MOUNTAIN VIEW, Calif.--News that First Solar CEO Robert Gillette had stepped down sent shares in the company plummeting 25 percent on Tuesday (Oct. 25), in a year where the Arizona-based company’s stock has already lost over 70 percent of its value.
No reason was given for Gillette’s sudden departure, but he is the third executive to leave the energy company this year, after First Solar's president of operations Bruce Sohn resigned in April and president of the firm’s utility systems unit, Jens Meyerhoff, left last month.
Gillette had served as CEO of First Solar for the past two years, a time of intense turbulence in the solar industry, in which U.S. based firms faced increasing competition from cheaper Chinese competitors and crystalline silicon producers. Demand for solar panels has also petered off after several European countries ended green energy incentive plans this year.
The industry is also thought to have been adversely affected by the Solyndra scandal earlier this year, in which California based solar panel manufacturer Solyndra took $535 million in federal loan guarantees before filing for bankruptcy and laying off over 1000 workers. Solyndra had previously been singled out by the Obama administration as a strong example to follow in terms of green job initiatives.
First Solar too has received some $3.1 billion from the U.S. government’s Energy Department, and is also thought to be facing job cuts, with analysts predicting a cull of some 10 percent of the workforce due to underutilization of factories.
“We believe the news (along with timing of announcement) is likely to raise a lot of investor questions about the health of overall industry as well as near/longer term profitability outlook of the company,” said Deutsche Bank in a statement advising investors to hold when it came to buying First Solar stock.
First Solar shares on Tuesday had fallen to $43, and the firm’s current market capitalization is thought to be around $4 billion.
The company's chairman and founder, Mike Ahearn, will take on the role of interim CEO while the firm searches for a permanent replacement for Gillette.
The firm will announce its official earnings next week.
I believe Solar manufacturers will do better in coming days because many countries have started moving away from nuclear power plants. Even in India people are opposing creation of new nuclear power plants. And I believe solar is the only viable alternative to nuclear energy. I feel this is great to enter these stocks.
Compared to chips, xtalline Si semiconductor based Solar PV technology is far simpler in design or mfg. which is why China has caught up so quickly. But PV is still a technology under development ( new materials & configurations ) to achieve grid parity and still requires a lot of subsidy and patience.
The development of relatively simple devices like PV in the US provides a lower return compared to doing it in China ( engineering cost there still only about 40 % of the US ). So the "smart" money is staying away from investing in Solar development in the US and actively siphons out US developed PV technologies to China !
The only way to compete with China in PV is to develop technologies that totally sidestep their current capacity in conventional Si wafer based cells and panels, and delivers a lower cost / watt after installation. However the key to lowering cost of PV Solar is no longer just in the cells themselves but in assembling the panels and in their installation.
Paradoxically the Obama Admin's political compulsion to create a lot of Green jobs in the short term has emphasized on the installation of panels made with current technologies ( often from China ) at the expense of R&D & have actually driven up installation costs in the US !
Even if funding for PV R&D in the US once again starts to flow, to protect any IP from China, all operations will have to be guarded ( doubtful ) from China's friends in the US.
No it's because the whole industry was based upon incentives from governments across the globe. When the "Global Warming" hoax was finally uncovered with the email leaks and clearly cooked data the money started to dry up. There is still a big push by the greenies to fund these projects but the reality of economic feasibility is starting to kick in. Add on top of this the Chinese are still going full blast with their cheap solar incentives for plants the domestic Solar companies are getting hurt badly.
The political connected loans is just an unfortunate reality of "free money" and a bunch of spineless politicians and greedy executives peddling the wares.
It is really bad time for the Solar companies. Is the cost competition for the solar panel the primary factor? Or is it bacause of the technology is not yet upto the mark?
I think, the industry badly needs a technological breakthrough.
Solar is facing a tough time not only because of the Chinese companies but also from the higher cost based technology. The short term viability is expensive and given the nature of solar power; uncertain.
First Solar also just recently sold 2 of its solar energy farms which had just started construction in September 2011 to satisfy a Government condition for receipt of federal funds for 3 projects. Only 2 started construction and qualified for ~$2Billion in loan guarantees.
Tellingly, On September 30, 2011, GE and NextEra agreed to purchase Desert Sun Solar Farm from First Solar just one day after the DOE approved a $646Million loan guarantee.
Because of no loan guarantee on the third project, they are attempting to sell it as well and are having trouble finding buyers.
What would give First Solar another blow would be to find connections between either the executives or directors to fund raising (bundling) for Obama similar to what was uncovered at Solyndra. The GE participation in the purchase is already suspicious in light the close relationship of Jeffrey Immelt and the Obama administration.
David Patterson, known for his pioneering research that led to RAID, clusters and more, is part of a team at UC Berkeley that recently made its RISC-V processor architecture an open source hardware offering. We talk with Patterson and one of his colleagues behind the effort about the opportunities they see, what new kinds of designs they hope to enable and what it means for today’s commercial processor giants such as Intel, ARM and Imagination Technologies.