First Solar broke ground last month on the Topaz project in California’s San Luis Obispo county. At a planned capacity of 550 MW, it’s one of the largest solar photovoltaic (PV) power projects in the world. Upon completion, slated for 2015, Topaz will supply clean, renewable electricity to some 160,000 homes.
First Solar’s Mega-projects
With legislation requiring that 33% of the state’s electricity come from renewable sources by 2020 California continues to lead the nation in renewable energy investment and project development.
The Topaz project is supported by a 25-year power purchase agreement (PPA) with Pacific Gas & Electric (PG&E). Community benefits include the creation of as many as 400 jobs over the three-year construction period, additional tax revenue for San Luis Obispo County, and indirect benefits to dozens of area businesses.
First Solar has several solar power mega-projects in development. Difficult economic and solar market conditions have prompted management to sell its ownership stakes in them recently, however. Doing so provides cash that can be reinvested in new project development, though recurring, long-term cash flow streams associated with owning the solar power farms are given up. First Solar typically continues to earn income from these asset sales, however, as the builder and operator, as well as by providing maintenance.
In addition to Topaz, First Solar’s in the early stages of building the 550 MW Desert Sunlight Solar Farm in Riverside County’s Chuckawalla Valley. Desert Sunlight was sold to NextEra Energy Resources LLC and GE Energy Financial Services at the end of September. The solar power farm will generate enough clean, renewable electricity to supply some 160,000 California homes and displace some 300,000 metric tons of greenhouse gas emissions per year. As many as 630 people are to be employed in building Desert Sunlight, and the project will generate nearly $200 million in wages over its minimum 25-year operating life.
Economic benefits to Riverside County are estimated to be $336 million over the 25-year life of the two supporting PPAs, one with Southern California Edison and another with PG&E. Some of the thin-film solar PV modules for the project are being manufactured at First Solar’s plant in Mesa, Arizona, where the company employs some 600 people.
First Solar’s also in the midst of building the 230 MW Antelope Valley Solar Ranch One solar power farm on 2100 acres of former farmland in Los Angeles County. Chicago-based Exelon, one of the largest power utilities in the US, acquired ownership of Antelope Valley Solar Ranch One at the end of September. Exelon expects to invest up to $1.36 billion in the project, which it anticipates will be “accretive to earnings” and free cash flow starting in 2013, when the project is due to come on-line.
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