Editor’s Note: Lucky shareholders who bought shares of First Solar (Nasdaq: FLSR) when it went public last November have seen the stock skyrocket from $20 to $250. The stock, which currently stands at $222 is considered a “buy” by most analysts, which see it having several years of growth ahead of it. It could well become a $500 stock. You’d know much more if you subscribed to Progressive Investor!
by Ellen Pfiefer
Over the past few years, as climate change and alternative energy have become hot stories in the mainstream media, alternative energy companies have become hot investments – and none have been on a hotter streak than solar companies. And while there has been no shortage of companies and investors trying to get in on the solar action, most of solar’s promise remains in the future, as solar-generated electricity is still generally prohibitively expensive to produce without governmental subsidies.
One company, however – First Solar, Inc. – is poised to change that, and investors have taken note. So what’s all the excitement about?
Low Cost Solution
Traditional solar PV energy systems use a crystalline form of silicon as their semiconducting material. But as the number and scale of solar panel manufacturers has increased over the past few years, solar-grade silicon has become more and more in demand, and more and more expensive, to the point where it has been the limiting factor in the industry’s growth. To find an alternative to expensive silicon, companies such as First Solar have experimented with a variety of materials and technologies.
Based in Phoenix,Arizona, First Solar (NASDAQ: FSLR) manufactures thin film photovoltaic modules for utility scale projects using cadmium telluride (CdTe) as its semiconducting material, trading efficiency in converting sunlight to energy for more cost competitive products. CdTe is significantly less efficient at converting light to electricity compared to silicon. First Solar currently converts about 9.5% of sunlight to energy compared to up to 18-20% for some crystalline manufacturers, according to analyst estimates.
However, First Solar requires only a fraction of the semiconducting material that silicon systems use. Combined with an efficient manufacturing process, this lets First Solar sell their modules for about 40% less than silicon-based modules – no small difference. This helps bring down the cost of solar power, which has been one of the chief obstacles to solar gaining traction as an energy source.
In fact, management has a stated goal of reaching “grid parity” – offering solar energy at the same price as traditional energy, the holy grail for all alternative energy sources – in the 2010-2012 timeframe. Analysts agree that this is an achievable goal.
Cadmium: A Pollutant Defanged
Cadmium, which is salvaged from waste produced during zinc smelting, is toxic if released into the environment. However, FSLR’s “up-cycling” stabilizes and sequesters the material, offering a solution to a pre-existing environmental problem. Indeed, analysis of the company’s CdTe usage by the US Department of Energy and Brookhaven National Laboratory got a clean bill of environmental health.
“CdTe is much more stable than the Cd and Cd(OH2) used in batteries. Further, it is prevented from leaching because it is encapsulated between glass sheets,” states author Vasilis Fthenakis in a 2004 life cycle analysis available on FSLR’s website. The study concludes that “large-scale use of CdTe PV modules does not present any risks to health and the environment, and recycling the modules at the end of their useful life completely resolves any environmental concerns. During their operation, these modules do not produce any pollutants, and, furthermore, by displacing fossil fuels, they offer great environmental benefits. CdTe in PV appears to be more environmentally responsible than all other current uses of Cd, including Ni-Cd batteries.”
Although FSLR could justifiably pride itself on simply eliminating cadmium from the waste stream, it considers this just the beginning of its environmental mission. With cradle-to-grave product lifecycle management and a commitment to the health and safety of its employees, FSLR has earned ISO 9001:2000 Quality Management and ISO 14001:2004 Environmental Management certifications for its facilities.
Through ongoing technology improvements, the company has succeeded in reducing the amount of cadmium in its solar modules by 20%. It has also refined its designs to encapsulate the cadmium, and to prevent breakage and fire damage through the 25+ year life span of a module.
FSLR collects and recycles its manufacturing waste, ensuring that there are no cadmium air emissions; that process water is treated and filtered to remove waste; that solid waste is collected, purified and recycled; and that all employees are routinely tested to assure that they are not being exposed to harmful materials. And, as noted in the life cycle analysis, when a First Solar module comes to the end of its 25-year lifecycle, the company has established a Collection and Recycling Program to ensure it is not improperly disposed of in municipal waste.
Future Prospects and Competition
Although solar energy accounts for only 0.1% of the energy currently used in the U.S. it has the potential to eventually 20% of the U.S. market’s energy needs, predicts NanoMarkets LC, a technology research firm. “Because worldwide energy prices are rising fast and photovoltaic prices are falling fast, PV will carve off a big slice of the energy market.”
However, First Solar faces keen competition from other firms with their own proprietary technologies. While crystalline silicon remains the PV standard, several companies such as Miasole and Daystar Technologies are ramping up their ability to make thin films using a copper, indium, gallium and selenide compound known by its acronym CIGS.
Such CIGS systems typically achieve better efficiency than CdTe (19.5% vs. 9%), but have not yet been rolled out at a commercial scale. But so far, customers around the world seem to like what they see, and First Solar has been steadily expanding sales as well as the production facilities needed to meet the increased demand.
They currently have over 2 GW of modules contracted for large project deployment over the next 5 years. In addition to the existing 90 MW manufacturing plant in
We believe that sunny skies may be ahead, if First Solar continues its constant improvement and its commitment to protecting the environment throughout the life cycle of its products.
++++
FROM Winslow Environmental News, a SustainableBusiness.com Content Partner.
Check out Winslow’s new mutual fund, the Winslow Green Solutions Fund.
Loading...