Solar cell manufacturer
First Solar Inc.
) announced that it will sell 8.5 million equity shares. The
shares will be offered pursuant to a shelf registration statement
previously filed with the Securities and Exchange Commission.
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As per the underwriting agreement, the underwriters to the issue
were given an option to purchase 1.275 million shares of First
Solar to cover over-allotments, if any. The underwriters will be
provided a 30-day window to do so.
First Solar intends to utilize the net proceeds from the
transaction for general corporate purposes and fund its future
development plans. The development plans may include acquisitions
of solar PV projects currently under development, joint ventures
to develop PV solar power system projects, and strategic
investments to develop businesses in new markets.
The increasing global awareness for greener energy has led to
growth in the solar industry. The solar cell manufacturers are
focusing on developing new solar panels with higher conversion
capacity. The consistent R&D by solar cell manufacturers has
thus lowered the cost of power generation.
In Apr 2013 First Solar achieved the highest cadmium-telluride
photovoltaic module conversion efficiency, achieving a record
16.1% total area module efficiency in tests confirmed by the U.S.
Department of Energy's National Renewable Energy Laboratory
First Solar has also been active on the acquisition front. From
Apr 2013, the company made three acquisitions to expand its
market share. We believe the funds raised from equity issue will
allow First Solar to not only make strategic acquisitions but
continue with its R&D work. This in a way will aid the
company to maintain a strong position in the solar industry.
In fact, demand for electricity is ever increasing due to
urbanization and industrialization. As per a recent report from
the U.S. Energy Information Administration (EIA), the majority of
power units to be added in the current system will be generated
from natural gas and renewable sources.
The EIA report suggests 20% of the total power to be generated in
2040 will come from renewable sources and solar photovoltaic will
play a major role in it. Solar generation capacity is expected to
increase by a whopping 1000% to 46 Gigawatt (GW) in 2040 from
First Solar currently carries a Zacks Rank #3 (Hold).
Besides First Solar, other North American renewable energy
operators who are going to benefit from the increasing usage of
solar cells are
Enphase Energy, Inc.
) among others.
Headquartered in Tempe, Ariz., First Solar Inc. designs,
manufactures, and sells solar electric power modules using a
proprietary thin film semiconductor technology.