First Solar Inc. (FSLR) has become the first photovoltaic (PV) company to manufacture and ship more than 1GW of its PV solar modules in fiscal 2009. As the world’s largest solar module manufacturer, First Solar has increased its manufacturing capacity from approximately 75MW per year at the beginning of 2007 to more than 1GW.
Earlier also First Solar has consistently lowered the cost of manufacturing solar modules. It was the first solar company to break the $1 per watt barrier in early 2009.
First Solar has always focused on long term sales contracts with its customers who are primarily European and US solar power system project developers and system integrators. By focusing on long term contracts, First Solar has been able to grow its solar modules volume sales by 102.8% year-over-year in the recent quarter.
Based in Phoenix, Arizona, First Solar designs, manufactures and sells solar electric power modules using a proprietary thin film semiconductor technology. The company’s solar modules employ a thin layer of cadmium telluride semiconductor material to convert sunlight into electricity. It sells its products to project developers, system integrators and operators of renewable energy projects primarily in Europe with a distinct focus on Germany. First Solar also focuses on designing and deploying commercial solar projects for utilities in the United States.
First Solar enjoys a distinct cost advantage over its peers due its reliance on low cost thin-film cells. However, the advantage is ebbing fast due to falling polysilicon prices. First Solar’s growth potential and that of the solar industry in the aggregate requires a prudent long-term focus on technological enhancements, capacity build-out and cost minimization. Balancing all the three aspects would be an uphill task.
Competition in the field is becoming tougher by the day for U.S. solar players such as First Solar, who have a huge German exposure in their top line compared to Chinese counterparts such as Suntech Power Holdings Company Ltd (STP) and ReneSola Ltd (SOL), both of whom mainly thrive in their domestic market. Solar subsidies in Germany are falling fast, and First Solar is actively scouting for new markets for its products. We maintain our market Neutral recommendation on the shares.
Read the full analyst report on “FSLR”
Read the full analyst report on “STP”
Read the full analyst report on “SOL”
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