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A conversation with First Solar’s Bruce Sohn, Part II—‘We sell electricity’

by Tom Cheyney, PVTech, 26 May 2009

Although First Solar has indeed ramped 23 module production lines across its three manufacturing sites (with the 24th soon to follow), the company remains notoriously guarded about the inner workings of its processes and manufacturing facilities as well as its R&D activities. Not coming close to taking the bait, Sohn won’t answer any specific questions about film thickness uniformities or process temperature ranges or whether the research team is working on next-generation tandem-junction CdTe or even its own version of copper-indium-gallium-(di)selenide (CIGS). Nevertheless, he does shed some light on the company’s overall approach.

“Your average designer in the IC industry who puts together 32nm devices and a billion transistors on a chip might look at our ‘large-format wafer’ over here with 116 cells of 1cm in diameter and say that he can’t believe that would be very difficult to deal with,” Sohn points out. “But the so-called simple device that we create, which is in essence a diode, has really humbled many a senior engineer.

“We do not build any of our equipment; most of the equipment we have was designed by us or designed in close cooperation with an equipment supplier,” he explains. “One of the early things we did was integrate all of this. The ability to design a line that operates end-to-end, completely connected, where you put a piece of glass on the conveyor belt on one end, and two, two-and-a-half hours later, you’ve got modules going into a box that’s ready to be shipped out to a customer, there’s a lot of challenges to putting together a line like that. But once it’s running, it really enables very high throughput and excellent quality control.”

First Solar processes its modules using vapour transfer deposition (VTD), which Sohn says is “very similar to CSS (closed-space sublimation). It’s a high-temperature deposition vaporization of the materials transported above the device. The key is that the dep rate [with VTD] is especially high. When you’ve got a capital-intensive business and you’re trying to get the costs down, one of the best ways to do that is to have a very high dep rate across a large area and be able to deposit and keep the equipment running all the time.”

Process control, says Sohn, is “something that’s developing over time. In the early days, there was not a whole lot of online, in-situ kind of monitoring, and we’re starting to do more of that. You just didn’t need it before, since the process performance was relatively wide for a long period of time, so there wasn’t a need to measure as frequently. Nowadays, we’re improving our process control, we’re tightening things up, we have better and better performance, more predictable output from our lines, so we are starting to evaluate more frequently, and I think you’ll see an ongoing trend in that direction.”

With its tightly protected proprietary process and manufacturing technologies, don’t expect First Solar to jump on the solar PV industry standards bandwagon any time soon.  “There are not a lot of places where there is much standardization, but I’m not sure that there are very many companies clamouring for it right now,” Sohn opines. “For differentiated technologies, part of the differentiation is the lack of a standard, your own standard is the differentiation, so to speak. There are some exceptions that probably make sense, for example, where people use glass with similar thicknesses. The glass industry would probably really appreciate it if we would all hone in on a similar set of glass sizes.”

But the most important common denominator is outside the factory altogether. “Don’t forget that the interface ultimately turns into a standard because when we connect up to the power grid, that power grid is expecting a particular output, a particular performance, and the transformer tends to be the standardizing agent, the interface between any power plant and that transmission grid.”
‘Gunning for the fossil-fuel industry’

Although there are more similarities than differences between the semiconductor and solar domains, there is a fundamental distinction between his former industry and his current one, Sohn notes, and that is cost, which he says “is absolutely critical to our business. In most businesses, the product is sort of the market, and you try and grow that market. That’s different in our business, because what we’re creating is energy, power, and the power industry is one of the best examples of a commoditized industry in the world. That industry already exists and it has a particular cost structure to it.

“It may look like we sell glass in those boxes we ship out, but we don’t really sell modules, we sell electricity, and the cost of that electricity, if we’re going to be successful, has to match up in some way with the cost of traditional forms of creating electricity. That’s very much different from the semiconductor industry.”

Contrary to what one might think is First Solar’s competitive landscape, Sohn and his colleagues have a different way of looking at the marketplace.  “A lot of people, when they ask us about competition, always want to know about the other photovoltaics or solar companies that are out there, but that’s not our interest. Other companies may be kind of gunning for us because we’re the industry leader, but from our perspective, we’re really gunning for the fossil-fuel industry.

“We want to give utility companies a viable choice between dirty, traditional fossil fuel-generated energy and clean, environmentally friendly, photovoltaic-generated energy. That’s what we see as the core vision of our company. If we’re going to solve the world’s problems, we have to do it on a massive scale. And you can’t do things on a massive scale if it’s always going to be subsidized.

“So our objective is to drive down the cost, so now a utility company executive has to choose, ‘Do I really want to put in this gas peaker plant or do I want to put in this solar power plant? Do I have to invest in this coal-fired plant and can I put in a solar power plant?’ That’s the choice that we’re trying to create in the marketplace.”
Cost reduction makes happy customers

This relentless commitment to cost reduction helped land key early contracts for First Solar and underscores the company’s recognition of the importance of that old chestnut of “putting your money where your mouth is.”

“We try and make sure that we drive a cost roadmap that continues to scale down over time,” explains Sohn. “We were so committed to that when we signed our contracts with our initial six customers, we committed to them over a six-year period that we would reduce the cost of our modules about 6-1/2% per year, matching the EEG (German Renewable Energy Sources Act) digression at the time. That was a long-term promise to our customers, which was something that they needed to ensure that they could maintain their margins and strengthen their business over time.

“That’s what we’re really trying to do,” stresses Sohn.  “We want to make sure that we can keep our costs in a position that facilitates the ongoing flow of our modules into the marketplace, but also serves to strengthen our customers and make sure that they can be effective in maintaining their returns and so forth as they do the installations.”