The largest thin-film panel manufacturer in the world has an optimistic view of the immediate future for renewable energy demands. First Solar (FSLR) had an impressive charge for several years until the final quarter of 2008 when the stock value of the photovoltaic manufacturer began to plummet. Over the course of four years, the stock had dropped from approximately $311 per share to a dismal $11.43 nearing the end of the second quarter in 2012. At the beginning of April of 2013, the stock had nearly tripled in value and continues to gain momentum.
The beginning of First Solar’s downward spiral came in the form of U.S. government not developing a proper action for subsidies and credits as these would help reduce costs making solar power a cost effective solution all-around. During the same time First Solar’s stock hit its all-time low, European subsidies were pulling from open fields to rooftop models. Combined with the competitive market for eco-friendly energy development, the solar power company suffered from little sales growth by the middle of 2012.
Many photovoltaic companies are feeling the brunt of the lack of support from the governing bodies of respective countries. Other manufacturers such as SunPower (SPWR) rely on lower-scale residential installations and are able to thrive in the European market due to the subsidy change. First Solar is attempting to overcome the recent obstacles by providing a more cost effective solution without relying on these subsidies in order to make the process cheaper. Since the company’s stock hit its all-time low, the focus has been slightly shifted to produce goods for areas that can be utilized without government relief.
1. Future Contracts – Currently, First Solar is one of the contenders for developing 500 to 1,000 megawatt power plants that are to be assembled in the Middle East and North African areas. Experts state that the solar giant could easily win a large portion of these bids greatly increasing the company’s revenue based on the low-cost effectiveness of the manufacturing process of the thin-film panels. This comes on the heals of First Solar’s acquisition of TetraSun, a start-up silicon cell developer that has created a proprietary method of cost-effective manufacturing. The acquisition will give First Solar more diversity when bidding on projects and expand the market creating more opportunities later on by reducing costs in manufacturing which reduces the price to consumers.
2. Environmental Sustainability – First Solar is committed to sustainability in a variety of forms. When it comes to the carbon footprint left behind by energy production, First Solar systems are cleaner than nuclear sources. Surpassed only by wind generation, photovoltaic power generation is one of the most environmentally sound applications currently in production. Recycling of these CdTe photovoltaic modules at the end of their lifespan that are featured in First Solar’s developments continues the waste reduction even further.
3. Social Sustainability – A social conscience is what makes a good eco-friendly organization, and First Solar proves to be mindful of the future of humanity. The solar power giant has generously donated panels, equipment, and training to a wide variety of locations stretching from schools in California to non-profit organizations in Australia. First Solar has also teamed up with a number of other organizations around the globe in order to bring solar awareness and efficient productivity to as many people as possible regardless of their location.
4. Economic Sustainability – Launching campaigns to inspire job creation, First Solar provides knowledge and training to a variety of locations around the globe. The goal is to reduce the overall cost of photovoltaic manufacturing in order to compete with markets that are based in fossil fuels. With energy security on the minds of a great deal of people and governments world-wide, First Solar puts forth manufacturing efforts to ensure this security never diminishes. If we are unable to tap solar power, the planet has far more immediate and pressing concerns relating to our Sun.
Siemens discussed pulling out of the DESERTEC project in 2012
Some companies have begun to rethink strategies regarding renewable energy development as the value of such products are over-shadowed by doubt in their opinions. Siemens (SI) discussed pulling out of the Sahara Desert project, DESERTEC, and solar power in general, in October of 2012 due to variables such as falling government subsidiaries. This is shortly after being criticized over the controversial move of making a deal for windmill plants in Morocco occupied Western Sahara earlier in 2012. With as much attention as renewable energies have witnessed recently, First Solar is primed to be on the ground level of a variety of projects and is anticipating greatness in the future.
As long as companies like First Solar can keep the cost of building power plants low, the success will only increase. Since the middle of 2012, many photovoltaic manufacturers have been looking for methods and innovative creations in order to reduce these costs. First Solar has done a great deal to accomplish this task as well as restructure internally. With the acquisition of TetraSun, First Solar has been on the rise with manufacturing projects all around the globe. Between August of 2012 and nearing the end of April 2013, FSLR stock rose from $19.99 to $44.08. As manufacturing costs decrease, buyers are interested in building solar arrays once again and First Solar has the ability to offer a very competitive price while still being able to generate a profitable net income.
This is a guest post by Liz Nelson from WhiteFence.com. She is a freelance writer and blogger from Houston. Questions and comments can be sent to: liznelson17 @ gmail.com.