Pedro Elio
Former Country Manager
First Solar
View from the Top

Technology Evolves in Leaps and Bounds

Wed, 02/24/2016 - 13:13

Q: How would you describe the contribution of First Solar in the development of a sector that has notoriously lagged behind compared to other renewable energy sources?

A: One of the biggest issues plaguing the solar sector is a lack of knowledge regarding the technology. The energy industry moves almost at a snail’s pace, so when it is confronted with a quick and dynamic sector like solar, it can be difficult to explain its evolution and benefits. It is a well-known fact that solar has changed and continues to do so since it mirrors very much the dynamisms of the electronics industry. In the new association, ASOLMEX, we bring together key stakeholders and the public sector in order share the advancements of technology and bring clarity to this sector. Competition in the solar sector is tough, and all players are making momentous decisions about their business plans that will have a noticeable impact over the coming years.

First Solar intends to plant seeds, which means we are selecting the best sites for early stage development projects. We are taking a portfolio approach by developing sites across Mexico; we see the great resources available in Sonora, the high demand in Mexico City, and the manufacturing and industrial growth in the Bajio as it clamors for energy. All these regions are fertile with possibilities and we look to develop ten projects to varying stages by the end of 2015. We are considering a combination of brownfield and greenfield developments, and our vision is to begin the construction phase by 2016- 2017, with operations beginning in 2018 once the market is well-established. We are looking forward to the energy auctions that will take place in 2015 and we believe we can be very competitive in this respect.

Q: What role does R&D play in ensuring the survival of a company in a market that is packed with developers, but with few megawatts installed?

A: In this sector it is important to showcase permanence and a track record. To achieve this, we keep a strong balance sheet and we manage our corporate debt in order to provide that certainty to end customers. Solar technology evolves in leaps and bounds, so it is important to keep up. This is why we have invested US$650 million in R&D over the past five years. In our research we strive to improve the efficiency of our products. Many companies measure the efficiency of their products in a static and standard way with a defined humidity, irradiation, and temperature. The reality is far from this, since each site is unique and has different variables. Through our research we have been able to adapt our products to these variables, and as a result our products are ideal for the country’s conditions. In the last few years we have invested heavily in thin film modules. There is a competitive price advantage of thin film modules over the traditional crystalline silicon PV modules. Through our research we have been able to improve and even surpass the efficiency of traditional modules.

Q: In this transitional phase, what are the measures that a company like First Solar must take in order to ensure a healthy client base?

A: As First Solar plants the seeds of the ten projects, it sees that it must be flexible when creating its client base. For instance, we can develop a 50MW solar farm with ten different PPAs of 5MW each. Furthermore, we can build solar farms for other companies or we can develop our own projects and sell the energy to third parties. The options are limitless and it is important to be inventive and innovative when working under these new rules. We wish to engage with industrial players and exchange opinions regarding technology, regulations, and uncertainties in order to win them over. The company has a strong track record, evidenced by a couple of projects that are representative of our commitment to solar technology. Topaz is located in California and has an installed capacity of 550MW, making it one of the largest projects that encapsulates all the technological advancements the company has made, and we have a PPA with Apple to develop a solar project in California. The off-taker will receive 130MW of electricity under a 25-year contract. This is one of the largest agreements in the industry to provide energy to a commercial end user. Moreover, this international experience will serve the company’s activities in Mexico, since it can use the expertise and knowledge acquired in other markets and apply them to the local market conditions.