First Solar (FSLR)

[Guest ILOVEPV]

he is talking about FSLR. Too early to pick up. I will take it back below 22 (if any). My policy of not holding any stock through earnings works this time. What really makes me surprised is so adverse reaction for SOL shares. The stock lost almost 25% from its top only on good news. Shorts are working extremely effective and hard to bring all the sector down. I understand this stance with regard to american based stocks -they are grossly overvalued but the same approach to grossly undervalued prime Chinese one makes me puzzling. Playing this way big boys actually let you load at low price instead of forcing you to chase.

[Guest spiritcraft]

Back of the envelope... they could shut down module production and become and absolute giant in project development. They do know that business. If the worked on the BOS side they could use Chi modules and likely install a massive amount of GW's in the desert southwest alone in the coming years? Sounds like a plan.

[Guest littleguyintucson]

The fact that they can buy a module with 15% conversion efficiency, saving a lot of BOS cost compared to their own 13%, for 65 cents while having a 68 cent cost to make their own inferior modules, says that their module production is holding back their project profitability. Modules too bad, sad but true? Projects too good to be true, over time?

There are other intangibles within differing technologies that is not an apples to apples comparison of a performance of a watt in a real world scenario. Current cSi technology loses up to 25% efficiency depending on hot days. They break down much faster with elevated temps. You do not see companies bragging about this in their charts. You also have different performances in low light absorption due to angles of lights(AM/PM). Companies that do better in these areas are starting to point these out. SOL it touting better performance numbers from low light angles in their specs now. If you can perform 10-15% better through the day on average, that $0.03 cost difference is a $0.03 advantage.

[explo 706]

So what you are stating is, they have room to grow margins.

Or did I suggest that their projects margin is too good to be true in the future?

[Guest eysteinh]

Some of the c-si modules have better temperature coefficient and better NOCt performance than first solar. Some others have worse. I should know i compared 950 different module specs in q3.

[Guest MichaelZhao]

When CITI said "buy" like this one: http://www.forbes.com/sites/ericsavitz/2013/02/06/solar-citi-sets-buys-on-wfr-aeis-fslr-spwr-sell-on-stp/?ss=business%3Aenergy I knew it is the time to sell. When Gordon Johnson say "sell" like this: http://finance.yahoo.com/mbview/threadview/;_ylt=AuvPkXAaavn_R.ILWPWotnehuYdG;_ylu=X3oDMTFqbjdlaGdnBG1pdANNZXNzYWdlIEJvYXJkcyB3aWRnZXQEcG9zAzM0BHNlYwNNZWRpYU1zZ0JvYXJkcw--;_ylg=X3oDMTFlamZvM2ZlBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdAMEcHQDc2VjdGlvbnM-;_ylv=3?&bn=26b06026-17df-35ca-8ebe-217d2503f566&tid=1361979857300-4524a751-640b-4213-94b1-356a524225e9&tls=la%2Cd%2C23%2C3#mbt=Gordon%2520Johnson%2520...&mbl=%2Fmbview%2Fthreadview%2F%253F%2526bn%253D26b06026-17df-35ca-8ebe-217d2503f566%2526tid%253D1361979857300-4524a751-640b-4213-94b1-356a524225e9&mbtc=mb-tab-topic You BUY!

[explo 706]

thanks

[Guest Klothilde]

For apples to apples you need to consider: - approx. 5 cents in warranty and shipping costs that is included in FS COGS but not in Chi-Solar costs - an additional 3 cents in end-of-life recycling provision, included in FS COGS but not in Chi-Solar costs - my guess is that even though this is not necessarily a must for c-Si modules most projects will incur a decommissioning provision. - a yield advantage of 5-9% relative to c-Si under hot climate conditions (FS target markets) - a BOS penalty resulting from lower efficiency of the CdTe panels Do the math and you end up more or less at parity with the most competitive Chi-Solars. I'm eager to see the YGE figures to see at what cost per watt they exited 2013... However imho the value of FS results not from their current position but from the technological potential going forward. It seems to me that the room for higher efficiencies is larger for FS than for c-Si. For one the record cell efficiencies for c-Si have been stagnant for a long while (mono record set in 1999, poly record in 2004), and c-Si modules have already pushed the envelop considerably relative to these records. On the CdTe side the record cell efficiency is being pushed up at a much higher frequency and there is more room to expand module efficiency relative to record cell. What is quite unique in the case of FS is that the very same company owning the upstream cell record is the same marketing the electricity.

[Guest spiritcraft]

That is classic Gordo...

[Guest eysteinh]

- approx. 5 cents in warranty and shipping costs that is included in FS COGS but not in Chi-Solar costs - an additional 3 cents in end-of-life recycling provision, included in FS COGS but not in Chi-Solar costs - my guess is that even though this is not necessarily a must for c-Si modules most projects will incur a decommissioning provision. - a yield advantage of 5-9% relative to c-Si under hot climate conditions (FS target markets) - a BOS penalty resulting from lower efficiency of the CdTe panels

Klothilde I agree with you in many things so dont take this the wrong way. What I heard is that Canadian solar did not include warrenty and shipping costs in the cost estimate they made, (source of this is a photon international article where one of the stock analysists says the number from canadian solar does not include warrenty and freight.) I have not had this confirmed by other sources or if for example Trina solar dont include this. I know REC includes it in the costs they make and they had also lower cost than first solar in q4. (REC with yesterdays euro to dollar conversion had 0.65$/watt cost vs first solar including all costs 0.68, granted the real costs of first solar is lower as they point out in the presentation.) Things gets more interesting if you add the opex costs. Rec is at 0.08$/watt opex while fslr is around 0.19$/watt. (sg&a r&d) Trina solar including one off (rec includes one off in its opex so i assume this for both) is 0.17$/watt. They have lower processing cost than rec at 0.51 vs 0.56 for rec. Also trina has underutilization like fslr while REC is at allmost 100% capacity. Meaning that the real cost of both trina and first solar is lower if they produced at 100% (spreading deprecation costs over more volume.) Trina commented deprecation was at 9 cents and could down to 6 cents with 90%+ utilitization. (Currently at 70%.) When it comes to the yield advantage of FSLR vs c-si modules I am more sceptical. This is research done by FSLR, but there are other modules out there that perform exellent in tropical climates and hot climates. Again you just have to look at the temperature coefficent number and nominal operation temperature. Regarding your previous comment about sun at early and late night, this is because of the spectrum of radiance, mostly at the red wavelenght, REC is using backside passivation sensitive to this and yes this is an advantage some manufactures tout to try to achive higher ASP. The higher ASP is justified by higher effiency during the whole day of operation of the module.

[Guest eysteinh]

I should add REC has high interest costs so this is another factor to consider. Odyd makes a good presentation of these facts in his quarterly results report. I belive first solar is in a very good interest rate shape, while trina is a bit worse and rec kinda bad because they made many loans in the boom period of the economy.

[Guest ILOVEPV]

exactly, Michael. Absolutely right. All these analysts were very sharp in predicting oversupply glut but they did it after solars dropped 50%. After their prediction solars dropped 70% more presenting now extraordinary opportunities. Nowdays analysts are very cautious or staying aside keeping quiet because solars are extremely cheap. Buy recommendation they can do only on an intermediate top to squeeze some juice from retail investors. A huge load up is going on along with dragging the prices down. A first wave of solar stock enthusiasm with 100-300% fast rally is killed by non-stop shorting for the last 7 days in a row. According to TA a retracement of 50% of a previously made gain is approaching. For SOL it is around $2, For TSL and CSIQ is around 3.60-3.70, for JKS is still a lot of way down to $6. As for american stocks I do not think they bring them too low. My view for an absolute bottom is FLSR 22, SPWR 10, WFR 4.2. Most likely the stock won't reach these digits, so picking them now or a little bit lower is also right if you are an investor or swing (not day) trader.

[Guest Bodhi]

PV, what are your thoughts on the broader market in general? Is it alarming to anyone except me that the DOW seems to be ceiling bumping at 14k? One thing i know for sure, if the DOW dives to test 13 or 12k again, solars will sink with it. Might consider that as well. My 2c. KW

[Guest larryvand]

ILOVEPV, these are their highs and lows for 2013 TSL down 5.91 to 4 = DOWN 32.3% LDK down 2.32 to 1.57 = DOWN 32.3% YGE down 3.63 to 2.48 = DOWN 32% JASO down 6.14 to 4.22 = DOWN 31.3% FSLR down 36.98 to 25.50 = DOWN 31% CSIQ down 5.15 to 3.76 = DOWN 27% SOL down 2.8 to 2.1 = DOWN 25% SOL is the least down of the 7 listed above.

[Guest Klothilde]

Klothilde I agree with you in many things so dont take this the wrong way.

Don't worry, I'm not here to push or bash but simply to exchange thoughts on facts. I believe that FS is a good technology play but I also want to be challenged on this because I don't want to lose money. I'm looking to open a c-Si position and am currently looking for the highest long-term value.

What I heard is that Canadian solar did not include warrenty and shipping costs in the cost estimate they made, (source of this is a photon international article where one of the stock analysists says the number from canadian solar does not include warrenty and freight.) I have not had this confirmed by other sources or if for example Trina solar dont include this. I know REC includes it in the costs they make and they had also lower cost than first solar in q4. (REC with yesterdays euro to dollar conversion had 0.65$/watt cost vs first solar including all costs 0.68, granted the real costs of first solar is lower as they point out in the presentation.)

TSL AR 2011 Page 49: "Selling expenses consist primarily of provisions for product warranties, outbound freight, employee salaries, pensions, share-based compensation expenses and benefits, travel and other sales and marketing expenses." YGE AR 2011 Page 76: "Our operating expenses consist of: • Selling expenses, which consist primarily of advertising costs, salaries and employee benefits of sales personnel, salesrelated travel and entertainment expenses, sales related shipping costs, warranty costs, amortization of intangible assets (including backlog and customer relationships), share-based compensation expenses and other selling expenses including sales commissions paid to our sales agents. I like REC's cost position. From the Q3 numbers I get COGS of 52 €-Cts *1.31 = 68 uscents. No point in arguing about a few cents, this is extremely competitive.

Things gets more interesting if you add the opex costs. Rec is at 0.08$/watt opex while fslr is around 0.19$/watt. (sg&a r&d) Trina solar including one off (rec includes one off in its opex so i assume this for both) is 0.17$/watt. They have lower processing cost than rec at 0.51 vs 0.56 for rec. Also trina has underutilization like fslr while REC is at allmost 100% capacity. Meaning that the real cost of both trina and first solar is lower if they produced at 100% (spreading deprecation costs over more volume.) Trina commented deprecation was at 9 cents and could down to 6 cents with 90%+ utilitization. (Currently at 70%.)

FSLR gets most the revenue from systems at a much higher ASP per watt, so an OPEX comparison on watt basis becomes less of apples to apples. OPEX over Revenue is less of a difference. However I look at the high OPEX not as a burden but as an investment in proprietary technology. They plan on increasing efficiency by a full percentag point during 2013, which by itself will provide them with 10 cents of value at system level. 2013 will be a crucial year for FS, they will have to prove the value of the technology. BTW but this off-topic: I'm puzzled by the 9 cents depreciation comment of Trina, doesn't make sense to me at all. I had them at 27.5 million depreciation per quarter and relative to 415 MW that is 6.6 cents.

When it comes to the yield advantage of FSLR vs c-si modules I am more sceptical. This is research done by FSLR, but there are other modules out there that perform exellent in tropical climates and hot climates. Again you just have to look at the temperature coefficent number and nominal operation temperature.

Juwi did a comparison between CdTe and FS a few years back, and they came up with an average of 5,3% yield advantage for CdTe in their European project portfolio. I expect the advantage to be larger in sunbelt countries. FS speaks of 5-9 % yield advantage. The deciding factor will be how much of this yield advantage FS can monetize for the customer through higher performance guarantees. My guess is that they assume a conservative position on this, maybe 5%.

Regarding your previous comment about sun at early and late night...

I think this comes from littleguy. I'm keener on the yield advantage under hot climates.

[Guest spiritcraft]

To add to that... YTD. TSL and HSOL are the only names down for the year of the solar names I usually watch. (no LDK, CSUN, STP included) I know YTD is a moment in time with no real meaning but...

[Guest solarman1]

Odyd, will you have a new poll on which Chi Solar 11 will be winners in 2013 now we have info from FSLR and TSL?

[Paybak66 41]

Yeah, so much for the rally we had been having. Ouch...this is getting crazy..

[Guest ILOVEPV]

Larry I'm talking about 50% retracement in terms of losing 50% gain. SOL's bottom was 1.08 while top 2.80 i.e. 2.80-1.08=1.72; 1.72/2=0.86; 2.80-0.86=1.94 is the very (theoretical - TA classical) bottom for SOL retracement. JMHO: traders know this stuff and ready to pick up in there, that is why no stocks won't be allowed to reach this threshold i.e.. the stocks will start ramping up from higher level (for example from a current one). Being experienced in these games I bought back today a nice portion of SOL in 2.11-2.14 and SPWR in 10.8-10.85 ranges.

[Guest larryvand]

If you are going to have a new poll every quarter, better wait for all the participants included in the poll to report their quarter before doing a new poll. JMHO.

[Guest larryvand]

ILOVEPV, my post was in response to your first post where you said "What really makes me surprised is so adverse reaction for SOL shares. The stock lost almost 25%" So I'm pointing out that SOL is the least down amongst the 7 solars I included. FWIW. In general though, all the solars move together. It's like if one sneezes, they all catch a cold.

[Guest eysteinh]

BTW but this off-topic: I'm puzzled by the 9 cents depreciation comment of Trina, doesn't make sense to me at all. I had them at 27.5 million depreciation per quarter and relative to 415 MW that is 6.6 cents.

Interesting since the 9 cents is what they reported during conference call.

I like REC's cost position. From the Q3 numbers I get COGS of 52 €-Cts *1.31 = 68 uscents. No point in arguing about a few cents, this is extremely competitive.

Yeah its just rounding difference and what usd / eur exchange rate you use. I agree it is around that place.

TSL AR 2011 Page 49: "Selling expenses consist primarily of provisions for product warranties, outbound freight, employee salaries, pensions, share-based compensation expenses and benefits, travel and other sales and marketing expenses." YGE AR 2011 Page 76: "Our operating expenses consist of: • Selling expenses, which consist primarily of advertising costs, salaries and employee benefits of sales personnel, salesrelated travel and entertainment expenses, sales related shipping costs, warranty costs, amortization of intangible assets (including backlog and customer relationships), share-based compensation expenses and other selling expenses including sales commissions paid to our sales agents.

Exellent so there we have it straight from the reports, freight and warrenty is put into opex. Thanks again klothilde. No more rumors then it is true This explains perhaps why REC have a lower opex because it puts the cost into cogs, while also explaning the higher number for chinese c-si manufatures on opex.

FSLR gets most the revenue from systems at a much higher ASP per watt, so an OPEX comparison on watt basis becomes less of apples to apples. OPEX over Revenue is less of a difference. However I look at the high OPEX not as a burden but as an investment in proprietary technology. They plan on increasing efficiency by a full percentag point during 2013, which by itself will provide them with 10 cents of value at system level. 2013 will be a crucial year for FS, they will have to prove the value of the technology.

Yes all opex is not the same. I also like the opex people spend on r&d if it makes results. I notice a few companies put a lot more into r&d than others. (REC has and still put a lot of money into R&D)

Juwi did a comparison between CdTe and FS a few years back, and they came up with an average of 5,3% yield advantage for CdTe in their European project portfolio. I expect the advantage to be larger in sunbelt countries. FS speaks of 5-9 % yield advantage. The deciding factor will be how much of this yield advantage FS can monetize for the customer through higher performance guarantees. My guess is that they assume a conservative position on this, maybe 5%.

On average across all module producers I think this is still the trend. All I mean to say is there are modules out there that outperform FSLR also in hot countries.

I think this comes from littleguy. I'm keener on the yield advantage under hot climates.

My appologies then. Hopefuly answering his question then

[Guest spiritcraft]

We are not even close to being a mature sector. Most still think PV is a fad or a future investment not to be considered as yet. It has to be the most "played" sector by far. Case in point: FSLR could have come out last night and said point blank that "TSL is taking all of our business" and they would both be down today. There is not stable money, real investment in the sector... meaning a lot of big institutional money that provides a backstop. Not that the sector has earned it as yet but that day will come for the survivors and thrivers. As of now, especially in TSL, (and others as well) the shorts and the "players" have complete control rather than strong investors. The sector acts like OTC stocks...

[Guest Klothilde]

On average across all module producers I think this is still the trend. All I mean to say is there are modules out there that outperform FSLR also in hot countries.

Can you point out which ones? I'd be interested to have a look at them. I know you did an NOCT / STC comparison but forgot where you put the data...

[Guest ILOVEPV]

That is why a certain diversification is the must for solars (it helps you to avoid an unexpected blip with particular company) though on the other hand the best stock will perform better than others. That is why I made a compromise holding 5 solar stocks with different size of investment (proportionally to my understanding of their rank). for the time being I see SOL as the best one hoping it will be trading higher than YGE and may be TSL in a due time. It goes without saying all my current buys and sells are just a trading portion of solar portfolio. A core position is intact no matter what the Wall Street crooks do on a daily basis. I will gradually start reduce a core position after 300-400% gain from my buy price that translates in a case of SOL to $6-7.5 Though it is a commodity market I see no reason why this price is not reachable even within this 2013 year.

[Guest ILOVEPV]

Waiting for maturity means losing an opportunity. That is why this sector is so quiet, almost no exposure to TV, no analyst's appearance - everything is going on under a counter. The less attention of general public the better for those who are collecting shares. Well-known strategy. Just remember AAPL in those early 2000s - who was interested in this company with zero exposure?

[Guest spiritcraft]

I agree with that completely

[Guest eysteinh]

Data is from q3 2012: 22% noct efficency loss: (what is noct? http://pvcdrom.pveducation.org/MODULE/NOCT.htm) SCHOTT PROTECT ASI 107 SCHOTT PROTECT ASI 100 SCHOTT PROTECT ASI 105 SCHOTT PROTECT ASI 103 23.2% effiency loss SILIKEN SLK48P6L2180WBLACK 23.3% REC240PEPLUS 23.4% REC235PEPLUS 23.7% REC245PEBLK REC245PEECO REC245PEPLUS 23.8% REC240PEBLK REC240PEECO REC235PEBLK REC235PEECO 24.0% REC250PEPLUS 24.2% REC260PEBLK 24.3% REC255PEBLK 24.3% REC255PEECO REC255PEPLUS 24.4% REC250PEBLK REC250PEECO 24.9% FIRST SOLAR FS-275 FS-385 25.0% FS-272 FS-382 FS-270 FS-280 FS-380 FS-390 FS-387 FS-277 25.6% RENESOLA JC250M-24/Bbv 25.7% JC300M-24/Abv 25.7% SUNPOWER SPR-327NE-WHT-D SPR-245NE-WHT-D 25.8% RENESOLA JC260M-24/Bbv JC260M-24/Bb JC310M-24/Abv JC310M-24/Ab

[Guest MichaelZhao]

Working on a 2MW project, 30MW project is waiting for approval. http://www.ne21.com/news/show-39070-2.html

[Guest greensolar]

First Solar to become Desertec shareholder http://www.pv-tech.org/news/first_solar_to_become_desertec_shareholder Desertec are trying to develop 3000km of desert in solar farm, http://www.desertec.org/en/global-mission/