Has First Solar achieved grid parity? Report claims the numbers add up


According to Greentech Media’s report, it seems that First Solar has managed to achieve grid parity with its 12.6MW system in the Nevada desert, installed for Sempra Generation. Mark Bachman, a senior research analyst with Pacific Crest and a specialist in cleantech energy, has aggregated the numbers in the Greentech Media report.

Mr. Bachman claims that the Nevada desert system costs $0.075 per kilowatt-hour to install without any subsidies, compared to costs incurred by ‘conventional’ power of $0.09 per kilowatt-hour. Looking solely at these figures, it would seem that this is an achievement that should have the solar energy industry rubbing its hands together in joy.

However, naysayers will always challenge such claims. Bachman’s cost calculations are based on one particular location and one particular panel type; different results may have resulted from use of the same panels in a different location, or using different technology in conditions similar to those found in the Nevada desert.

“In our view, the industry leaders will be those companies that can deliver electricity at or below grid parity pricing without the aid of subsidies while also delivering superior return to shareholders,” said Mr. Bachman. “Currently, only First Solar can claim these achievements, in our view.”

First Solar has managed to produce large numbers of panels at a low cost for the past few years, claiming recently that it had lowered the cost-per-watt of production of its modules to $1.08 per watt. According to Greentech Media, this figure is an amalgamated average of the individual costs of production in each of the company’s manufacturing facilities, although First Solar has reached a low cost of 75 cents per watt in its Malaysia-based plants.

Bachman noted that while the installation for Sempra cost around $3.17 per watt, this price incorporated the cost of frames and installation as well as the cost of the modules themselves. He also pointed out that the solar industry spends too much time focussing on the cost of production and installation of panels, and not enough time looking at the overall cost of the entire project in terms of kilowatt-hours.

“By focusing on the cost/kWh calculation, we can compare competing business models on a defined metric that is independent of technologies,” he said.

This report also highlighted the potential competitors First Solar may encounter in the next few years in the race for grid parity. Cypress Semiconductor’s CEO T.J. Rodgers was reported as saying that power produced by crystalline silicon solar panels will be cheaper than that produced by coal by 2012.

SunPower is another potential runner: the company’s 14.2MW system at the Nellis Air Force base in Nevada features crystalline silicon panels that cost $7.04 per watt to install. In terms of kilowatt-hour cost, Bachman figured that it worked out at $0.164 per kilowatt-hour. For SunPower to rival First Solar’s kilowatt-hour rate of electricity generation, however, Bachman reckons that SunPower’s panels, despite the fact that they boast a much higher conversion efficiency rate, would have to be sold at 52% less, or $3.4 per watt.

So whether or not First Solar has achieved the much-coveted grid parity is unclear, but the numbers do add up.

29 November 2022
PV ModuleTech EMEA in Malaga on 29-30 November 2022 will address the factors underpinning the changing PV module landscape, gathering together all the key stakeholders across the value-chain from module production to field testing. Join us for presentations from the leading players in the sector, clearly identifying the opportunities and challenges set to impact module supply to Europe and the Middle-East over the next few years.
7 December 2022
Intersolar is the world’s leading exhibition & conference series for the solar industry. As part of this event series, Intersolar India in Gujarat is India’s most pioneering exhibition and conference for India’s solar industry. It takes place annually and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. Since 2019, Intersolar India is held under the umbrella of The smarter E India – India’s innovation hub for the new energy world.
14 February 2023
Intersolar North America (ISNA) and Energy Storage North America (ESNA) is the premier US-based conference and trade show focused on solar, energy storage, and EV charging infrastructure. Dedicated to accelerating the energy transition, the combined event delivers actionable education, invaluable networking, and an immersive expo hall experience.
22 February 2023
After a record breaking year at the Energy Storage Summit, join us next year at the 8th edition in 2023 where we are expanding in line with the increased opportunity across the renewable sector. As we see this continued growth of the industry through change in government policy, increased capital and a need for grid resilience in geographies with high renewable penetration, can the necessary scale be met across the value chain in order to meet net-zero goals in Europe? We will gather industry leaders across the sector to discuss a range of vital topics including the most lucrative markets for storage and what the best route to market strategy is for your storage asset, changes needed in policy and infrastructure, as well as the effects of the supply crisis, disruptive technologies and much more.
14 March 2023
PV CellTech will be return to Berlin on 14-15 March 2023 and looking at the competing technologies and roadmaps for PV cell mass production during 2024-2026.
21 March 2023
Large Scale Solar Summit is the meeting place for European solar developers, EPCs and IPPs. Designed to look into ground-mount PV, solar + storage, green hydrogen, floating solar and large scale commercial rooftop. With around 300 attendees expected, this is the place to exchange ideas and knowledge, expand your network and win new business.

Read Next

November 25, 2022
IDB Invest and South American financial group Bancolombia will provide developer Solarpack with a COP656 billion (US$133 million) loan to support the development of two solar PV projects in Colombia.
November 25, 2022
Finnish investment company Korkia has funded a partnership with Greek developers GH Energy and AA Sunshine to develop solar power parks in mainland Greece and Crete.
PV Tech Premium
November 25, 2022
PV Tech Premium caught up with Gyanesh Chaudhary, vice-chairman and managing director at Indian PV module manufacturer Vikram Solar, which has a 2.5GW annual production capacity, to discuss the thinking behind the ALMM and PLI schemes and whether ingot and wafer production is realistic in India.
November 25, 2022
Ukrainian energy company DTEK has said it is ready to restart operations at the 10MW Tryfonivska solar power plant in the liberated Kherson region.
November 25, 2022
JinkoSolar, the global PV manufacturer, will supply approximately 522MW of its Tiger Neo 78 Cell modules to the Brazilian Santa Luzia utility PV project, one of the largest in the country.
PV Tech Premium
November 25, 2022
Spanish solar players give their verdict on this week’s renewables auction, which was shunned by PV project developers.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
November 29, 2022
Malaga, Spain
Solar Media Events
February 22, 2023
Leonardo Royal Hotel London Tower Bridge
Solar Media Events
March 14, 2023
Berlin, Germany
Solar Media Events
March 21, 2023
Lisbon, Portugal
Solar Media Events
June 6, 2023
Napa, USA