Corrected from before.
CORRECTION: The previous version of this post incorrectly stated that First Solar was planning on taking its business to China. This was a misquote from the original article, which was explaining that First Solar intends to take their business to countries that are not heavily subsidized, such as China. Rather, countries in Africa, Southeast Asia, and the Middle East are likely candidate countries that have abundant solar resources that do not offer government subsidization.
Due to the way in which the United States Federal Government unequally subsidizes solar, natural gas, and coal, First Solar, one of the largest and most successful solar manufacturing and installation companies is looking overseas for a foothold in more profitable lands. In addition to creating jobs overseas, First Solar made a move that cuts me personally, as they laid off their research and development teams. Some 100 people in Santa Clara, many of which were colleagues and friends of mine, are now out of a job, thanks to their hard work and devotion toward developing the very technology that First Solar is now turning around and selling to other countries.
I’m reminded of the old Greek tale of the Brazen Bull, in which a metal-worker was hired to build an elaborate torture device by the king, only to become the very first torture victim the device was used upon while demonstrating how it was to work. But where the king of Greece at the time was fabled to be a tyrant, First Solar made this decision from simply a 15% revenue drop in the 2011 fiscal year. That’s it.

Apparently, 15% profit loss in a single year is enough for a major company in the U.S. to “call it quits” and shift its major business foundation to foreign soil. From the articles I’ve been finding, this decision isn’t even based on dwindling demand for Solar, but merely a dwindling government subsidy system that is no longer pouring milk and honey straight into First Solar’s gaping revenue-hole. Considering that the company made over $3-billion this year alone, it’s hard to fathom how these conditions are so bad.
On top of all of this hypocritical behavior from major companies such as this (claiming to be “creating jobs” then firing American workers), the major frustration point that I see is that First Solar’s plan is doomed to fail.
Please, anyone from First solar reading this, I challenge you to contact me and prove me wrong…
China is currently in the process of purchasing a large number of solar-modules for its own use, as well as making several module-manufacturing facilities on its own. Almost all of these plants are directed toward creating modules that use silicon-based solar cells, which are about four to five times as energy-efficient as thin-film modules (which is what First Solar is trying to peddle). As a result, the price of silicon modules has dropped while their relative efficiency has slowly increased.
First Solar’s claim is that they “hope to make modules in the $1.40 to $1.50 per Watt range.” However, silicon-manufacturers are already achieving that manufacturing cost, while at the same time producing products that gather many times more energy. Wholesalesolar.com sells silicon modules at roughly $1.30 to $1.50 per Watt, by comparison.
If I want to install a solar array in order to power my facility, I’ll need to buy five-times the modules from First Solar as I would from say…Sanyo, or Sharp, or some other silicon module-manufacturer. Now, if the thin-film modules were five-times cheaper, then this still doesn’t add up, because I’ll also need five times the steel framing to hold up the modules, five times the wiring to connect the modules, and five-times the maintenance from these frameless-glass panes snapping like peanut brittle in the wind.
Here’s a mathematical example:
Say I want to build a solar array and I’m trying to measure the cost in terms of major components: modules, steel, wiring, and other (such as inverters, labor, etc.). The purpose of this is to show how much the module’s efficiency effects the costs. Let’s take the first letters to represent each group of cost, m for modules, s for steel, w for wiring, and o for other. I’ll add a capital T in front of the variables for the thin film equation. So for comparison, the two costs for a system are as follows:
Cost for normal system: C Cost for Thin-film System: TC
C = m + s + w + o TC = Tm + Ts + Tw + To
Now, we can assume that the rate-costs of steel, wiring, and everything else is the same, and the amount is only based on the efficiency ratio of thin-film modules to silicon modules. Since a silicon module is about 20% efficient and a thin-film is at best 5% efficient, the ratio of efficiencies, N, is equal to this:
N = efficiency of thin-films / efficiency of silicon modules = ~5%/20% = 0.25
Given this ratio, we can then set the thin-film material values based on the ratio. A forth of the power output requires four times the materials to create an equally-producing array. Therefore:
Ts = 1/N * s = 4s
Tw = 1/N * w = 4w
To = 1/N * o = 4o
There are now only two remaining unknowns to solve in this system of equations, so we need another condition. Since the goal of this example is to compare how much additional material costs are involved by switching to thin-films, the next step is to set the two parent equations equal to each other. This allows us to solve for what the thin-film modules need to have their prices set to in order to break even with a standard silicon module in terms of cost and production. This is the same break-even point that the customer would see. Setting the equations of cost equal to one another:
C = TC
m + s + w + o = Tm + Ts + Tw + To
Since we solved for Ts, Tw, and To, we can substitute:
m + s + w + o = Tm + 4s + 4w + 4o
Now we solve for Tm, the cost of the thin-film modules in terms of the costs of the rest of the array.
m + (s + w + o) = Tm + 4(s + w + o)
m –Tm = 3 (s + w + o)
Therefore:
Tm = m – 3 (s + w + o)
Ok, so what does that mean for the average person? In order for the thin-film modules to break even in terms of the customer’s costs, their total cost must be equal to (or less than) the cost of conventional modules, MINUS three times the cost of the rest of the array and labor. In a typical commercial or utility-scale solar array, the modules make up roughly 50% of the entire cost of the array. I’ll use this to then deduce that for the rest of the typical solar array, all other equipment, wiring, labor, and steel…also makes up the other 50% of the array. That allows us to set (s + w + o) equal to m.
Tm = m – 3m
Anyone with experience in Algebra can now see how screwed up this is getting…
Tm = -2m
When the final comparison is reduced, we see that in order to “break even,” a solar customer wishing to use thin-film modules would have to somehow acquire them for negative money…
To put this in more everyday terms…I wouldn’t install thin film modules on any array I build, even if the modules were given away to me for free. In fact, even if free, I’d still take a loss. First Solar would have to pay me twice the cost of conventional modules just for me to break even using their product.
Therefore, choosing to go with thin-film modules results in more materials needed to erect the same amount of power harvesting ability, which means that it’s mathematically impossible to save money as a customer by switching to thin-film technology. The problem is…both modules are almost the same in terms of end-cost to the customer.
So now that we have established the “real reason” that First Solar is hurting for revenue (which…really, they’re not), we can more clearly understand First Solar’s rationale…they’re desperate. Incidentally, this is also pretty much the same reason that Solyndra went out of business, as their modules produced about half the power of a normal silicon module, at only four-times the cost.
The ultimate reason that I say that their plan won’t work is their decision to stick with their thin-film CIGS technology until the very end. This was a brilliant move in the late 90’s and early 2000’s, when silicon was extremely expensive and hard to buy, but now that the pricing bubble has collapsed, sticking with CIGS is financial suicide.
I’m sorry First Solar, but your product is inferior in terms of efficiency and it mathematically doesn’t make sense to purchase from you (I have had to explain this to several of my employers throughout my career). Your decision to flail around the world, helplessly trying to catch your last breaths of business has only gathered the attention of smaller business entities like me. It’s been like this for years, you just never took the time to look up and re-assess your surroundings.

UPDATE: Since I am kind of a math-enthusiast, I took the time to re-solve that example I did above for all possible variant conditions of thin-film efficiency as well as module-cost. Suffice it to say, without a significant change in the solar market, thin-film technology is pretty much hosed.

The graph above shows the same resultant coefficients that represent the ratio (Tm/m), or the “relative cost of thin-film modules” divided by the “cost of conventional silicon modules” necessary for the two technologies to break even. Basically, a positive fractional number, like 0.67 implies that thin-film modules would have to be sold at a 33% discount compared to conventional modules, assuming thin-films produce on average 35% of the energy of silicon modules AND those same silicon modules happen to cost 85% of the entire array installation.
A value of zero indicates conditions in which thin-film modules would have to be given away for free in order for the customer to break even. That means that the negative values are conditions in which the module manufacturer would have to pay the customer to take the modules off their hands.
The highlighted red square shows roughly where the thin-film module industry currently stands, and the arrow indicates the direction that the industry is heading…notably that of more efficient thin-films and cheaper modules overall. The only ways that thin-film manufacturers have a chance of staying in the game is if they either very quickly find a way to boost their module’s output efficiency, or pray to the sun god that silicon becomes scarce again.