First Solar Inc. (FSLR) concluded an agreement with Indian independent power producer Green Infra Limited for supplying its thin-film solar modules for a 25 megawatt AC (MW) project in India's Rajasthan state.
The project is part of the second batch of utility-scale solar projects concluded under India's Jawaharlal Nehru National Solar Mission, which aims to install 20,000 MW of new solar electricity generating capacity by 2022. The engineering, procurement and construction contract for the project however would be done by German firm Juwi Holding AG.
The project is expected to produce 46 million kilowatt hour units of clean electricity per year, equivalent to the annual electricity needs of more than 19,000 average Indian households, and to displace more than 44,000 metric tons of CO2 per year based on national averages.
First Solar is the only stand-alone solar player in the S&P 500 Index. Based in Phoenix, Arizona, the company 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.
Currently, the solar industry is experiencing a steep drop in Average Selling Prices. Also, the current macro scenario does not bode well for the solar industry, which thrives mainly on subsidies and grants.
However, First Solar stands out among the pack due to its stable liquidity position, which is in sharp contrast to its cash-strapped peers. Moreover, in order to counter the weak trend, the company is focusing more on utility-scale electricity power projects. It is partially compensating for its drop in margins through a major restructuring of its operations.
The company presently retains a short-term Zacks #2 Rank (Buy) rating. Over the longer run we also maintain our long-term Neutral recommendation on the stock. This is in line with other solar peers like ReneSola Ltd. (SOL) and Canadian Solar Inc. (CSIQ).
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