First Solar Gets Market Savvy

First Solar Inc. (FSLR - Analyst Report) extended its material and workmanship warranty on its Advanced Series 3 Modules from the existing five to ten years. The extension of the warranty period comes on the heels of stiff competition in the cramped solar space with players vying to add value to their products.

First Solar modules are also covered by a 25-year power performance warranty, pre-funded collection and recycling program. The announcement was made at the 2011 European Photovoltaic Solar Energy Conference and Exhibition (EU PVSEC), one of the world's largest solar energy trade shows.

Also China Sunergy Co. Ltd. (CSUN - Snapshot Report), a specialized solar cell and module manufacturer, announced an enhanced module product warranty policy.

Under this new policy, China Sunergy will extend its limited product warranty covering material defects and workmanship flaws from five to ten years, for all standard Photovoltaic Solar Module products shipped after August 10, 2011.

First Solar, the largest stand-alone solar module manufacturer in terms of market capitalization, is steadily ramping up capacity. The company will benefit greatly from the steady economic recovery as well as favorable legislations supporting PV installations. Moreover, by diversifying its revenue base geographically, enhancing technology and minimizing cost, the company is trying to steal a march over competition.

However, its short-term growth may be partially hampered by the volatile euro, apprehension over reduction in German subsidies, falling crystalline silicon prices and the modules’ oversupply situation in the market. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

In August 2011, First Solar Inc. reported second quarter 2011 results with earnings per share of 70 cents considerably below the Zacks Consensus Estimate of 93 cents and the year-ago figure of $1.33 per share. The downside reflects lower average selling prices and increased investment in the Utilities Systems business and research and development. Its quarterly revenues were $532.8 million, down from the year-ago revenue of $587.9 million.

First Solar Inc. designs, manufactures, and sells solar electric power modules using a proprietary thin film semiconductor technology. The company's solar modules employ a thin layer of cadmium telluride semiconductor material to convert sunlight into electricity. It sells its products to project developers, system integrators, and operators of renewable energy projects primarily in Europe with a distinct focus on Germany. First Solar also designs and deploys commercial solar projects for utilities.

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