Tag Archives: First Solar

Is First Solar gaming the system? Getting $456 million U.S. loan guarantee to develop low-risk Ontario projects indicates as much

So, I’m reading Bloomberg News and come to this headline: “First Solar Gets $455.7 Million Guarantees For Canada Plants.” Found the official corporate press release here.

I had to do a double-take. The world’s largest maker of thin-film solar modules, a company approaching $4 billion in annual sales and with a market cap of $8 billion, is getting nearly half a billion dollars in loan guarantees from the Export-Import Bank of the United States to develop seven solar projects totaling 90 megawatts in southwestern Ontario, Canada. According to the bank, the transaction constitutes the “largest financings in history supporting U.S. solar-energy exports to any country.”

“The Bank’s support was needed because viable long-term financing for these projects was not otherwise available in the commercial marketplace,” according to First Solar’s press release.

Wha? What a load of crap. There’s low risk to First Solar in doing these projects. It’s a large company with a strong balance sheet. It already has built more than 100 megawatts of solar in Ontario so it now has a track record. And, on top of that, it is being guaranteed 42 cents per kilowatt-hour under a 2o-year power purchase contract secured through Ontario’s older Renewable Energy Standard Offer Program (RESOP). As history indicates, it is building these projects then turning around and flipping them for an immediate profit, yet it will have 18 years to pay off the low-interest loans secured with the help of these loan guarantees. This company doesn’t need the help. If I were a U.S. citizen, I’d want these guarantees directed at companies that did need it or at least to projects in regions that carry less certainty and more risk.

This deal also highlights a big problem in Ontario. First Solar, when it’s done, will have built more than 200 megawatts of solar in Ontario but not as part of the feed-in-tariff program. You see, it hates the feed-in tariff program and supports protests from Japan, the EU and the U.S. against Ontario’s local content rules. Yet, ironically, it has been the most to benefit in the Ontario solar market. You see, all of its contracts were secured under the older RESOP program. This program had no local content rules, so First Solar brings very little with respect to job creation in Ontario. It’s painful to see at a time when Ontario has lured 18 solar module manufacturers with its newer FIT program but has failed to turn huge demand into finished projects connected to the grid. The Ontario Power Authority has offered contracts to more than 1,300 solar projects in Ontario but so far only 10 megawatts are in operation because of footdragging by Hydro One, an overly bureaucratic environmental permitting process, and political uncertainty — no thanks to Tim Hudak’s pledge to kill the program if elected.

Behind the scenes, however, First Solar continues to build away, using solar gear manufactured across the border in Michigan and apparently under no time restrictions (unlike conditions of the FIT program). Meanwhile, First Solar’s costs have dropped dramatically in the four or five years since it secured its power-purchase agreements under the now-discontinued RESOP program, yet it will continue to rake in 42 cents for every kilowatt-hour it produces. Its profits will be huge, thanks to a poorly designed RESOP program that didn’t build-in time restrictions for projects and local content requirements.

On both sides of the border, somebody is being had. Ontario boasts having the largest solar PV installation in the world in Sarnia, but that site has absolutely nothing to do with the FIT program. It was built with little Ontario content, it was sold to a natural gas company (Enbridge), and now that construction is done there is little to tout in terms of local job creation.

The FIT program, by comparison, is a gem with respect to the conditions it places on developers. The RESOP, at least with respect to solar, has proven a disaster in retrospect. First Solar is laughing.

5N Plus acquires majority stake in maker of germanium substrates for CPV cells

This is an interesting acquisition by Montreal-based 5N Plus. Sylarus, a company based in Utah that makes germanium substrates for solar cells, has been an important customers for 5N, which as a supplier of high-purity metals is a producer of purified germanium. 5N has basically converted a $3 million (U.S.) debenture it had with Sylarus into stock, giving 5N two-thirds ownership in the company. Greentech Media has a story about the deal here. 5N, of course, is the leading supplier of tellurium to thin-film solar cell makers First Solar and Abound Solar and others.

Who knew? World’s largest solar PV plant is now in Ontario

In the realm of solar, you’d kind of expect the title of “largest” to go to sunny and hot places like, say, California or Arizona or Nevada, or some sunny place in Europe or the Middle East somewhere. Nope — that title goes to Ontario, at least for today. First Solar announced today that it has completed the final phases of its Sarnia solar power plant and that the facility now ranks as the largest solar PV plant in the world. The plant is owned by gas and pipeline giant Enbridge Inc. — you know, the guys who had the big oil spill in Michigan. The press release says it is an 80-megawatt plant, but over at PRResources.com it ranks the project first at 97 megawatts. Not sure what the deal is there. But even at 80 megawatts it’s still 33 per cent larger than the second-largest plant, which is in Olmedilla, Spain. The next largest in Canada, ranking 24th worldwide, is the 23.4 megawatt facility in Arnprior, Ontario.

I remember it was just a few years ago when it was a big deal to see 1 megawatt of solar installed across ALL of Ontario, let alone single projects.

Solar farms in Ontario begin their 20-year harvest

Toronto-based renewable-energy developer SkyPower Corp., along with joint-venture partner SunEdison, formally announced the activation and grid connection today of a 9.1 megawatt solar park near the tiny Ontario town of Stone Mills. Their project, called First Light I, becomes the first multimegawatt-scale solar park in Canada to go live.  Two more phases are in the works — First Light II and First Light III — which will add 7.8 MW and 10 MW, respectively.

First Light I takes up 90 acres, equivalent to 50 Canadian football fields (i.e. they’re larger than those pansy NFL fields). All three phases totalling about 26 MW will cover 290 acres and be composed of 130,000 solar panels. These projects are backed by 20-year power purchase contracts obtained under Ontario’s former Renewable-Energy Standard Offer Program, or RESOP. That means the companies can sell power from the projects into the Ontario grid at 42 cents (Canadian) per kilowatt-hour. And because it’s not under the new Feed-In Tariff (FIT) program, it doesn’t have to comply with new local content rules.

First Solar and EDF are in similar situations under the RESOP — 42 cents and no local content restrictions. EDF started construction in June of its 23.4 MW project in Arnprior, Ontario (near Ottawa), while First Solar (which acquired the Ontario project pipeline from OptiSolar earlier this year) has been busy in Sarnia with more than 10 megawatts already installed. Today, it was announced that natural gas and oil pipeline giant Enbridge Inc. of Calgary was purchasing 20 megawatts of First Solar’s Sarnia pipeline for something close to $100 million. Enbridge also indicated that it’s interested, potentially, in doing more deals with First Solar, which has about 80 MW of projects in Sarnia and more than 200 MW under contract across province with the Ontario Power Authority.

In other news, expect Samsung to build about 100 MW of solar in Ontario — potentially. The company, which has signed a “framework agreement” with the province of Ontario (whatever that means), appears ready to develop 500 megawatts worth of wind and solar in the province. The hint came this week, when Energy and Infrastructure Minister George Smitherman directed the power authority to “hold in reserve” 500 MW of transmission capacity for a certain “proponent” doing some business dealings with the government — i.e. Samsung. The government is giving Samsung the royal treatment because it has also indicated plans to manufacture wind and solar products in Ontario to meet its own and other developer demands.

Sounds good, unless you’re a developer being booted further back in the transmission-connection waiting queu. Expect some vocal pushback. (check out my Monday column for more on that).