First Solar (FSLR) talked about its pricing challenges in last Wednesday’s conference call with analysts. The company is having trouble sorting through the various factors slowing demand for their thin film solar panels: for example, lack of credit and financing or competitor pricing. I suspect that First Solar’s sales teams need to do more aggressive market intelligence: talking to customers, monitoring the conference calls of competitors, and cataloguing the reasons motivating buying customers. Since the company is sure that prices must come down (demand continues to weaken), it makes sense to start as soon as possible with at least modest price concessions and schedule frequent reviews of pricing policies. Hopefully, the company also has a formal pricing team in place.
Here is the blurb from the Reuter’s story from June 24, 2009 (“First Solar sees costs down by a third in 5 yrs“:
“First Solar has said it would cut its prices to remain competitive with silicon-based panels, but Chief Executive Mike Ahearn said it was still unclear whether it was a lack of access to financing, competitors’ prices or other factors that were slowing down demand.
“Broadly speaking we need to look at price as a way to drive throughput against the production plan we’ve put in place. The question becomes, is price the constraint?” Ahearn said. “Is that the issue or is volume throughput constrained by other factors like project finance or permitting approvals and so on? It’s pretty easy to get caught up in market hype … Sometimes it’s hard to see what the real data points are.””