[Interview] First Solar Tapping Japanese Market With CdTe Panels

2014/04/29 03:42
Shinichi Kato, Nikkei BP CleanTech Institute

First Solar Inc, a leading solar panel manufacturer based in the US, established a Japanese subsidiary in 2013 and started to tap the Japanese market.

Its main solar panel product uses a compound semiconductor solar cell using cadmium telluride (CdTe). While CdTe solar panel allegedly has the highest conversion efficiency and lowest cost of all types of compound semiconductor solar panels in production, it uses a compound containing cadmium, which is a toxic material. In Japan, which has a history of cadmium contamination such as Itai-itai disease, there is a high psychological barrier to accepting the material.

We interviewed Karl Brutsaert, Director, Business Development, First Solar Inc, who is in charge of the Japanese market.

Q: Do you think CdTe compound semiconductor solar panels will be accepted in Japan, where people are highly reluctant to use cadmium?

Brutsaert: First of all, we want to stress that cadmium telluride (CdTe) is different from cadmium (Cd) and that CdTe is chemically stable. CdTe has been certified as reliable and safe by, for example, independent certifying bodies. Also, in Japan, the safety of solar panels using CdTe has been proved through researches conducted by the University of Tokyo and other organizations.

Furthermore, we launched a recycling program in 2005 to thoroughly control the life cycle of solar panels such as installment, collection and recycling. We believe that, as we continue to present those facts, Japanese users and investors will understand our view.

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Q: Could you tell us about First Solar's past records?

Brutsaert: We have installed more than 100 million solar panels worldwide, and their total output capacity is higher than 8GW. In some of those projects, we provided not only solar panels but also EPC (engineering, procurement and construction) services.

In regard to EPC services, we have been currently engaged in a total of 3GW of construction projects. In terms of EPC and O&M (operation and maintenance) of 1MW or larger-scale solar power plants, we have the largest share in the world.

In April 2013, we acquired TetraSun. It manufactures crystalline silicon solar panels that can maintain high output levels even in high-temperature seasons because of their low temperature coefficient. Therefore, they are best suited for systems to be installed on rooftops where a limited area is available.

We aim to improve the cost competitiveness of solar power generation to a level equivalent to conventional power production sources by making use of a vertically-integrated business model that covers not only production of solar panels but production, construction, operation and maintenance of entire solar power generation systems.

Q: How can power producers benefit from the vertically-integrated business model?

Brutsaert: Because the business model optimizes an entire project, makes it easy to lower costs and enables to see risks in every phase, a power plant that has a long-term, high reliability can be realized. And investors will find it an attractive investment.

Also, we have a large amount of ready cash. In 2013, we raised US$430 million by issuing new shares for the second time. We will invest the raised capital in mega solar construction projects in new regions.

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Q: First Solar announced that it will engage in the construction of solar power plants in Japan and invest about ¥10 billion in it. How do you consider the Japanese market?

Brutsaert: We consider that, among power sources, solar energy will play an important role. After the Great East Japan Earthquake, the amount of electricity generated by nuclear power plants decreased, and it has been made up for by thermal power plants. As Japan's dependence on imported fossil fuel has been at a very high level, power sources that do not depend on fossil fuel are becoming more important from the viewpoint of national security.

We expect that some of the nuclear power plants in Japan will restart power generation. And the importance of thermal power plants will not change. However, solar power generation, which is not affected by procurement status or cost of fuel, will stabilize energy price in the future.

We are investing in countries where there is a long-term demand for solar power generation, and Japan is one of them. We will develop mega solar plants as well as unique applications and technologies suited for the Japanese market.

We are also paying attention to solar projects that have received certification of FIT facilities from Japan's Ministry of Economy, Trade and Industry but have not started construction yet. We want to materialize those projects by using our vertically-integrated business model and financial power.