First Solar Inc.
), the largest manufacturer of thin-film solar panels in the
world, is all set to construct one of its major solar projects.
The New Mexico Public Regulatory Commission approved of a power
purchase agreement (PPA) that clears the way for First Solar to
supply 50 megawatts (MW) of solar power for 25 years to
El Paso Electric Co.
EL PASO ELEC CO (EE): Free Stock Analysis
FIRST SOLAR INC (FSLR): Free Stock Analysis
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With this approval First Solar can now initiate the construction
of New Mexico's largest solar power plant, Macho Springs, on 500
acres of State Trust Land in Luna County.
First Solar's proposed Macho Springs project − acquired from
Element Power Solar earlier this year − will generate enough
energy to power over 18,000 average New Mexico homes. The venture
will eradicate more than 40,000 metric tons of carbon-dioxide
that corresponds to 7,500 cars been taken off the road.
First Solar has already submitted its final development plan that
is yet to receive various required permits. Once approved,
construction is expected to begin in Jul 2013. The company will
construct the Macho Springs facility using its advanced thin-film
PV modules that boast the smallest carbon footprint and shortest
energy payback time of any solar technology currently available.
The price of this solar power PPA is at $57.90 per MW-hour. El
Paso Electric has thus agreed to buy the power for 5.79 cents a
kilowatt-hour. This is less than half of what has typically been
paid for projects of this nature.
First Solar is looking to expand in other regions including
Japan. In Apr 2013 the company announced its intention to acquire
TetraSun from JX Nippon Oil & Energy Corporation for an
undisclosed amount. We note that JX Nippon is the largest oil
company in Japan. Post-acquisition, both the parties intend to
produce and market TetraSun products in Japan. The acquisition is
expected to complete in the second quarter of 2013. The
acquisition would be a strategic fit as Japan is expected to
become the second-largest market for solar products in 2013 after
First Solar presently retains a short-term Zacks Rank #3 (Hold).
In the near term, solar companies that look more promising and
worth buying now include
JA Solar Holdings Co., Ltd.
Yingli Green Energy Holding Co. Ltd.
), both with a Zacks Rank #2 (Buy).