First Solar Inc. (FSLR) acquired a portion of Edison Mission Group’s solar project development pipeline. The utility-scale solar projects are located in California and the Southwest. Edison Mission Group is a wholly-owned subsidiary of California-based utility holding company Edison International (EIX).
The acquisition complements and diversifies First Solar’s existing portfolio of utility-scale thin film photovoltaic solar projects. First Solar’s existing projects are largely sited on public land of around 550MW in size, and are mostly under contract with utilities. The Edison Mission projects that First Solar is acquiring are sited largely on private land, and range from 20MW to 150MW.
First Solar and Edison Mission have worked together since 2008 on projects, with First Solar providing engineering, procurement and construction services while Edison Mission was responsible for land acquisition.
First Solar recently completed development and construction of its first California utility-scale solar power plant in Dec 2009, the 21MW Blythe project that was sold to NRG Energy Inc. (NRG). Prior to that in Oct 2009, the company sold a 20MW solar power project in Ontario to Canadian oil pipeline company – Enbridge Inc. (ENB).
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. We maintain our market Neutral recommendation on the shares.
Read the full analyst report on “FSLR”
Read the full analyst report on “EIX”
Read the full analyst report on “NRG”
Read the full analyst report on “ENB”
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