First Solar Inc. (FSLR) announced that it would sell the 21 MW solar energy project that it has developed and constructed in Blythe, California, to NRG Energy Inc. (NRG). First Solar will provide operations and maintenance services at Blythe under a long-term contract with NRG Energy. This is second sale by First Solar, recently in October 2009 the company sold a 20 MW solar power project in Ontario to the Canadian oil pipeline company – Enbridge Inc. (ENB).
Located in Riverside County about 200 miles east of Los Angeles, the Blythe project is California’s first and largest utility-scale photovoltaic (PV) solar generation facility, and among the largest in North America. Construction on the project began in September 2009 and is expected to be fully completed by year-end fiscal 2009. Once fully completed, the Blythe project when will generate over 45,000 megawatt-hours of electricity annually. The solar generation reduces over 12,000 tons of carbon dioxide emission per year, the equivalent of taking 2,200 cars off the road. The construction of this project has created 175 green jobs.
Electricity from the plant will be sold to Edison International’s (EIX) subsidiary Southern California Edison under a 20-year power purchase agreement. California based utilities such as Edison International is spending big money to reduce greenhouse gas emission and adhere to California’s renewable portfolio standard. First Solar is also developing 1,300 MW of PV solar projects in California and the Southwest.
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 day by day for U.S. solar players such as First Solar, who have missed out on Government doles unlike its Chinese counterparts including Suntech Power Holdings Company Ltd (STP) and ReneSola Ltd (SOL). We maintain our market Neutral recommendation on the shares.
Read the full analyst report on “FSLR”
Read the full analyst report on “NRG”
Read the full analyst report on “ENB”
Read the full analyst report on “EIX”
Read the full analyst report on “STP”
Read the full analyst report on “SOL”
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