22
A Cheaper
WaytoTap
The Sun
THE BOTTOM LINE YouTube istrying harder than usual to win
back advertisers turned off by its string of scandals, even at the
risk of alienating aspiring video makers.A year ago, First Solar Inc.’s future looked uncer-
tain. Deeply underpriced by a string of Chinese
competitors, the Tempe, Ariz., maker of solar
panels laid off hundreds of workers, sold equip-
ment, and shut down its factory on the outskirts
of Toledo, its only one in the U.S., as it prepared to
gut and remodel the place. That last move, how-
ever, has paid off.When Google announced the changes in
mid-January, it said 99 percent of the affected
video channels earn less than $100 a year. That
didn’t soothe many creators, some of whom were
already furious when YouTube cut some videos it
deemed risqué out of its ad network last summer.
“Every time I’m so close to a goal and I’m so close
to something @YouTube changes the rules and lit-
erally knocks me down,” tweeted Tianna Ouellette,
a YouTuber who posts makeup and beauty videos.
A few YouTube stars, including Philip DeFranco
(6 million subscribers), advised lesser-known
video makers to seek donations from viewers on
platforms such as Patreon. Phillip Huynh, a direc-
tor at ad agency 360i, says he expects aspiring
YouTube “influencers”—online entertainers with
a large, typically young following—to start spend-
ing more time on other sites. “You have to be on
YouTube, but they won’t go all-in,” he says.
The first true test for YouTube will come in the
spring with the NewFronts, the digital equivalent
of the upfronts, an annual gathering where TV net-
works pitch shows to advertisers. In 2012 at the first
NewFronts, YouTube “was the only show in town,”
says Omnicom’s Anselmo. Now, if they don’t like
what they see, advertisers, like the video makers,
have other options.—Mark Bergen and Lucas Shaw○ The cost of
R&D for First Solar’s
cad-tel spray$1b
○EvenbeforeTrump’stariffs,aU.S.panel
maker underpriced Chinese rivalsThe Ohio plant has been reborn as an almost
fully automated operation, daily churning out
hundreds of solar panels for a fraction of what it
costs rivals to make them. The secret: supersize
panels made with cadmium telluride, an energy-
absorbing metal compound that First Solar engi-
neers figured out how to spray on glass sheets in
a thin film. First Solar invested more than $1 bil-
lion in researching and developing the cad-tel
spray over the course of two decades. Its success
upended the business of solar panel production
even before the Trump administration announced
tariffs on overseas solar hardware on Jan. 22.
Early in the plant renovation process, “when I
first saw that empty factory floor, my heart sank,”
Chief Executive Officer Mark Widmar recalls. He
was unsure the automation would pay off. “I
thought, What have we done? But we’re now in a
better competitive position than ever.”
Today a visitor to the factory, which reopened
in December, looks out over a line of robotic arms
guiding sheets of specialized conductive glass onto
rollers that snake 3 miles through cleaning, grind-
ing, and spraying machines. A final robot grabs
the completed panel, about the size of a large
flatscreen TV, and places it in a box for shipment.
There are just a few dozen workers scattered about;
before the renovation, there were hundreds. The
company acknowledges that it’s cut jobs, but it says
the ones that remain are safer and pay better.
First Solar’s patented handful of steps takes just
three and a half hours, compared with the three
days the leading Chinese solar companies need to
make similar-size silicon panels. The conventional
process requires more than 100 steps, includ-
ing fabricating silicon ingots in a furnace, shav-
ing them into wafers, wiring on metal contacts to
make cells, and assembling 60 or so of those cells.
The panels coming off the new line in Ohio
are triple the size of First Solar’s previous model
and produce 244 percent more power at a man-
ufacturing cost of as little as 20¢ per watt, about
30 percent less than the cheapest Chinese equiv-
alent. The advantage widens in hot, humid, and
low-light conditions. “They have a great new
product and a significant cost advantage for at
least a couple years,” says Jay Rhame, a portfolio
manager at Reaves Asset Management, which has
invested in First Solar.
Using cad-tel for solar energy dates to the 1950s,
and companies including General Electric, Kodak,
and BP worked on the technology before aban-
doning it. In the 1990s, First Solar founder Harold
McMaster came up with a method for spraying a
liquid form of the compound onto sheets of glass.
He later sold the company to John Walton, a son TECHNOLOGY Bloomberg Businessweek January 29, 2018