First Solar, Inc.
) has declared that 290 megawatts (MW) Agua Caliente solar project
has accomplished a peak generating capacity of 250 MW AC. Located
in Yuma County, Arizona, the plant is under construction and will
be the world's largest operating photovoltaic (PV) power plant.
Initial construction work of the project had begun at the end of
2010 and the solar module installation was started back in June
2011. Installation of solar module included modern system layout
and design, optimized balance-of-system components, and integrated
Just after seven months of installation of solar module in
January 2012, the project began generating 30 MW of clean
electricity. It began generating more than 100 MW of grid-connected
power this spring and 200 MW of power recently in summer 2012. The
$1.8 billion project is expected to be completed in 2014.
The project is expected to create 400 to 450 construction jobs.
When fully operational, the project will offset approximately 5.5
million metric tons of CO2 over 25 years, which is equivalent of
taking over 40,000 cars off the road annually serving more than
First Solar is engaged in designing and constructing the project
using its advanced thin-film photovoltaic modules. The plant is
NRG Energy Inc.
) and MidAmerican Energy Holdings Co. Under a 25-year agreement,
the energy generated from the project will be sold to Pacific Gas
and Electric Company, a subsidiary of
). The Agua Caliente project is being financed with support from a
loan guarantee from the U.S. Department of Energy's Loan Programs
As the project has already completed 85% of its construction before
schedule and has met all of its contractual milestones to date and
exceeded targets for the speed, quality and safety of the
construction process, First Solar has stopped panel deliveries to
the project. Till January 2013, the company will neither ship
additional modules nor will install panels at the project.
First Solar Inc. designs, manufactures and sells solar electric
power modules using a proprietary thin film semiconductor
technology. This current achievement demonstrates the company's
knowledge gained over years of experience in designing, building
and operating utility-scale solar projects for leading utilities
and energy providers.
The company makes cadmium telluride glass substrate-based thin film
photovoltaic panels. However, unlike silicon-based solar cell
manufacturers (who produce crystalline silicon PV cells), First
Solar makes thin-film PV panels on glass substrates. First Solar is
the largest player by volume in this niche segment. Though First
Solar's solar cells convert sunlight to electricity less
efficiently than traditional silicon PV modules, thin film PV cells
have an advantage in producing electricity even in low light.
The company, however, is currently witnessing a steep drop in
Average Selling Prices, like its peers
Suntech Power Holdings Co. Ltd.
). Also, the current macro scenario does not bode well for the
solar industry, which thrives mainly on subsidies and grants.
However, in order to counter the weak trend, the company is
focusing more on utility-scale electricity power projects.
Moreover, First Solar is partially compensating for its drop in
margins through a major restructuring of its operations initiated
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The company presently retains a short-term Zacks #2 Rank (Buy). We
have a long-term Neutral recommendation on the stock.