First Solar, Inc.
(
FSLR
) has sold a 50-megawatt (
MW
) Silver State North photovoltaic (PV) project to
Enbridge Inc.
(
ENB
). Post-acquisition, Enbridge will have 100% ownership in the
project developed and constructed by First Solar at Clark County,
Nevada, near the community of Primm.
Silver State North will use more than 800,000 of First Solar's
advanced thin film PV modules. It will also provide operations and
maintenance services to Enbridge under a long-term contract. First
Solar will start recognizing revenue from the project after final
testing and commissioning which it expects in the second quarter of
2012.
The project will have a generation capacity of 122,000 MWh that
will serve about 9,000 average Nevada homes per year. Under a
25-year power purchase agreement ("PPA"), the electricity generated
from the project will be purchased by
NV Energy Inc.
(
NVE
). The company expects the solar plant to come on line by May
2012.
Like other energy companies, Enbridge is also focused on meeting
its renewable energy goals. The project will help Enbridge in
fulfilling its commitment to generate a kilowatt of renewable
energy for every kilowatt of conventional electricity that the
company consumes. The electricity generated would be eco-friendly
and will displace about 42,000 metric tonnes of carbon dioxide
annually which is equal to taking roughly 8,000 cars off the
road.
Returning to First Solar, like its peers, it is witnessing an
oversupply of photovoltaic products in the market, leading to 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.
First Solar expects the weak trend to continue in 2012. Though
in order to counter this, it is focusing more on utility-scale
electricity power projects, a volatile euro, apprehension over a
reduction in European solar subsidies and falling crystalline
silicon prices are matters of concern.
The company presently retains a short-term Zacks #3 Rank (Hold).
We have a long-term Underperform recommendation on the stock.
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.
ENBRIDGE INC (
ENB
): Free Stock Analysis Report
FIRST SOLAR INC (
FSLR
): Free Stock Analysis Report
NV ENERGY INC (
NVE
): Free Stock Analysis Report
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