What Just Happened: First Solar’s Strategy Shifts

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2016 was a wild year and not just for solar and after decades of reliance on government incentives, subsidies and mandates the global solar industry may be inured to unpredictability but the industry as a whole should be wary of global trends.  Solar PV expert Paula Mints looked at a number of the developments for solar companies in the December edition of  SPV Market Research‘s Solar Flare.  Adapted for AltEnergyStocks.com, this series of articles is reprinted with permission.

Though First Solar (FSLR) indicated recently that 2017 would be a transition year there is no indication from the company’s behavior in 2016 that it knows where it is going.

The company has been restructuring since Q1 2016. Early in the year it pulled the plug on TetraSun, shifted focus from its EPC and its O&M businesses to a new strategic focus on module sales and community solar deployment. Recently it leapfrogged over its Series 5 module, which it showcased at the 2016 Solar Power International Trade Show, scrapping it to instead launch its Series 6 module. The company also an-nounced 1600 layoffs.

What this means for solar: Pardon the pun but First Solar would not be the first solar company to fail to read the market and stumble strategically.

It is easy to step back and suggest that a focus on module sales in an industry with historically painful price pressure is a mistake and to applaud an implicit admission that expansion via acquisition into crystalline may have been an unnecessary loss of focus from its core technology, CdTe.
The global solar industry is brutally competitive internally – and this is before the competitive effect of cheap natural gas is thrown into the mix. Solar industry participants should hope that this industry pioneer and largest thin film manufacturer globally rights the ship.

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Paula Mints is founder of SPV Market Research, a classic solar market research practice focused on gathering data through primary research and providing analyses of the global solar industry.  You can find her on Twitter @PaulaMints1 and read her blog here

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