FIRST SOLAR: FIRST IN SUN, FIRST IN EARNINGS

The Wall Street Journal writer in this good news about First Solar Inc. raises the oft-repeated canard about solar energy’s land requirements: “One drawback of solar technology is that it takes lots of modules spread over a large geographic area to make a significant amount of electricity. Project costs are driven by land and equipment costs. By contrast, a gas-fired power plant makes vast amounts of electricity from a small footprint. Fuel, not equipment or land, drives the cost.”

A small footprint? Those gas plants are big facilities and the ones to be equipped with emissions-capture equipment are going to be bigger. And what about gas pipeline rights-of-way? That's more land. And gas fields. That’s all land usage. And the gas drilling equipment, the pipelines, the plant hardware - that costs less than solar modules? Not likely. And what about the costs of carbon capture equipment? And then there are the LNG factors necessary to keep the U.S. burning gas as domestic supplies dwindle: A special fleet of ships, offshore terminals, undersea pipelines...How anybody can think solar installations require significantly more costs and space than all that is utterly baffling.

NewEnergyNews reported First Solar’s stunning 2007 growth early in February in FIRST SOLAR & IBERDROLA JOIN BIGGEST ENERGY when PFC Energy recognized First Solar as the ENERGY COMPANY with the biggest growth in stock value for 2007.

Now the Wall Street Journal recognizes First Solar for having the biggest stock value growth of ANY COMPANY. The First Solar stock value grew 795.2%. No, that’s not a typo. SEVEN HUNDRED AND NINETY FIVE (point two) percent.

First Solar’s growth was no doubt buoyed by a general boom in New Energy and a specific expansion of impressive proportions in the solar energy industry. Driven by favorable state and federal policies, solar module manufacturers are making and selling their products as fast as their capacities allow.

When First Solar’s newest plants come on line in 2009, the company will have a one gigawatt/year capacity, 3 times what it can produce now. It is aiming to wholesale modules at $1/watt by 2012, which would put it at price parity with other power sources without subsidies. The price it was producing modules at in late 2007 was calculated at $2.48/watt.

A caution: While investment in New Energy is expected to continue expanding, First Solar’s growth has been extraordinary and it would be unreasonable to expect any company to sustain it.

Second caution: Federal Investment Tax Credits (ITCs) will expire at the end of 2008 and so far the U.S. Senate has refused to extend them. Absent such policy support, there may be a contraction in the industry’s growth.

Learn more about how to support solar energy at: WHAT SOLAR NEEDS

First Solar has taken the business principle of specialization to heart and focused on the newest kind of solar panel material, thin film. (click to enlarge)

Best 1-Year Performer: First Solar
Rebecca Smith, February 25, 2008 (Wall Street Journal)

WHO
First Solar Inc.; The Wall Street Journal (WSJ); Wedbush Morgan Securities (Al Kaschalk, analyst)

WHAT
WSJ recognized First Solar as the company with the single biggest stock growth last year.

WHEN
- Stock value when First Solar first went public in late 2006: $20/value.
- Stock value peak in late December 2007: $283
- First Solar was founded in 1999.

Thin film solar is growing so fast the manufacturers are literally selling the panels as fast as they can make them. (click to enlarge)

WHERE
- First Solar ranked number one among the 1,000 companies on its Shareholder Scoreboard.
- First Solar plants: (1) Perrysburg, Ohio – 3 high volume lines, opened in 2003; (2) Frankfurt-Oder, Germany – 4 lines, opened in 2007; (3) Malaysia – 4 unfinished plants, 16 lines, expected to open in 2009.

WHY
- $1,000 in First Solar at the end of 2006 = $8,952 at the end of 2007.
- $1000 in in the Standard & Poor 500 index at the end of 2006 = $1,055 at the end of 2007.
- First Solar presently has orders for $6 billion in solar modules. That will be most of First Solar’s output capacity through 2012.
- First Solar revenue quadrupled in 2007. Earnings were 40 times the previous year’s earnings.
- There are reasons such levels of expansion may be hard to sustain over a longer term. Wedbush Morgan Securities issued a hold rating for the stock in late January.

Schematic of the First Solar Cadminum Telluride thin film construction. (click to enlarge)

QUOTES
- Rebecca Smith, Wall Street Journal: “Call it a year in the sun.”
- Al Kaschalk, analyst, Wedbush Morgan on First Solar’s strategy in the marketplace: "They're picking off the edges of the market where they can help [boost the power] grid…"