First Solar, Inc.
) has entered into an agreement with NextEra Energy Resources,
LLC, a subsidiary of
NextEra Energy, Inc.
), for the construction of a solar power plant, McCoy Solar
Energy Project, in Riverside County, Calif. Per the
agreement, First Solar will utilize its cadmium telluride
photovoltaic thin-film modules and provide Engineering,
Procurement and Construction ("EPC") services.
The project with an electric generation capacity of 250 megawatt
(MW) will be located on approximately 2,300 acres of mostly
public land provided by the Bureau of Land Management,
approximately 13 miles northwest of Blythe, CA.
The company expects the construction to begin in late 2014 and be
completed in late 2016. During the peak construction period, the
project is expected to create 400 construction jobs.
The current project is located near the 550 Megawatt alternating
current (MWAC) Desert Sunlight Solar Farm. This project is also
being constructed by First Solar and is jointly owned by NextEra,
GE Energy Financial Services, a subsidiary of
), and Sumitomo Corp. of America.
First Solar is regularly winning contracts from electric
utilities like NextEra for the construction of grid scale solar
power projects. This marks the company as one of the world's
leading developers and builders of photovoltaic (PV) solar power
systems. In Dec 2010, NextEra had purchased four solar PV
projects totaling 40MW in Ontario, Canada from First Solar.
A differentiated, vertically integrated business model helps
First Solar to provide utility-scale PV generation solutions to
the emerging markets that have an immediate need for mass-scale
The solar industry continues to experience a challenging business
environment due to intense pricing competition. Most of the solar
modules and cell manufacturers have installed production capacity
that significantly exceeds global demand. This imbalance between
supply and demand continues to put pressure on pricing and
results of operations.
However, First Solar has an established expertise and
meaningful PV generation solutions in other areas of the solar
value chain, such as, project development and EPC services. This
will likely help the company to develop economically sustainable
FIRST SOLAR INC (FSLR): Free Stock Analysis
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Despite these positives, a volatile euro, apprehension over a
reduction in German subsidies, falling crystalline silicon prices
and the glut of modules in the market are matters of concern. The
company presently has a short-term Zacks Rank #4 (Sell).
In the near term, we would advise investors to accumulate its
short-term Zacks Rank #2 (Buy) peer
JinkoSolar Holding Co., Ltd.