Order Focus: First Solar adds 380MW of new expanded European contracts for 2011

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A key aim for First Solar in 2010 has been to focus on broadening its customer base in Europe to mitigate potential fluctuations in core markets such as Germany. In 2009, 71% of sales were to Germany but have been declining to around 50% by the second quarter of this year as both utility-scale projects went ahead in the U.S. and important emerging markets in Europe, such as France and Italy continued to grow. Expanded contracts with seven key customers in Europe have led to a 380MW increase in module supply agreements for 2011.

“Our customers continue to expect robust growth in the market for solar electricity in Europe next year,” said Stephan Hansen, Managing Director of First Solar’s European sales and customer service organization. “The additional volumes will allow First Solar to continue to scale and contribute to making solar electricity more affordable globally.”

First Solar noted that the new contracts were all signed in recent weeks, suggesting that planned price reductions in the second-half of 2010 have been sufficient to support the ‘sell-through’ of modules in 2011.

With over 2.2GW of captive projects in its pipeline, First Solar is continuing to attempt to retain full factory loading of its CdTe thin-film lines, crucial to its cost leadership position.

Company executives reiterated in their last financial analyst conference call that captive projects allowed the company to be more flexible in meeting customer demand, pushing-out projects until 2011 and beyond to meet module demand, especially in Europe in 2010 and now into 2011, which are also higher margin business.

By mid-year, First Solar operated 24 production lines with an annual manufacturing capacity of approximately 1.4GW at plants in Perrysburg, Ohio, Frankfurt/Oder, Germany, and Kulim, Malaysia. The current plan was to have 38 production lines by 2012, with 2.2GW annual capacity.

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