First Solar, Inc.
) has entered into a 20-year power purchase agreement ("PPA")
with the member cities of the Southern California Public Power
Authority ("SCPPA") to provide electricity. The electricity will
be generated from the company's upcoming Kingbird photovoltaic
("PV") solar power plant.
Per the agreement, the company will supply power to the cities of
Pasadena, Riverside, Colton as well as Azusa's municipal power
utilities. The City of Pasadena alone will take half of the
electricity from First Solar and the remaining will be
distributed to other three cities.
First Solar will construct its 320-acre Kingbird photovoltaic
solar power project, having power generation capacity of 40
megawatt ("MW") AC, at Kern County, CA. The company will start
construction in the middle of 2014 and is expected to be online
by the end of 2015.
In the first year, the company will generate adequate
emission-free power from the project and avoid emission of carbon
dioxide by 20,000 metric tons per year. During the peak
construction period, the plant is expected to create 200 jobs.
First Solar is investing substantially to install emission-free
renewable set ups, which will subsequently help the utility
distribution companies to expand their renewable portfolio. It is
evident that the company has a proven record to build large
projects in a cost effective manner. First Solar also enters
long-term power purchase agreement with several utility
In Aug 2013, the company inked a 10-year PPA to sell electricity,
generated from its forthcoming Lost Hills photovoltaic power
plant, to the City of Roseville, Calif. This agreement will be
effective from 2015. The plant has an electricity generation
capacity of 32MW.
According to the agreement, the electricity generated from the
plant will be purchased by Roseville for the first four years.
From 2019, First Solar will start sharing the power with Pacific
Gas and Electric, a subsidiary of
), along with Roseville.
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We believe signing long-term PPA at regular intervals will enable
First Solar to improve its forthcoming revenue stream. Stable
cash inflows will also encourage the company to invest more in
the new ventures.
First Solar currently has a Zacks Rank #2 (Buy). Other solar
module manufacturers which are worth considering are
Canadian Solar Inc.
Trina Solar Ltd
), each with a Zacks Rank #2 (Buy).