Tuesday, October 12, 2010

General Electric Takes Aim at First Solar NextGen, Adds CIGS to Solar Offerings:: Will Primestar CdTe Be Phased Out? (GE; FSLR; SI)

It appears that GE has drawn a bullseye on First Solar's back, comments after the jump. From Bloomberg:
GE Expands Solar Business as Immelt Seeks to Mirror Its Work in Wind
General Electric Co., which has become the world’s second-biggest wind turbine maker in less than a decade, is expanding production of two thin-film solar products to increase its renewable-energy business.
GE will work with Japan’s Showa Shell Sekiyu KK’s Solar Frontier unit to make thin-film panels coated with copper indium gallium and selenide, or CIGS, according to a statement today. GE’s PrimeStar Solar plant will make cadmium telluride-based thin film panels.

Chief Executive Officer Jeffrey Immelt has spent more than $1 billion on research and development of renewable power since acquiring Enron Corp.’s wind division out of bankruptcy in 2002. GE will offer total solar-system packages, panels, inverters and service contracts.

“We expect to grow faster than the market and we’re going to do it as a technology leader,” Victor Abate, who oversees GE’s renewable energy businesses, said in an interview, declining to give a revenue target. “This is a big-bet commitment that GE’s making in renewable energy, and the next big phase is solar.”

Global manufacturing capacity in solar panels is set to soar to 30,000 megawatts by 2013 from 10,104 megawatts last year, according to Bloomberg New Energy Finance. GE announced the move as the industry gathers at its biggest conference, Solar Power International, in Los Angeles.
Thin-Film TechnologyMost solar panels convert sunlight into electricity using silicon-based photovoltaic cells. Thin-film panels are made by coating glass or other material with cadmium telluride or CIGS. They account for about 15 percent of a $28 billion global solar- panel market and have been gaining as prices rise for crystalline silicon, according to Bloomberg New Energy Finance....MORE 

As was pointed out a couple years ago in "First Solar, PrimeStar Solar and Cadmium Risks (FSLR; GE)":
There has been quite a bit of misinformation flying around the blogosphere on the risk to human health from FSLR's use of cadmium in their photovoltaic cells. Cd is comparatively stable, FSLR's compound, CdTe, more so. There is some risk when it is exposed to fire but the fire has to be hot.* See note below.

The biggest risk is political. If one of the German ground arrays that use FSLR cells were to suffer a grass fire, it is probable that no cadmium would be released. It is also probable that FSLR would have a tough sell convincing the populace and politicians to allow any further deployment of CdTe. Cd is one of the six hazardous materials subject to the EU's "Restriction of Hazardous Substances Directive"...
Regardless of the reality there is the perception out there that CdTe will be outlawed, as exemplified by this boneheaded analyst (since relieved of his duties):
Hapoalim Cuts First Solar Target to $65 on Cadmium Telluride Risk; It Won't Matter and Probably Sets an Intermediate Low (FSLR):
The stock is at $105.35 +0.37 in subdued pre-market trade.
This fear is not immediate and for First Solar may not even be relevant in five years. I'm not sure Hapoalim understands the politics, the science or the company I'll explain after the jump....
The stock did set it's intermediate low that day, $100.19.
First Solar's management wants to stay ahead of the market and the regulators. So we have stories like this:
UPDATED: First Solar Looks to CIGS Technology (FSLR)
...Duh. It was January 2009 that we posted "First Solar Snags Rival Solyndra’s Top Scientist (FSLR)", Solyndra being the best funded of the CIGS companies....
Or, from the Hapoalim post:
Here's Ed Gunther putting on his gumshoes back on March 10:

First Solar skunk works

FSLRlogo [Sunnyvale, California USA]
CdTe development or CIGS entry?
I started looking for the First Solar, Inc. (NASDAQ:FSLR) research outpost in Silicon Valley sometime after the defection of Solyndra Chief Scientist Markus Beck to the Chief Technologist position at the world’s number one photovoltaic (PV) and thin film module manufacturer.
From First Solar skunk works
Marked only by a large sign with the street name and number, the unpretentious 10000 square foot (~929 square meters) building is located on a low traffic road in an average industrial park not far from the local Lockheed Martin facility. A First Solar sign, large or small, is no where in sight.
A $2500 building permit was issued by the City of Sunnyvale on 09-Sep-09 enabling Evergreen Engineering to complete a “RACKS & EQUIPMENT INSTALL FOR FIRST SOLAR”. Yes, that’s the same date as Nanosolar’s mass production announcement last year. Irony?
Where the lab has no name?
Supporting the skunk works designation, the location is unlisted on the First Solar
contact page unlike the project office across the San Francisco Bay in Oakland....MORE
As recently as March of this year GE was still pitching Cadmium:
Watch Out First Solar: "GE outlines R&D efforts with CdTe thin-film technology" (FSLR; GE)

Will CdTe be phased out? Nah. My bet is: GE uses CdTe in China to beat the Chinese silicon manufacturers and CIGS in Europe and California whose toxics law is based on the EU's.

Any takers?