First Solar Inc.
) has been selected by AGL Energy Limited as part of Australia's
Solar Flagships Program to design, construct and maintain two
utility-scale solar photovoltaic (PV) power projects totaling 159
megawatts AC (MW).
The Australian Government's Solar Flagships Program is one of a
number of programs and market mechanisms providing unprecedented
support for the development of a broad range and scale of solar
energy projects and technologies in Australia. The Solar Flagships
Program is offering funding to support the construction and
demonstration of large-scale, grid connected solar (PV and thermal)
power stations in Australia.
Under the program, AGL Energy will develop a 106 MWAC project in
Nyngan and a 53 MWAC project in Broken Hill, both in New South
Wales. First Solar will design and construct the integrated PV
power plants, using its leading engineering, procurement and
construction services and its advanced thin-film PV modules for
both projects. First Solar will also maintain both projects for AGL
Energy for their first five years of commercial operation. The
electricity produced by the projects will be sold under power
purchase agreements to AGL Hydro Partnership, a wholly owned
subsidiary of AGL Energy.
The projects will be supported with funding provided by the
federal government and the state government of New South Wales
under separate funding agreements. On an annual basis, the projects
will produce enough electricity to meet the needs of at least
30,000 Australian homes. The projects are expected to provide
approximately 350 GWh of energy annually.
The projects are expected to create approximately 450 jobs at
peak construction. Construction is expected to begin on both
projects in 2014, with commercial operation in 2015. AGL Energy
will be the majority owner of the project vehicle.
AGL Energy is one of Australia's leading integrated renewable
energy firms. The company operates retail and merchant energy
businesses, power generation assets and an upstream gas portfolio.
It is Australia's largest private owner and operator of renewable
energy assets and is looking to further expand this position by
exploring a suite of low emission and renewable energy generation
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.
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 and
environmentally viable alternative to fossil fuel.
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
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 module
glut in the market. We are currently neutral on the Zacks #3 Rank
(short-term Hold rating) stock. Over the longer run we also
maintain our long-term Neutral recommendation on the stock. This is
in line with other solar peers like
Canadian Solar Inc.
JA Solar Holdings Co. Ltd.
CANADIAN SOLAR (CSIQ): Free Stock Analysis
FIRST SOLAR INC (FSLR): Free Stock Analysis
JA SOLAR HOLDGS (JASO): Free Stock Analysis
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