First Solar - Market Performance

Market Performance

First Solar lost $449 million, or $5.20 per share, in Q1 2012, primarily due to costs related to the restructuring efforts it announced in April 2012. However, by the third quarter of 2012, it posted a profit of $87.9 million, or $1.00 per share.

Historically, the low cost of First Solar’s modules has been the key to its market performance. The use of cadmium telluride instead of silicon has allowed it to achieve a significantly lower module cost ($0.67 per watt), compared to crystalline-silicon PV, which averaged $1.85 per watt in 2010.

In December 2011, the company's stock value dropped 20%, for a total reduction of 76% in 2011. The rapidly falling prices for solar modules, higher costs, and uncertainty over European subsidies for renewable energy, are thought to be key factors in the company’s drop in profits. In December 2011, citing a "structural imbalance" of the solar market and volatility in government subsidies of the industry, First Solar announced that in 2012 it would shift its focus away from selling modules in subsidized markets and to providing utility-scale PV systems.

As the company shifts its focus away from module sales to utility-scale projects, it will need to become price competitive with non-solar power sources, a move which its executives say will require the company to reduce manufacturing costs and optimize efficiency.