General Electric has taken a near 2% stake in First Solar in a major agreement that sees a technological and commercial partnership between the two companies on the thin film front.
As part of the deal, announced Tuesday, First Solar acquired GE’s thin film solar panel technology in exchange for a near 2% stake in the Tempe, Arizona, company. GE received 1.75 million shares in First Solar for its global cadmium telluride (CdTe) technology unit, with GE agreeing to retain the stake for at least three years. GE’s stake in First Solar is worth an estimated $82 million based on the company’s current stock price.
The agreement gives First Solar a major boost in the advancement of thin film solar cell and module technology.
"GE currently holds the efficiency record for a 10-cell research cell at 19.6%, which eclipsed the recent First Solar cell record at 18.7%," First Solar CEO Jim Hughes said in a conference call on Tuesday. "GE high efficiency cells employ technologies which are quite distinct from those being developed at First Solar and yet are consistent with our manufacturing platform. This is why we are excited to purchase their IP in this transaction."
Hughes added that GE has more than 450 issued patents and pending applications on its 10-cell technology, which effectively doubles the number of First Solars patents.
"We are creating an exciting synergy with this deal," Hughes said. "The addition of GE’s PV thin film technology and R&D resources will advance our technology roadmap, while realizing cost reduction in our manufacturing process."
The combination of GE tech and First Solar’s manufacturing capabilities are expected to accelerate the development of test cells over module performance and create significant improvements in efficiency at full manufacturing scale, Hughes said, adding, "GE Global Research and First Solar research and development will also collaborate on future technology development to further advance cadmium-telluride solar technology."
GE has 34 GW of renewable energy installed globally and will now employ First Solar’s modules for its future global deployments in addition to its investment in inverters, controls, balance of plant and ownership of utility scale systems.
GE and First Solar have also formed a commercial partnership around solar inverter technology. First Solar will continue to purchase inverters from GE Energy Management for its own global deployments.
"By combining complementary technologies, the collaboration is expected to lead to an improvement in solar grid integration, more competitive cost structures and a roadmap for combined electrical equipment," First Solar said in a statement.
"To lead in today’s solar industry, you must have the most competitive technology at the most competitive cost position," added Anne McEntee, president and CEO of GE’s renewable energy business.
First Solar’s will develop the new CdTe technoloy at its existing manufacturing sites while GE will discontinue the build-out of its Aurora, Colorado, solar manufacturing facility.
First Solar also announced the acquisition of a 1.5 GW pipeline of U.S. and Mexico development assets from global renewable energy developer Element Power, which includes diverse projects in various stages of development in California, Arizona, Texas, Georgia, North Carolina, Colorado, Louisiana and Illinois.
"These U.S. assets are an excellent complement to our existing project pipeline," said Tim Rebhorn, First Solar’s senior vice president of Business Development for the Americas. "The mix of projects in emerging U.S. regions and an optimized pipeline in established markets will better position First Solar to secure customer off-take agreements."
The portfolio also includes several Mexican projects located in the state of Sonora that are in a position to take advantage of the emerging utility scale PV market in Mexico.
"The Mexican project pipeline strategically positions First Solar for our entry into the market," said Rebhorn. "We are excited by the opportunity to explore new relationships with CFE [Mexico’s state-owned utility] and with commercial and industrial customers and the Mexican government, and to establish a strong initial presence in the region."
The companies did not disclose financial details of the deal.
First Solar on Tuesday posted a near 46% drop in revenue to $520 million in the second quarter compared to the same period a year ago. The company saw net profit plunge 72% to $39 million from April to June.
First Solar attributed to decline in revenue to lower systems business project sales as well as to the sales of its Antelope Valley Solar Ranch and Silver State North projects in the second quarter of last year. The company also reported a lower module-only sales volume to third parties this year.