Tempe, AZ-based First Solar Inc. (FSLR) has teamed up with Clean Energy Collective (“CEC”) to develop and market community solar projects to residential customers and businesses. First Solar has also invested in CEC by buying equity stake in the firm.
Colorado-based CEC is one of the leading developers of community solar solutions. First Solar, on the other hand, designs, manufactures and sells solar electric power modules. Its customer base chiefly includes project developers, system integrators and operators of renewable energy projects, in U.S. and Europe with a distinct focus on Germany.
Through this partnership, both First Solar and CEC are looking toward opportunities in the community solar market in the U.S. to provide reasonable and easy alternative to rooftop generation.
Community Solar: Now Everyone Can “Go Solar”
Community solar, an alternative to rooftop solar, involves the use of ground-mounted installations to provide clean energy directly to a utility’s grid. It thus makes solar energy conveniently available for those who either do not have suitable roofs for solar panels or live in multi-tenant buildings. In this way, Community solar caters to those markets which are not addressed by rooftop solar.
This is not the first time that First Solar has tried venturing into the residential solar market. In 2008, the company acquired a minority stake in SolarCity Corp. (SCTY) with a $25 million equity investment to get a foothold in the residential rooftop market. But First Solar failed to witness much traction from the deal and finally sold its stake in 2010.
The latest partnership is a part of distributed generation strategy of First Solar that aims to strengthen the company’s position in the residential solar markets.
Distributed generation leads to expansion of the solar market and addresses opportunities that exist beyond the boundaries of traditional residential and commercial sectors.
Booming Residential Solar Market
Residential solar market in the U.S. is now a sizzling story. It had outpaced even the commercial and utility segments in 2013 and has already attracted quite a few conventional electric power companies that produce power mostly from coal and natural gas. As per Solar Energy Industries Association (“SEIA”), the U.S. saw solar photovoltaic (“PV”) installations of 1,354 megawatts in the third quarter, an increase of 41% year over year and 8% sequentially. Moreover, residential PV installation exceeded 300 megawatts in the third quarter of 2014.
First Solar’s eagerness to tap this market is thus understandable. The SEIA report also states that PV installations will reach a record capacity of 6.5 gigawatts in 2014, up 36% year over year.
Industry Peers
Similarly, other solar companies like SunPower Corp. (SPWR) are also trying their best to grab a piece of the pie. In Apr 2014, SunPower teamed up with Google Inc. (GOOGL) to form a $250 million fund and facilitate installation of solar panels in the U.S. residences. This pact essentially aims to finance residential solar system installations which SunPower will then lease out to homeowners.
Zacks Rank
First Solar currently carries a Zacks Rank #3 (Hold).
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