First Solar Inc. FSLR announced that it will supply its photovoltaic (“PV”) modules for the 200 megawatt (“MW”) second phase of the Mohammed bin Rashid Al Maktoum solar park in Dubai. This will be the largest solar plant of its kind in the Middle East upon completion in early 2017.
The park’s operators, the Saudi Arabian water and power company ACWA Power along with its Spanish partner TSK, awarded the leading solar-panel manufacturer of the U.S. − aka First Solar − an engineering, procurement and construction contract for the second phase. It is believed to be worth $200 million, as per media reports.
This plant will be powered by over 2.36 million First Solar modules and will be built over an area of almost 1.7 square miles. It is sufficient to power 30,000 average homes in the UAE and will wipe out more than 469,650 metric tons of carbon dioxide annually. The 13 MW first phase of the Mohammed bin Rashid Al Maktoum Solar Park went online in Apr 2013 with 152,880 First Solar modules.
In Jan 2015, ACWA Power and TSK were selected by the Dubai Electricity and Water Authority (“DEWA”) to develop, construct, own and operate the independent power project. The project boasts of the world’s lowest rates for solar PV electricity at 5.84 cents per kilowatt hour, reducing the cost of solar electricity by more than 20%.
Owned by DEWA, the Mohammed bin Rashid Al Maktoum project will provide over 3,000 MW of power upon completion, which is slated for 2030.
First Solar has been able to develop economically sustainable businesses on the strength of its PV generation solutions as well as its expertise in other areas of the solar-value chain, such as, project development, engineering, procurement and construction (EPC) and Operation & Maintenance (O&M) services.
The company continues to focus on retaining its competitive edge and aims to further consolidate its position in the market. Its advanced PV modules have set the industry benchmark with over 10 gigawatt installed worldwide.
The company exited the first quarter 2015 with 593 MW Dc of bookings. However, its quarterly sales were hurt because of the retaining of projects meant for the First Solar−SunPower Corp SPWR Yield Co joint venture. This was further exacerbated by multiple project delays and a higher mix of module-only sales.
Having said that, First Solar stands to benefit from the emphasis it places on research and development. Last year, the company achieved a significant milestone by building the thin-film PV cell with a conversion efficiency of 21%. In contrast, the average production panel converts only 17% of sunlight into electricity. Increased efficiency of solar modules and a focus on technological innovations will result in a growing order book for the company.
First Solar holds a Zacks Rank #3 (Hold). Better-ranked stocks include JinkoSolar Holding Co., Ltd. JKS and SolarEdge Technologies, Inc. SEDG, both carrying a Zacks Rank #2 (Buy).
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