FIRST SOLAR GETTING FIRSTER

First Solar Buys Solar Developer NextLight for $285M
Camille Ricketts, April 29, 2010 (VentureBeat via NY Times)

"First Solar, the largest solar company in the world…will be acquiring NextLight Renewable Power, a developer of solar power projects, for about $285 million. The deal will add 1.1-gigawatts worth of solar panel arrays to the larger company’s 1.4-gigawatt pipeline.

"But for First Solar, the move isn’t about capacity — it’s about relationships. Between its Agua Caliente and AV Solar Ranch developments, NextLight has power purchase agreements for more than 520 megawatts with [Northern California’s] Pacific Gas & Electric, one of the largest and most strategically positioned utilities in the U.S…"

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"First Solar is hoping to become a formidable force in California, which last year mandated that a third of its power be generated from renewable sources of energy by 2020. It already has connections with Southern California Edison, but lacked a strong bond with PG&E — until now. NextLight, based in San Francisco, could give the company a serious boost.

"The deal also marks the continuation of First Solar’s acquisition strategy. Not content to develop projects as fast as it can on its own, the company has been gobbling up other companies…In the last year, it absorbed both Optisolar and Edison Mission Group…After the deal with NextLight closes next quarter, First Solar can claim to have a development pipeline seven times the size of its next biggest competitor, public company SunPower…SunPower isn’t backing down, running an acquisition game of its own. In February, it bought European Sunray Renewable Energy for $277 million to expand its core business beyond panel manufacturing into utility-scale solar development."

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"Dwarfing domestic rivals, First Solar is now protecting its empire against Chinese competitors like SunTech and JA Solar, which have been growing steadily and initiating more projects everywhere, including the U.S. Benefiting from low-cost manufacturing and a lax regulatory environment, these companies pose a real and serious threat to First Solar…[which] posted strong first quarter earnings, including an unexpected rise in profit that bumped up its stock price 6.5 percent to $136.78. Driven by sales in Europe, where government subsidies for the solar industry will be cut later this year, the company saw a profit of $172.3 million and revenues of $568 million (an increase of 36 percent) for the quarter.

"…First Solar will also be adding manufacturing capacity, announcing the construction of a new plant to churn out its solar thin film, to be completed by the end of next year. The material is produced at a lower cost, but is also said to be less efficient than that churned out by competitors."