near the inverter, a piece of hardware First Solar does not build, but specifies and purchases in high volumes.
Darrell Issa Committee Attacks DOE loans to AVSR and Agua Caliente
The House Oversight and Government Reform Committee, chaired by Darrell Issa, is investigating the DOE loans to the innovative and doomed Solyndra solar panel factory. But the committee is also going after the DOE loans to California's Antelope Valley Solar Ranch and Arizona's Agua Caliente solar power plant because the technology was not innovative enough. Both of those plants were developed by First Solar, which is suggesting that the advanced technology in the plants involves new power electronics technologies such as low voltage ride-through and dynamic voltage support (see above).
Herman Trabish contributed to this article.