First Solar Looks Set To Succeed, ITC Or Not, Deutsche Bank Forecasts

Originally published on Sustainnovate.
By Henry Lindon

First Solar’s project pipeline will still be viable even following the end of the Investment Tax Credit (ITC) in the US, according to a new investor note from Deutsche Bank.

The investor note specifically stated that Power Purchase Agreements (PPAs) being obtained by First Solar in the ~$45/MWh to ~$60/MWh range would still (feasibly) be viable even with the ITC at 10% — which is what current policy calls for, a reduction of the ITC from 30% to 10% at the end of next year.

As the expected winding down of the ITC is having a dampening effect of sorts on the utility-scale solar energy industry in the US, the investor note is worth considering, as it shows that there are still options. First Solar, a 2015 Zayed Future Energy Prize finalist, has certainly remained optimistic — hence the project pipeline.

“Our total 1.7 gigawatt (GW) of bookings since last earnings call are not only impressive in size, but also reflect some positive indications of utility-scale solar demand in the US after 2016,” stated First Solar CEO James Hughes. “Approximately 60% or over 1 GW DC of the total 1.7 GW DC booked are projects in the US that have commercial operation dates after 2016.”

“In the event of either ITC extension beyond 2016 or commence construction language being introduced, First Solar would be one of the largest beneficiaries, in our view,” the Deutsche Bank analysts stated in the investor note. “We believe the company can push out a few projects from 2016 into 2017 and this would allow for more capacity to be allocated to other markets. A number of utilities that think they have missed the ITC window could come back to the table to have further discussions about projects beyond 2016.”

Image by First Solar