First Solar Inc. (FSLR) has entered into an agreement with one of India’s leading independent power producers, Reliance Power, for the supply of 100 megawatt (MW) solar modules.
Per the agreement, First Solar will deliver 40MW of advanced thin film modules to Reliance Power by the end of 2011 while the remaining 60MW is expected to be delivered in 2012.
This agreement marks the largest photovoltaic (PV) module supply agreement in India to date. Reliance Power will use the solar panels for its solar power project in Jaisalmer, which will supply renewable electricity to Mumbai.
This August, the U.S. Export-Import Bank had approved an $84.3 million, 16.5-year direct loan to finance Reliance Power’s project to buy the first 40MW of First Solar panels.
Recently, First Solar Inc. also announced that it will supply 150,000 advanced thin film PV modules and also provide engineering, procurement and construction services for the first 10MW, PV power plant to be built in Australia. The project will be built on land measuring 80 hectares, southeast of Geraldton and will fulfill the energy requirements of the Southern Seawater Desalination Plant. It is 10 times larger than any current PV project in the country.
First Solar, the largest stand-alone solar module manufacturer in terms of market capitalization, will benefit greatly from the steady economic recovery as well as favorable legislations supporting PV installations.
Moreover, by virtue of its diversified revenue exposure, technological enhancements and cost minimization, the company has a distinct edge over its competitors. Through cadmium telluride-based solar modules, the company offers a differentiated technology versus its silicon-based peers.
However, First Solar’s short-term growth may be partially hampered by the volatile euro, apprehension over reduction in German subsidies, falling crystalline silicon prices and the modules’ glut in the market. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
First Solar manufactures solar modules with an advanced semiconductor technology, and is a premier provider of comprehensive PV system solutions. The company is delivering an economically viable alternative to fossil-fuel generation.
From raw material sourcing through end-of-life collection and recycling, First Solar is focused on creating value-driven renewable energy solutions that protect and enhance the environment. The company mainly competes with Suntech Power Holdings Co. Ltd. (STP).
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