First Solar invests $20MM in Generation 2 solar panels

Toledo Business Journal, Feb 01, 2003

Ground will be broken in arc or April at First Solar, LLC for an expansion project. Plans include a new production line, a 50,000 square foot addition, and updating current equipment. "We'll be investing over $20 million in new equipment," explained Jim Flanary, COO of First Solar. "It's a combination of upgrading, replacing, and modifying current equipment." Planning began in early 2002, and the company estimates it will be in full production by the fourth quarter of 2004.

This expansion is more than an increase in capacity. Up to this point, First Solar was still in Generation 1, a term the company uses to describe its initial commercial production phase of its solar cell production process. Through that processing, First Solar has proven commercial viability by having the capability of producing about two megawatts of production.

Generation 1 has enabled the company to come up the learning curve enough to be able to identify key improvement areas to significantly impact the economics of its process. It was designed as a proof-ofconcept that First Solar could do highvolume production without sacrificing quality. Generation 2 will now allow the Perrysburg facility to achieve a 25 megawatt production run rate.

"Our goal is to become the high-volume, low-cost producer of solar energy," stated Flanary. "By putting this Generation 2 process in Perrysburg, we will have one of the highest volume thin film process capabilities in the solar arena."

Flanary went on to explain that most of the solar panels made today are silicon-based, where individual silicon wafers are made and then put together on a module, which is a costly, labor-intensive process.

This investment is being made to implement key changes in First Solar's process that are designed to enable the company to produce solar panels in a highspeed, high-volume environment.

The company's research and development (R&D) works in two phases. Flanary explained: "We have a research and development group that looks at the science behind the product. They are looking for ways to improve the science and technology understanding, so that we can then develop that technology for commercialization. And then we have an engineering group that takes the science and develops it into a commercialized process."

The company has three locations. First Solar's R&D group is located on Eckel Junction Road in Perrysburg Township. The engineering group is on Cedar Park Boulevard in Perrysburg Township, which is also the location where the building space will be added. The company's sales and marketing office is located in Phoenix, Arizona.

Without some special efforts from the Township, the Wood County Economic Development Commission, and the State, this project could have moved to a new location in another state.

"We've worked really hard to try to keep Gen 2 in Ohio. It's been a year of activity, working with the County, the Township, and the State that's culminating at the State level to keep it here. And it's going pretty well," explained Judy Williamson, vice president finance & administration for First Solar. "The township and the county have come to the table in a very good way."

Flanary explained that the three top markets in the world for solar panels are Japan, Germany, and California. "We've looked at markets within California that specialize in putting solar panels on commercial rooftops," stated Flanary. "Other markets that we've taken advantage of are basically utility markets... We have deployed quite a few products in Arizona. And so we'll continue to take advantage of the utilities market where solar provides alternative or green energy." Continuing with the commercial rooftop market, First Solar recently introduced a product called EZ MountTM. Essentially, EZ MountTM is a non-penetrating roof mounting system, that reduces the cost of installation and the mounting material, and allows solar panels to be installed on flat roofs at a much lower cost than traditional mounting systems, according to Flanary.

First Solar currently has approximately 140-150 employees. Twenty new jobs will be created over the next five years. "Gen 2 is a highly automated process, and so we're able to leverage our current workforce, and we'll significantly reduce the nonproductivity of our current process," Flanary stated. "And we'll be able to produce almost ten times more volume, essentially, with a slightly higher headcount."

The 75,000 square foot Cedar Park facility is currently being leased from Vista Solar. Vista will be investing in the 50,000 square foot building addition; First Solar will be responsible for the rest of the investment in this expansion. Vista is working with Rudolph/Libbe on the building addition.