First Solar Announces Strong Results, to Start Work on 139-MW Campo Verde Solar Project

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It’s been a good news week for thin-film solar photovoltaic (PV) market leader First Solar. The Tempe, Arizona-based solar PV manufacturer and project developer was the first, and so far the only, solar PV manufacturer to post a 2Q profit, and an unexpectedly higher one at that. Management also announced that it is developing a utility-scale solar power farm in California’s Imperial Valley, an area that’s literally and figuratively become a hotspot for solar and geothermal resource development in the US.
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Imperial Valley: Solar PV Hotspot

First Solar yesterday announced it’s developing the Campo Verde Solar Project, a planned 139-MW solar PV farm near El Centro in Imperial Valley. Construction is due to start in 3Q and be completed in 2013, creating some 250 construction jobs.

Using its advanced thin-film PV panels, the project will generate clean, renewable electricity sufficient to power 50,000 average California homes while displacing 80,000 metric tons of CO2 per year, the equivalent of taking 15,000 cars off the road, according to a First Solar press release.

San Diego Gas & Electric (SDG&E) is taking on the electricity as per the terms of a 20-year power purchase agreement (PPA) the California Public Utilities Commission (CPUC) approved in late May.

Campo Verde is jointly owned by First Solar and US Solar Holdings LLC. First Solar has contractual rights to acquire 100% of the project, however, and is in the process of doing so.

Better than Expected 2Q Results

Earlier this week, First Solar reported that its 2Q profit spiked up 82% year-over-year (YoY), which sent prices of shares in the company soaring, according to a Fox Business News report. Rising sales and profits is also leading First Solar management to increase production at its PV plants, which produce the industry’s lowest-cost thin-film cadmium-telluride (Cd-Te) solar cells and modules.

Back in May, management stated the company intended to cut 2012 PV production by about one-third, to 1,400-1,700 MW. That’s been revised upwards, with First Solar now planning to manufacture 1,800-1,900 MW of Cd-Te PV modules this year.

In its 2Q earnings call, CEO Jim Hughes said First Solar is seeing higher demand for its thin-film solar panels, as well as for solar PV farms.

“We have more investors seeking to buy our projects than we have projects to sell them,” he was quoted as saying. That has led management to revise its full-year revenue and earnings per share guidance upwards, the former to $3.6 billion–$3.8 billion and the latter to $4–$4.50 per share.

Facing cutthroat competition on prices, along with the ripple effects of global economic weakness and cuts or elimination of key subsidies, First Solar, along with industry peers, has been selling assets to pay down debt and shore up its cash and financial position. It has sold nearly 2,000 MW of solar farms, and has another 900 MW worth that it’s looking to sell.

Photo Credit: First Solar

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