The Path to Drawdown: PV Solar Manufacturing
To solve climate change and remain below 1.5ºC of global warming, the globe needs to switch to generating power from fossil fuels to using 100% emissions free sources.
The largest source of this clean energy is the sun (barring advances in nuclear fusion). Photovoltaic or PV solar panels (the kind you see on rooftops) have emerged as the predominant way of capturing the sun's energy and converting it into electricity.
The industry has been growing fast and, as of 2020, solar panels are now the cheapest source of electricity in most places on earth.
Solar produces ~2% of global electricity today. According to Project Drawdown, to be on a path to remain under 1.5ºC of warming, rooftop and utility scale solar will need to be generating a combined ~40% of global electricity by 2050.
To get there, the PV solar industry is going to need to continue to massively scale over the few next decades:
- 720 TWh of solar electricity generated in 2019
- 28,200 TWh needed by 2050
- CAGR of 12.56% from 2019 - 2050
Another analysis from the IEA predicts that in order to reach a 100% clean electricity grid by 2050, annual solar panel manufacturing capacity will need to scale from 110 GWs in 2019 to 500 GWs in 2030
Headquartered in Tempe, Arizona, First Solar (FSLR) designs and manufactures innovative solar panels made from a single glass substrate. This design enables them to build their panels all in one factory, with each panel taking 4.5 hours to build from start to finish.
FSLR's Role in Drawdown
In 2019, FSLR had the capacity to manufacture 5.7 GWs of solar panels. That’s 5.2% of the estimated global manufacturing production in 2019 of 110 GW. For them to retain a similar market-share, they will need to be producing 25.9 GWs of solar panels by 2030.
Such 4.5x growth would necessitate a 16.3% annual increase in production capacity. Given that First Solar is already projecting an increase of manufacturing capacity to 9.4 GWs by the end of 2022, a 21.5% annual increase, we are encouraged that they will reach this end of 2030 goal.
FSLR: What We Like
Not only is FSLR building a key component of reaching a 100% clean electricity grid, but they are clear leaders in the goal of fully sustainable solar panel production.
- >90% of their solar panels can be broken down and rebuilt into new panels after their end of life.
- 100% renewable energy commitment in their operations by 2028 (their commitment)
- 1 factory. Their unique solar panel design enables them to build their panels all in a single factory from start to finish in just 4.5 hours (compared to 3 days and 3-4 factories).
- Scalability. This single-factory operating model could enable them to scale faster in more regions without having to rely upon as many external manufacturing partners.