Bruce Sohn; President, First Solar

1. Solar Future II: Thin Film PV
Bruce Sohn, President
,
June 8, 2010

2. Forward‐Looking Statement
During the course of this presentation the company will make projections and other
statements that are forward‐looking statements within the meaning of the federal
securities laws. The forward‐looking statements in this presentation are based on
g p
current information and expectations, are subject to uncertainties and changes in
circumstances, and do not constitute guarantees of future performance. Those
statements involve a number of factors that could cause actual results to differ
materially from those statements, including the risks as described in the company’s
most recent annual report on Form 10‐K, quarterly report on Form 10‐Q, and other
filings with the Securities and Exchange Commission. First Solar assumes no
obligation to update any forward‐looking information contained in this presentation
or with respect to the announcements described herein.
© Copyright 2010, First Solar, Inc. 2

3. Our Mission
Our Mission
To create enduring value by enabling a world
powered by clean, affordable solar electricity.
db l ff d bl l l t i it
© Copyright 2010, First Solar, Inc. First Solar Confidential & Proprietary 3

4. Environmental Responsibility
First Solar's Environmental Plan
2
1 3
Procure, Produce,
Convert Reduce
Use And
Mining Byproducts Emissions By
Recycle Solar Modules
Recycle Solar Modules
To Clean, Substituting Solar
In A Perpetual,
Renewable Energy For
Environmentally
Energy Fossil Fuels
Safe Life Cycle
© Copyright 2010, First Solar, Inc. 4

5. Life Cycle Assessment for PV
M/Q M/Q M/Q M/Q M/Q M/Q
Raw Material Material De‐ Treatment
Manufacturing Use
Acquisition Processing commissioning & Disposal
M/Q
E E E E E E
Recycling
M/Q: Material and Energy Inputs
E: Effluents (air, water, solid)
E
© Copyright 2010, First Solar, Inc. 5

6. LCA: Global Warming Potential
CO2‐eq (g/kWh)
1000 900 850
800
600 400
400
200 45 24 15 11
0
Coal Oil Gas CC BioMass Nuclear PV CdTe
Gas CC BioMass Nuclear PV CdTe Wind
CHP USA
Source: ExternE project, 2003; Kim and Dale, 2005; Fthenakis and Kim, 2006: Fthenakis and
Alsema, 2006; Fthenakis and Kim, in press.
, ; , p
de Wild-Scholten & Schottler, 2009.
Assumptions: PV CdTe based on 9% efficiency at insolation of 1700 kWh/m2
© Copyright 2010, First Solar, Inc. 6

7. Energy Payback Time
• EPBT: The Amount of Time a System Must Operate to Produce The Amount
of Electricity That Was Required to Fabricate the System
1.0 EPBT (Years)
• Objective: Minimize EPBT
– Supports Rapid Scalability 0.8
BOS
0.6
0.4
Module
0.2
0.0
CdT
CdTe
Source: de Wild-Scholten & Schottler, 2009.
© Copyright 2010, First Solar, Inc. 7

8. Cash Pay Back Time
D ll
Dollars
Investment Payback
Time
© Copyright 2010, First Solar, Inc. First Solar Confidential & Proprietary 8

9. Energy Payback Time
kWh
EPBT
Months
‐15 ‐12 ‐9 ‐6 ‐3 0 3 6 9 12 15 18 21 24
Raw Materials EPC/BOS Production and O&M
ort
Mfg
M
Transpo
© Copyright 2010, First Solar, Inc. First Solar Confidential & Proprietary 9

10. Leadership Across the Value Chain: Delivering Energy
VALUE CHAIN
Module Development EPC O&M Financing
INDUSTRY CONSTRAINTS
Turnkey Solution
T k S l ti Long Development
L D l t High Balance of
Hi h B l f Module Lifecycle &
M d l Lif l &
High Cost of Capital
Pricing too High Lead Times System Costs Performance
• OptiSolar (2009) • Balance Sheet
• Low Module Cost • Turner (2007)
•Positioned for Near • Proven Track
• Aggressive Cost • EPC Velocity • Data Monitoring
Term Execution Record
Reduction Roadmap • BoS Cost • O&M Program
• Strategic • Leading Strategic
• Scale Optimization
Partnerships
p Partners
FIRST SOLAR INJECTIONS
© Copyright 2010, First Solar, Inc. 10

11. Development
Systems Project Cost Structure
Module
EPC Standard2
1 IDC = interest during construction
IDC = interest during construction
2 EPC Standard Costs= balance of system costs (inverters, electrical, mounting hardware, project
management and engineering, and installation labor)
© Copyright 2010, First Solar, Inc. 11

12. Manufacturing Cost per Watt Trend
$1.59
$1.50
$
$1.40
$1.23
$1.08
$1.00
$0.93
$0.87 $0.85 $0.84 $0.81
$0.50
FY05 FY06 FY07 FY08 Q109 Q209 Q309 Q409 Q110
Core SBC Ramp
© Copyright 2010, First Solar, Inc. 12

13. Module Cost Reduction Roadmap
$2.94/W
$2 94/W Q1 2010 cost per watt = $0.81
Q1 2010 cost per watt = $0 81
$0.93/W
100% 18‐25%
4‐6%
4‐6%
3 4%
3‐4% $0.52 ‐ 0.63/W
$0 52 0 63/W
2%
56‐68%
2004 Q1 09 Efficiency Throughput Spending Low Cost Plant Scale 2014
Cost/Watt Cost/Watt Location Cost/Watt Target
© Copyright 2010, First Solar, Inc. 13

14. Production Capacity Growth
Total current and announced capacity grows by 780MW to 2.1GW
Total current and announced capacity grows by 780MW to 2.1GW
2,117 MW
2,005 MW 111 France
Plant
5 & 6
1,337MW
1,228 MW Malaysia
1337 1337
891
716 MW 854
382 Plant 2
308 MW Germany
223 446 446
176 191 214
100 MW
100 MW 223 223 223 Ohio
Capacity 25 MW 132 143 160
2005 2006 2007 2008 2009 2010 2011 2012
2005 & 2006 based on Q406 run rate; 2007 based on Q407 run rate; 2008 based on Q408 run rate; 2009 based on Q409 run rate,
© Copyright 2010, First Solar, Inc. 2010‐2012 based on Q1 2010 run‐rate 14

15. Balance of System* Cost Reduction Roadmap
~$1.40 /W
100% 2%
8%
7% $0.91‐0.98/W
1% 12% Target
T
65‐70%
Q1’09 BOS Engr. , Mounting Inverter Other Installation 2014 BOS
Proj. Mgmt. Hardware Transformer Electrical
* Includes standard EPC costs; excludes site‐specific and development costs, as well as interest during construction
© Copyright 2010, First Solar, Inc. 15

16. BOS Costs Inverse to Velocity and Constructability
Site: Blythe, CA Site: Sarnia, Ontario Site: Boulder City, NV
System Size: 21MW System Size: 20MW => 80 MW in ‘10 System Size: 10MW => 58 MW in ‘10
Project Project Project
First Solar Developer:
First Solar Sempra
Developer: Developer:
Owner: NRG Energy Owner: Enbridge Owner: Sempra
(All MW AC)
© Copyright 2010, First Solar, Inc. 16

17. Copper Mountain: 48MWs
© Copyright 2010, First Solar, Inc. 17

18. Cost Reduction – Solar Electricity (LCOE)
Medium Resource – 1400 hours High Resource – 1800 hours
U.S. ¢/kWh U.S. ¢/kWh
35 35
30 30
25 25
20 20
Transition Transition
15 15
Sustainable Sustainable
FSLR 2014
2014
10 10
FSLR 2
5 5
0 0
$6.00 $5.00 $4.00 $3.00 $2.00 $6.00 $5.00 $4.00 $3.00 $2.00
Note: Assumes 7.5% unlevered IRR, 10% ITC, 2.5% electricity power price escalator, FSLR panels, utility scale plant, install labor and site specific cost estimates. Includes
owner development costs, financing costs and O&M.
© Copyright 2010, First Solar, Inc. 18

19. Our Strategy
Leading Business
Shares in the Model that Sustainable
Sustainable Enduring
Solar Markets Most Drives Superior Competitive Business Value
Attractive
Attractive Returns on
Returns on Advantages
Markets Capital
• Reduce solar electricity costs to sustainable levels through technology
development, operational excellence and scale
• Use price adaptive business models and partnerships to expand markets
Use price, adaptive business models and partnerships to expand markets
• Own and develop the technologies necessary to be the low cost provider of
solar electricity
• Maintain financial discipline that assures superior returns on invested capital
f ld l h d l
© Copyright 2010, First Solar, Inc. 19

20. The Migration from Existing Subsidy to Transition Markets
Sustainable
Markets
Markets
Transition
Markets
Markets
Existing Subsidy Constraints
Markets
Markets
© 2009 First Solar, Inc. 20

21. Growth opportunities
Potential PV Capacity by Region (GW) – Assuming Regulatory Targets and Macro Factor Growth
Sustainable
Markets
Other
Australia
l
GCC
Transition
Rest of U.S. 1,7001
Markets
India
China
California
C lif i
Other
Ontario
Italy 105 105
Existing
g
Spain
S i
Markets 105
France
Japan 65
Germany
Existing Transition Sustainable
Markets Markets Markets
Markets
2020 ‐ 2050
1) Assumes potential solar capacity equal to 6% of total electricity consumption in identified solar markets
Source: Market analyst estimates; First Solar analysis. Assumes base case scenario.
© Copyright 2010, First Solar, Inc. 21

22. Crossing Over to Sustainable Markets
$0.40
$0.35
/kWh)
Carbon emissions
$0 30
$0.30
Electricity ($/
cost adder
Price parity with
conventional generation Conventional,
$0.25 drives inflection in price base cost
elastic demand
$0.20
$0 20 Conventional, ,
ized Cost of E
fuel sensitized cost
$0.15 PV cost roadmap
$0.10 Global PV demand
Global PV demand
Leveli
$0.05
$0.00
Gas Peaking Coal Gas Combined Cycle Nuclear
Note: Conventional generation LCOE, Lazard 2008. Carbon emissions cost assumes $30/ton CO2.
High end of coal costs incorporates 90% carbon capture – emissions adder does not apply.
© Copyright 2010, First Solar, Inc. 22

23. Industry Demand – Estimates1 as of 4/16/10
9.9 GW in 2010, with a 30% CAGR% 2009‐2012
9 9 GW in 2010 with a 30% CAGR% 2009‐2012
16
16,000 15.3
14
14,000
12.1
12
12,000
9.9
10
10,000
GW
8
8,000
7.0
6
6,000
5.9
4
4,000
4 000
2.7
2
2,000
1.7
0
‐
2006 2007 2008 2009 2010 2011 2012
Germany Spain France Italy ROE North America Japan China ROW
1 Forecasts from Auriga, Barclays, Collins Stewart, Credit Suisse, Deutsche Bank, JP Morgan, Lazard, Morgan Stanley, Raymond
James, Think Equity, UBS, and Wedbush. 2009 Germany demand from Bundesnetzagentur registration data
© Copyright 2010, First Solar, Inc. 23

24. Good Policy Makes Strong Markets
Source: Meteotest
© Copyright 2010, First Solar, Inc. 24

25. Solar is still a small portion of total energy production
Solar represents a small percentage of total energy production, even in the most
p p g gy p ,
mature solar markets, but the growth potential is significant.
Percent of Total Electricity Production*
2.13% 1.11% 0.27% 0.04% 0.04% 0.03%
100%
90%
80%
97.87% 98.89% 99.73% 99.96% 99.96% 99.97%
70%
60%
50%
Spain Germany Italy France ROEU US
% of Total Electricity Production from All Other Sources % of Total Electricity Production from Solar
Note: *Solar includes both Solar PV & Solar Thermal generation. 2009 data for EU; 2009 US estimate extrapolated from 2008 EIA data based solar capacity added in 2009.
Source: Eurostat: Electricity Estatistics, Provisional Data 2009; EIA; Marketbuzz.
© Copyright 2010, First Solar, Inc. 25

26. …enabling a world powered
enabling
by clean, affordable solar electricity
clean,
© Copyright 2010, First Solar, Inc. 26
1.4MW · Dimbach, Germany · Beck Energy