Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd
Upload
160 views

First Solar Answer

First Solar faced several problems including weakening market demand, falling silicon prices benefiting competitors, high costs from Chinese competition, and reduced European subsidies. However, it had advantages in using lower-cost thin film technology, controlling the entire production process, and diversifying geographically. If forced to retrench, First Solar should focus on its systems business installing and maintaining solar power plants rather than just selling components, as systems had more stable profits and Chinese manufacturers had less presence in that market.

Uploaded by

Eleonora Salvagno
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
160 views

First Solar Answer

First Solar faced several problems including weakening market demand, falling silicon prices benefiting competitors, high costs from Chinese competition, and reduced European subsidies. However, it had advantages in using lower-cost thin film technology, controlling the entire production process, and diversifying geographically. If forced to retrench, First Solar should focus on its systems business installing and maintaining solar power plants rather than just selling components, as systems had more stable profits and Chinese manufacturers had less presence in that market.

Uploaded by

Eleonora Salvagno
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

First Solar

PROBLEMS
Market demand for PV panels is weakening
Crystalline silicon was the dominant technology in the market
Variability of material prices: silicon raw material prices were also falling helping First Solar’s
competitors, which produced silicon-based panels, but not First Solar, which produced cadmium
telluride-based ones.
China’s photovoltaic: the increasing market share of Chinese competitors led to First Solar
producing only 1.7 gigawatts of panels despite having the capacity to produce 2.5 gigawatts
European countries significantly reduce the incentives and subsidies
High SG&A expenses: selling, general and administration costs raised after the acquisitions
Dependence from Europe specially Germany

PRO
Panels using thin film were typically lower cost and required 98% less semiconductor material
than traditional c-Si panels. In 2011, cadmium telluride use in thin film solar panels was
approximately 0.1 grams per watt. Lot of R&D invested for overcome the obstacles and technical
challenges deriving from thin film cadmium telluride
China manufactures were largely absent in the system business
Less borrowings than the others
Controlling all stages of production entirely in-house
Geographic diversification: establishment in tactic areas in terms of logistic, stockage and prices

Thin film cells while cheaper are generally less efficient than polysilicon cells but have lower
production costs, making them more attractive from a financial perspective

ACTION PLAN
Was the systems business a competitive advantage or a distraction?
Through its systems business, First Solar controlled the engineering, procurement, construction,
operations, maintenance, and development of solar power plants, and at times, project finance

If First Solar was forced to retrench, which market should the company focus on, and would it be
able to prevail in that market?
components segment had historically achieved higher profitability and generated more cash
than systems, but the systems business had less margin variability because the provision of
ongoing maintenance, engineering, and construction was less dependent on materials prices.
Chinese manufacturers were largely absent from the systems business.

more independence from Germany, so trying to diversifying in other countries


Focus on utility and residential market
More system than components (around 60% and 40% maybe(?))
If we are forced to retrench, we can “steal a deal” with companies that provide services and
return to the model business of 2006 because we know how to do that, how to sell it and to
whom, and people know us

You might also like