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•	structural imbalances in global supply and demand for photovoltaic (“PV”) modules;

•	the market for renewable energy, including solar energy;

•	reduction, elimination or expiration of government subsidies and support programs for solar energy projects;

•	our ability to execute on our Long Term Strategic Plan;

•	interest rate fluctuations and both our and our customers’ ability to secure financing;

•	our ability to execute on our solar module and balance of systems (“BoS”) cost reduction roadmap;

•	our ability to attract new customers and to develop and maintain existing customer and supplier relationships;

•	changes in, or the failure to comply with, government regulations and environmental, health and safety requirements;

•	our competitive position and other key competitive factors;

•	environmental responsibility, including with respect to cadmium telluride and cadmium sulfide;

•	claims under our limited warranty obligations;

•	future collection and recycling costs for solar modules covered by our module collection and recycling program;

•	our ability to protect our intellectual property;

•	our continued investment in research and development;

•	the supply and price of components and raw materials, including cadmium telluride;

•	our ability to successfully develop and complete our systems business projects;

•	our ability to attract and retain key executive officers and associates;

•	general economic and business conditions, including those influenced by international and geopolitical events; and

•	all other matters discussed in Item 1A: “Risk Factors,” and elsewhere in this Annual Report on Form 10-K.

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First Solar is vertically integrated across substantially the entire solar value chain. Many of the efficiencies, cost reductions and capabilities that we deliver to our customers are not easily replicable for other industry participants that are not similarly vertically integrated. The First Solar model offers PV energy solutions that benefit from our capabilities, including: project development; engineering and plant optimization; grid integration and plant control systems; project finance; advanced PV modules; inverters and power conversion components; trackers and fixed mounting systems; procurement and construction consulting; operations and maintenance; energy forecasting; and warranties and performance guarantees.

•	First Solar systems deliver solar energy that is cost competitive with certain conventional energy sources today, depending on the location and application. Our solutions diversify the energy portfolio and reduce the risk of fuel-price volatility, while delivering a LCOE that is cost competitive in some circumstances with electricity generated from fossil fuels. With

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•	First Solar’s bankability and financial credibility enables us to offer meaningful system-level warranties for entire solar power plants years after the installation, which provides us with a competitive advantage relative to some of our peers in the solar sector in the context of project financing.

•	We offer one of the most bankable utility-scale solar energy solutions in the world. With our financial stability and ability to maximize the use of our leading technology in debt-financed projects, our bankable energy solutions provide access to capital and relatively low-cost financing to leading utilities and energy investors.

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First Solar has developed advanced grid integration technology, which provides PV plants the ability to actively stabilize the electricity grid and operate more like traditional electricity generation plants. Advanced plant features of our grid integration systems include the ability to provide accurate energy forecasts, regulate voltage, curtail active power when necessary, limit the rate of change of power, prevent trips during faults and disturbances, and react to changes in grid frequency.

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First Solar has made significant improvements to BoS components to optimize the entire PV power plant and reduce lifecycle costs. Our proprietary data acquisition, plant control, and mounting systems are examples of plant optimizing technologies that enable us to provide reliable and predictable solar energy, increased energy yields and system availabilities, faster construction velocities, and a lower levelized cost of electricity.

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We invest significant resources in advanced research and development (“R&D”). First Solar’s R&D model differentiates us from our competition due to its vertical integration, from advanced research to product development, manufacturing and applications. Our module conversion efficiency has improved on average more than half a percent every year for the last 10 years. First Solar has recently achieved two new world records for cadmium telluride (“CdTe”) PV efficiency, achieving independently certified research cell efficiency of 20.4% and total area module efficiency of 16.1%. Our module R&D efforts are being focused on driving improvements in the lifetime energy production of our modules while simultaneously integrating our module and BoS offerings for cost effective, productive and reliable PV power plants.

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In certain climates, First Solar’s CdTe PV module can provide an energy yield advantage over conventional crystalline silicon solar modules with equal power rating. For example, in humid climates, our CdTe PV module provides a superior spectral response and in hot climates, our CdTe PV module provides a superior temperature coefficient. As a result, at temperatures above 25°C, First Solar CdTe modules produce more energy than competing conventional crystalline silicon solar modules with equal power rating. This performance advantage provides stronger plant performance in high temperature climates, which is particularly advantageous as more than 90% of a plant’s generation on average occurs when module temperatures are above 25°C. As a result, First Solar power plants can produce up to 8% more annual energy than competing power plants with the same nameplate capacity.

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First Solar CdTe PV modules are manufactured in a high-throughput, automated environment that integrates all manufacturing steps into a continuous flow line. At the outset, a sheet of tempered glass enters the production line and in less than 2.5 hours it is transformed into a complete PV module-flash tested, boxed and ready for shipment. We currently have 28 manufacturing lines worldwide and 2.2 GW of annual manufacturing capacity. Each line is currently capable of producing approximately 2,500 modules per day; totaling approximately 70,000 modules each day across 28 lines. About every 1.2 seconds, a completed PV module rolls off a First Solar line somewhere in the world. With expected increases in module efficiency as per our roadmap, our capacity has a potential to scale up to approximately 3 GW in 2017 based on the 28 existing lines. In addition, our stored manufacturing equipment includes up to 12 lines either from our closed German factories or from manufacturing facilities that we put on hold with capacity of up to approximately 1.3 GW. As a result our total available manufacturing capacity includes up to 4.3 GW of either installed or stored capacity that can be readily installed and deployed in production and become a significant enabler of our future growth.

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O&M is a key driver for power plants to deliver on their projected revenues. By leveraging our extensive experience in plant optimization and advanced diagnostics, we have developed one of the most advanced O&M programs in the industry. With more than 2.5 GW AC of utility-scale PV plants under the O&M program, we maintain a fleet average system availability that is above the industry modeled standard of 98%. Our experienced O&M staff enhances the probability that our power plants produce the energy predicted in their energy model. Our products and services are engineered to

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Utility-Scale Power Plant. We have extensive, proven experience in delivering reliable grid-connected bulk power systems for utility-scale generation. First Solar’s grid-connected PV power plants diversify the energy portfolio, reduce fossil-fuel consumption, reduce the risk of fuel price volatility, and save costs, proving that centralized solar generation can deliver reliable and affordable solar electricity to the grid in many places around the world. Benefits of our grid-connected bulk power system solutions include reduction of fuel imports and improvements in energy security; diversification of the energy portfolio and reductions of risk related to fuel-price volatility; enhanced peaking generation and faster time-to-power; improved grid reliability and stability with advanced PV plant controls and managed PV variability through accurate forecasting.

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AC Power Block. First Solar is developing the AC Power Block as a pre-engineered system solution with guaranteed performance, consisting of First Solar modules, mounting solutions, third party inverters, a power block warranty and certain related services. Building on the core of our PV plant technology, the AC Power Block will enable our local Engineering, Procurement, and Construction (“EPC”) partners to develop PV power plants in diverse regions. By utilizing technologies optimized by First Solar, the AC Power Block is expected to provide verification of the power plant energy model ensuring that delivered performance equals predicted performance. The AC Power Block is expected to (i) feature execution by a local partner with First Solar technology and training; (ii) provide a bankable revenue stream; (iii) streamline development, financing, permitting, installation, and commissioning; (iv) reduce LCOE and (v) ensure predictable energy performance. As a result of First Solar’s experience in utility-scale generation, First Solar power plants are expected to deliver an accurate energy profile, cost structure and be optimized for project-specific economics. By applying our knowledge and technical expertise to the AC Power Block solution, we will be able to predict the energy model and guarantee the first year revenues. The AC Power block performance guarantee is expected to result in a high level of bankable revenue stream for project owners.

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Fuel Displacement. Our hybrid power plant solutions, which are currently in development, are expected to reduce fuel consumption and save costs for certain energy customers using liquid fuel as their primary energy source. Today, solar electricity is cheaper than diesel generated electricity in certain markets. With fixed pricing and no fuel-price volatility, solar can provide a meaningful value proposition for energy customers burning liquid fuel as their primary energy source. Our innovative hybrid system solutions are expected to provide cost-competitive solar energy as an alternative source of fuel, reducing fuel consumption and variable costs with reliable and affordable solar electricity. Benefits of our fuel displacement product are expected to include the reduction of fuel consumption and cost savings; an increase in fuel reserves or exports at market prices; a smaller impact from fuel price volatility; greater energy independence; reduction of CO2 emissions and generator operating time.

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Commercial and Industrial (“C&I”) - Distributed Generation for Restricted Spaces. We are in the process of developing system solutions, both ground-mounted and roof-top, for commercial and industrial applications, using both our CdTe PV technology and the high efficiency crystalline silicon technology we acquired in 2013. Distributed solar generation can be deployed rapidly, and because the energy generated is consumed locally, less energy is lost in transmission from the point of production. While our CdTe PV modules have been used in many C&I systems worldwide, our high-power density, mono-crystalline solar technology is expected to be particularly attractive in restricted spaces, enabling our customers to pack more power and energy production into each location, resulting in improved performance in site-constrained locations. We expect to begin manufacturing modules incorporating this crystalline silicon technology in limited quantities by the end of 2014.

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Off-Grid and Energy Access. Our off-grid and energy access offerings, currently in development, can address underserved energy markets and bring power solutions to some of the approximately 1.3 billion people without access to a modern energy grid. First Solar’s energy access offerings are expected to provide a practical and affordable option for underserved off-grid energy markets across the globe. Our mini-grid capabilities under development can provide aggregate surplus supply for village electrification in remote locations to power homes, schools, hospitals, telecommunication systems, and many other modern applications. Our underserved energy market capabilities under development can provide base-load solar generation with no fuel cost or delivery risk; reduce health risks associated with kerosene and diesel fuel; support fast installation, low maintenance, and easy service and provide income generation and economic development opportunities. We are currently engaged in three off-grid energy access test pilot sites in Kenya.

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Advanced PV Modules. Our Series 3 Black CdTe PV module outperforms conventional crystalline silicon solar modules with equal power rating due to superior spectral response and temperature coefficient. As a result, at temperatures above 25°C, First Solar modules produce more energy than conventional crystalline silicon solar modules with equal power rating. Our TetraSun crystalline silicon module (scheduled to begin manufacturing by the end of 2014) is designed for applications where space is at a premium or customers prefer a high-power density solution. With a proprietary cell architecture and manufacturing process, our crystalline silicon modules are expected to offer one of the industry’s highest

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Project Development. During project development, we obtain land and land rights for the development of PV solar power systems incorporating our modules, negotiate long-term PPAs with potential purchasers of the electricity to be generated by those plants or develop plants in regulated markets where feed-in-tariff (“FiT”) or similar structures are in place, manage the interconnection and transmission process, negotiate agreements to interconnect the systems to the electricity grid, and obtain the permits which are required prior to the construction of the PV solar power systems, including applicable environmental and land use permits. We also buy projects in various stages of development and continue developing those projects with system designs incorporating our own modules. We sell developed PV solar power systems to system operators who wish to own generating facilities, such as utilities, or to investors who are looking for long-term investment vehicles that are expected to generate consistent returns.

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EPC Services. We provide EPC services to projects developed by us, to projects developed by independent solar power project developers, and directly to system owners such as utilities. EPC products and services include engineering design and related services, BoS procurement, advanced development of grid integration solutions, and construction contracting and management. Depending on the customer and market need, we may provide our full EPC services or any combination of individual products and services within our EPC capabilities. An example of such combination of individual services would be providing engineering design and procurement of BoS parts (“EP” services) for a third party constructing a PV solar power system.

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O&M Services. We have a comprehensive O&M service offering with multiple PV solar power systems in operation. Utilizing a state of the art Global Operations Center, our team of O&M experts provide comprehensive services including NERC compliance, energy forecasting, 24/7 monitoring and control, PPA and Large Generator Interconnection Agreement compliance, performance engineering analysis, turn-key maintenance services including spare parts and breakdown repair, and environmental services. We offer our O&M service to solar power plant owners that use either our solar modules or modules manufactured by other third-party manufacturers.

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Project Finance. Our project finance group is primarily responsible for negotiating and executing the sale of PV solar power systems incorporating our modules which allows us to optimize the value of our project development portfolio. Our project finance team includes professionals with experience in arranging for and structuring financing for projects incorporating our modules including non-recourse project debt financing in the bank loan market and debt capital markets and project equity capital from tax oriented and strategic industry equity investors.

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The First Solar Tracker and Other Balance of System (“BoS”). BoS consists of all of the non-module components of the solar power plant. We sell certain components of the solar system including single-axis trackers, which are manufactured by a third party using our proprietary technology. We offer several proprietary mounting solutions that have been custom-designed by First Solar engineers to integrate exclusively with our modules and reduce system costs. Project specific factors such as the local irradiance, weather, soil, wind, and topography will dictate the optimal mounting solution for each project. With a single-axis tracker technology and multiple fixed mounting solutions to choose from, we offer a suite of mounting systems that have been engineered to maximize energy output, increase installation velocity, and reduce costs. Our proprietary tracker systems follow the sun throughout the day to maximize energy output and generate up to 25% more energy than fixed mounting systems.

•	Power Sales and Marketing. We are developing capabilities in power sales and marketing, which will enable us to source buyers of electricity from our projects as needed, for instance during any stub periods between a solar plant’s commercial operation date and the subsequent start date of a long term PPA.

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United States. Multiple PV markets in the United States, which accounted for 86% of our 2013 net sales, exemplify several of the criteria critical for a sustainable solar market: (i) sizeable electricity demand, particularly around growing population centers and industrial areas, (ii) high existing power prices, and (iii) abundant solar resources. In those areas and applications in which these factors are more pronounced, our PV solar solutions are getting closer to competing solely on an economic basis with more traditional forms of energy generation. The market penetration of PV solar is impacted by certain state and federal support programs, including the 30% federal investment tax credit set to expire at the end of 2016, as described under “Market Overview” and “Support Programs.” We have significant experience and a market leadership position in developing, financing, engineering, constructing, and maintaining utility-scale power plants in the United States, particularly in California and other southwestern states. Currently, our solar projects in the United States account for substantially all of the 2.7 GW AC advanced-stage pipeline of projects that we are either currently constructing or expect to construct. See Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Systems Project Pipeline” for more information about these projects.

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Chile. Chile is a promising region for PV solar in that certain markets are characterized by high existing electricity prices, abundant solar resources and visible demand in the form of mining or industrial activity. In 2008, Chile enacted the Non-Conventional Renewable Energy (“NCRE”) Law which made it mandatory for electricity companies selling energy to final customers to assure that a specified quota (which rises over time) of the energy they sell comes from NCRE sources, directly or indirectly.

•	Other Americas. We are developing our business in other countries in the Americas including Canada, Brazil, Mexico and certain Central American countries. Canada accounted for approximately 8% of our 2013 net sales.

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Europe. While PV solar adoption in prior years was driven to a large degree by feed-in-tariffs and other incentive programs in Germany, France, Italy and Spain, PV solar is entering its next phase in which growth will ultimately be determined by the degree to which PV solar solutions can compete economically with more traditional forms of electricity generation, particularly in areas with high prevailing electricity prices, strong electricity demand and strong solar resources.

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Middle East and North Africa (“MENA”). The MENA region offers strong potential for PV solar adoption. In addition to this region benefiting from particularly abundant solar resources, PV solar offers this region the opportunity to shift more current and future domestic electricity consumption to PV solar, thereby allowing incrementally more hydrocarbon exports into the world markets. In MENA, several countries have announced sizeable solar targets, although policy mechanisms are in many cases not yet firmly established. For example, in the Kingdom of Saudi Arabia, a solar policy with a target of 41 GW of solar energy (of which at least 16 GW is PV) by 2032 was introduced in 2012. While the expected potential of the MENA market is significant, policy promulgation and market development are especially

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South Africa. South Africa offers strong market potential for PV solar, which can play a useful role in delivering electricity to the region’s mining industry. The mining industry in South Africa and around the region is working to address electricity supply challenges that have a direct impact on operations. Whether mines are grid-connected or relying on diesel generators, solar energy, with its cost competitiveness and reliability, represents a meaningful value proposition. Deploying PV hybrid solutions that supplement existing power sources, such as the electricity grid or diesel generators, can help mining companies address their daytime electricity supply challenges, while minimizing costs and lowering their environmental impact. In South Africa, the government is procuring bids under a competitive tender process in support of a target of procuring over 18 GW of renewable energy by 2030 in South Africa’s Integrated Resource Plan of which over 8 GW was allocated to solar PV. First Solar has established an operating subsidiary in Cape Town, South Africa as a regional hub for activities across sub-Saharan Africa.

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Australia. Australia is a promising region for PV solar in that certain markets are characterized by abundant solar resources and visible demand in the form of mining and industrial activity. In Australia, which accounted for less than 1% of our 2013 net sales, the solar industry is impacted by several regulatory initiatives that support the installation of solar PV modules in both rooftop and free-field applications, including the federal government’s national Renewable Energy Target, which has set a renewable energy goal of 20% by 2020. Additional support has been provided by the Australian Renewable Energy Agency which offers grant-based funding for solar PV projects in both grid-connected and off-grid applications. Due to the uncertain nature of federal incentive programs, the states/territories have also launched their own policy support programs.

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Japan. Japan has evolving electricity market characteristics, particularly after the 2011 Fukushima Daiichi nuclear disaster, that make it an attractive market for PV solar. Japan announced new safety standards after the failure of the Fukushima Daiichi nuclear power station resulting in the idling of Japan’s nuclear reactors, which historically generated nearly 50 GW or 30% of the country’s electricity. Japan has few domestic fossil fuel resources and as a result of the shutdown of its nuclear reactors, it further increased its dependence on fossil fuel imports to cover the generation shortfall. Japan is the largest importer of liquefied natural gas globally. The Japanese government has announced a long-term goal of dramatically increasing installed solar power capacity, with a target of 28 GW or more of solar power capacity by 2020. Japan is a signatory to the Kyoto Protocol, which requires it to reduce greenhouse gas emissions. As Japan will not likely reach its renewable energy (including solar) targets, Japan is increasing its incentives for solar power installations. Besides

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India. There is significant potential for PV in India due to its growing energy needs, substantial population centers, a lack of electrification to many parts of the country, high competing energy costs, high levels of irradiance, and the aggressive renewable energy targets set by the government. In India, which accounted for less than 1% of our net sales, the Central Government has initiated actions to roll out Phase-III of its Jawaharlal Nehru National Solar Mission (“JNNSM”), which aims to install 22 GW of new solar electricity generating capacity by 2022, or a cumulative target capacity addition of 11 GW between 2013-17 as part of Phase II of JNNSM.

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Other APAC. We are developing our business in other APAC countries including Indonesia, Malaysia and Thailand. In China, we continue to evaluate our options and remain committed to our presence, with the goal of developing sales and joint venture opportunities in the market. Due to market environment and other reasons, we have determined that we will no longer be pursuing the Ordos project that we had previously announced as part of a 2 GW Memorandum of Understanding with the City of Ordos.

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•	cost-effectiveness of the electricity generated by PV power systems compared to conventional energy sources, such as natural gas and coal (which fuel sources may be subject to significant price swings from time to time), and other non-solar renewable energy sources, such as wind;

•	performance, reliability and availability of energy generated by PV systems compared to conventional and other non-solar renewable energy sources and products;

•	success of other renewable energy generation technologies, such as hydroelectric, tidal, wind, geothermal, solar thermal, concentrated PV, and biomass;

•	fluctuations in economic and market conditions that affect the price of, and demand for, conventional and non-solar renewable energy sources, such as increases or decreases in the price of natural gas, coal, oil, and other fossil fuels;

•	fluctuations in capital expenditures by end-users of solar modules and systems which tend to decrease when the economy slows and when interest rates increase; and

•	availability, substance, and magnitude of support programs including government targets, subsidies, incentives, and renewable portfolio standards to accelerate the development of the solar energy industry.

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•	difficulty in accurately prioritizing geographic markets which we can most effectively and profitably serve with our PV offerings, including miscalculations in overestimating or underestimating our addressable market demand;

•	difficulty in overcoming the inertia involved in changing local electricity ecosystems as necessary to accommodate large-scale PV solar deployment and integration;

•	protectionist or other adverse public policies in countries we operate in and/or are pursuing, including local content requirements or capital investment requirements;

•	business climates, such as that in China, that may have the effect of putting foreign companies at a disadvantage relative to domestic companies;

•	unstable economic, social and/or operating environments in foreign jurisdictions, including social unrest and currency, inflation and interest rate uncertainties;

•	the possibility of applying an ineffective commercial approach to targeted markets, including product offerings that may not meet market needs;

•	difficulty in generating sufficient sales volumes at economically sustainable profitability levels;

•	difficulty in timely identifying, attracting training and retaining qualified sales, technical and other personnel in geographies targeted for expansion;

•	the possibility of having insufficient capital resources necessary to achieve an effective localized business presence in targeted jurisdictions;

•	difficulty in maintaining proper controls and procedures as we expand our business operations both in terms of complexity and geographical reach, including transitioning certain business functions to low-cost geographies;

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•	difficulty in competing against competitors who may have greater financial resources and/or a more effective or established localized business presence and/or be willing and able to operate with little or no operating margins for sustained periods of time;

•	difficulty in competing against competitors who may gain in profitability and financial strength over time by successfully participating in the global rooftop PV solar market, which is a segment in which we do not have deep historical experience;

•	difficulty in identifying the right local partners and developing any necessary partnerships with local businesses, on commercially acceptable terms; and

•	difficulty in balancing market demand and manufacturing production in an efficient and timely manner, potentially causing us to be manufacturing capacity constrained in some future periods or over-supplied in others.

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•	making changes to our production process that are not properly qualified or that may cause problems with the quality of our solar modules;

•	delays and cost overruns as a result of a number of factors, many of which may be beyond our control, such as our inability to secure successful contracts with equipment vendors;

•	our custom-built equipment taking longer and costing more to manufacture than expected and not operating as designed;

•	delays or denial of required approvals by relevant government authorities;

•	being unable to hire qualified staff;

•	failure to execute our expansion plans effectively;

•	manufacturing concentration risk resulting from a majority of production lines worldwide being located in one geographic area, Malaysia;

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•	difficulty in balancing market demand and manufacturing production in an efficient and timely manner, potentially causing us to be manufacturing capacity constrained in some future periods or over-supplied in others; and

•	incurring manufacturing asset write-downs, write-offs and other charges and costs, which may be significant, during those periods in which we idle, slow down or shut down manufacturing capacity.

•	difficulty in enforcing agreements in foreign legal systems;

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•	difficulty in forming appropriate legal entities to conduct business in foreign countries in the required time frame and the associated costs of forming those legal entities;

•	varying degrees of protection afforded to foreign investments in the countries in which we operate, and irregular interpretations and enforcement of laws and regulations in these jurisdictions;

•	foreign countries may impose additional income and withholding taxes or otherwise tax our foreign operations, impose tariffs, or adopt other restrictions on foreign trade and investment, including currency exchange controls;

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fluctuations in exchange rates may affect demand for our products and services and may adversely affect our profitability and cash flow in U.S. dollars to the extent that our equity investments, revenues or our costs are denominated in a foreign currency and the cost associated with hedging the dollar equivalent of such exposures is prohibitive; the longer the duration of such foreign currency exposure, the greater the risk;

•	anti-corruption compliance issues, including the costs related to the mitigation of such risk;

•	inability to obtain, maintain, or enforce intellectual property rights;

•	risk of nationalization or other expropriation of private enterprises;

•	changes in general economic and political conditions in the countries in which we operate, including changes in the government incentives we are relying on;

•	unexpected adverse changes in foreign laws or regulatory requirements, including those with respect to environmental protection, export duties, and quotas;

•	opaque approval processes in which the lack of transparency may cause delays and increase the uncertainty of project approvals;

•	difficulty in staffing and managing widespread operations;

•	difficulty in repatriating earnings;

•	difficulty in negotiating a successful collective bargaining agreement in applicable foreign jurisdictions;

•	trade barriers such as export requirements, tariffs, taxes, local content requirements, anti-dumping regulations and requirements, and other restrictions and expenses, which could increase the price of our solar modules and make us less competitive in some countries; and

•	difficulty of, and costs relating to, compliance with the different commercial and legal requirements of the overseas countries in which we offer and sell our solar modules.

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•	obtaining financeable land rights, including land rights for the project site, transmission lines, and environmental mitigation;

•	receipt from governmental agencies of required land use and construction permits and approvals;

•	negotiation of development agreements, public benefit agreements, and other agreements to compensate local governments for project impacts;

•	receipt of rights to interconnect the project to the electric grid or to transmit energy;

•	entering into financeable arrangements for the purchase of the electrical output and renewable energy attributes generated by the project;

•	securing necessary rights of way for access and transmission lines;

•	securing appropriate title coverage, including coverage for mineral rights, mechanics’ liens, etc.;

•	obtaining construction financing, including debt, equity and funds associated with the monetization of tax credits and other tax benefits;

•	payment of PPA, interconnection and other deposits (some of which are non-refundable); and

•	timely implementation and satisfactory completion of construction.

•	delays in obtaining and maintaining required governmental permits and approvals, including appeals of approvals obtained;

•	potential permit and litigation challenges from project stakeholders, including local residents, environmental organizations, labor organizations, and others who may oppose the project;

•	in connection with any such permit and litigation challenges, grant of injunctive relief to stop development and/or construction of a project;

•	unforeseen engineering problems;

•	construction delays and contractor performance shortfalls;

•	work stoppages;

•	cost over-runs;

•	labor, equipment and materials supply shortages or disruptions;

•	additional complexities when conducting project development or construction activities in foreign jurisdictions (either on a stand-alone basis or in collaboration with local business partners), including operating in accordance with the U.S. Foreign Corrupt Practices Act and applicable local laws and customs;

•	unfavorable tax treatment;

•	adverse weather conditions;

•	water shortages;

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•	adverse environmental and geological conditions; and

•	force majeure and other events out of our control.

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•	difficulty in assimilating the operations and personnel of the acquired company;

•	difficulty in effectively integrating the acquired technologies or products with our current products and technologies;

•	difficulty in achieving profitable commercial scale from acquired technologies;

•	difficulty in maintaining controls, procedures, and policies during the transition and integration;

•	disruption of our ongoing business and distraction of our management and associates from other opportunities and challenges due to integration issues;

•	difficulty integrating the acquired company’s accounting, management information, and other administrative systems;

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•	inability to retain key technical and managerial personnel of the acquired business;

•	inability to retain key customers, vendors, and other business partners of the acquired business;

•	inability to achieve the financial and strategic goals for the acquired and combined businesses, as a result of insufficient capital resources or otherwise;

•	incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results;

•	potential impairment of our relationships with our associates, customers, partners, distributors, or third party providers of technology or products;

•	potential failure of the due diligence processes to identify significant issues with product quality, legal and financial liabilities, among other things;

•	potential inability to assert that internal controls over financial reporting are effective;

•	potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions; and

•	potential delay in customer purchasing decisions due to uncertainty about the direction of our product offerings.

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•	incur additional debt, assume obligations in connection with letters of credit, or issue guarantees;

•	create liens;

•	enter into certain transactions with our affiliates;

•	sell certain assets; and

•	declare or pay dividends, make other distributions to stockholders, or make other restricted payments.

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(1)	See Note 14 “Debt,” to our consolidated financial statements for the year ended December 31, 2013 included in this Annual Report on Form 10-K for additional information on property encumbrances.

(2)	Manufacturing ceased in December 2012.

(3)	We did not proceed with our previously announced 4-line plant in Vietnam and such property is being actively marketed for sale.

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(1)	Includes 5,278,226 shares issuable upon vesting of restricted stock units (“RSUs”) granted under the 2010 Omnibus Incentive Compensation Plan.

(2)	The weighted average exercise price does not take into account the shares issuable upon vesting of outstanding RSUs, which have no exercise price.

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(1)	The volume of modules installed in MW DC (“direct current”) will be higher than the MW AC (“alternating current”) size pursuant to a DC-AC ratio typically ranging from 1.2-1.4. Such ratio varies across different projects due to various system design factors

(2)	EPC contract or partner developed project

(3)	First 92 MW AC phase was completed in 2012. Remaining phase is 58 MW AC for which substantial completion is expected in 2015

(4)	UOG = Utility Owned Generation

(5)	PPA term does not begin until 2019

(6)	First Solar will own five percent of projects

(7)	Project has short-term PPA that begins in 2015 with PG&E PPA beginning in 2019

(8)	SCPPA - Southern California Public Power Authority

(9)	Project sale closing subject to certain conditions precedent

(10)	Kent South (Kings County), Kansas (Kings County), Adams East (Fresno County) and Old River (Kern County)

(11)	Merchant Plant - No PPA

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•	Engineering and Procurement (“EP”). Contract Design for customer of a solar electricity generation system that uses our solar modules; includes the procurement of some or all BoS components from third party suppliers.

•	Engineer, Procure, and Construct (“EPC”). Contract Design and construction for a customer of a turn-key solar electricity generation system that uses our solar modules; includes the procurement of all BoS components from third party suppliers.

•	Sale of Project Assets. Sale of project assets to a customer at various stages of development. This generally includes a single project consisting of costs incurred for permits, land or land rights, and/or power purchase agreements.

•	Operating and Maintenance (“O&M”) Agreement. Typically a fixed-price long-term services agreement to operate and maintain a solar electricity generating system that we built.

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•	Expenses associated with our voluntary remediation efforts for our 2008-2009 manufacturing excursion decreased $39.5 million;

•	Accelerated depreciation expense for certain manufacturing equipment that was replaced as part of our planned equipment upgrade programs decreased $24.8 million;

•	Expenses associated with inventory write-downs to lower of cost or market and other adjustments declined by $27.5 million primarily as a result of favorable fluctuations in inventory market pricing;

•	Expenses related to our voluntary remediation efforts for workmanship issues affecting a limited number of solar modules manufactured between October 2008 and June 2009 declined $15.8 million.

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•	Selling, general and administrative expenses for 2012 included $15.9 million related to the 2008-2009 manufacturing excursion as discussed further in Note 15 “Commitments and Contingencies - Accrued Expenses in Excess of Product Warranty,” to our consolidated financial statements for the year ended December 31, 2013 included in this Annual Report on Form 10-K;

•	Infrastructure expenses including facility, rent and utilities declined $7.1 million primarily due to an early exit from certain administrative office leases in 2012 and reduction in telecommunication spending.

•	Depreciation and amortization expense declined $6.4 million mainly due to acceleration of expense for certain leasehold improvements in 2012 and lower depreciation expense related to our Mesa facility;

•	Project, business development, legal and professional services fees increased $14.5 million largely due to increased business development activity and continued expansion of our systems business into sustainable markets;

•

Salary and benefit expenses increased by $5.6 million primarily in connection with an increase in share-based compensation of $26.1 million, partially offset by a decrease in salaries of $20.5 million due to headcount reductions and lower incentive compensation. Share based compensation expense increased primarily as a result of the impact of a change in our estimated forfeiture rate for share-based compensation awards in 2012, partially offset by a change in 2013. Our 2012 restructuring activities resulted in an increase in actual forfeitures and thus lower share based compensation expense compared with historical experience prior to such restructuring activities.

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•

The amount of accounts receivable, unbilled and retainage as of December 31, 2013 was $521.3 million. Included in accounts receivable, unbilled and retainage as of December 31, 2013 was $103.0 million of accounts receivable, unbilled. Accounts receivable, unbilled represents revenue that has been recognized in advance of billing the customer under the terms of the underlying construction contracts. Such construction costs have been funded with working capital and the unbilled amounts are expected to be billed and collected from customers during the next twelve months. Once we meet the billing criteria under a construction contract, we bill our customers accordingly and reclassify the accounts receivable, unbilled and retainage to accounts receivable trade, net. Included in accounts receivable, unbilled and retainage as of December 31, 2013, was $418.4 million of current accounts receivable, retainage. In addition, we also had $1.0 million of noncurrent retainage as of December 31, 2013. Accounts receivable, retainage represents the portion of a systems project contract price earned by us for work performed, but held for payment by our customer as a form of security until

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•

The amount of finished goods inventory (“solar module inventory”) and BoS parts as of December 31, 2013 was $474.7 million. As we continue with the construction of our advanced-stage project pipeline we must produce solar modules and procure BoS parts in the required volumes to support our planned construction schedules. As part of the normal construction cycle, we typically must manufacture modules or acquire the necessary BoS parts for construction activities in advance of receiving payment for such materials. Once solar modules and BoS parts are installed in a project, such installed amounts are classified as either project assets, deferred project costs, or cost of sales depending upon whether the project is subject to a definitive sales contract and whether all revenue recognition criteria have been met. Accordingly, as of any balance sheet date, our solar module inventory represents solar modules that will be installed in our advanced-stage project pipeline or that we expect to sell to third parties.

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We expect to commit working capital during 2014 and beyond to acquire solar power projects in various stages of development including advanced-stage projects with PPAs and continue developing those projects as necessary. Depending upon the size and stage of development, costs to acquire such solar power projects could be significant. When evaluating project acquisition opportunities, we consider both the strategic and financial benefits of any such acquisitions.

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In connection with the execution of our LTSP, we expect joint ventures or other business arrangements with strategic partners to be a key part of our strategy. We have begun initiatives in several markets to expedite our penetration of those markets and establish relationships with potential strategic partners, customers, and policymakers. Many of these business arrangements are expected to involve a significant cash investment or other allocation of working capital that could reduce our liquidity or require us to pursue additional sources of financing, assuming such sources are available to us. Additionally, in order to execute our LTSP in such markets, we have elected, and may in the future elect or be required to temporarily retain a minority or non-controlling ownership interest in the underlying systems projects we develop, supply modules to, or construct. Any such retained ownership interest is expected to impact our liquidity to the extent we do not obtain new sources of capital to fund such investments.

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Our restructuring initiatives are expected to result in total remaining cash payments of up to $8 million. Such cash payments are related to payments for other long-term tax liabilities, severance costs for reductions in workforce as a result of such restructuring initiatives and a land remediation accrual. There is the potential for additional future restructuring actions as we continue to align our manufacturing capacity with market demand, evaluate our cost structure and identify potential cost savings opportunities, and focus on developing target markets. We could in the future incur additional restructuring costs (including potentially the repayment of debt facilities and other amounts, the payment of severance to terminated employees, and other restructuring related costs) that could reduce our liquidity position to the point where we need to pursue additional sources of financing, assuming such sources are available to us. See Note 4 “Restructuring and Asset Impairments,” to our consolidated financial statements for the year ended December 31, 2013 included in this Annual Report on Form 10-K.

•	During 2014, we expect to spend between $325 million to $350 million for capital expenditures, including expenditures for upgrades to existing machinery and equipment, which we believe will increase our solar module efficiencies. A

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•

Under the sales agreements for a limited number of our solar power projects, we may be required to repurchase such projects if certain events occur, such as not achieving commercial operation of the project within a certain time frame. Although we consider the possibility that we would be required to repurchase any of our solar power projects to be remote, our current working capital and other available sources of liquidity may not be sufficient to make any required repurchase. If we are required to repurchase a solar power project we would have the ability to market and sell such project at then current market pricing, which could be at a lower than expected price to the extent the event requiring a repurchase impacts the project’s marketability. Our liquidity may also be impacted as the time between the repurchase of a project and the potential sale of such repurchased project could take several months.

i)

Our accounts receivable trade, unbilled and retainage, exclusive of the change in allowance for doubtful accounts and net of effects from business combinations, decreased $565.0 million during 2013 as compared to a $388.0 million increase during 2012. Fluctuations in our accounts receivable are primarily due to the number and size of utility-scale projects under construction, timing of billings and collections as well as timing of revenue recognition. We bill our customers once the billing criteria under a construction contract are met, generally around completion of certain project construction milestones. Decrease in our accounts receivable was driven primarily by cash collections on our AV Solar Ranch One, Agua Caliente, Alpine, and Imperial Energy Center South projects as well as cash collections related to module-only sales to third-party customers. Such decreases were partially offset by accounts receivable increases related to our Desert Sunlight and Topaz projects which are currently under construction.

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ii)

Operating cash inflows associated with decreases in our accounts receivable were offset by cash outflows related to increases in project assets and deferred project costs. Our project assets and deferred project costs, net of effects from business combinations, decreased our cash flow from operations by $316.0 million during 2013 as compared to a $174.5 million decrease during 2012. The development and construction of solar power plants require long periods of time and substantial initial investments, including costs associated with transmission deposits, land acquisition, permitting, legal and other costs and the actual costs of constructing a project. Increases in our project assets and deferred project costs in 2013 included payments for the acquisition of solar power projects including Moapa, Solar Gen 2, North Star and Element Power as well as additional costs associated with development and construction of our Campo Verde, Macho Springs and Maryland Solar projects. These increases were partially offset by decreases in project assets and deferred projects costs associated with initial revenue recognition for our Desert Sunlight project and sale of the completed projects in Canada.

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(1)	Includes estimated cash interest to be paid over the remaining terms of the underlying debt. Interest payments are based on fixed and floating rates in effect at December 31, 2013 and include the effect of interest rate and cross currency swap agreements.

(2)	Purchase obligations are agreements to purchase goods or services that are non-cancellable, enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed minimum, or variable price provisions, and the approximate timing of transactions.

(3)	We assume our collection and recycling obligations will be satisfied more than five years from December 31, 2013.

(4)

In connection with project acquisitions we agreed to pay additional amounts to project sellers upon achievement of project related milestones such as obtaining permits, reaching certain construction stages and project completion. We recognize a contingent liability when we determine that such liability is both probable and reasonably estimable. See Note 15 “Commitments and Contingencies,” to our consolidated financial statements for the year ended December 31, 2013 included in this Annual Report on Form 10-K for further information about our contingent consideration.

(5)	Includes expected letter of credit fees.

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(b)	Exhibits: The exhibits listed on the accompanying Index to Exhibits on this Annual Report on Form 10-K are filed, or incorporated into this Annual Report on Form 10-K by reference.

(c)	Financial Statement Schedule: See Item 15(a)(1) above.

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•	Level 1 — Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

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Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques.

•	Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect our own assumptions about the assumptions that market participants would use to price an asset or liability.

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(1)

On April 8, 2009, we entered into a credit facility agreement with a solar power project entity of one of our customers for an available amount of €17.5 million to provide financing for a PV solar power system. The credit facility replaced a bridge loan that we had made to this entity. The credit facility bears interest at 8% per annum payable quarterly, with the full amount due on December 31, 2026. As of December 31, 2013 and 2012, the balance on this credit facility was €7.0 million ($9.7 million and $9.3 million, respectively at the balance sheet dates).

(2)

Joint ventures or other business arrangements with strategic partners are a key part of our Long Term Strategic Plan, and we have begun initiatives in several markets using such arrangements to expedite our penetration of those markets and establish relationships with potential customers and policymakers. Some of these business arrangements have and are expected in the future to involve significant investments or other allocations of capital on our part. Investments in unconsolidated entities over which we have significant influence are accounted for under the equity method of accounting. Investments in entities in which we do not have the ability to exert significant influence over the investees’ operating and financing activities are accounted for under the cost method of accounting. We made $17.9 million of cash investments in unconsolidated entities during the year ended December 31, 2013 primarily related to furthering our goal of expanding our service and product offerings and developing partnerships in new markets. The following table summarizes our equity and cost method investments as of December 31, 2013 and 2012 (in thousands):

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Cash equivalents. At December 31, 2013 and 2012, our cash equivalents consisted of commercial paper and money market funds. We value our commercial paper cash equivalents using quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals). Accordingly, we classify the valuation techniques that use these inputs as Level 2. We value our money market cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics, and accordingly, we classify the valuation techniques that use these inputs as Level 1.

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Marketable securities and restricted investments. At December 31, 2013 and 2012, our marketable securities consisted of commercial paper, U.S. debt, U.S. government obligations, foreign debt and foreign government obligations and our restricted investments consisted of foreign and U.S. government obligations. We value our marketable securities and restricted investments using quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals), and accordingly, we classify the valuation techniques that use these inputs as Level 2. We also consider the effect of our counterparties’ credit standings in these fair value measurements.

•

Derivative assets and liabilities. At December 31, 2013 and 2012, our derivative assets and liabilities consisted of foreign exchange forward contracts involving major currencies, interest rate swap contracts involving a benchmark of interest rates, and a cross-currency swap including both. Since our derivative assets and liabilities are not traded on an exchange, we value them using industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit risk, foreign exchange rates, and forward and spot prices for currencies. These inputs are observable in active markets over the contract term of the derivative instruments we hold, and accordingly, we classify these valuation techniques as Level 2. We consider the effect of our own credit standing and that of our counterparties in our fair value measurements of our derivative assets and liabilities, respectively.

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(1)	Outstanding balance split equally between fixed and floating rates.

(2)	Interest rate hedges have been entered into relating to these variable rates. See Note 10 “Derivative Financial Instruments.”

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(1)

Changes in estimate of product warranty liability during 2012 includes a net increase to our best estimate of $22.6 million partially related to a net increase in the expected number of replacement modules required for certain remediation efforts related to the manufacturing excursion that occurred between June 2008 and June 2009. Such estimated increase was primarily due to the completion of the analysis on certain outstanding claims as of December 31, 2011. Additionally, the remaining increase was primarily related to a change in estimate for the market value of the modules that we estimated

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*	Net sales and/or accounts receivable to these customers were less than 10% of our total net sales and/or accounts receivable during this period.

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†	Confidential treatment has been requested and granted for portions of this exhibit.

*

This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.