First Solar provides big fish for solar development

Even if it should have been, First Solar’s decision to land in Mesa wasn’t an easy one, according to pretty much everyone involved in the deal.

First Solar (Nasdaq: FSLR) has been the 800-pound solar gorilla in the Valley that everyone wanted to be here, but somehow never was. Its headquarters are here, along with about 200 employees, but the economic development folks wanted a U.S. manufacturing facility, which, until this morning, was in the solar mecca of Ohio.

Barry Broome, the president and CEO of the Greater Phoenix Economic Council -- which helped bring the new facility to Mesa -- said when GPEC was first calling on companies to lure the solar firms to the region, First Solar inevitably came up.
“One of the questions we got asked all time was how come First Solar didn’t have a facility there,” he said.

Not having a First Solar manufacturing facility in the Valley was a detriment to other companies coming here in GPEC’s early recruiting days, Broome said.

There were reasons for that. First Solar’s big market initially was in Germany, and one of its many manufacturing facilities is there. It went to Ohio, and that’s pretty close to the major East Cost markets like New Jersey that are snapping up panels.

Then came the wave of renewable energy standards that states began passing (like Arizona’s), that require utilities to get 15 percent of their power from renewable sources by 2025. The problem was that a lot of the companies that had agreements to develop the power didn’t have the funding, particularly in 2008 when the recession hit.

At that time, First Solar, which was a big hit in Germany, had a lot of money, and began building its Southwest power portfolio by buying everyone else. Companies such as OptiSolar Inc. and NextLight Power were bought out.

By the end of 2010, First Solar had become the dominant player in providing photovoltaic panels to utility companies.

The problem with that pipeline is that all the projects were in California and Arizona. First Solar didn’t have nearly enough North American panel production to meet the demand. It was producing 250 megawatts annually in Ohio, and needed 500 megawatts or more to get through the next five to 10 years.

Based on just the supply chain, Arizona was a logical choice, given how much weight solar companies put on being close to the final destination of their products.

“You can imagine the productivity gains we can have when we can take a piece of glass and have a solar panel in 2.5 hours, and then have it on a truck that would go just a few hundred miles away to a project,” said Bruce Sohn, president of First Solar.

The company had reasons to want to be close to home, and the Valley had a vested interesting in making sure this one didn’t get away. If it landed in Austin or Albuquerque, it would have been a blow to the whole effort. Now, Arizona officials say the decision puts them on an elite level.

“With First Solar, with Suntech, with Power-One, we’ve got some of the top-tier manufacturing plants in the solar industry,” said Don Cardon, president and CEO of the Arizona Commerce Authority.

SOURCE: First Solar provides big fish for solar development | Phoenix Business Journal