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First Solar Inc. (FSLR - Analyst Report) has entered into an agreement with NRG Energy Inc. (NRG - Analyst Report) to provide engineering, procurement and construction (“EPC”) services to NRG's Alpine solar project in Lancaster, California. Per the agreement, the company will also provide operations and maintenance (“O&M”) services to the 66 megawatt (“AC”) solar project.

NRG is a pioneer in developing cleaner and smarter energy choices for its customers as one of the largest solar power developers in the country.

The solar project will make use of First Solar's advanced thin film photovoltaic (PV) modules. Construction of the project is expected to start before the end of 2011 and be completed in the third quarter of 2012. It is expected to create approximately 250 jobs over the course of construction.

Under a 20-year power purchase agreement, electricity generated from the Alpine project will be sold to the Pacific Gas and Electric Company (PCG - Analyst Report) and will help California to meet its renewable energy goals. The electricity generated will be enough to serve a yearly average of nearly 25,000 homes. The project is expected to offset approximately 1.5 million metric tons of greenhouse gases over 20 years which is equivalent of taking 15,000 cars off the road annually.

First Solar, the largest stand-alone solar module manufacturer in terms of market capitalization, is steadily ramping up capacity. Moreover, by focusing on branching out its revenue base geographically, technological enhancements and cost minimization, the company is adding a distinct edge over its competitors.

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 #5 Rank (Strong Sell). We have a long-term Neutral recommendation on the stock.

Recently, First Solar Inc. reported third quarter 2011 results with earnings of $2.25 per share, 42 cents below the Zacks Consensus Estimate of $2.67. Earnings were, however, 10.3% higher than $2.04 earned in the year-ago quarter. The company’s quarterly revenues were $1.005 billion, up from the year-ago revenue of $0.797 billion. The top line also failed to meet the Zacks Consensus Estimate of $1.022 billion.

First Solar manufactures solar modules with an advanced semiconductor technology, and is a premier provider of comprehensive photovoltaic system solutions. The company is delivering an economically viable alternative to fossil-fuel generation today. From raw material sourcing through end-of-life collection and recycling, First Solar is focused on creating value-driven renewable energy solutions that protect and enhance the environment.

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