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First Solar, Inc. (FSLR - Analyst Report) has completed the acquisition of Solar Gen 2 power project from a subsidiary of The Goldman Sachs Group, Inc. (GS - Analyst Report), Energy Power Partners and a third equity partner for the project. The financial terms of the transaction were not disclosed.

As a part of the transaction, First Solar will also get hold of 40 megawatt of direct current (MWDC) of solar modules purchased earlier for the solar photovoltaic (“PV”) plant from another supplier. Following the transaction, First Solar will supply the remaining modules for the plant and provide project development, engineering, procurement and construction, and grid integration services.

Located in Imperial County, Calif., near El Centro, the solar power project has an electric generation capacity of 150-megawatt alternating current (MWAC). It will generate sufficient electricity to power more than 60,000 average Calif. homes. It will displace more than 115,000 metric tons of CO2 on an annual basis which is equal to eradicating 22,000 cars off the road. Moreover, this project will save 93,000 metric tons of water annually.

Under a 25-year agreement, San Diego Gas & Electric Company (SDG&E), a subsidiary of Sempra Energy (SRE - Analyst Report), will purchase all the electricity generated from the project. This will help Sempra in meeting its renewable portfolio standard requirement that calls for generating 33.0% of renewable power by 2020.

Besides being eco-friendly, the project also fulfills its corporate social responsibility well. Solar Gen 2 is expected to create more than 800 construction jobs in Imperial County on an average. Currently, the region is suffering from high unemployment. The company expects the construction of the solar PV plant to begin in 2013 and complete in 2014.

First Solar is a leading global provider of comprehensive PV solar systems. The company designs, manufactures, and sells solar electric power modules using a proprietary thin film semiconductor technology. First Solar makes cadmium telluride glass substrate-based thin film PV panels. Unlike silicon-based solar cell manufacturers who produce crystalline silicon PV cells, First Solar makes thin-film PV panels on glass substrates.

Currently, the company is working on a major restructuring plan to counter the continuous drop in margins. The fall in margins came in the wake of a precipitous drop in Average Selling Prices due to a supply glut in the market. We also remain concerned about the current macro scenario which does not bode well for solar energy producers who thrive mainly on subsidies and grants. The company presently retains a short-term Zacks Rank #3 (Hold).

In the near term, we would advise investors to accumulate its short-term Zacks Rank #2 (Buy) peer Canadian Solar Inc. (CSIQ - Analyst Report).

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