Investor Overview · PV Market Growth and Competitiveness $-$50 $100 $150 $200 Gas Combined Cycle...

October 27, 2020

Investor Overview

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2First Solar Proprietary & Confidential - General

Cautionary Note Regarding Forward Looking Statements

This presentation contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in this presentation, other than statements of historical fact, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: effects resulting from certain module manufacturing changes and associated restructuring activities; our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; our financial guidance for the fourth quarter 2020 and implied full-year 2020 guidance, future financial results, operating results, net sales, revenues, cost of goods sold, gross margin, gross margin percentage, operating expenses, operating income, earnings per share, net cash balance, capital expenditures, products, product improvements, efficiency, projected costs (including estimated future module collection and recycling costs), warranties, shipments, bookings, booking opportunities, backlog, confirmations, sales, supply, production, nameplate manufacturing capacity, solar module technology and cost reduction roadmaps, restructuring, product reliability, photovoltaic (“PV”) market growth and competitiveness, installed PV capacity growth, comparative levelized cost of energy, investments in unconsolidated affiliates, and capital expenditures; our ability to continue to reduce the cost per watt of our solar modules (and the impact of drivers to reduce such costs); our ability to expand manufacturing capacity worldwide; our ability to reduce the costs to construct PV solar power systems; research and development (“R&D”) programs, the impact of our copper replacement (CuRe) program; sales and marketing initiatives; the impact of U.S. tax reform; and competition. These forward-looking statements are often characterized by the use of words such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “seek,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,” “will,” “could,” “predict,” “continue” and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events and therefore speak only as of the date of this presentation. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason, whether as a result of new information, future developments or otherwise. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to: the severity and duration of the COVID-19 pandemic, including its potential impact on the Company’s business, results of operations and financial condition; structural imbalances in global supply and demand for PV solar modules; the market for renewable energy, including solar energy; our competitive position and other key competitive factors; reduction, elimination, or expiration of government subsidies, policies, and support programs for solar energy projects; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to execute on our long-term strategic plans; our ability to execute on our solar module technology and cost reduction roadmaps; our ability to improve the wattage of our solar modules; interest rate fluctuations and both our and our customers' ability to secure financing; the creditworthiness of our offtake counterparties and the ability of our offtake counterparties to fulfill their contractual obligations to us; the ability of our customers and counterparties to perform under their contracts with us; the satisfaction of conditions precedent in our sale agreements; our ability to attract new customers and to develop and maintain existing customer and supplier relationships; our ability to successfully develop and complete our systems business projects; our ability to convert existing production facilities to support new product lines, such as Series 6 module manufacturing; general economic and business conditions, including those influenced by U.S., international, and geopolitical events; environmental responsibility, including with respect to cadmium telluride (“CdTe”) and other semiconductor materials; claims under our limited warranty obligations; changes in, or the failure to comply with, government regulations and environmental, health, and safety requirements; effects resulting from pending litigation; future collection and recycling costs for solar modules covered by our module collection and recycling program; our ability to protect our intellectual property; our ability to prevent and/or minimize the impact of cyber-attacks or other breaches of our information systems; our continued investment in R&D; the supply and price of components and raw materials, including CdTe; our ability to attract and retain key executive officers and associates; and the matters discussed under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our most recent Annual Report on Form 10-K, and our subsequently filed Quarterly Reports on Form 10-Q, as supplemented by our other filings with the Securities and Exchange Commission. You should carefully consider the risks and uncertainties described in these reports.

| Important Information

Corporate Overview

Photo © Swinerton Renewable Energy

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Providing modules globally to:

Utilities Developers IPPs

EPCs

Commercial &

Industrial

Distributors

| First Solar Overview

5.5GWmanufacturing capacity

across 3 countries

45+countries with

First Solar modules

6 xlower carbon footprint than c-Si PV

$3.1B USD2019 net sales

20+ years

Founded in 1999

25GW+modules shipped

$19B USDFirst Solar Facilitated

project financing

90%+material recoverythrough recycling

Financial

Investors

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Market Opportunity

In the next five years, installed PV capacity globally is expected to double(1)

Unsubsidized utility-scale solar has a lower levelized cost of energy compared to conventional generation including coal, nuclear, and natural gas peaking plants(2)

Our Series 6 technology, product roadmap, and research and development are all key differentiators which we believe will enable us to meaningfully participate in this wave of demand for clean and affordable energy

Differentiated Cadmium Telluride (CdTe) thin-film technology with superior temperature coefficient and spectral response yielding an energy advantage in many climates

Proprietary manufacturing process which enables production of a CdTe module in a matter of hours and utilizes less than 2% of the amount of semiconductor material that is used to manufacture conventional crystalline silicon solar panels

Market leading Series 6 product, with an approximate 12 GW contracted backlog for deliveries in 2020 through 2023

Strong balance sheet which enables investment in disruptive technology roadmap

| Investment Thesis

Competitive Advantage

(1) EIA ‘Renewables 2019

(2) Lazard’s Levelized Cost of Energy Analysis – Version 14.0 (October 2020)

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| PV Market Growth and Competitiveness

$-

$50

$100

$150

$200

GasCombined

Cycle

Coal Gas Peaking Solar PV—Thin Film

Utility Scale

Cumulative Global Installed PV Capacity(1) Levelized Cost of Energy ($/MWh)(2)

609

939

1,195

2019 2022 2024

Cost Competiveness – A Driver of Growth

• Unsubsidized utility-scale solar has a lower

levelized cost of energy compared to

conventional generation including coal,

nuclear and natural gas peaking plants(2)

(1) EIA ‘Renewables 2019

(2) Lazard’s Levelized Cost of Energy Analysis – Version 14.0 (October 2020)

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(1) Announced exit of the U.S. EPC business and transition to a third-party execution model in Q3’19

(2) From time to time, we may temporarily own and operate, or retain interests in, certain of our systems projects for a period of time based on strategic opportunities or market factors

• Direct module sales presence in the United

States, Western Europe, India, Latin

America, Brazil, Middle East, Japan, and

Australia

Manufacturing Module Sales

Project Development (1,2) Operations and Maintenance

• Multi-GW project development pipeline

across the United States and Japan

• Evaluating strategic options for U.S. project

development business; launched strategic

process in June 2020

• Signed an agreement in August 2020 to sell

the North American O&M business to

NovaSource Power Services, a portfolio

company of Clairvest Group

• Series 6: Anticipate 2020 production of

approximately 5.8 GW

• Series 4: Achieved 2020 production target of

0.2 GW: production ended, company

transitioned fully to Series 6

| Business Segments

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| First Solar Across the Globe

6GW+Series 6 Shipped

25GW+Total Modules

Shipped

Manufacturing

Plants

Headquarters

First Solar

Modules

Regional

Sales Offices

Manufacturing and Technology Advantages

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| Vertically Integrated Manufacturing Process

factory1~4.5hours

module supplier

Poly /ingot

ingot to wafer

wafer to cell

multiple processes

3–4

3+days

c-Si Batch ProcessingFirst Solar’s CdTe Thin Film Technology

process1

Fully integrated, continuous process is quality-controlled under one roof

Supply chain traceability and transparency

98% less semiconductor material vs c-Si

Single glass substrate vs. multiple c-Si wafers

Lowest carbon footprint and fastest energy payback time available in the market today

factories

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● Leading-edge performance derived from over$1 billion in R&D investments

● Continuous technology enhancements lower LCOE and boost module efficiency consistently year-over-year

● Ultra-thin semiconductor film is 3% the thickness of a human hair

● Durable and encapsulated glass-on-glass construction stands up to rigorous lab and field testing

● Optimized design from manufacturing through shipping, installation, and recycling

|What’s Inside 20+ Years of Innovation?

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| Series 6 CuRe vs. Leading c-Si Bifacial Module Expected Energy Yield Advantage Over 30 Years (1)

…and up to 14.0% more than traditional c-Si.

Series 6 CuRe Expected to unlock

up to 10.0%more lifetime energy vs.

leading bifacial c-Si…

Cumulative Specific Expected Energy Yield Advantage % (Series 6 CuRe vs. Leading c-Si Bifacial)

(1) Reflects expected energy yield advantage of our next generation Series 6 CuRe modules as compared to leading c-Si bifacial and traditional c-Si modules, as applicable, over a 30-year project life. We expect to begin delivering Series 6 CuRe modules in the second half of 2021.

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Series 6

CuRe

Expectations

Improved efficiency,

temperature

coefficient, and long-

term degradation

Improved efficiency

reduces fixed and

variable CpW

Minimal change to

installation process or

support structures

Minimal change to

project development or

operating costs

No risk associated with

backside energy

c-Si BifacialBackside energy gain,

partially offset by lost

front-side wattage

Additional PV glass and

reduction in front-side

wattage modestly

increases variable and

fixed CpW

Taller posts needed to

maximize backside

energy gain

Increased vegetation

management costs and

insurance premiums

associated with cell

cracking risk

Energy prediction and

albedo uncertainly

associated with

backside energy gain

c-Si Large

Form Factor

Wattage increase often

driven by larger form

factor, not improved

efficiency

Larger form factor

reduces fixed CpW,

partially offset by added

variable costs

Machinery required for

installation;

Additional support

structures needed

Increased insurance

premiums associated

with cell cracking risk

Larger form factor

increases cell cracking

and wind load risk

| Technology, Cost, and Risk | Levers of ASP

Accretive to ASP

Increased Energy Lower Cost per Watt (CpW) Higher BOS Higher Dev. Costs Additional Risk

Dilutive to ASP

Relative value ascribed to energy,

capex, and operating expenses…

…varies by project site, geography,

market, energy price, and buyer

Sustainability

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| Responsible Leadership through Stewardship

Leading eco-efficient PV technology

Globally recognized for environmental performance and excellence

Member of RE100, a global consortium of companies committed to operating using clean energy

● Higher energy yields at competitive cost with the industry’s smallest environmental footprint

● Joint winner of PV Magazine’s inaugural Sustainability Award

● Committed to powering 100 percent of global operations with renewable energy by 2028

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| Creating More Value with Less Environmental Impact

Up to 6x lower carbon footprint than c-Si PV

Up to 4x faster energy payback time than c-Si PV

Up to 24x lower water footprint than c-Si PV

90%+ module recycling material recovery rate

Semiconductor layer is <2% the thickness of a silicon cell

First Solar’s sustainability advantage supports a circular economy

6xLOWER

90%+

4xFASTER

24xLOWER

<2%

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● First and industry leading global PV module recycling program with more than 10 years experience

● Recycling facilities in the USA, Germany, Vietnam, and Malaysia

● Modules are designed for high-value recycling and maximum resource recovery

● Recover more than 90% of semiconductor materials and approximately 90% of glass for use in new modules and other products

| Responsible Life Cycle Management

Operations, Bookings and Financialsas of October 27, 2020

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|Module Segment Update

Fleet-wide

Performance

Metrics

4.9 GW of year-to-date production(1), including 4.7 GW of Series 6

Each factory averaged over 100% capacity utilization during the third quarter

Commenced commercial production of 445 watt modules

16.9(2) / 17.7(3) MWs produced per day and 96.6%(2) / 97.2%(3) manufacturing yield

436(2) / 438(3) average watts per module and 92%(2) and 96%(3) ARC bin distribution from 435 to 445

Factory

Specific

Updates

International factories averaged 118%(2) / 119%(3) capacity utilization

Ohio factories averaged 109%(2) / 121%(3) capacity utilization

Vietnam factories achieved manufacturing yield of 98%(2,3)

Malaysia 2 equipment onsite; potential for production start up delays

Supply Chain

and Logistics

Vertically integrated CdTe manufacturing process has helped mitigate potential operational disruptions

Forward shipping contracts partially mitigated impacts of higher spot rates

Financial Module segment gross margin increased on a quarterly basis

(1) Data from January 1, 2020 through October 25, 2020(2) Data from September 1, 2020 through September 30, 2020(3) Data from October 1, 2020 through October 25, 2020

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| Expected Module Shipments(1) (GWDC): Systems + Third-Party Module

The above table presents the actual module shipments for 2020 through Sept 30, 2020, new module volume bookings through Oct 27, 2020, and the expected module

shipments beyond Sept 30, 2020. A module is considered to be shipped when the delivery process to a customer commences and the module leaves one of our

facilities. Expected module shipments do not have a direct correlation to expected revenues as expected module shipments do not represent total systems revenues and do

not consider the timing of when all revenue recognition criteria are met, including timing of module installation.

(1) Expected Module Shipments includes systems projects and contracted 3rd party module-only sales. Systems projects include (a) under sales agreement, (b) executed

PPA not under sales agreement, and (c) no PPA and not under sales agreement, but electricity to be sold on an open contract basis.

(2) 3.6 GW of net shipments deducted from backlog; 0.1 GW of 3.7 GW total shipments shipped to safe harbor the U.S. investment tax credit for future systems projects.

(3) Reflects bookings from Jan 1, 2020 to Sept 30, 2020.

(4) Reflects bookings from Oct 1, 2020 to Oct 27, 2020.

(5) Balance includes remaining shipment volumes as of Sept 30, 2020 and bookings through Oct 27, 2020. Shipments from Oct 1 to Oct 27, 2020 not deducted.

Dec 31, 2019 YTD Shipments as of Sept 30, 2020

YTD Bookings as of Sept 30, 2020(3)

QTD Bookings Q4’20(4)

Oct 27, 2020(5)

11.7 GW

3.8 GW

0.3 GW 12.2 GW

(3.7) GW(2)

(3.6) GW(2)

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| Quarterly Income Statement Highlights

(1) Actual, QoQ, and YoY amounts rounded to the nearest million and may not tie due to rounding

(In millions, except per share amounts)(1) Q3 2020A Q2 2020A Q3 2019A QoQ Change YoY Change

Net sales $928 $642 $547 $285 $381

Gross profit % 31.6% 21.4% 25.3% 10.2% 6.3%

Selling, general and administrative 50 52 54 (2) (4)

Research and development 23 22 25 0 (2)

Production start-up 13 6 19 7 (6)

Litigation loss - 6 - (6) -

Operating income (loss) 207 51 41 156 166

Income tax (expense) benefit (38) (10) (15) (28) (23)

Net income (loss) 155 37 31 118 124

Net income (loss) per share - diluted 1.45 0.35 0.29 1.10 1.16

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| Quarterly Balance Sheet Highlights

(1) Actual, QoQ, and YoY amounts rounded to the nearest million and may not tie due to rounding(2) Includes cash and cash equivalents, marketable securities, and restricted cash(3) Includes accounts receivable trade, net & accounts receivable, unbilled and retainage, net(4) Assets and liabilities related to the agreement to sell our North American O&M operations

(In millions)(1) Q3 2020A Q2 2020A Q3 2019A QoQ Change YoY Change

Cash and marketable securities(2) $1,671 $1,642 $1,637 29 33

Accounts receivable(3) 307 352 532 (44) (225)

Inventories (current and noncurrent) 765 703 729 62 36

Balance of systems parts 34 35 69 (0) (35)

Property, plant and equipment, net 2,387 2,324 2,107 62 280

PV solar power systems, net 257 466 485 (208) (227)

Project assets - current and noncurrent 364 382 572 (18) (208)

Assets held for sale(4) 35 - - 35 35

Total assets 6,985 7,073 7,055 (87) (69)

Long-term debt - current and noncurrent 261 465 480 (204) (219)

Liabilities held for sale(4) 13 - - 13 13

Total liabilities 1,589 1,846 1,872 (257) (283)

Total stockholders’ equity 5,396 5,227 5,182 169 214

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| Q4’20 Guidance Assumptions

Strategic

Given the uncertainty around any outcome from the evaluation of strategic options for our

U.S. project development business, and the sale timing of our North American O&M business,

our fourth quarter guidance assumes no change to our existing lines of business or the

potential financial impacts

Shipments Fourth quarter module shipments guidance range accounts for potential project, financing,

logistics, and customer driven delays

Systems Sales Anticipate the Sun Streams 2 project will be sold in Q4’20 or Q1’21

Fourth quarter guidance range accounts for the financial impact of closing the Sun Streams 2

transaction

COVID-19

To date have managed the impacts of the COVID-19 pandemic, which has not had significant

effects on our operations

Guidance assumes continued mitigation of any such impacts of COVID-19 on supply chain

and operations without the incurrence of material costs

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| Q4’20 Guidance as of October 27, 2020

Q4’20 Implied FY’20

Net Sales $540M to $790M $2.6B to $2.9B

Gross Margin (%)(1) 26.5% to 27.0% 25%

Operating Expenses(2) $90M to $95M $351M to $356M

Operating Income(3) $50M to $120M $310M to $380M

Earnings Per Share $1.00 to $1.50 $3.65 to $4.15

Net Cash Balance(4) $1.2B to $1.3B -

Capital Expenditures $123M to $223M $450M to $550M

Shipments 1.8GW to 2.0GW 5.5GW to 5.7GW

(1) Includes $5 million of ramp costs for FY’20

(2) Includes $15 million of plant start-up expense for Q4’20 and $39 million for FY’20

(3) Includes $44 million of ramp costs and plant start-up expense for FY’20 and $27 million of Series 4 shutdown and other severance costs for FY’20

(4) Defined as cash, cash equivalents, marketable securities, and restricted cash less expected debt at the end of 2020

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(2,000)

(1,500)

(1,000)

(500)

0

500

1,000

1,500

2,000

First Solar Competitor #1 Competitor #2 Competitor #3

Ne

t C

ash

(1) /(D

ebt)

(2)in

$ m

illio

ns

Note: ‘Net (Debt) / Cash’ is based on latest quarterly financial filings as of 10/29/2020; (1) Cash includes cash, cash equivalents, marketable securities and restricted cash; (2) Debt includes current portion of long-term debt, long-term debt and convertible debt

| Strong Balance Sheet | U.S. Listed Competitors

Long-Term Cost and Technology Outlook

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| Indicative Drivers of Long-Term Module Cost Reduction

20-30% reduction

(predominantlyglass and

aluminum)

95% 98%

30-35% increase

10-20% reduction

CuRe and other R&D programs

440 500watts

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| Series 6 Efficiency Roadmap

Note: Actuals represents fleet average year end exit rate

* = Forecast improvements inclusive of all R&D program, primarily driven by CuRe Phases 1-3

420

430

460

411

431

447

440

500

380

400

420

440

460

480

500

2018 2019 2020E Prior Mid-Term Target New Mid-Term Target

2017 Guidance Call (Nov 2016) 2017 Analyst Day (Dec 2017) Actuals Current Forecast

Watts per Module

CuRe Phase 1*

CuRe Phases 2&3*

Expected Launch Range

Record module

Investor Overview · PV Market Growth and Competitiveness $-$50 $100 $150 $200 Gas Combined Cycle...

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Transcript of Investor Overview · PV Market Growth and Competitiveness $-$50 $100 $150 $200 Gas Combined Cycle...