First Solar, the top performer of the year so far, has been giving its investors a google-like ascent up the stock index. A staggering 498% since the beginning of the year until COB yesterday and up 5.84% today. It's also looking a bit toppy at the moment, down 14% yesterday and up as much as 8.5% today. It reminds me of
Hoku Scientific , another solar company, which earlier in the year had massive upside and some spills too . . .
Anyway, if you want to know what's so special about First Solar, their first FUSP (
fairly unique selling point) is their thin film solar, pictured here, which is silicon free, using cadmium telluride.
As a backgrounder to thin film, I suggest reading this very digestible and i
nformative piece here written earlier this year by J. Peter Lynch on thin film solar stocks and their technologies. In hindsight, and not wishing to be overtly critical, it looks a little too bullish. 2007 has not been the year of thin film, but it is starting to get noticed. Heavy crystalline silicon is still king, by a very long way in solar photovoltaics.
Now back to First Solar
which has been in a dealmaking and
capacity expansion frenzy of late. The most interesting and little reported fact of all their publicity lately has been that "
... manufacturing costs are at an extremely competitive $1.19 per watt"
That's a very big deal, because as I
posted last year on solar costs in response to a piece published in the Economist, the lowest reported manufacturing costs were then $ 2.70 per watt. Still, whilst this may be helping First Solar's margins, we are still not seeing a fall in the retail cost across the industry - essential to achieving grid parity, i.e. where the cost of distributed home solar power equals that of retail electricity. That is born out by the
Solar Buzz index here, which shows the retail cost of modules per watt peak and no change to speak of over the previous 12 months. Indeed, it is even more expensive than 3-4 years ago. Confusingly however, I believe the index was recalculated over the last year as these figures back then were an average $1 higher.
So all in all, one must have great patience in waiting for the solar breakthrough.
Installation costs are certainly not going to come down soon because it is so labour intensive. All that really counts to the owner is the fully installed cost per watt and the annual yield in % that it generates. Efficiencies may be rising, still incrementally by 1 % a year or so. But this does not feed through to a greatly increased load factor, still only 10% in the world's solar market leader, Germany. Last year, Germany produced 0.3% of its electricity from solar pv, so there's still a very long way to go there, let alone for everyone else . . . !
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