Yola



TABLE OF CONTENTS

INTRODUCTION 3

TABLE OF CONTENTS

INTRODUCTION

• Executive summary 3

• Business Case 3

• Mission 4

• Vision 5

• Problem Statement 5

• Timeline 5

EXTERNAL ASSESSMENT _

MACRO ENVIRONMENT

• Economic 5

• Political/Regulatory 6

• Demographic 7

• Socio-Cultural 7

• Technology 8

• Natural Environment 8

• Global 9

• The Red Thread of the Macro Environment 9

COMPETITIVE AND COMPETITOR ENVIRONMENT __

• Industry Profile 10

• Economic Structure 11

• Industry Life Cycle 12

• Porter’s Five Forces 13

• Profit Pool Analysis 15

• Industry Attractiveness: Red Thread of the Industry Analysis 16

• Strategic Group Analysis 16

• Key Success Factors 17

• Porter’s Competitive Analysis 18

• The Red Thread for Competitive Analysis 19

INTERNAL ANALYSIS __

• Leadership and Culture 19

• Organizational Structure 20

• Value Chain Analysis 21

• Resources, Capabilities and Core Competence 24

• Financial Analysis 25

• Red Thread of the Internal Audit 25

STRATEGIC RECOMMENDATIONS __

• SWOT Analysis 26

• SWOT Strings 26

• General Strategic Orientation 27

• Grand Strategy Clusters: Attractiveness 27

• Grand Strategy Selection Matrix: Investment 28

• Strategic Recommendations 29

• Managerial Implications 30

• Competitor Implications 30

REFERENCES 31

INTRODUCTION

Executive Summary

This report details the solar energy industry, an industry that is poised for enormous growth. As one of the sources of Renewable Energy, the solar initiative finds itself at a disadvantage based in the perception that it is the most expensive in terms of cost per watt of energy produced. Photovoltaics, based on silicon grade semiconductor materials, absolutely meet this perception. But thin film photovoltaics, the Holy Grail of the Solar Industry because they are not based on expensive silicon, have been slow to come to market. That is, before First Solar. First Solar has put the solar energy industry on notice that they are a low cost supplier of electricity and they have built in plenty of manufacturing capacity to meet demand. The following report details the industry and First Solar, the competition and the facts. An industry bent on growth, the global recession of 2008 has set back the solar energy industry and transformed them from a under supply market to an oversupply market. Normally, this would crush most companies as the weight of unfulfilled orders would stop production lines and result in heavily discounted products. But this has not been the case at First Solar. First Solar has taken the necessary steps to build capacity but to also find an outlet for the capacity. The net result is that they are the market leader and their stock today trades at nearly 9 times greater than their competitors. But First Solar needs strategic direction…and to do this a full SWOT analysis was conducted and the SWOT strings point to concentrated growth strategies needed for the future. The recommendations for expanded manufacturing and new markets are a direct result of this analysis that also includes managerial and competitor implications. First Solar is poised for future greatness and needs a stable, strategic game plan, especially in t he economic downturn, to achieve it.

Business Case

The business case for renewable energy is one of first a consciousness that renewable energy has advantages for them. Many companies are starting to realize that energy from renewable resources is increasingly available and cost-competitive. For instance, 20 percent of Starbucks Coffee stores in the United States use green power, and IBM extracts over 100 million kWh per year from renewable energy. Companies are discovering that there can be a strong business case for using renewable energy or “green power,” and are seeking to obtain associated business benefits[i]. Some of those benefits are soft benefits. Renewable energy can strengthen a company’s relationships with its various stakeholders like customers and local communities by signaling that it cares about climate-related risks. This is one of the reasons why firms such as FedEx Kinko’s and Staples use renewable energy in many of their stores[ii]. But others use renewable energy as a means to reduce overall costs, emissions and to hedge against the high price of fossil fuels.

An important concept is the perception of cost and payback as most feel that renewable energy is not cost competitive. It’s a question of Return on Investment:

With a combination of city, state, and local incentives, homes and businesses in New York, New Jersey, Delaware, and Colorado can make all their money back from a solar installation in three years.

The new hot market for solar electricity is Pennsylvania with incentives covering 60% of the installation cost.

Solar hot water is now a one-year payback in Florida and southern Texas.[iii]

In 2008, the global solar market increased 50% and the US advanced to third position globally.  The market demand for solar power has grown an average of 30% per year for the last five years. The US government has just changed the solar tax credit to a solar grant, funded by the federal stimulus bill.  Additionally, hundreds of states and municipalities have launched their own incentives on top of this federal grant. New Jersey, Pennsylvania and others are throwing fuel on the solar fire with generous incentives that are driving adoption at faster rates per capita than California.  Global Solar Center has conducted a 50-state survey of solar incentives and adoption, which has revealed surprising results.  States that were solar laggards have now become solar leaders. “With incentives on the federal, state and local level along with the support and expertise offered by our members, like Global Solar Center, this is a great time to go solar,” said Monique Hanis, spokesperson for the Solar Energy Industries Association (SEIA) in Washington, D.C. [iv]

The business case for renewable energy sources is a well documented. Through the Recovery Act, President Obama is investing more than $80 billion in clean energy. This money is putting tens of thousands of Americans to work in developing new battery technologies for hybrid vehicles, making our homes and businesses more energy efficient, doubling our capacity to generate renewable electricity, and building a smart, strong, and secure electricity delivery system.[v] In addition to being a cornerstone of US Energy Policy, earlier this year, analyst Adam Morehead said, “We need to further develop our ability to capture solar energy while avoiding unsustainable manufacturing materials”[vi] This is the crux of the renewable energy conundrum. The key will be to be able to not only make renewable energy affordable to manufacture and install but to be able to use and recycle materials in the process of producing that energy. This will have the most profound impact on reducing costs and impacting the environment.

Mission

To create enduring value by enabling a world powered by clean, affordable solar electricity[vii].

Vision

First Solar, Inc. (Nasdaq:FSLR) manufactures solar modules with an advanced thin film semiconductor process that significantly lowers solar electricity costs. By enabling clean renewable electricity at affordable prices, First Solar provides an economic alternative to peak conventional electricity and the related fossil fuel dependence, greenhouse gas emissions and peak time grid constraints.[viii]

Problem Statement

In a market that has gone from under supply to over supply, how can First Solar continue to lower the cost of solar modules to gain a dominant position in the market and grow as a company while the industry is in an oversupply situation?

Timeline[ix]

1990 – Harold McMaster started Solar Cells Inc. experimenting with different ways to put photovoltaic materials on glass. John Walton (of the Wal-Mart family) was an early investor.

1999 – McMaster sells Solar Cells to an investment firm headed up by Walton. The firm is reincarnated as First Solar.

2000- First Solar is moving ahead with thin film photovoltaics based on Cadium Telluride (CdTe).

2002 – First Solar makes their first commercial product available from their Perrysburg Ohio Mfg facility.

2005 – First Solar is up to 25MW of production capacity and has started construction on their Ohio plant expansion.

2006 – Ohio Plant produces 75MW of capacity. Construction started on Oder, Germany facility

2007 – Announce expansion into Malaysia of $150 Million USD in additional capacity

2008 – Malaysian expansion to 768 MW of capacity distributed over 4 plants

2009 – First Solar achieves over 1 Gigawatt of production capacity. Reduced manufacturing costs of < $1 per watt are the lowest in the industry.

EXTERNAL ASSESSMENT

Macro Environment

Economic

The U.S. economy has started to recover from a recession that many economists believe officially started in December of 2007.[x] This recession, which has had a major impact on credit and the ability to get credit to finance projects, has significantly affected the Renewable Energy sector. To remedy this, President Obama passed the Stimulus Bill in early February 2009 that includes provisions that will jumpstart greatly the renewable energy industry and particularly the solar energy segment.[xi]

The first sections of the bill extend the production tax credit (PTC) and offer the ability for developers to take the investment tax credit (ITC) in lieu of the PTC. The industry will also get what it has been advocating for since January — monetization of the tax credits in the form of grants. Because of current market conditions, it is difficult for many project developers to find financing due to the uncertain future tax positions of potential investors in these projects. The bill would allow facilities to elect to claim the investment tax credit in lieu of the production tax credit. This proposal is estimated to cost US $285 million over 10 years. Current economic conditions have severely undermined the effectiveness of both the PTC and ITC, so the bill would also allow taxpayers to receive a grant from the Treasury Department in lieu of tax credits. This grant will operate like the current-law investment tax credit. The Treasury Department will issue a grant in an amount equal to thirty percent (30%) of the cost of the renewable energy facility within sixty days of the facility being placed in service or, if later, within sixty days of receiving an application for such grant. An applicant will qualify for a grant if an application is received by September 30, 2011. The amount of money that will be made available for this program is still unknown [xii] partly due to the difficulty in estimating how many people or businesses will take advantage of it. If the program has intrinsic value like the “Cash for Clunkers” program, then monies will be made available and a second round of extended funds could even be afforded.

In addition to those measures, manufacturers in the wind, solar, storage, efficiency and transmission spaces will be able to take advantage of a new 30% tax credit designed to benefit manufacturers of advanced energy property. Caps on the tax credits for residential solar hot water, geothermal heat and small wind systems will be removed under the new bill as well[xiii].

For homeowners and businesses alike that may entertain the idea of using renewable energy, most of the fundamental decision making is economic and rooted in affordability and payback.

Political / Regulatory

The current stimulus bill (The American Recovery and Reinvestment Act of 2009), an outgrowth of the economic difficulties during the former Bush administration among them the skyrocketing cost of oil ($147.02 per barrel July 11, 2008[xiv]), makes provisions for renewable energy. These Bush administration events set in motion demand for alternative energy and became a rallying cry during the 2008 McCain Obama presidential campaign.

Prior to this, there have only been a handful of energy legislative acts[xv] and most have been reactionary to events or crisis of the time. In the 1920’s and 30’s, the acts were related to the sale of electricity and hydro electrics. In 1946 and 1954, the Atomic Energy Act paved the way for commercial nuclear power. It wasn’t until our mid 70’s OPEC oil crisis that Energy Conservation and Policy act develop fuel economy standards and the Strategic Oil Reserve. In 1977 the Department of Energy was formed and in 1978 is the first legislation in the National Energy Act, which makes provisions for an electric market from alternate power producers. The 1980 Energy Security Act puts the first face on Renewable Energy including Solar. Aside from the 1982 Nuclear Waste Act, and the 1992 Energy Policy Act regarding alternative fuels for government vehicles, nearly 25 years goes by to 2005 that Energy legislation appears again. This is partially because states individually took on a more empowered role in the development of energy and incentive policies, like California in 2007 with their Million Solar Roof Initiative[xvi]. Today renewable energy incentives vary from state to state, with states like California, New Jersey, Pennsylvania and Florida leading the way for introduction.

Demographics

Fossil fuels (coal, natural gas and petroleum), which account for most of the energy consumed in the U.S., claim crude oil petroleum as the largest single source of energy. In fact, the U.S. as a whole is the largest user of crude oil petroleum at 19.498 Million barrels per day[xvii]. The chart below details U.S. Consumption by Energy Source:

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Renewable energy represents the smallest segment with Solar only 1%.

Socio/Culture

The U.S. people as a whole have experienced a number of times of economic crisis brought on by oil embargos, political unrest or an act of God (Hurricane Katrina) that has adversely impacted U.S. way of life either economically or in restriction of freedoms.

This has spurred on a conscious movement (along with the concepts and publicity of global warming (from former VP and alarmist Al Gore who I always see driving a large limousine to his Global Warming Presentations), greenhouse gases, the thinning ozone layer, and the Kyoto Protocol (chlorofluorocarbon ban)) of becoming more “green”, reducing one’s carbon footprint and contributing towards helping the environment. This climate has spurred the development of hybrid gasoline/electric cars with improved fuel economy that cost more to buy but have a willing clientele who pay for the upgrades. The American people, who may not be fully cognizant of the ramifications of Renewable Energy, are full engaged and are culturally adept at understanding that actions that they take locally have a true impact globally.

Technology

The technology of Renewable Energy is based on using what the environment provides and transforming it into a usable entity. Each and every form of Renewable Energy proscribes to this philosophy, whether its natural steam well caverns for geothermal energy in Iceland, the windy shores of Lake Michigan for Wind Power or the scorching California sun for Solar Power. Key is that the power generation source does not alter the environment…so the hydroelectric turbines at the bottom of Niagara Falls don’t turn if the water level is low or the feeding river is frozen. This makes the technology of delivered power susceptible to changes in the environment; this does not exist with fossil fuels, which burn as long as they are present. It also makes Renewable Energy in total somewhat less reliable. That being said there is still a significant role for Renewable Energy because each percentage of alternative energy reduces the dependence on crude oil and petroleum[xviii].

The Solar Power Renewable Energy is based on two concepts: either the use of photovoltaic materials which by their nature have the capability to transform sunlight energy into electricity (flowing electrons) or the concentration of the sun’s rays to heat water, make steam or drive a turbine. Solar concentration is normally relegated to either a commercial supply plant or to home hot water heating systems. Photovoltaics are more widespread in use and have the ability to provide direct electricity at the point of usage, like at a house for any electric need. Photovoltaics, or PV for short, are an incredible field of science in and by themselves.

Within the realm of Photovoltaics, the science is further divided into two different material types, silicon and non-silicon. One of the best photovoltaic materials known to man is silicon. An abundant material in nature, a purified grade needs to be used in order to be an effective energy producer. Since this same purified grade is also used for semiconductor computer chips, the best grades of material are reserved for semiconductors and the lesser grades are used for photovoltaic. This makes solar power tied to the material flow and general availability of purified silicon. The second material type, non-silicon, is photovoltaic that are based on thin films of exotic metals, which in certain combinations exhibit photovoltaic nature. Although the metals used are rare, the overall cost factor compared to purified silicon is a fraction of the cost. Thin films essentially represent the Holy Grail of Photovoltaics.

Natural Environment

Renewable energy represents the ingenuity of mankind to use his surroundings to the best possible use without being destructive to those surroundings. Unlike strip mining coal or cutting down forests of trees, solar, wind, geothermal, hydroelectric and biomass energy sources do not tear down or cause any ill effects to the surroundings. Since these energy production sources coexist with nature, they are fondly looked upon as sources of energy that shine as samples of a humanity not pillaging the earth. Unfortunately, the aggregate amount of energy produced today is small and until more renewable energy installations are made (at albeit a somewhat higher cost than fossil fuels[xix]) it will be considered to be a minor contributor.

Global

Renewable Energy represents a global phenomenon similar to what was seen in the world with the usage of cell phones. The western world, with a high degree of infrastructure, transmission wires and fiber optic cables was the last to adopt cellular phone usage because it had a high degree of infrastructure. The eastern and third world locales readily accepted cell phones as it brought mass communication because of their lack of infrastructure. Renewable Energy can be thought of similarly. A wind turbine in a desert village can provide all the electricity they need to run lights, water pumps and all household items. There is no need for a power generating station and high-tension transmission lines. That commune in southern Africa can now have all the power they need from just a few solar panels and minimal storage batteries. In these applications Renewable Energy represents a major dislocation and an opportunity for the lesser global communities to have a higher standard of living while providing no negatives to their surrounding environment.

Here is further evidence just in the Solar Power venue. The world leader in installed PV market share is Germany with 43% and Europe overall has 65% market share. The US Market share is 18% and Japan and the rest of the world (including China, one of the faster growing locales) is 16%.[xx]

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The Red Thread of the Macro Environment

With the “green” sentiment running high and the infusion of capital from the latest stimulus package, the opportunity for the expansion of the renewable energy market has never been greater. Each one of the industries has important considerations, but the Solar Energy market has lagged behind and is ready to take off. The question will be can manufacturers produce products low enough in cost that they can gain traction on their own without incentives.

Competitive Environment

Industry Profile

The Photovoltaic or PV industry is one that has been experiencing significant growth.

Fueled by government incentives, the rising cost of energy during the Bush Administration, and the growing concerns over global warming and greenhouse gas impact on the climate, the PV industry in the United States experienced two consecutive years of enormous growth from 2005 to 2007 that resulted in a 10X increase in the industry since 1998[xxi]. In addition, the number of active PV manufacturers and/or importers that ship PV cells and modules increased from 41 companies in 2006 to 46 companies in 2007. These new companies increased overall PV production to meet the expected increase in demand internationally.[xxii] The following chart[xxiii] shows PV cell and module shipments from 1998 to 2007:

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Not including solar concentration products, PV cells and modules are divided into two main categories by product type: (1) crystalline silicon, a type of photovoltaic cell/module made from a wedge of single-crystal or polycrystalline silicon, based on crystal-producing processes such as single-crystal, cast, and ribbon; and (2) thin-film, photovoltaic cell/module made from layers of semiconductor material, such as amorphous silicon (a-Si), cadmium telluride (CdTe), or copper indium gallium selenide (CIGS)[xxiv]. The following chart shows shipments of the two different types of PV since 1998[xxv]. Note the growth in the thin film segment since 2004.

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The explosive growth of PV led to silicon price destabilization and raw material shortages. The result has been an opportunity for the thin-film market companies to create new innovations to close the gap between thin-film PV and conventional crystalline silicon PV[xxvi].

Economic Structure

As stated before there are 46 companies producing photovoltaic cells and modules to the industry. Of those, 10 companies hold 60% of the total market share with First Solar having the largest single market share of 12.8%. The other significant players in the industry are Suntech, Sharp Electronics, Q Cells, Yingli Green Energy, JA Solar, SunPower, Kyocera, Motech Industries and Gintech Energy[xxvii]. Here is the top 10 by share:

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Besides First Solar which has about the twice the market share of the next competitor, the other 9 nine firms have nearly the same share between 4 – 6%. Part of the reasoning is that firms like Suntech who are dependent on silicon may be restricted to access unless they vertically integrate. First Solar uses thin film technology that does not rely on silicon.

From McKinsey’s report on the Economics of Solar Energy[xxviii], solar power faces challenges common from emerging industry sectors. An important aspect in this segment is the ability to continue to drive down costs. By reducing manufacturing costs and improving the product while maintaining a strong raw material supply a low cost supplier will emerge.

Industry Life Cycle

All product life cycles are comprised of four main stages: introduction, growth, maturity and decline. [xxix] The solar power industry life is clearly in its infancy. The Solar Energy Industries Association (SEIA) provides evidence of the industry growth with

-- Overall 16% growth in capacity1,265 MW and MWTh added in 2008

-- Cumulative capacity now 9,183 MW and MW

-- Overall 9% increase in annual capacity additions81% growth in on-grid PV installations

-- 50% growth in solar water heating installations[xxx]

The SEIA also shows the cumulative growth[xxxi] over the past 8 years confirming the notion that the solar energy industry is on a path of great growth.

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But it’s McKinsey’s report on the Economics of Solar Power[xxxii] that forecasts that solar power, long derided as uneconomic, is gaining ground as technologies improve and cost of traditional energy rises. They forecast that by 2020, global installed solar capacity could be 20x to 40x today’s capacity. The McKinsey forecast, year by year:[xxxiii]

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Porters Five Forces

The solar energy industry, which has already experienced substantial growth, is on the precipice of unprecedented growth. With any industry in this phase, there will be a scramble for companies to invest and make a play for leadership based on low cost, technologically advanced products before consolidation occurs and the largest players emerge. Initially fueled with government incentives, the success of the industry will be truly gaged as incentives disappear and a competitive cost energy source takes hold.

The Threat of Entry – High: With the number of PV Manufacturers increasing from 41 to 46 between 2006 and 2007[xxxiv], it is clear that the threat of entry is high in the industry.

Companies joining the industry would most probably shy away from silicon based PV as the material is in short supply and the cost to vertically integrate is very high. But, thin film PV carries a lower raw material cost and in some cases a significantly reduced manufacturing cost a (see Nanosolar [xxxv]or First Solar[xxxvi]). In addition, companies that are fundamental in semiconductor computer chip production, particularly advanced tool vendors like Applied Materials, Veeco and Rigaku have made their way to the PV manufacture table. These companies have the tooling and expertise to do everything from manufacture in turnkey systems to Metrology (Quality Control Testing). With forecast growth this number of entrants will only grow.

Bargaining Power of the Supplier – Moderately Low: The bargaining power of the supplier with respect to the solar energy industry can be considered low. The general products of the industry are solar cells and modules and although there are efficiency differences between them the only real difference comes to supply and the final size of the installation. By and large the solar components are more similar, even in appearance than not and many times it’s a question of availability at the time a project is being done. Suppliers who have generally low bargaining power are considered to be good for the overall business/industry.

Bargaining Power of the Buyer – Moderately High: The bargaining power of the buyer for the solar energy industry is moderately high. Although the buyers are buying a single entity, solar panels or solar modules, they still have a wide choice of suppliers to choose from. They can also choose to subcontract any portion of an installation, making their power to demand to schedule much higher.

Solar energy companies commit to supplying projects that are fueled by capital money. If at any time they cannot close a commit, projects can be bought or sold not unlike trading done in the Engineering Project Management Field (CE Lummus, Foster Wheeler, Bechtel, for example).

Threat of Substitutes – Moderately Low: The threat of substitutes to the solar industry is moderately low based on the application. For example, roof mounted PV on a residential home typically does not have a substitute as a wind power or geothermal option generally doesn’t exist in a residential neighborhood. However, at the utility scale level a commercial wind farm could definitely serve as a threat to a solar installation based on the weather and airflow conditions.

Rivalry Among Participants – Moderately High: The rivalry among the participants in the solar industry is moderately high given the fact that 9 of the top ten suppliers have market share numbers within a whisker of each other between 4 and 6%.[xxxvii] This makes for a very intense rivalry among the participants meaning that they will need to differentiate themselves from their competitor in order to survive and win. In the solar energy industry, that means driving down costs of solar cells and modules to win projects. In a time when capital spending has significantly tightened and the industry in and by itself is facing an oversupply situation because of less ongoing projects, those companies with the lowest cost structures will be the survivors and winners.

Profit Pool Analysis

The profit pool analysis presented looks at the value chain of the infant solar energy industry. Because the industry uses two different technologies, silicon and thin film technology, the profit pool analysis cuts across a value chain that has to necessarily encompass both competitive positions. To develop this analysis, the two articles by Gadiesh and Gilbert are used as the cornerstone as they present the fundamental business concept of “Profit Pools” through case study and strategy discussion[xxxviii].[xxxix]

Assumptions

In order to develop a coherent Profit Pool Analysis, the value chain was reduced to four components – the silicon raw material industry which encompasses the silicon raw material, ingots and wafers used for the PV industry, the solar cell and module production, the solar module installation and miscellaneous maintenance and service costs. The year used was 2007, a year where all of the information could be retrieved. In 2007, the size of the Solar Energy Industry Profit Pool was $7.7 Billion[xl]. The silicon raw material industry was based on 3 Gigawatts of silicon delivered to the PV industry in 2007 at a nominal rate of $4500 of silicon per kilowatt[xli]. That year was a down year for silicon with only 10% profit margins (normally upwards of 30%)[xlii]. PV cell and module production was 4.2 Gigawatts at a nominal cost of $4 per watt[xliii]. Net profit for the industry was based on First Solar’s year, which was typical at 30%[xliv]. The same margin was assumed for the installations. In 2007, 2.826 Gigawatts was installed (note the almost 1.4 gw inventory) at a rate of $1/Watt[xlv]. The balance of the profit picture went to miscellaneous maintenance and service.

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The chart shows that solar cell and module production comprised the largest single portion of the profit pool at 65.5%. The silicon raw material had the second highest level of profit at 17.5%. Remember that the thin-film PV companies do not use silicon and yet silicon is positioned as an enormous profit portion of the industry. That is partially because of the fact that silicon is in short supply and in the coming years the industry is expected to meet the shortages with increased supply. The profit from solar module installation is expected to decline in time as the experience base in installations goes up. Longer-term maintenance and service, which represent a small portion of the profit picture today, will increase as the installations age.

Red Thread for the Industry Analysis

The solar energy industry is in its early stages of growth with many players, a lot of uncertainty and no set direction for mass introduction. The industry has been fueled by government incentives, which help place many more units in the field. This in turn drives down costs and increases the level of competition amongst the survivors. Coupled with a global economic downturn, the industry with 50% of the installed costs needing to be up front[xlvi] is facing serious challenges as project financing dries up and an oversupply of modules exists.

Strategic Group Analysis

The strategic group analysis drawn below is a product of the value chain analysis that these companies provide. As expected, the group map does contain some of the top 10 PV suppliers but also includes lesser companies whose unique strategy allows them to provide diversity in the industry. Pertinent to the solar energy industry, the strategic map drawn shows the reliance on silicon based PV as the domain and the company’s degree of value chain service that company can provide as the range.

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Key Success Factor Analysis (KSF)

In this Key Success Factor Analysis, the top two solar energy PV companies and two other companies in the top ten were analyzed against factors which are make or break in the future success of the firm in this industry.

The most important KSF is the ability to provide flexible low cost solutions for energy projects. Energy projects are funded by some form of financing, whether it’s a second mortgage from a residential lender or venture capital funding power for a village, the bottom line is going to be cost because 50% of the project costs are tied up in the actual solar module materials[xlvii]. In order to be able to attract customers, often time’s suppliers need to be the lowest cost option. In this analysis, First Solar’s CdTe thin film modules are hands down the lowest cost option as compared to Suntech, Yingli Green Energy and JA Solar who use silicon based cells, which may be more efficient but also cost significantly more.

The next important KSF is the ability to manage the project from inception to startup. First Solar, Suntech, Yingli Green Energy and JA Solar all have similar capabilities.

Vertical integration in solar modules is important for the completion of projects. Companies that are dependent on other suppliers for modules are subject to delays in completing granted projects. Again First Solar, Suntech and JA Solar have similar resources. Yingli Green is vertically integrated in silicon production and can sell what they produce relying on no middleman.

Lastly, the ability to adapt to the infrastructure makes not only for a smooth project but also for easy maintenance and service longer term. All solar companies are challenged by new surroundings, so First Solar, Suntech, Yingli Green and JA Solar have similar scores.

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Scale: 1 is low, 5 is high

First Solar’s position is strong based on the fact that they have invested in low cost vertically integrated solutions, have excellent project management experience and have been involved with many projects. Their KSF score is what we would expect for a market leader. Key for First Solar will be how can they sustain their growth and top position in the face of daunting economic conditions for project financing.

Porter Competitor Analysis

| |First Solar |Suntech |Yingli Green Energy |JA Solar |

|Goals |To create enduring value by |Committed to delivering |To be a world leading solar |To commit ourselves to the great |

| |enabling a world powered by |alternative energy choices |energy company[l] |and splendid solar energy |

| |clean, affordable solar |through lasting | |cause[li] |

| |electricity[xlviii] |partnerships[xlix] | | |

|Assumptions |PV based on CdTe Thin Film |PV based on silicon |PV based on silicon |PV based on silicon |

| |Technology |Traditional silicon manufacture |Constantly improving efficiency| |

| |To be the lowest cost provider |techniques for solar cells |to gain market share | |

| |of PV | | | |

| |CdTe will gain world acceptance | | | |

|Capabilities |Low cost manufacture process |Innovative R&D program provides |Technically Advanced |Uses less expensive lower grade |

| |Economies of scale |a sound crystalline technology |China Based |silicon |

| | |road map |Vertically Integrated in |Capable of Diversifying |

| | | |Silicon | |

|Strategies |Expanded Non-Silicon |Clear road map to increase |Grass Roots Residential Plan |Cutting costs always takes |

| |Manufacturing Capacity Fast |efficiencies to 20% |Reduce Module costs further |priority |

| |Low Cost Manufacturer |Improving Encapsulation |Protect the Environment |Reducing material use |

| |Can aggressively load project |Technologies extending module | |Develop third generation thin film|

| |schedule |life | |technology[lii] |

| | |Develop thin film PV based on | | |

| | |silicon | | |

|Satisfied Position?|Yes but wants to wants to gain |No – wants to become market |No – wants to be world leader |No – limited to regional |

| |more market share and provide |leader | |distribution |

| |shareholder value | | | |

|Likely Moves? |Larger Project Work |M&A to grow |Seek strategic partnerships |Diversify into thin films |

| |Expansion to India | | |Seek strategic partnerships |

| |US Expansion | | | |

|Where Vulnerable? |Cd Toxicity |Silicon base |China Focused |China based |

| |Supply of Tellurium | | |Takeover Target |

| |Third world politics | | | |

|Action to Invoke |Expand Capacity |Merger |M&A |Expand Capacity |

|Retaliation? |Reduce Costs | | |Diversify |

| |Improve efficiency | | | |

Red Thread for the Competitive Analysis

The competition sees the advantage of a non-silicon based entity for costs and capacity. The question is whether or not they can deploy as quickly and catch up to First Solar who has installed an enormous amount of capacity to anticipate growth. The net may be a consolidation of some of the industry leaders to catch up to First Solar who have made all of the right moves so far.

INTERNAL ASSESSMENT

Leadership and Culture[liii]

First Solar’s Executive Leadership cuts across a vast experiential level that includes top industry firms like Intel, Honeywell and GE and Top University’s like MIT. Three key players are Michael Ahearn, Rob Gillette and Bruce Sohn.

Michael J. Ahearn serves as Executive Chairman of First Solar and served as CEO from August 2000 to September 2009. Prior to First Solar, he was Partner and President of the equity investment firm, JWMA (formerly True North Partners, L.L.C.), the majority stockholder of First Solar. Prior to joining JWMA, Mr. Ahearn practiced law as a partner in the firm of Gallagher & Kennedy.

Michael has served on the boards of Arizona Technology Enterprises, Arizona State University Research Park, Homeward Bound, and the Arizona Science Museum and currently serves on the board of the German Marshall Fund of the United States. He received both a B.A. in Finance and a J.D. from Arizona State University.

Rob Gillette joined First Solar in October 2009 as Chief Executive Officer. Prior to coming to First Solar, Mr. Gillette served as President and CEO of Honeywell Aerospace. He joined Honeywell in 1996 and has served in a number of senior management positions, including President and CEO of Honeywell Transportation Systems, President of Honeywell Turbo Technologies, and he also served the Turbo business as Vice President of Strategic Growth and Vice President/General Manager, Asia. Prior to joining Honeywell, Mr. Gillette spent over 10 years at General Electric where he served in numerous senior management positions. Mr. Gillette holds a B.S. in finance from Indiana University.

Bruce Sohn joined First Solar in February 2007 as President. Mr. Sohn was formerly a senior executive at Intel Corporation and has served on First Solar’s Board of Directors since 2003. He was a technical and managerial consultant to the company prior to joining the management team.

Mr. Sohn is responsible for technology development, manufacturing, expansion, quality, EHS, supply chain, MIS and worldwide human resources. He heads operations for First Solar’s module business; systems engineering, procurement and construction business; and monitoring & maintenance business.

During his 24 years at Intel, Mr. Sohn played a leadership role in developing and manufacturing leading-edge semiconductor technology. He designed an early generation transistor and spearheaded initiatives in cycle time reduction and automated operations. He served as an integral part of the start-up team at five Fabs, was program manager for Intel's conversion to 300mm wafers and managed Intel's two largest Fabs.

Mr. Sohn is an engineering graduate of the Massachusetts Institute of Technology, is a certified Jonah and has been a guest lecturer at several universities including MIT and Stanford. He has published research in a variety of high technology topics including: applying constraint theory to semiconductor process lines, high-volume factory design, silicon surface defects, oxygen gettering, gate oxide quality, transistor design and statistical design of experiments.

First Solar’s depth at the top is evident and what would be expected of a top market share company.

Organizational Structure

First Solar Inc. is a C corporation. Originally operated as a Delaware limited liability company from 1999 until 2006, First Solar, Inc. was then incorporated in Delaware on February 22, 2006.[liv] In February 1999, Harold McMaster sold the company to True North Partners, an investment arm of the Walton family, owners of Wal-Mart. John T. Walton joined the Board of the new company, and Mike Ahearn of True North became the CEO of the newly minted First Solar[lv]. As the company developed, its leadership under Ahearn took shape and today’s current management team is shown below.

[pic]

Value Chain Analysis

The PV industry has an expansive value chain and a number of fervent competitors. Below is a chart of some of the companies and what they deliver in the value chain:

[pic]

In the PV Industry Value Chain, First Solar is part of the largest portion of the profit pool as a solar cell and panel module supplier.[lvi] Specifically, their expertise lies in the capability to be a low cost manufacturer, to build capacity and establish a healthy pipeline of projects to direct the manufactured capacity[lvii].

Low Cost Manufacturer

First Solar has done an excellent job becoming a low cost manufacturer. To start, their solar photovoltaic technology is based on a thin film technology that does not use crystalline silicon (except for tempered glass). That means the cost structure of the cells they produce is not subject to changes in the semiconductor industry or how quickly the silicon industry can ramp up to meet PV demand. The thin film technology chosen, Cadmium Tellurium (CdTe) is unique in that the tellurium is a waste stream from copper processing. Their vertically integrated manufacturing process produces completed solar modules in 2.5 hours.[lviii] Below are some of the key design features that set First Solar apart form the competition[lix]:

[pic]

The result of these features and First Solar’s relentless drive to reduce costs was the lowest cost to manufacture a solar module at 85 cents per watt achieved in 3Q 2009.[lx]

Building Capacity

As other PV firms were deciding on how to build their business, First Solar aggressively expanded their business searching out partnerships in areas of prime business (like Oder, Germany) and seeking out places for low cost production (like Malaysia). The result has been a value chain based on high volume, low cost that leads the industry. The chart below summarizes First Solar’s expansion from small time operation in Perrysburg Ohio to manufacturing juggernaut[lxi].

[pic]

From PV-, “First Solar’s annual nominal production capacity will double in 2009 to a planned 1.1GW as manufacturing plants, specifically in Malaysia ramp to full production. Plants 3&4 in Malaysia are now ramping, with capital spending expected to be between US$270 and US$300 million, which is targeted at plants 3 and 4, and expansion at its existing plant in Perrysburg, Ohio. Each of the Malaysian plants or lines has a nominal capacity of approximately 190MW. With over 1GW capacity, First Solar can leverage the cost of materials and productivity improvements to a much greater extent than in previous years, giving it the confidence that the cost per watt goals internally set could well be exceeded.”[lxii] Key to their expansion is the fact that the company has not only developed a process with its own machinery that can churn out high volumes of cells but that they can replicate those factories to rapidly expand capacity[lxiii].

Project Pipeline

First Solar built in the capacity to manufacture a gigawatt of solar module capacity. But they also developed a multigigawatt project pipeline to place those modules. Earlier this year First Solar purchased OptiSolar outright including their solar project pipeline:[lxiv]

• A 550 megawatt (MW) AC solar development project under a power purchase agreement with PG&E

• A project pipeline of additional 1,300MW AC which are in negotiation with Western region utilities for solar development projects

• Strategic land rights of approximately 136,000 acres (approximately 210 square miles) with the potential to deploy up to 19 gigawatts (GW) AC of utility-scale solar power projects

Core Competence, Capabilities and Resources

Core Competence

First Solar’s core competence is in manufacturing and manufacturing optimization. Through trade secret they have developed proprietary machines and processes to manufacture a non-silicon crystal thin film solar module. They have developed acumen to optimize the process. And they have developed core expertise to replicate the process. This core competence is what sets them apart from their competition. The fact that they can expand at will and produce the virtually identical product is the same core competence that made McDonald’s great.

Capabilities (Taken from the most recent 10-K Filing)[lxv]

First Solar designs and manufactures solar modules using a proprietary thin film semiconductor technology that has allowed them to reduce average solar module manufacturing cost to among the lowest in the world. The solar modules are manufactured on high throughput production lines and First Solar performs all of the manufacturing steps in an automated, proprietary continuous process which eliminates the multiple supply chain operators and expensive and time consuming batch processing steps used to produce a crystalline silicon solar module. Solar Modules are produced in Perryburg, Ohio, Oder Germany and Kulim Malaysia. Research and Development is primarily done at the Perrysburg manufacturing facility. The objective of R&D is to lower the per watt price of solar electricity from their modules by increasing the conversion efficiency of the modules and optimizing the cost and other components in the PV system.

First Solar provides a complete solar power system solution including deployment of modules and balance of system components procured from third parties. They also sell solar power systems directly to system owners including components such as land for building systems, engineering permits, construction management, maintenance and monitoring.

Tangible Resources[lxvi]

Protection of First Solar processes, methods and other technology, especially their proprietary vapor transport deposition process and laser scribing process is critical to their business. Failure to protect and monitor use of the proprietary intellectual property could result in loss of valuable technologies and competitive advantage. In the U.S., First Solar holds 23 patents that expire between 2009 and 2026 and have 37 patents pending. Internationally, First Solar holds 17 patents and has 70 patents pending.

Intangible Resources

First Solar relies on patents, trademarks, trade secrets, copyrights and other contractual restrictions to protect their intellectual property. First Solar also relies on unpatented proprietary manufacturing expertise, ongoing innovation and other trade secrets to develop their competitive advantage. Failure to protect these secrets would adversely affect First Solar’s market position.

Financial Analysis

The solar energy industry is made up of some brand new, venture capital staked entities like First Solar, Nanosolar and Miasole and other well established corporations like BP, Sharp and Kyocera. As a matter of competitive comparison, I looked at the financials of First Solar compared to some other firms in the top ten that were used in the previous comparisons…Suntech, Yingli Green Energy and JA Solar. The chart below from data gathered at Wikinvest shows the size of the companies by market capitalization and other ratios looking at valuation, profit, business strength and investment returns.[lxvii]

[pic]

First Solar dwarfs the other companies in size at 5 times largest its nearest competitor, Suntech. It also has a significantly higher net profit, stronger fundamentals and much better returns on equity and assets. By making some basic moves on increasing capacity even in the midst of the economic downturn First Solar has positioned themselves for success. An acquisition in 2008 for Turner Renewables gave them some much needed project expertise and the 2009 OptiSolar acquisition provided them with a deep pipeline of projects for their increased capacity to fill to. So in addition to the necessary marketing and sales required to sell projects, they have a built in project install plan which keeps them busy during the financially challenging times which in turn increases their experience base…a necessary requirement to sell subsequent future projects.

First Solar, a company who has seemingly made all the right moves, is not bulletproof. The technology of thin film semiconductors still tethers them to exotic materials like Tellurium that can be in short supplies at time. Also, the late John Walton’s estate is a major stockholder at 40% ownership and has voting rights over board members and approving/disapproving mergers and acquisitions. This could hamper future growth or provide a stumbling block to any future diversification or vertical integration that First Solar may want to take on.

Red Thread for Internal Audit

First Solar is primed to be market leader. The leadership instilled when they were formed has provided superb guidance. They have concentrated on the largest part of the profit pool and have technologically untethered themselves from silicon-based photovoltaics. The results have been strong exploitation of the core competence in manufacturing resulting in over a gigawatt of manufacturing capacity, excellent project acquisitions to create a strong pipeline of work and great financial success. But can they sustain it…what does the competition have that can impact them and what other threats lurk that can jeopardize First Solar and their brightly shining standing.

STRATEGIC RECOMMENDATIONS

First Solar SWOT Analysis

|Strengths |Weakness |

|S1 Strong Manufacturing Competence – can easily replicate facilities |W1 Tellurium Supply tied to Copper Industry |

|quickly |W2 Short time incorporated (just 10 years) |

|S2 Best Solar Economics – Lowest Cost per Watt |W3 Much Manufacturing protected only by Trade Secret |

|S3 Strong Leadership |W4 Toxicity of Cadmium |

|S4 Over a Gigawatt of Manufacturing Capacity |W5 Low conversion efficiency of CdTe modules |

|S5 Market Leader | |

|S6 Strong Business Financials | |

|S7 Excellent Project Pipeline | |

|S8 Strong Raw Material Supply Contracts | |

|Opportunities |Threats |

|O1 Solar demand in unbounded |T1 Removal of Gov’t Subsidies |

|O2 US is the next great battlefield and First Solar is US based |T2 Global economic recession |

|O3 Stimulus money available to rejuvenate industry |T3 Concerns over Foreign Currency |

|O4 Strong Financials for M&A |T4 Loss of Trade Secret Advantages |

|O5 Market Leader clout for getting new projects |T5 Merger & Acquisition |

|O6 Diversify First Solar as a project owner |T6 Environmental Pressure |

|O7 Further Manufacturing Expansion | |

SWOT Strings

|Strengths / Opportunities |Weakness / Opportunities |

|S1, S2, S4, S6, S8 / O1, O3, O7: CG, I |W2, W5/ O1, O2, O3: CG, I |

|Utilize the company’s Manufacturing core strengths to expand into |Need to convince US market that CdTe solar is a perfect fit-Born in the |

|emerging markets (US, India) |USA |

|S3, S5, S6/ O1, O3, O4, O5: CG, SA, JV |W3 / O5, O6, O7: CG, I. VI |

|Find acquisition targets that bolster core business and allow further |By further reducing costs they can make it difficult for the competition |

|manufacturing expansion |to win projects |

|Strengths / Threats |Weakness / Threats |

|S2, S5, S6, S7 / T2: CG |W1, W4, W5 / T6: I, VI |

|In the down economy create work by buying competitors projects/project |Develop PR around the recyclable nature of exotic chemicals to improve |

|lists |environment and make superior product |

|S1, S2, S6 / T1, T2 : CG, I, VI |W2, W3 / T4: HI |

|Reduce costs further to make projects stand on their own without subsidy |Provide incentives to employees to guard trade secrets (stock ownership) |

General Strategic Orientation – Strength /Opportunity

First Solar is clearly in a position of strength in the solar energy industry. Solar panels and modules in and by themselves are not new and novel. There are many ways to make them and they all work to provide electricity. But First Solar’s are less expensive, making the investment return particularly in a down economy the critical difference between project on and project off. They are less expensive because they use materials that are inherently less expensive to start with…the cadmium and tellurium they used are from recycled mining and smelting processes unlike silicon which are crystals that need to be grown. They are less expensive because the vapor deposition coating process that they employ (proprietary trade secret) allows them to coat a sheet of glass to make a solar panel in a very short period of time whereas in silicon panel production the vapor deposition processes (sputtering) uses vacuum, is high cost to use, has low yields and takes a long time to make. Less expensive materials and process adds up to a winning combination to drastically reduce costs. That combination allowed them to build capacity fast and even though the 2008 solar energy market was challenged going from an undersupply position to an oversupply position (partly because credit woes strapped projects), First Solar continued to succeed because they had an outlet for their production as a consequence of the strength to manufacture and deliver. The chart below shows First Solar’s position graphically:

[pic]

Grand Strategy Clusters – Attractiveness – Improving position/rapid growth

The McKinsey Report referenced earlier showed the explosive growth that the solar energy industry is on the verge of. All of the major players are ramping up and adding capacity to their manufacturing capability. The competition will be fierce as companies vie for projects and deliver systems. The real battleground will be the U.S. as not only are there miles and miles of open rooftops ready to accept solar panels, but there is little or no maintenance and unlike a wind turbine that is always turning there is no mechanical mechanism to wear out. With the cost of solar systems dropping and intense competition creating a true market economy for this industry, large corporations will get larger and be better positioned for investment. First Solar is uniquely positioned based on their manufacturing prowess and low cost systems. This will appeal greatly to project mangers looking to bring solar power in a timely and cost effective manner.

Grand Strategy Selection – Investment – Strength/Internal & External

First Solar has been very successful at both internal and external development. Even though their history is short, they had excellent guidance from John Walton (of the Wal-Mart fame) who instilled an entrepreneurial sense in the new company. They did due diligence in the internal development of their processes to achieve the lowest manufacturing costs in the industry. Couple this with the company’s choice of technology and the result has been the market leader position. Externally, they have had no problem seeking the pieces required to round out their expertise. In 2008, Turner Renewables provided them with necessary project utility experience that they did not possess. In 2009, OptiSolar came with a project pipeline that provided them an outlet for the foreseeable future for the capacity that they have built. With over $11 Billion in Market Capitalization, First Solar has the deep pockets to acquire more companies and is positioned to do so. The chart below shows where First Solar is positioned graphically:

[pic]

Recommended Strategy

First Solar has defined themselves as the low cost leader in solar energy by exploiting their technological prowess and leveraging cost to get projects and implement their technology. Fundamentally, by choosing non-silicon based thin film semiconductor they immediately removed themselves from the high cost and limited supply of photovoltaic grade silicon. Not to say that the industry will not respond and provide this silicon, its just that the many year time penalty is lost time in building business.

My recommendation is for them to continue what they have started and to further expand and grow. This is based on their very strong financials, a manufacturing process that can be easily replicated and a cost proposition that is making competitors cringe. The growth that I am proposing is on a number of different levels.

First, on manufacturing First Solar needs to continue to build inexpensive capacity to have more modules available for growth. In starting production in Malaysia, they took advantage of a superb situation and were able to quickly build capacity. They should now look for another inexpensive place to expand. My choice would be India where the solar energy market will be amazing but to date has been mostly left behind. By building capacity in the country of sale they will be building in Goodwill and further reducing their costs. I have no illusions that solar energy projects in India will have to come at reduced costs because of India’s economic standing. However, rural plant generation could provide millions of dollars of revenue so First Solar should not only build a facility to manufacture solar module capacity in India, they should also fund some grass roots projects which will herald them as not only savvy business folks but humanitarian ones as well. This is the hallmark of all great corporations.

Next, First Solar needs to win in the United States. The U.S. with 18% market share lags behind Germany with 43% and Europe overall with 65% market share.[lxviii] Think about all of the big box stores with flat roofs, the shopping malls with flat roofs, the parking lots that bake in the sun…all of these are First Solar opportunities to convert that lost energy into electricity. On the roof of a building they are basically unseen. They have no mechanical or moving parts. They are a maintenance supervisors dream. In order to penetrate this space, the cost has to be rock bottom. Importing modules from Malaysia and India to supplement Ohio production could keep costs down.

Lastly, First Solar needs to make acquisitions with their hard earned cash and those acquisitions have to have future return. First Solar should look closely at companies like Yingli Green Energy or JA Solar in China. That would give them a strong local presence, access to local projects and an ability to grow in the next electricity Mecca of the world – China. Boots on the ground expansion into China needs to be done through merger & acquisition. First Solar will need the Chinese expertise to navigate the local government and issues in order to succeed.

The recommended strategy is daring but a natural conclusion based on the comprehensive study, the SWOT analysis and the development of the SWOT strings.

Managerial Implications

The baton has been passed from Mike Ahearn to Rob Gillette who will need to make his mark in this company. He is a veteran of Honeywell, a place where progressive thinking was a way of life. In one of his first moves, he has brought in TK Kallenbach as Executive Vice President of Marketing and Product Management. Mr. Kallenbach was most recently of Honeywell.

But like Sam Palmisano who took over from Lou Gerstner, Rob Gillette will need to decide direction and develop his stamp. My recommendation to build in India should be credibly researched by First Solar who will find that handsome government incentives (refer to IBM Offshore) would be made available to them and would provide real incentive to build.

Look for First Solar to build a close strategic alliance with someone capable of weighing M&A in China closely, perhaps a Morgan Stanley or Price Waterhouse. Either way First Solar will need others expertise and guidance from the Walton estate to ensure that they are in good hands.

Lastly, look for the company to start to provide stock dividends (something they don’t do now) to avoid paying taxes on the future windfall from the above recommendations.

Competitor Implications

First Solar has put the competition on notice that they are not waiting for the silicon market to catch up to them. They are clearly positioned for growth and expansion and a global recession slows them but does not stop them.

Look for the competition to merge to become bigger in order to do battle with First Solar. This will be the only viable way to be competitive with First Solar.

References

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[i]"Business Powered by the Sun." Allianz Knowledge Partnersite. 2009. Allianz, Web. 1 Dec 2009. .

[ii] Ibid.

[iii] "Solar Spreading to Surprising Locations." GlobalSolarCenter. 2009. GlobalSolarCenter, Web. 1 Dec 2009. .

[iv] Ibid.

[v] "The Recovery Act and Clean Energy." The White House. October 28, 2009. , Web. 1 Dec 2009. .

[vi] Morehead, Adam. "A Business Case for Renewable Energy." Net Impact Austin. 20 Jan 2009. Net Impact Austin, Web. 1 Dec 2009. .

[vii] "Overview." First Solar. 2009. First Solar Inc., Web. 15 Dec 2009. .

[viii] "Investor Press Release." First Solar. 24 Jan 2008. First Solar Inc., Web. 1 Dec 2009. .

[ix] "First Solar." Wikipedia The Free Encyclopeadia. 10 Dec 2009. Wikipedia Foundation Inc., Web. 15 Dec 2009. .

[x] Leonhardt, David. "Unites States Economy." NY Times. 13 Aug 2009. NY Times Inc., Web. 15 Dec 2009. .

[xi] " Update: President Obama Signs Stimulus Package into Law." . 13 Feb 2009. , Web. 15 Dec 2009. .

[xii] Ibid.

[xiii] Ibid.

[xiv] "2003 to 2008 world oil market chronology." Wikipedia The Free Encyclopaedia. 3 Dec 2009. Wikipedia Foundation, Web. 15 Dec 2009. .

[xv] "List of United States Energy Acts." Wikipedia The Free Encyclopaedia. 22 May 2009. Wikipedia Foundation, Web. 15 Dec 2009. .

[xvi] "Fact Sheet Making Solar Power Mainstream." Environment California. 2007. , Web. 15 Dec 2009. .

[xvii] "U.S. Energy Facts Explained." U.S. Energy Information Administration Independent Statistics and Analysis. 2009. US Government Department of Energy, Web. 15 Dec 2009. .

[xviii] "Renewable Energy Explained." U.S. Energy Information Administration Independent Statistics and Analysis. 16 Jul 2009. US Government Department of Energy, Web. 15 Dec 2009. .

[xix] Ibid.

[xx] "Welcome to the World of Solar Energy." Solarbuzz. 9 Dec 2009. Solarbuzz, LLC, Web. 15 Dec 2009. .

[xxi] "Solar PV Report." U.S. Energy Information Administration Independent Statistics and Analysis. . 2009. US Government Department of Energy, Web. 15 Dec 2009. .

[xxii] Ibid.

[xxiii] "Energy Information Administration (EIA), Form EIA-63B, "Annual Photovoltaic Module/Cell Manufacturers Survey."." U.S. Energy Information Administration Independent Statistics and Analysis. . 2009. US Government Department of Energy, Web. 15 Dec 2009. .

[xxiv] "Solar PV Report." U.S. Energy Information Administration Independent Statistics and Analysis. . 2009. US Government Department of Energy, Web. 15 Dec 2009. .

[xxv] "Energy Information Administration (EIA), Form EIA-63B, "Annual Photovoltaic Module/Cell Manufacturers Survey."." U.S. Energy Information Administration Independent Statistics and Analysis. . 2009. US Government Department of Energy, Web. 15 Dec 2009. .

[xxvi] "Solar PV Report." U.S. Energy Information Administration Independent Statistics and Analysis. . 2009. US Government Department of Energy, Web. 15 Dec 2009. .

[xxvii] "Top-10 solar cell suppliers in 2009: iSuppli." Pradeep's Point!. 6 Sept 2009. , Web. 15 Dec 2009. .

[xxviii] Lorenz et al., . "The Economics of Solar Power." The McKinsey Quarterly. June 2008. McKinsey Inc., Web. 15 Dec 2009. .

[xxix] "Industry Life Cycle." Encyclopedia of Small Business. Ed. Kevin Hillstrom and Laurie Collier Hillstrom. Gale Cengage, 2002. . 2006. 28 Sep, 2009

[xxx] "US Solar Industry Year in Review 2008." . 2009. SEIA, Web. 15 Dec 2009. .

[xxxi] Ibid.

[xxxii] Lorenz et al., . "The Economics of Solar Power." The McKinsey Quarterly. June 2008. McKinsey Inc., Web. 15 Dec 2009. .

[xxxiii] Ibid.

[xxxiv] "Solar PV Report." U.S. Energy Information Administration Independent Statistics and Analysis. . 2009. US Government Department of Energy, Web. 15 Dec 2009. .

[xxxv] "Nanosolar: technology for profitable solar." . 2009. Nanosolar Inc., Web. 15 Dec 2009. .

[xxxvi] "Home Page." First Solar. 2009. First Solar Inc., Web. 15 Dec 2009. .

[xxxvii] "Top-10 solar cell suppliers in 2009: iSuppli." Pradeep's Point!. 6 Sept 2009. , Web. 15 Dec 2009. .

[xxxviii] Gadiesh, Orit, and James L. Gilbert. "Profit Pools: A Fresh Look at Strategy." Harvard Business Review. May/June (1998): Print.

[xxxix] Gadiesh, Orit, and James L. Gilbert. "How to Map Your Industry’s Profit Pool." Harvard Business Review. May/June (1998): Print.

[xl] Skinner , Liz. "Sun will shine on solar-energy investing, report says." Investment News. 18 June 2007. Crain Communications Inc, Web. 16 Dec 2009. .

[xli] "Solar Power." Wikinvest. 2009. Wikinvest, Web. 16 Dec 2009. .

[xlii] "Silicon price hike squeezes solar-product profit margins." Silicon price hike squeezes solar-product profit margins. 18 Dec 2007. .CN, Web. 16 Dec 2009. .

[xliii] "Worldwide Solar Panel Production Doubles in 2008." CalFinder. 2009. CalFinder Contractors, Web. 16 Dec 2009. .

[xliv] "First Solar (FSLR)." Wikinvest. 2009. Wikinvest, Web. 16 Dec 2009. .

[xlv] Osborne, Mark. "German market to top 3.2GW says Solarbuzz: Global growth of 5% in ‘09." PV-. 9 Dec 2009. PV-, Web. 16 Dec 2009. .

[xlvi] "Solar Power." Wikinvest. 2009. Wikinvest, Web. 16 Dec 2009. .

[xlvii] Ibid.

[xlviii] "Overview." First Solar. 2009. First Solar Inc., Web. 15 Dec 2009. ................
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