bryan crabb - gw solar symposium 2012

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Overview

Largest utility-scale EPC and O&M provider in the industry

Constructing the three largest PV solar power plants in the world

Largest thin-film solar module manufacturer in the world

Industries smallest carbon footprint and fastest energy payback

66 million solar modules produced, generating over 5GW of power

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Worldwide Presence

Ontario, Canada Project Development

Tempe, Arizona Corporate Headquarters

Perrysburg, Ohio Operations, R&D, and Manufacturing

Bridgewater, New Jersey EPC/ Systems Engineering

New York, New York Legal, Project Finance

San Francisco

Project Development

Berlin, Germany Government Affairs

Frankfurt (Oder), Germany Manufacturing

Kulim, Malaysia Manufacturing

Sydney, Australia Sales & Marketing

Beijing, China Project Development

Washington, D.C. Government Affairs

Mesa, Arizona Project Development

Cape Town, South Africa Project Development

Ontario, Canada Project Development

Sacramento, California

Government Affairs

Brussels, Belgium Government Affairs

Paris, France Sales & Marketing

Madrid, Spain Sales & Marketing

Mainz, Germany Sales, Marketing & Customer Service

Rome, Italy Sales & Marketing

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Projects in Construction, 2012 (MWdc)

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Solar Power Plants Completed

Blythe (NRG) 21MW 2009

Cimarron (Southern) 30MW 2010 Sarnia (Enbridge) 80MW 2010

Copper Mtn (Sempra) 48MW 2010

Tilbury (Enbridge) 5MW 2010

El Dorado (Sempra) 10MW 2008

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Solar PV is Delivering as Promised

PV manufacturing costs declined from $5 watt in the 1990s to less $0.75/watt today

US Solar installations increased from a few hundred MW in 2000 to over 3,900 MW in 2011

Over 3,000 MW of solar currently under construction in the US with over 40,000MW proposed for development

Over 100,000 solar jobs per the 2010 US census

Manufacturing, supply-chain and development companies in all 50 states

US a net-exporter of solar products

Module costs declined by 30% in 2010 and 40% in 2011 – global manufacturing capacity doubled

Solar has done more with less:

Renewables accounted for 6% ($44 billion) of the $740 billion worth of Federal energy subsidies from 1960-2006

Temporary incentives versus permanent

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Crossing Over to Sustainable Markets

Conventional generation based on Lazard LCOE Analysis v 5.0; June 2011. Assumes coal price of $2.50/MMBtu and natural gas price of $5.50/MMBtu.

High end of coal and IGCC costs incorporates 90% carbon capture. Fuel sensitivity assumes +/- 25% fuel cost. Nuclear does not reflect decommissioning costs.

$0

$50

$100

$150

$200

$250

$300

Gas Peaking Coal IGCC Gas Combined Cycle

Nuclear

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Conventional, Base Cost

Conventional, Fuel Sensitized Cost

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1 2

5.2 5.5

15.8

13.6

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40%

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100%

2006 2007 2008 2009 2010 2011E 2012E

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Core Market Installation Capacity (GW), 2006-2011 -- Sustainable?

• Sources: EPIA, IREC, IMS Research, equity analysts & FSLR analysis.

Germany, France, Spain, Italy, California, & Czech Republic

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Spain PV Installation Capacity (GW), 2006-2012

• Sources: EPIA, IMS Research, equity analysts & FSLR analysis.

0.1

0.5

2.7

0.1 0.4

0.5 0.5

0%

20%

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2006 2007 2008 2009 2010 2011E 2012E

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Czech Republic PV Installation Capacity (GW), 2006-2011


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0 0 0.1

0.4

1.5

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100%

2006 2007 2008 2009 2010 2011E 2012E

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France PV Installation Capacity (GW), 2006-2012


0 0 0

0.2

0.7

1.5

0.8

0%

20%

40%

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80%

100%

2006 2007 2008 2009 2010 2011E 2012E

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0 0.1 0.3

0.7

5.6 5.5

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011E 2012E

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Italy PV Installation Capacity (GW), 2006-2011

• Note: 2010 demand shown here includes plants constructed under the Salva Alcoa decree.


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0.8 1.3

1.8

3.8

7.4

5.4

0%

20%

40%

60%

80%

100%

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German PV Installation Capacity (GW), 2006-2011


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1.3

4.6

1.8

0.6 0.6

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011E 2012E

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CA RPS Solar PPAs (By Year of Solicitation*) (GW), 2007-2011

• Source: IOU RPS Projects Status List, November 2011. Note: 2011 Solicitation still in progress.

• *Projects classified according to CPUC filings based on solicitation year, RPS

Includes CSP

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0.1 0.1

0.1

0.4

0.2

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011E 2012E

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CA DG PV PPAs (GW), 2007-2011

• Source: CPUC, CSI , IOU websites. Incorporates CSI program, RAM program, Utility PV program.

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What Explains the Pattern?

Market initially slow to take off while legislation is translated into an effective program and bureacracy is streamlined

Once market begins to function effectively, the incentive programs caused an over-supplied industry to quickly descend to develop project backlogs.

The unexpected size and velocity of market expansion combined with high import volumes alarm politicians, who worry about high cost and economic impact

Politicians react by sharply reducing the size of the program and in some cases making it less transparent

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Will New Subsidized Markets Turn Out Differently?


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2

4

6

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GW/yr

ROE (ex Czech) India Australia ROAPAC USA

RO Americas Saudi Arabia Morocco Sub-Saharan Africa Thailand

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Is PV Already at Grid Parity?

Retail electricity costs per kWh in US Dollars:

Australia: $0.25

Belgium: $0.29

Brazil: $0.34

Chile: $0.23

Denmark: $0.40

Germany: $0.36

Kuwait: less than one cent but…

Philippines: $0.30

Tonga: $0.58

India: Varies – net short supply

Middle East: Varies - dependent on the price of oil/gas/subsidies

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In order to thrive, the industry must:

• Continue to drive down costs to grid parity

• Increase efficiency

• Create and develop new markets

• Improve PV’s impact on the grid as an intermittent resource

• Transition away from subsidized markets and subsidy dependence

• Develop customer-focused solutions – clean, peaking energy is not enough

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Challenges and Questions for the Industry:

• How to price at grid parity levels at scale and without subsidies?

• How to accommodate PV into mainstream energy generation mix?

• How to ensure priority access to transmission and distribution?

• How to promote efficient land planning/permitting approval processes

• How to build additional transmission?

• How to ensure new and continued support from policymakers, regulators and utilities?

• How to support deep robust project financing markets and creditworthy off-takers?

• How to transition out of subsidized markets while preserving cash and assuring profitability

bryan crabb - gw solar symposium 2012

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