First Solar stock surges on major announcements

While many solar companies’ share-price performance hasn’t been anything to write home about of late, First Solar looks to be stepping out in the other direction. On the back of strong projected sales revenues, and acquisition and efficiency news, the company’s share price has shot up by nearly 50% in a single day.

In its 2013 financial guidance, First Solar has announced projected sales of US$3.8 billion to $4.0 billion for 2013, which includes $3.6 billion in system sales. The company expects to ship total modules of 1.6 GW to 1.8 GW.

First Solar has also released a strong outlook for 2014 and 2015, with module shipments of 1.8 GW to 2.2 GW, and 2.3 GW and 2.7 GW, respectively. These are forecast to generate sales of up to $4 billion and $4.8 billion for 2014 to 2015.

The 2013 guidance certainly indicates that First Solar’s transition towards project development and integration, as opposed to purely module manufacture and sales, is beginning to bear fruit.

Part of the optimistic outlook it attributable to its 550 MW Desert Sunlight project, in California, which is expected to begin generating revenue this year. "We’ll recognize about a third of Desert Sunlight this year and two-thirds in 2014," said Chief Financial Officer Mark Widmar, in announcing the projects, as reported by Bloomberg.

There have been concerns that First Solar will struggle to develop a new large project pipeline, after projects currently under construction are completed. The anticipated sales revenues of $12 billion over three years appear to set these concerns to rest. Certainly pipeline growth has been occurring through acquisition for the company, which may prove costly and is throwing up various challenges.

REC announces project sale to First Solar

The most recent First Solar project acquisition, also announced yesterday, is the 60 MW North Star Power project in California. REC and Summit Power Group had formed the NorthLight Power JV to develop the project.

The JV is 60% REC and 40% Summit Power Group. The JV sold the project to First Solar, having completed the project development phase, including permitting.

Terms of the sale were not announced. Construction of the power plant is expected to start in 2014, for completion in 2015. The North Star project will operate under a 20 year PPA with Pacific Gas and Electric. It is located in Fresno County.

First Solar acquires TetraSun to move into Japan

Clearly intent on generating maximum impact from its public statements, First Solar also announced yesterday that it will acquire photovoltaic technology startup TetraSun from JX Nippon Oil and Energy.

The move indicates that the company is no longer willing to miss out of the opportunities presented by Japan’s booming photovoltaic market. First Solar is currently not able to sell its CdTe modules in Japan, because of the presence of cadmium. "Japan is an important market with unique energy challenges, and we believe this new technology is well-suited to help them meet their energy needs," said First Solar CEO, Jim Hughes.

TetraSun’s technology is an n-type c-Si photovoltaic cell. It has achieved cell efficiencies exceeding 21%, First Solar claims in a statement announcing the acquisition. "First Solar and JX Nippon Oil & Energy also have entered into discussions on an agreement to distribute the technology in Japan," the statement reads. The U.S.-based company "tentatively" plans to commence commercial production of the TetraSun technology in the second half of 2014. Terms of the acquisition were not disclosed.

The potentially high-efficiency modules, using the TetraSun technology, could also give First Solar access to the rooftop market. In an interview with Bloomberg, CEO Hughes confirmed this: "Japan is the highest value, space-constrained market so that’s why we’re starting there."

CdTe 16.1% efficiency record

First Solar’s TetraSun acquisition marks a change of tack for First Solar, into c-Si technology when previously it had only been concerned with thin film. However that does not mean that it is not continuing to progress its CdTe technology.

In the company’s third major release yesterday, it announced that it has hit 16.1% module efficiency, as confirmed by NREL. The new record is a big leap forward over its 14.4% previous record. First Solar increased its efficiency roadmap to 16.4% to 17.1% by 2017.

"We are especially proud of this new efficiency record because the technology was created for production-scale implementation, as evidenced by our accelerated efficiency roadmaps," said Raffi Garabedian, First Solar’s Chief Technology Officer, in a statement announcing the result.

Six weeks early, First Solar had announced a CdTe cell efficiency milestone of 18.7%.

The results are validation for CTO Garabedian, who has not been long in the role. He will be keen to avoid the "low power module" issues, which had undermined confidence in First Solar modules in 2012 and 2011.

The company also released a new Series 3 Black module yesterday. The module has a new validation, the IEC "sand and dust test" certification, indicating that it is suitable for arid environments. This is good news as the global solar markets moves towards the "sunbelt" region. First Solar is also set to supply over 150 MW to a project in Australia and is becoming increasingly active in the MENA region.

Taken together, along with news of the major share bounce, First Solar has commenced 2013 with a positive outlook. A widely reported "solar rally" occurred on European and U.S. markets on the back of First Solar’s positivity. Firms such as Wacker Chemie, SMA Solar, SolarWorld AG and REC also all received a bounce between 8% and 15%.

"The solar industry has passed its low point and that’s benefiting stocks across the industry," said Stefan Freudenreich, an analyst at Equinet AG, in an interview with Bloomberg. "First Solar’s impressive numbers show that its thin-film technology based solar power plants still can generate good sales volumes despite previously pessimistic market expectations."