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First Solar, Inc. (FSLR - Analyst Report) and Enbridge Inc. (ENB - Snapshot Report) announced the completion of Silver State North Solar Project. The utility-scale solar project built on public land is ready for commercial operation. The 50-MW (AC) solar farm was developed and constructed by First Solar in Clark County, Nevada, near the community of Primm. Recently, in March 2012, Enbridge had acquired the project for an undisclosed amount.

First Solar had utilized its advanced thin film photovoltaic modules in constructing the project. Despite its acquisition by Enbridge, First Solar will look after its operation and maintenance.

Under a 25-year Power Purchase Agreement, the electricity generated from the solar farm will be sold to NV Energy, Inc. . First Solar expects to recognize revenue from the 50-MW project in the second quarter of 2012.

Besides generating profits, this will also help the company to meet its renewable energy goals. Being an eco-friendly project, it will produce renewable energy that will be sufficient to power about 9,000 homes in Nevada. This is tantamount to displacing approximately 42,000 metric tonnes of CO2 per year, equivalent to about 8,000 cars off the road.

Despite focusing on overall development, the company could not do well in the first quarter of 2012 due to low average selling prices. Like its solar peers, the company is also witnessing an oversupply of photovoltaic products leading to a steep drop in ASPs. In the first quarter, its earnings fell below the Zacks Consensus earnings per share estimate of 48 cents by 56 cents to digest an adjusted loss of 8 cents. It also came in below the year-ago quarterly EPS of $1.33.

First Solar designs, manufactures, and sells solar electric power modules using a proprietary thin film semiconductor technology. In order to counter the weak trend, the company is focusing more on utility-scale electricity power projects.

Moreover the company is partially compensating for its drop in margins by branching out its revenue base worldwide, implementing technological enhancements and enforcing cost minimization. As a caveat, the current macro scenario does not bode well for the solar industry, which thrives mainly on subsidies and grants.

The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

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