First Solar Inc. (FSLR) has joined forces with Rio Tinto and Ingenero to build a 6.7 megawatt (MW) solar power plant at Rio Tinto Alcan's Weipa bauxite operations to power the mine, as well as the township and local port.
The first phase of the Weipa Solar Photovoltaic Project invloves 18,000 solar photovoltaic (PV) panel installations on the west coast of the Cape York Peninsula and is due to be completed by the end of this year. This will generate 1.7 MW of off-grid power for the mine, Weipa township and port facilities. The initial phase is being supported by $3.5 million of funding from the Australian Renewable Energy Agency (AREA).
Following the commissioning of the first phase, the power can be expanded by an additional 5 MW. Rio Tinto will purchase power from the plant under a 15-year agreement. Apart from reducing diesel consumption, the project would cut carbon dioxide emissions by about 1600 tons a year.
This project is significant in the sense that a mining company has adopted renewable energy to power its operations for the first time in Australia. The rising cost of diesel fuel combined with the falling cost of solar panels has made solar a reliable economic alternative for resource developers.
The company is already committed to expand its presence in the Australian market. In Jan 2014, First Solar started the construction of Australia's largest utility-scale solar project, a 250 hectare solar plant in Nyngan, New South Wales (NSW).
Apart from this, First Solar is also providing engineering and procurement services for the project and will provide maintenance services for a period of five years post commissioning. The project is scheduled to be completed by mid 2015. The project will produce 102 MW AC of electricity for more than 33,000 NSW domiciles.
Recently, the company easily surpassed the Zacks Consensus Estimate on both lines in the first quarter 2014, thanks to a bullish solar business. First Solar has lifted its 2014 earnings per share guidance range to $2.40 to $2.80 per share from its prior forecast of $2.20 to $2.60 per share. For 2014, the Zacks Consensus Estimate is pegged at $2.64 per share.
Currently, First Solar holds a Zacks Rank #3 (Hold). However, other solar companies with a bullish Zacks Rank are JA Solar Holdings Co., Ltd. (JASO), Trina Solar Ltd. (TSL) and ReneSola Ltd. (SOL). While JA Solar Holdings and Trina Solar carry a Zacks Rank #1 (Strong Buy), ReneSola holds a Zacks Rank #2 (Buy).
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