First Solar Inc. (FSLR) will supply 150,000 advanced thin film photovoltaic (PV) modules and also provide engineering, procurement and construction services for the first photovoltaic, 10-megawatt power plant to be built in Australia. Once operational, it will also assist in operations and maintenance support of the Greenough River Solar Farm.
The project will be built on 80 hectares of cleared land, 50 km 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.
Both Western Australian (“WA”) state-owned power utilities Verve Energy and GE Energy Financial Services, a unit of General Electric Company (GE) will own 50% of the Greenough River Solar Farm. The WA Government will provide A$20 million for the project of which A$10 million will be from the WA Royalties for Regions program. No debt will be raised to fund the project.
First Solar, the largest stand-alone solar module manufacturer in terms of market capitalization, is steadily ramping up capacity. The company will benefit greatly from the steady economic recovery as well as favorable legislations supporting PV installations. Moreover, by focusing on branching out its revenue base geographically, technological enhancements and cost minimization, the company is adding a distinct edge over its competitors.
However, its short-term growth may be partially hampered by the volatile euro, apprehension over reduction in German subsidies, falling crystalline silicon prices and the modules’ oversupply situation 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.
In August 2011, First Solar Inc. reported second quarter 2011 results with earnings per share of 70 cents considerably below the Zacks Consensus Estimate of 93 cents and the year-ago figure of $1.33 per share. The downside reflects lower average selling prices and increased investment in the Utilities Systems business and research and development. Its quarterly revenues were $532.8 million, down from the year-ago revenue of $587.9 million.
First Solar Inc. 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. Suntech Power Holdings Co. Ltd. (STP) is one of its main competitors.
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