Tuesday, May 20, 2008

JP Morgan Tech Show: First Solar Sees Lots Of Capacity Coming Into the Solar Industry (FSLR)

From Barron's Tech Trader Daily:

It was out the door and into the hallway for First Solar’s (FSLR) presentation at JP Morgan’s technology conference.

“We can turn a sheet of glass into a funtioning solar panel in less than two-and-a-half hours,” declared First Solar’s chief financial officer Jens Meyerhoff.

But what stood out to me was Meyerhoff’s observation that the market for solar technology is about to be hit with tons of capacity, in the form of amorphous silicon and polysilicon production.

That could spell much deeper cost competion, I imagine, though the company has sewn up a lot of existing business in long-term contracts, which it negotiated at prices below the market average. Leaving money on the table was the trade-off First Solar made to secure deals that would give the company long-term visibility, said Meyerhoff. The company has planned for there to be 6.5% declines in pricing in its industry on an annual basis....MORE