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2 hours ago, Klothilde said:

BNEF: U.S. module prices seeing “aggressive” reductions
https://pv-magazine-usa.com/2018/10/19/bnef-u-s-module-prices-seeing-aggressive-reductions/

Mono PERC to drop to 33 cts by year end 2019.  How on earth is FSLR supposed to survive with just 40% gross margin?

That is a good question how is FSLR to survive? What does 40% margins really mean? They might get 3GW of S6 prodcution in 2019 as 1.2GW comes online mid 2019. If they can get 3GW of shipments with fat 40% margins on that $0.33 ASP, then you can expect $264M gross profits from the S6 line. Opex is $400M. Where does the rest and profits come from?

What do they do with the 2GW of S4 production? Where do those shipments go to? The production costs are above current global ASP. Do they ship these to the U.S.? That is questionable. If they do ship to the US they may get another $140M in gross at best.

That is a total of $400M in gross. Their Opex runs at $400M  a year so where is the profits?

Now the big question is can FSLR sell 5GW in 2019 in the US? Does the markets support that?

 Their market segment which is groundmount. In the US groundmount has  been slashed 45% for 2019 to 6.3GW.  At 5GW, you are suggesting that the entire ground mount market is FSLR. That is unreasonable. The growth rate overall is now only 7% from 2018 levels. There is expected to be 5GW of U.S. production capacity for Crystalin modules alone.  That is before 5GW of US capacity before any tarrif free imports from Sunpower. That Sunpower import is expected to be 2GW of module capacity. That is 7 GW of production that is tarrif free from Crystalin.  That leaves only 3GW  of extra capacity for Thin films and other crystalin imports of which you are looking at 5GW+ for FSL alone. That foreign Poly PERC will be imported at a cost of around $0.28-$0.30(including shipping and tarrif). 

 

Something is going to have to give.

 

https://www.pv-magazine.com/2018/08/09/us-eia-forecasts-modest-uneven-solar-market-growth-in-2019/


10.3 GW-AC of solar will be installed in 2019, a 7% growth from 2018 


In the August edition of the report, EIA has dramatically reduced its expectations for utility-scale deployment from 11.4 GW-AC to only 6.33 GW in 2019
 

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SCSolar seems to raise good points. Any rebuttal to that Klothilde? Or to the end of the article that you posted about 2021 margins evaporating for US manufacturers? I’m trying to figure out how to handle my large FSLR position. I hope for some clarity tomorrow evening, buuuut. 

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1 hour ago, SCSolar said:

That is a good question how is FSLR to survive? What does 40% margins really mean? They might get 3GW of S6 prodcution in 2019 as 1.2GW comes online mid 2019. If they can get 3GW of shipments with fat 40% margins on that $0.33 ASP, then you can expect $264M gross profits from the S6 line. Opex is $400M. Where does the rest and profits come from?

Okey let me tweak this in favor of FSLR.  I don't even understand your math. 3GW at $0.33 and 40% yields $264M ?  I get $396M.  But let's push this further.  Average ASP for 2019 according to the article is 35 cts.  At costs of 20 cts the gross goes up to $450M.

OPEX in 2018 is $400M because it includes $120M in start-up expenses.  Next year start-up costs are set to drop to $25M and OPEX to $300.  Means $150M in juice already.

1 hour ago, SCSolar said:

What do they do with the 2GW of S4 production? Where do those shipments go to? The production costs are above current global ASP. Do they ship these to the U.S.? That is questionable. If they do ship to the US they may get another $140M in gross at best.

That is a total of $400M in gross. Their Opex runs at $400M  a year so where is the profits?

S4 is pushed into the U.S. as well with the advantage that it is suitable for the commercial and industrial segment as well.  Produced at 27 cts and sold for 35 cts gives me $160M in gross.  Total gross thus $610M and EBT thus $310.

Expect further juice from the contracted project pipeline that has a GM north of 50%.

1 hour ago, SCSolar said:

Now the big question is can FSLR sell 5GW in 2019 in the US? Does the markets support that?

I hope so.  

1 hour ago, SCSolar said:

...That foreign Poly PERC will be imported at a cost of around $0.28-$0.30(including shipping and tarrif)

Whaaat?  I think the 33 cts ASP is at 0%GM for the CNs.  No way they can have a profit on this.  Let's look into it please.

1 hour ago, SCSolar said:

 Something is going to have to give.

Yes, fully agreed, and I think now it's the Chinese's turn to start giving.  Enough of companies selling at cash cost and being kept alive by politicians.  Let Junko start giving.  $0M in gross profit and $400M in OPEX and NI looks adequate to start giving imho.

 

  • Thanks 1

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28 minutes ago, Klothilde said:

 

Okey let me tweak this in favor of FSLR.  I don't even understand your math. 3GW at $0.33 and 40% yields $264M ?  I get $396M.  But let's push this further.  Average ASP for 2019 according to the article is 35 cts.  At costs of 20 cts the gross goes up to $450M.

 

Yeah me bad, the $264 is based on 2GW and a 33 cent ASP. As for $0.35 in 2019, they are suggesting $0.35 - $0.40 quotes for Q4  this year..

 

As for the phat project pipeline, no double counting. Capacity is only 5GW tops for 2019.

 

 

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4 hours ago, SCSolar said:

...That foreign Poly PERC will be imported at a cost of around $0.28-$0.30(including shipping and tarrif). 

I'm kinda confused with the U.S. tariffs and how they are all applied in combination.  I was hoping you can help me with some questions.

For starters here's PV-magazine stating that for imports from China tariffs are compounded:
https://pv-magazine-usa.com/2018/08/07/united-states-confirms-additional-25-tariffs-on-chinese-cells-modules/
"...Among the 279 product lines included on this list are solar cells and modules, and these 25% tariffs will add to the 30% Section 201 import duties. According to expert trade lawyer John Smirnow, the anti-dumping and anti-subsidy tariffs imposed in 2014 currently also represent around 30%, meaning an effective 85% tariff on any solar cells or modules imported into the United States from China..."

Now regarding the 2.5GW cell waiver in the 201 case, do those cells get the 2014 and 301 tariffs applied to them nevertheless?

When you talk about $0.28-$0.30 including shipping and tariff I assume you are talking about non-Chinese production in SEA e.g. Malaysia.  Those would only have the 201 tariff of 25% and not the whole whopping 80%.  However production in SEA is a coupla pennies more expensive than China, right?

Please help me.

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27 minutes ago, solarpete said:

We'll see just how fantastic tomorrow.

I'm scared of the market reaction because bookings will suck...  I'll have a bottle of Chardonnay ready for whatever happens.

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40 minutes ago, Klothilde said:

I'm kinda confused with the U.S. tariffs and how they are all applied in combination.  I was hoping you can help me with some questions.

For starters here's PV-magazine stating that for imports from China tariffs are compounded:
https://pv-magazine-usa.com/2018/08/07/united-states-confirms-additional-25-tariffs-on-chinese-cells-modules/
"...Among the 279 product lines included on this list are solar cells and modules, and these 25% tariffs will add to the 30% Section 201 import duties. According to expert trade lawyer John Smirnow, the anti-dumping and anti-subsidy tariffs imposed in 2014 currently also represent around 30%, meaning an effective 85% tariff on any solar cells or modules imported into the United States from China..."

Now regarding the 2.5GW cell waiver in the 201 case, do those cells get the 2014 and 301 tariffs applied to them nevertheless?

When you talk about $0.28-$0.30 including shipping and tariff I assume you are talking about non-Chinese production in SEA e.g. Malaysia.  Those would only have the 201 tariff of 25% and not the whole whopping 80%.  However production in SEA is a coupla pennies more expensive than China, right?

Please help me.

Most all the major companies all open plants outside of China in tariff free zones. Thus the 2014 tariffs do not apply to that tariff free production volumes.

I do not view the Malaysia/Vietnam capacities at any more cost than China as most is new and automated equipment. At most, I expect a penny or 2 more in cost max.

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SCSolar, why are you so negative about First Solar's 2019 earnings? That doesn't make much sense considering the company is booked out for the year. And to question where gross profit will come from outside of S6 module sales completely ignores the project business that the company does.

FSLR is expected to make around $1.70 this year. Next year the company will sell the same amount of S4 as this year and do a little more project business. In addition to that, First Solar will sell 3GW of S6 modules and save around $120M on startup and ramp expenses. The $3 analysts are expecting seems very achievable.

That said, one thing completely ignored by folks is that earnings this year should be considerably higher than expected. Last year the company took a $400M tax hit to repatriate its overseas cash. Doesn't this seem excessive to people? At a 15.5% rate that would mean the company had $2.58B stashed away. That doesn't make any sense at all. The company had accumulated earnings of $2.3B at the end of 2017, already repatriated over $600M in 2016, and presumably has made a lot of profit in the US that didn't need to be repatriated.

What seems likely is that the company budgeted repatriating the cash at the full 35% rate and will thus claim a huge, $200M+ refund either this quarter or next when it files it taxes for the year. If you read the 10Q and listen to the conference call you will see several hints about this potential refund.

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2 hours ago, Luz del Norte said:

SCSolar, why are you so negative about First Solar's 2019 earnings? That doesn't make much sense considering the company is booked out for the year. And to question where gross profit will come from outside of S6 module sales completely ignores the project business that the company does.

FSLR is expected to make around $1.70 this year. Next year the company will sell the same amount of S4 as this year and do a little more project business. In addition to that, First Solar will sell 3GW of S6 modules and save around $120M on startup and ramp expenses. The $3 analysts are expecting seems very achievable.

My concerns with FSLR are around the S4 capacity, the S6 ramps and the ASP. There was an exchange in the Q2 con call with Widmar in which the Goldman analyst asked about ASP and S4 viability with ASP targets falling to $0.25 near term. Widmar answered it as if the cSi had a production cost of $0.25 + $0.02 freight and insurance. Then he suggested the $0.20 showed them with a $0.07 production cost advantage. He did not really touch at all on the S4 viability at this ASP level.  The implication of the cost points using S6  is then you get the ASP sales markup in which Opex and Profits are added to that $0.25 cost for the CN.  In reality  FSLR  gives costs including freight, while CN gives ASP and then includes freight and warranty in Opex.

From this spin given,  If you look flatly at the ASP at $0.25 or $0.27 and FSLR costs for  S4 capacity at $0.27, then it is not competitive right now globally and is marginal at best profitable in the U.S.  Right now all the S6 apacity is targeted for Systems from the Q2 con call. That means the S4 is for module sales.  Customers are not going to take the S4 globally(which was something like 20% at an ASP of $0.35-$0.42 when they can get Si for $0.25. Even in the U.S. with an ASP at $0.23, the cost with tariff will be under $0.30 for Poly. 

I expect FSLR as the analyst asked to look to be phasing out the S4 far sooner than anticipated. The S6 will have costs in the $0.22 range for 2019 as they iron out the manufacturing issues. They will have ramp costs for their plants. And their Opex will run around $100M+ with the new plants and capacities at full capacity. 

FSLR has more downside risk to their $3 earnings with a $0.25 global ASP. My suggestion is that the lower ASP average has a $160M risk in gross alone which cuts that $3 in EPS in half.  The rising interest rates are going to make the sales of  owned projects less desirable which will also lower the gross on those. The EPC contracts will have pricing pressure on the module ASP  as well that could cut 3-5% of that income. 

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SCSolar, I am not sure why you are concerned about the S4 selling at the global ASP when those modules will be sold at the price listed on signed contracts. I really doubt the company would have signed those contracts if it was losing money on them. Besides, the two S4 factories will be converted to S6 in the near future. One will be shut down at the end of 2019 and the other I am guessing will be converted once the S6 factories are operating at nameplate capacity and the company is sure it can cover existing orders with S6 production. Regarding Opex, has it occurred to you that the systems business pretty much covers that?

While 2019 will be a tough year for the solar industry as a whole, First Solar seems well protected in its tariff bubble. Things could get tough when the tariffs wind down but by then the S4 will be long gone and FSLR will have 6.5 factories churning out S6 modules. In the meantime, you are looking at a company with 2/3rds of its market cap in cash and a forward PE of 12 all while going through a major transition.

If you want to be a concern troll about a stock have you considered SunPower? That is a stinky pile soon to have a negative book value.

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6 hours ago, Luz del Norte said:

SCSolar, I am not sure why you are concerned about the S4 selling at the global ASP when those modules will be sold at the price listed on signed contracts. I really doubt the company would have signed those contracts if it was losing money on them. Besides, the two S4 factories will be converted to S6 in the near future. One will be shut down at the end of 2019 and the other I am guessing will be converted once the S6 factories are operating at nameplate capacity and the company is sure it can cover existing orders with S6 production. Regarding Opex, has it occurred to you that the systems business pretty much covers that?

While 2019 will be a tough year for the solar industry as a whole, First Solar seems well protected in its tariff bubble. Things could get tough when the tariffs wind down but by then the S4 will be long gone and FSLR will have 6.5 factories churning out S6 modules. In the meantime, you are looking at a company with 2/3rds of its market cap in cash and a forward PE of 12 all while going through a major transition.

If you want to be a concern troll about a stock have you considered SunPower? That is a stinky pile soon to have a negative book value.

I just view FSLR in a different light than some as I see  downside risks. You can call it trolling if you want because it expresses downside risk.

As for contracts, they can be broken and adjusted if market dynamics change. That happened in the past and several companies . I know they have downplayed that risks near term which I agree in general.  The quality of their customers are reliable in the U.S.. They also acknowledged that future contracts are slowing with a wait and see where the ASP falls to. They also seemed to imply heavy competition for projects lowering ASPs for them.  The EIA forecast took PV installs for utility scale projects down from 11.4GW to 6.9GW after tariffs for 2019. That is a significant market change.  The question is real as to how much can FSLR expect to gain in sales from that market segment with that market dynamics change. I do not think that is reflected in the future prospects for 20% of their un-contracted capacity through 2020.

 

They have 10GW of sales booked through 2020. They have an  extra 20% they need to book to fill expected capacity is going to be lower. Some that is booked may be adjusted. You will be looking at a future global ASP not at $0.25-$0.30 which is where it is near today, but you will be looking at $0.20-$0.25 by the  S4 lines are converted to S6.  $0.25 is currently the average for Thin Film with a low at $0.22. Poly which will die off is at $0.22 average with $0.20 as the low.  Those S6 lines are not as profitable globally as some might be suggesting.  I find the reliance on a single subsidized and now protected market market for 80% of their volumes risky. 

 

I agree SPWR is a stinky. I told a person exactly that when he was going to interview with them as a purchasing director a year or so ago,

 

The CN companies are sleazy as well. Several large industry leading companies have gone under over the past decade. Yingli had a billion dollar negative equity but is still around because of government assistance. Jinko sold at a sweatheart deal the power business, to the founder.  Jaso sold out to the CEO at way below asset values, Now CSIQ CEO appears to be waiting for the right time to lower his offer as he is taking a very long time to make a solid buyout offer like Jaso.

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4 hours ago, SCSolar said:

I find the reliance on a single subsidized and now protected market market for 80% of their volumes risky

But isn't it riskier NOT to have a protected market and having to sell at production cost or below?  

 

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3 hours ago, Klothilde said:

But isn't it riskier NOT to have a protected market and having to sell at production cost or below?  

 

I agree. The idea that during a price war the company with a large nest egg operating in a protected market is going to fare worse than highly indebted companies selling at below in-house cost to a suddenly smaller market doesn't make much sense.

Jinko's in-house cost has been remarkably consistent over the past year and a half at 31 cents. Even if it were to be given silicon ingots for free (a 7 cent savings) I don't see how it could profitably sell at 20 cents in the near future. And if poly is dead, what does that say about Canadian Solar?

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On 10/24/2018 at 8:38 AM, Klothilde said:

Okey let me tweak this in favor of FSLR.  I don't even understand your math. 3GW at $0.33 and 40% yields $264M ?  I get $396M.  But let's push this further.  Average ASP for 2019 according to the article is 35 cts.  At costs of 20 cts the gross goes up to $450M

 

From the Q3 con call if I heard right, the margins of S4 are mid teens(15-16%). The ASP declined for recent quotes by 10%. If the cost to manufacture the S4 is $0.27, then the ASP is around $0.315. The S6 has a 6% premium and thus the ASP is ~ $0.332. That seems below the $0.35 you were suggesting for 2019 in your estimates. Do these numbers look like what you heard?

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8 minutes ago, SCSolar said:

From the Q3 con call if I heard right, the margins of S4 are mid teens(15-16%). The ASP declined for recent quotes by 10%. If the cost to manufacture the S4 is $0.27, then the ASP is around $0.315. The S6 has a 6% premium and thus the ASP is ~ $0.332. That seems below the $0.35 you were suggesting for 2019 in your estimates. Do these numbers look like what you heard?

The numbers you are coming up with are for modules that will ship in 2020 and 2021. As for 2019, from the last 10Q FSLR stated it had contracts to sell 8.3GW at $3.0B which is around 36 cents.

Now that we have learned the cancelation penalty is 20% can this fear of cancelations be put to rest? Any canceled contracts appear to be great for FSLR. It makes a nice profit for doing nothing and then the company can sell the modules to someone else for more profit.

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6 hours ago, SCSolar said:

From the Q3 con call if I heard right, the margins of S4 are mid teens(15-16%). The ASP declined for recent quotes by 10%. If the cost to manufacture the S4 is $0.27, then the ASP is around $0.315. The S6 has a 6% premium and thus the ASP is ~ $0.332. That seems below the $0.35 you were suggesting for 2019 in your estimates. Do these numbers look like what you heard?

Yeah I concur with Luz, from what they said the new bookings apply to latter half of 2020 and 2021.  Looks like he mentioned a 10% price premium.

"...We are largely sold out to the end of 2020 when taking into account our new bookings in combination with opportunities that are signed but not yet counted as bookings...

...And the way I would look at that is where we're pricing Series 4 with the new bookings will be kind of mid-teens type of margin which I'm happy with. And then I'm getting about – and if I look at my last quarter bookings I got about a 10% premium of Series 6 over my Series 4 price. So that's obviously very, very positive. So from that standpoint the volume is great and the actual underlying ASPs and the economics relative to the headlines..."

Your quick & dirty picture for S6 would change to an ASP of 31.5 cts *1.1 = 34.7 cts which for end 2020 is a better pricing than the mono-PERC quotes from bloomberg discussed above.  If S6 costs are 20 cts you get >40% on GM with that pricing.

That said I don't put that much emphasis on the accuracy of ASP and cost projections two years into the future which naturally carry some uncertainty.  For me the bigger point to make is that FSLR sits on a mountain of cash and has ensured substantial cash flow for the next two years whereas CN peers all sit on a mountain of debt and face substantial cash burn that can make them go bust in no time.

Here's why I see this downturn so risky for the CNs:  Historically the CN PV industry has counteracted periods of oversupply by lowering prices and generating additional demand to balance the market.  Until now this has worked because we've had a series of uncapped FIT-driven markets around the world where lower prices sent IRRs through the roof and made installations explode.  This happened particularly in Spain, Italy, Germany, and China.  And every time the CNs reduced prices they were able to keep or bring back margins to healthy levels through cost reduction - the main lever being a reduction in polysilicon prices and margin transfer from the upstream to the downstream.

Things have changed this time around.  The world doesn't have any uncapped FIT market or any other market around that can expand massively in the short term to absorb the excess supply.  Thus prices keep falling and falling without any noticeable demand appearing.  In parallel the ability to counteract lower component margins by shifting polysilicon margin into the downstream is coming to an end, as the poly margins have been squeezed to the bone.  As a result we have prices that are approaching cash cost at each step of the value chain and for the first time are driving historically competitive companies out of business, e.g. the Taiwanese industry which is currently imploding.  In a nutshell I expect the balancing of the market this time around to happen through a reduction in supply (as opposed to an expansion of demand in the past) that ultimately will result in higher prices once enough players have exited the market.  No rocket science but simple classical and brutal consolidation.

 

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8 hours ago, Klothilde said:

Things have changed this time around.  The world doesn't have any uncapped FIT market or any other market around that can expand massively in the short term to absorb the excess supply.  Thus prices keep falling and falling without any noticeable demand appearing.  In parallel the ability to counteract lower component margins by shifting polysilicon margin into the downstream is coming to an end, as the poly margins have been squeezed to the bone.  As a result we have prices that are approaching cash cost at each step of the value chain and for the first time are driving historically competitive companies out of business, e.g. the Taiwanese industry which is currently imploding.  In a nutshell I expect the balancing of the market this time around to happen through a reduction in supply (as opposed to an expansion of demand in the past) that ultimately will result in higher prices once enough players have exited the market.  No rocket science but simple classical and brutal consolidation.

That is a compelling argument.  But then I wonder why all the CN CEOs are so eager to take their companies private.  If I'm expecting market conditions rough enough to threaten my very survival, why would I take my company off the market and forego the possibility of raising needed cash by just diluting the hell out of existing shareholders?  I'd think the only reason to take a company private would be to keep future PROFITS all to yourself, not expose yourself to all the risk of complete and total loss.

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18 hours ago, Luz del Norte said:

The numbers you are coming up with are for modules that will ship in 2020 and 2021. As for 2019, from the last 10Q FSLR stated it had contracts to sell 8.3GW at $3.0B which is around 36 cents.

Now that we have learned the cancelation penalty is 20% can this fear of cancelations be put to rest? Any canceled contracts appear to be great for FSLR. It makes a nice profit for doing nothing and then the company can sell the modules to someone else for more profit.

Actually 20% on a $0.36 ASP is $0.072. If you can buy for $0.25 then you save over 10%   even paying the 20%. If you building a 100MW plant , you are saving $3.8M  on the  module costs. That is significant. I

If you had contracted that ASP for a year out say in 2020, you may very well get even lower than $0.25. There is a compelling reason to cancel or re-negotiate with FSLR.

If you look at at projects cost $1 to build and you were expecting a 10 or 12% ROI, then a 4 cent saving is a 33-40% more profit by canceling and buying lower. That is a HUGE incentive to rework the contract.

I believe Widmar in a past conference call suggested an ASP variance of 2 or 3 cents would not cancel a project due to fundamentals. A purchase saving 4 cents or more per watt, then would clearly fall outside of his 2 to 3 cents and a 33% increase in profits would clearly lead someone to withdraw. This may not happen for projects with modules ready to mount today, but if you are looking at 90 plus days out that could be a different scenario.

Caveat- the comments above are suggesting outside US sales as tariffs will not allow a $0.25 purchase.

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27 minutes ago, SCSolar said:

If you had contracted that ASP for a year out say in 2020, you may very well get even lower than $0.25. There is a compelling reason to cancel or re-negotiate with FSLR.

While it might make sense for a developer to cancel a contract, I really don't understand how this could be considered bad for First Solar. Making 7.2 cents for doing nothing is a lot more profitable than making 5 cents by having to do something.

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Plus you can always sell modules from cancelled contracts for good cash. S6 will have cash cost of 16 cts, so anything above that is juice. 

However Widmar has said no u.s. customer has talked about cancelling.

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11 hours ago, Klothilde said:

Things have changed this time around.  The world doesn't have any uncapped FIT market or any other market around that can expand massively in the short term to absorb the excess supply.  Thus prices keep falling and falling without any noticeable demand appearing.

This is the thing I really wonder about. Companies got through the 2016 downturn by doubling capacity. This time, however, not only will the market shrink rather than experience huge growth, but bigger fish like Longi are crowding the market and will shrink the available pool even more.

It wouldn't be too surprising if in 5 years all the currently heavily indebted solar companies are distant memories, replaced by Longi, LG and other large corporations.

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Plus, would you rather take some cheap Chinese module from a manufactuer that's about to go out of business and trying to dump inventory?  Or do you go with a company that'll be around to service a warranty for a massive project?  Sure, FSLR isn't without quality competition from Jinko, Trina, Longi, LG, etc... but at a point in the next year or so, prices will stabilize and there outta be plenty of work to go around for those Tier 1s worldwide, because the supply won't be there anymore, once the smaller players have dumped and closed up shop.  

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4 minutes ago, Luz del Norte said:

While it might make sense for a developer to cancel a contract, I really don't understand how this could be considered bad for First Solar. Making 7.2 cents for doing nothing is a lot more profitable than making 5 cents by having to do something.

There is nothing wrong with getting 7 cents.

The problem I was pointing out initially that they are going to have a harder time selling for the "Juicy" profits overseas with the ASP collapse. The $0.35 ASP bantered around has in my opinion significant downside risk. FSLR has indicated that they expect a significant amount of business to come from overseas growth. Those markets are not protected and the module margins are at risk.

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24 minutes ago, Klothilde said:

Plus you can always sell modules from cancelled contracts for good cash. S6 will have cash cost of 16 cts, so anything above that is juice. 

However Widmar has said no u.s. customer has talked about cancelling.

Yes you can always resell but where and at what price?  Overseas where the ASP is $0.25 today for thin film? The issue is you have to find the demand. In the U.S. the market is not booming and is contracting.  As I pointed out the EIA estimates a 40% decline in ground mount systems due to the tariff impacts. That is FSLR markets. If you look at FSLR capacity at 5GW + 2GW for SPWR and what is looked at 5GW of new U.S. capacity, there will be competition in the U.S. 

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35 minutes ago, Mark said:

Plus, would you rather take some cheap Chinese module from a manufactuer that's about to go out of business and trying to dump inventory?  Or do you go with a company that'll be around to service a warranty for a massive project?  Sure, FSLR isn't without quality competition from Jinko, Trina, Longi, LG, etc... but at a point in the next year or so, prices will stabilize and there outta be plenty of work to go around for those Tier 1s worldwide, because the supply won't be there anymore, once the smaller players have dumped and closed up shop.  

Where do you see the price stabilizing? China seems to be suggesting $0.25 or less to be grid competitive. If you have a $0.60 target with storage come 2023 to be competitive  where is that module ASP headed?

In the past, modules sold for cash cost then rebounded around 10%-15% and stabilised before gradual reductions. I believe the cash costs are around $0.20 today.

CSIQ suggested they were at $0.25 recently for production costs of their new half sized poly perc wafers. 

If you look at 3.5 grams per watt and 5 cent processing(0 improvement) a wafer cost $0.075 to make at new Si capacity costs to manufacture. You look at the next gen being ramped with efficiency of 22-24% you have a module processing dropping from $0.10 to $0.08ish. Your cell processing costs drop from $0.06 to $0.05. Loaded costs will be around $0.20 in the next year for the most efficient companies that by the way will have over 80% of the Global capacity.

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11 minutes ago, Klothilde said:

Guys, is the 10K out yet? What is the ASP of the module backlog? I'm out with the girls and cannot check.

The backlog 8.4GW for $3.1B. That comes out to 36.9 cents though I am guessing the increase over last quarter is a rounding issue. Incrementally the change was 0.1GW for $0.1B.

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