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Guest Klothilde

First Solar (FSLR)

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1 hour ago, Klothilde said:

Help me out.  If we compare blended COGS excluding freight and insurance for FSLR and JKS we get 27 cts for FSLR vs. 34 cts for JKS.  That's 7 cts difference.  What are you comparing to get 1-2 cts difference only?  CSIQ was at 36 cts blended on my books, that difference would be even higher.

I was not comparing FSLR to JKS, rather commenting on FSLR to Longi. I was indicating FSLR might have a slight advantage over Longi when you add shipping costs to Longi. If they do it is likely very low at a penny or 2.  The point is FSLR would lose any advantage over Longi on an operational income per watt from modules due to high Opex.   

 All the CN companies should have similar shipping and insurance costs. Therefore if Longi is shipping to the Asian peninsula, then they are adding maybe 1-1.5 cents to the $0.27 indicated in the question of your post.  The higher end shipments to the U.S. or the EU  would be up at  $0.30.  That is the range the FSLR gave.

 

What was not pointed out by FSLR was their probable inefficient operational income prospects from modules. The CN companies Opex is  in the range of $25M for GA and Dev costs. This is spread over the GW shipped and is only $0.01-$0.015 for pure module manufacturers.

 

This would imply a total cost for Longi including Opex of $0.27+$0.0125+$0.01= $0.295 for shipments to Asia area.

 

FSLR would have a total cost of manufacturing + Opex of $0.27+$0.065=$0.335/W(Granted FSLR spends some on the projects division)

 

When you are comparing pure modules of FSLR to Longi, FSLR may not look all that good right now for module selling unless of course, there is an advantage in the markets and the ASP each sell into.

Edited by SCSolar

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Thanks, uh Longi, got it.

OPEX is definitely the Achilles heel of FSLR and currently the inefficiency is even worse than you suggest, they are around 10 cts/W.  One thing in favor of FSLR vs. CNs is that 80% of current OPEX is fixed, enabling a larger leverage from scaling.  They will have to scale to 8-10 GWs however to reduce OPEX to comparable levels of CNs.  For the time being (2018) their legacy project business will mask this OPEX inefficiency, but if they run out of juicy projects in 2019 the high OPEX burden will probably screw up numbers then.  Patience, baby, patience.

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First Solar Series 6 - This Is Huge
https://seekingalpha.com/article/4130618-first-solar-series-6-huge

Another superficial pumping article.

The thing has a completely wrong cost projection and a laughable EPS projection.  I commented on the cost projection mistake in the article.

There's a piece of kryptonite in the presentations that nobody seems to have noticed so far.  On the module cost projection slide they reiterate the 40% cost savings of S6 vs S4 but explain that this is the target for end of 2020 compared to the average cost in 2016.  If 2016 average cost is 37 cts this places the 2020 cost target at 22 cts, which imho just doesn't cut it.

For me this is new and it is disappointing since up til now they promised 40% cost savings when S6 was "fully ramped" implying a fully ramped production line in 2018.

On the other hand 40% cost savings by 2020 vs 2016 for S6 doesn't make much sense since on a subsequent slide they show 30% cost savings by 2020 for S4 and the whole tech transition with over $1B in Capex does not make sense if S6 only provides 10% lower costs vs S4.

Comments?

Edited by Klothilde

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1 hour ago, Klothilde said:

First Solar Series 6 - This Is Huge
https://seekingalpha.com/article/4130618-first-solar-series-6-huge

Another superficial pumping article.

The thing has a completely wrong cost projection and a laughable EPS projection.  I commented on the cost projection mistake in the article.

There's a piece of kryptonite in the presentations that nobody seems to have noticed so far.  On the module cost projection slide they reiterate the 40% cost savings of S6 vs S4 but explain that this is the target for end of 2020 compared to the average cost in 2016.  If 2016 average cost is 37 cts this places the 2020 cost target at 22 cts, which imho just doesn't cut it.

For me this is new and it is disappointing since up til now they promised 40% cost savings when S6 was "fully ramped" implying a fully ramped production line in 2018.

On the other hand 40% cost savings by 2020 vs 2016 for S6 doesn't make much sense since on a subsequent slide they show 30% cost savings by 2020 for S4 and the whole tech transition with over $1B in Capex does not make sense if S6 only provides 10% lower costs vs S4.

Comments?

The kryptonite is not new. It was always 22 cts S6 in 2020 vs 37 cts S4 in 2016. The problem was that it at that time seemed like other cost reduction measures for CdTe and c-Si alike were a bit exhausted and that this was still good. That S6 will only be 14% lower cost than S4 in 2020 is a bit disappointing. Hopefully the BOS effect is bigger.

Maybe it was said 22 cts in 2019 before the S4 extension decision, but the crypotnite is the same.

Edited by explo

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