First Solar Investor Presentation

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					El Dorado, Nevada, USA (10MW); Sempra Energy

First Solar Corporate Overview Q1 2009

Forward‐Looking Statement
This presentation contains forward‐looking statements within the meaning of the federal securities laws. The forward‐looking statements in this presentation are based on current information and expectations, are subject to uncertainties and changes i circumstances, i f i d i bj i i d h in i and do not constitute guarantees of future performance. Those statements involve a number of factors that could cause actual results to differ materially from those statements, including the risks as described in the company’s most recent annual report on Form 10‐K and other fili d th filings with th S ith the Securities and E h iti d Exchange C Commission. Fi t S l assumes no i i First Solar obligation to update any forward‐looking information contained in this presentation or with respect to the announcements described herein. All financial numbers reported and discussed in this presentation are based on U.S. Generally Accepted Accounting Principles.

© First Solar, Inc.

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Our Mission
To create enduring value by enabling  g y g a world powered by clean, affordable  solar electricity.

© First Solar, Inc.

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Introduction
Mainz,Germany  Mainz Germany
European Sales 

Frankfurt (Oder), Germany 
Manufacturing began in 2007

(198 MW)

Bay Area, CA
Project Development

Bridgewater, NJ 
Project Dev. & Engr.

Tempe, Arizona
Corporate Headquarters

Perrysburg, Ohio
Manufacturing began 2006

(198 MW) 

Kulim, Malaysia 
Manufacturing began  Manufacturing began 2008‐2009

(790 MW) 

One of the largest solar manufacturers world  f th l t l f t ld • O wide  Shipped >1GW cumulative volumes • Global Footprint

• A Approximately 1.2 GW production capacity  i t l 1 2 GW d ti it operating or announced  • 1st PV maker to produce modules < $1/watt
© First Solar, Inc.

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The First Solar Solution
Module Manufacturing: Module Manufacturing:
Glass In    < 2.5 Hours    Module Out

• Breakthrough thin film process technology • 99% reduction in high‐cost semiconductor material
Semiconductor  Deposition Cell Definition Final Assembly & Test

• Fully integrated, continuous process vs. batch process  • Cost reduction trajectory driven by productivity and  technology improvements • Large (2'x4') substrate vs 6" wafers Large (2 x4 ) substrate vs. 6 wafers 

System Solutions:
• Utility‐scale PV systems • Engineering, procurement and construction capabilities provide turnkey solution • Monitoring & Maintenance Program – predictable lifetime expenses 

© First Solar, Inc.

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PV Module Technology & Manufacturing
First Solar Fully Integrated, Automated and Continuous Thin Film Process First Solar Fully Integrated, Automated and Continuous Thin Film Process Glass In < 2.5 Hours  Module Out

• 98‐99% reduction in high‐cost    semiconductor material
Semiconductor  Deposition Cell Definition Final Assembly  & Test

• Fully integrated, continuous  process vs. batch processing  • Large 60 x 120cm (2' x 4 ) Large 60 x 120cm (2 x 4') substrate vs. 6" wafers 

Conventional Crystalline Silicon Batch Technology y gy

Polysilicon

Ingot

Wafer

Solar Cell

Solar Module
© First Solar, Inc.

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Capacity Expansion Plan
“Copy Smart Process”
1,136MW
198 198

1,186MW
198 198 198 198 198 49
148

Malaysia 4 Malaysia 3 Malaysia 2  Malaysia 2 Malaysia 1 German Facility Ohio Expansion Ohio Base

716MW
191 191 191
143

198 198 198
148

308MW
176

25MW
2005

100MW
33 2006

66

88
44

2007

2008

2009

2010
© First Solar, Inc.

2005 & 2006 based on Q406 run rate; 2007 based on Q407 run rate; 2008 based on Q408 run rate; 2009 – 2010 based on Q109 run rate 7

Environmental Responsibility

© First Solar, Inc.

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Life Cycle Analysis Benefits
Global Warming Potential
1000
C CO2 – eq (g/kWh h)

900

850

800 600 400 400 200 0 Coal Oil Gas CC Biomass CHP PV mc‐Si  (13.2%)* Nuclear USA PV CdTe  (9%)* Wind 45 37 24 18 11

Source:

ExternE project, 2003; Kim and Dale, 2005; Fthenakis and Kim, 2006: Fthenakis and Alsema, 2006; Fthenakis and Kim, in press. * Assumptions: PV mc-Si based on 13.2% efficiency and PV CdTe based on 9% efficiency – both at insolation of 1700 kWh/m2 y

© First Solar, Inc.

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First Solar Markets
PV Subsidized Markets Geographic markets Germany, Italy, France,  Spain and Ontario,  Canada Modules  Other PV suppliers Subsidies and prices decline over time d li ti U.S. Utility Markets California Southwestern U.S. System level solutions y Utility scale renewables Prices must reduce to  develop market but  d l k tb t should stabilize over time

g First Solar offering Customer options First Solar pricing trend

© First Solar, Inc.

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First Solar Market Progress
Module Supply
• > 1 GW shipped through Q1 2009 • Expect to produce 1.1GW in 2009 • 60% ground from 1 to 40 MW • 40% roof from 30KW to 4.5 MW   • System designs evaluated by First  Solar engineers Solar engineers

System Solutions Provider
• Acquired Turner Renewable Energy 11/07
Engineering, procurement and construction,  Engineering procurement and construction and monitoring & maintenance 

• Completed 2 U.S. utility pilot projects in  2008 • Closed OptiSolar acquisition 4/09
Project pipeline and development team

• New deals announced Q1 '09 with Sempra  (El Dorado expansion) and Tri‐State  Generation

© First Solar, Inc.

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Sales Channels
• • • • Sell modules to developers and IPPs  under multi‐year agreements p y g Project developers design and develop turnkey commercial  solar power plants Develop solar PV project sites in U.S. and Canada g yp Sell EPC and monitoring  to create PV electricity plants for U.S. utilities

Europe

U.S./Canada

© First Solar, Inc.

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Representative Projects – PV Modules

Site: System Size: Developer:

Althegnenberg, Germany  2MW  (DC) Phoenix Solar 

Site: System Size: Developer:

Ramstein, Germany 2 MW (DC) COLEXON Energy AG 

Site: System Size: Developer:

Bullas, Spain 5 MW (DC) Gehrlicher Solar AG 

Site: System Size: Developer:

Brandis, Germany 40 MW (DC) Juwi

© First Solar, Inc.

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Representative Projects – PV Modules

Site: System Size: S t Si Project  Developer:

Dimbach, Germany 1.4MW (DC) 1 4MW (DC) Beck Energy GmbH  (Blitzstrom) 

Site: System Size: S Si Project  Developer:

Margreid, Italy 697kW juwi Solar GmbH

Site: System Size: S Si Project  Developer:

Narbonne, France 7MW EDF Energies Nouvelles

© First Solar, Inc.

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Representative Projects – Solar Plant Solutions Engineered by FSLR

Site: System Size: Completion: System Purchaser:

El Dorado, NV 10 MW (AC); new 48 MW expansion Q1 ‘09 12/08 initial project; 2010 expansion Sempra Generation

Site: System Size: Completion: System  Purchaser:

Fontana, CA 2 MW (AC) 9/2008 Southern California Edison1

1

additional projects contracted with SCE at Chino and Rialto, CA represent ~3 MW (AC) to be completed in 2009e
© First Solar, Inc.

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U.S. Utility Market Progress
Utility Projects 
• Expand El Dorado 48MW (Sempra) • Vermejo Ranch, NM 30MW (T i S G ) 30MW (Tri‐State Gen)

High Volume  Utility Deployment Utility Deployment
• Develop OptiSolar pipeline • EPC large scale IPP/ utility partnerships

3  EPC Pilots 
• El Dorado, NV  10 MW (Sempra) Fontana, Chino,  • Fontana Chino Rialto, CA  ~5MW  (SCE) • Blythe, CA   7‐21MW (SCE)

• Acquired OptiSolar development pipeline: 
— 210MW Ontario 550MW Topaz  — 550MW Topaz — 1.3GW short listed — 136K acres of land

Market Entry  M k tE t
• Acquired Turner  EPC 11/07

• EME Strategic  Alliance

2007 2008 *    Bar height conceptual in relative MW size and not projections
** Projects based on announcements.  MW are AC.

2007

2008

2009

2009

2010+

2010+
© First Solar, Inc. © First Solar, Inc.

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Acquisition of OptiSolar Project Pipeline and Development Team
• Enable fastest time‐to‐generation as utilities progress toward RPS compliance – OptiSolar acquisition and Edison Mission framework agreement • Combine lowest cost PV, EPC, and multi‐GW pipeline in the U.S. • Accelerate throughput and cost reduction Accelerate throughput and cost reduction • Increase long term visibility • Establish the lead in U.S. utility markets • 550MW AC T 550MW AC Topaz project with PG&E and 210MW AC Ontario j t ith PG&E d 210MW AC O t i • 1,300MW AC of projects in negotiations with utilities in the Western U.S.

Purpose:

Transaction:

• Strategic land rights of ~136,000 acres (up to 19,000 MW) • Significant interconnection queue g q • Core development team

Price: Closed:

$400 million in stock (3.5% dilution) April 3, 2009
© First Solar, Inc.

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Module Roadmap to Grid Parity
Module MFG Cost Reduction Roadmap
$1.29/W 100%  16‐18%

15‐17% 7‐8% 4% 3% % $0.65 ‐ .70/W 50‐55% 

Q1 07 Cost/Watt

Efficiency

Low Cost Location

Spending

Throughput

Plant Scale

2010‐12 Cost/Watt  Target
© First Solar, Inc.

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Module Cost Per Watt Trend
$1.59 $
$0.04 $0.00

Core
$1.40
$ $0.02 $0.07

SBC

Ramp

$1.50

$1.23
$0.04 $0.05

$1.08
$0.04 $0.02

$1.00

$1.55 $1.31 $1.14 $1 14

$0.93

$0.02 $0.01 SBC

$1.02

$0.90

$0.50

FY05

FY06

FY07

FY08

Q109
© First Solar, Inc.

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Sustainable Competitive Cost Advantage
2.20 2 20

Avg Competitor
2.00 1.80

Best of Breed

Module e Cost1 $/Watt

1.60 1.40 1.20 1 20 1.00 0.80 0.60 0.40 150 125 100 75 50 25

FSLR Roadmap  2012 Range

Poly Si Cost $/Kg
1

Best of Breed and Average Competitor based on Street solar sector analyst estimates   
© First Solar, Inc.

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Sustainable Competitive Cost Advantage
2.20 2.00

Avg Competitor Best of Breed

A Adjusted Module Cost11 $/W Watt

1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 150 125 100 75 50 25

FSLR Target 2012 Range1 g g

Poly Si Cost $/Kg
1

FSLR adjusted module cost  = module cost + added balance of system cost differential for lower efficiency; Best of Breed and Average Competitor based on Street solar sector analyst estimates
© First Solar, Inc.

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Roadmap to Grid Parity
Balance of System* Cost Reduction Roadmap 
~$1.59 /W
100% 5% 12% 7% 1% 11%

16% of balance of system cost savings  are driven by our roadmap to achieve  at least 12% conversion efficiency

~$1.00/W Target
64%

95% 83% 77% 75% 64%

2008 BoS

Engineering & Project Mngt

Mounting Hardware

Inverter & Transformer

Other Electrical Material

Installation

2012 BoS

* Excludes  sales tax, finance costs, SG&A costs and IPP project development/connection costs 
© First Solar, Inc.

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First Solar long‐term business model philosopy
• • • • • • • Superior long‐term revenue growth & volumes; drive throughput $ vs. margin % Price to enable PV solutions competitive with conventional electricity Maximize long‐term earnings and cash flow Earn 5% over WACC or >20% RONA to be in top 25% percent of Russell 3000 Maintain strong balance sheet profile and efficiently deploy capital p Scale costs and expenses Mitigate risks 

© First Solar, Inc.

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Net Sales and Operating Income Trends
Net Sales Operating Income %

30.4% 7.2% 7.5%

39.0% 29.5%

33.2%

37.3% 37 3% $348.7 

$433.7  $418.2  $433 7 $418 2 37.2% 40.2%

$267.0  $200.8  $159.0  $196.9 

$66.9 $66.9 

$77.2 

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09 

© First Solar, Inc.

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Financial Model – 20% RONA
2005 Gross Margin Gross Margin Operating Expense Production Start‐up Operating Margin Operating Margin Stock Based Comp 34.5% 34 5% 37.9% 6.6% (10.0%) (10 0%) 10.2% 2006 40.2% 40 2% 29.4% 8.7% 2.1% 2 1% 8.8% 2007 49.9% 49 9% 19.4% 3.8% 27.2% 27 2% 7.8% 2008 54.4% 54 4% 16.7% 2.6% 35.2% 35 2% 4.7% Target 35 – 35 – 40% 8 – 12% 2 – 3% 25% 2 – 4%

© First Solar, Inc.

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Superior Financial Strength
Cash vs. Debt ($mm) $1,400  $1,256  $1,200  $1 200 $1,000  $812  $800  $656  $656 $600  $400  $228  $200  $‐ FSLR STP 1
1

Cash Debt

$911  $743  $803 

$199  $199

YGE

SPWR 2

1

Inclusive of $250mm issuance of 20mm ADSs; 2 Inclusive of $75mm IFC loan and secondary and convertible offerings

© First Solar, Inc.

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Maintaining 2009 Guidance 1
Q4 Earnings Revenue Start up Expense Stock Based  Compensation p Operating Margin Annual Tax Rate Share Count  (Year End) Capex  C $1.8 – $1.9 B $13‐14 M  $75‐80 M 33‐34% 9‐11% 84 M $270‐300 M $270 300 M Opti Update $1.9 – $2.0 B $13‐14 M  $75‐80 M 31‐33% 9‐11% 87‐88 M $270‐300 M $270 300 M Q1 Update1 $1.9 – $2.0 B $12‐13 M  $75‐80 M 31‐33% 9‐11% 86‐87 M $270‐300 M $270 300 M
© First Solar, Inc.

1 Includes impact of OptiSolar acquisition completed 4/3/2009

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Summary:  First Solar Competitive Advantages
FSLR has a sustainable winning growth platform in electricity industry 
• Proprietary technology provides low levelized cost of energy  • Proven performance  and reliability ‐ >1GW shipped • ~ 1.2GW of capacity, proven production scaling.  >14M modules produced • European system integrators and IPP partners, and growing U.S utility relationships • EPC experience • One of the largest U.S. and Canadian utility‐scale project development pipelines • Industry’s first comprehensive, pre‐funded end‐of‐life collection and recycling program • Strong balance sheet and cash flow  

Superior growth, business model, RONA, cash flow and net cash position S i th b i d l RONA h fl d t h iti
© First Solar, Inc.

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Appendix

© First Solar, Inc.

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Key Quarterly Financial Data
Key Quarterly Financial Data
($ in millions, except gross profit and net income per share data) (Unaudited)

Q1'08

Q2'08

Q3'08

Q4'08

Q1'09

Q1'09  Y/Y

Q1'09  Q/Q

Net sales  Gross profit % Research and development Selling, general and administrative Production start‐up Operating income Income tax expense  Net income  Share count ‐ Diluted Net income per share ‐ Diluted RONA (1) Stock‐based compensation expense Stock based compensation expense Capital expenditures (cash basis) Cash and marketable securities See also Notes to our Consolidated Financial Statements

$      196.9 53.0%              4.8            28.7            12.8            58.1            18.6 $        46.6            81.6 $        0.57 16.8%            10.9 10 9            74.6 $      709.0

$      267.0 54.2%              7.7            43.6              4.6            88.7            24.2 $        69.7            82.0 $        0.85 17.0%            15 5 15.5         160.3 $      661.2

$      348.7 56.1%           10.0           49.0             6.3        130.2           33.8 $        99.3           82.4 $        1.20 19.6%           17 3 17.3           95.7 $      729.4

$      433.7 53.9%           11.0           52.7             8.8        161.3           38.8 $      132.8           82.5 $        1.61 22.4%           15 2 15.2        128.7 $      821.8

$      418.2 56.3%           11.7           49.3             6.2        168.1             5.1 $      164.6           82.6 $        1.99 27.4%           15 2 15.2           86.4 $      811.6

112% 3% 144% 72% ‐52% 189% ‐73% 253% 1% 249% 65% 39% 16% 14%

‐4% 2% 7% ‐7% ‐29% 4% ‐87% 24% 0% 24% 22% 0% ‐33% ‐1%

Supplemental Data
(Unaudited)

Average foreign spot exchange rate (€/USD) Free cash flow Free cash flow + Purchases of property, plant and equipment = Net cash provided by operating activities MW Produced Line run rate Conversion efficiency  Core cost per watt produced Stock‐based payment cost per watt (manufacturing) (2) Ramp penalty (cost per watt) (3)                                    pp y( p )( ) Total cost per watt produced

           1.50         (11 3) (11.3)            74.6            63.3            79.4            45.0 10.6% $        1.12 $        0.02 $ $          ‐ $        1.14

           1.56        (101 1) (101.1)         160.3            59.2         114.1            48.0 10.7% $        $        $ $        $        1.09 0.03 0.06 1.18

          1.51           41 6 41.6           95.7        137.3        136.5           49.3 10.7% $        $        $ $        $        1.01 0.03 0.04 1.08

          1.32           74 6 74.6        128.7        203.3        173.6           47.7 10.8% $        $        $ $        $        0.93 0.02 0.03 0.98

          1.31         (22 7) (22.7)           86.4           63.7        219.5           49.4 10.9% $        $        $ $        $        0.90 0.01 0.02 0.93

‐13% 101%

‐1% ‐130% 130%

177% 10% 0.3% ‐20% ‐50% 0% ‐18%

26% 4% 0.1% ‐3% ‐50% ‐33% ‐5%

(1) RONA = 4 quarter rolling NOPAT / 4 quarter rolling NET ASSETS (where NET ASSETS = Assets ‐ Non interest bearing liabilities) (2) Represents stock‐based payment costs associated with factory labor. (3) Ramp penalty start‐up costs consist primarily of fixed production labor and overhead spending associated with production below normal        capacity utilization in a new production facility.

© First Solar, Inc.

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Description: First Solar Inc's Q1 2009 Update to Investors, including company strategy, financial / earnings guidance, etc.