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First Solar Inc. (FSLR - Analyst Report) has entered into an agreement with Southern Power and Turner Renewable Energy, a subsidiary of Southern Company (SO - Analyst Report), to sell its 139-megawatts (MW) Campo Verde Solar Project. Per the contract, First Solar will construct the power plant and will operate and manage it for 10 years.

First Solar started developing the power plant last December and is expected to bring it online by fall 2013. The plant is expected to provide power to approximately 48,000 homes annually. At the same time, it will reduce carbon dioxide emission by 80,000 metric tons per year. Southern Power and Turner Renewable Energy will sell the output to San Diego Gas & Electric Company over the next 20 years.

First Solar has been a committed partner of Southern Power and Turner Renewable Energy in terms of meeting its commitments and maintaining product and service standards along with delivery timing. In 2010, the company sold the 30-MW Cimarron I Solar Project to Southern Power and Turner Renewable Energy.

In Aug 2005, the U.S Environmental Protection Agency circulated a regulation that each of the federal agencies will consume renewable energy in amounts of not less than 7.5% in 2013 and afterward. Currently, most of the utility providers invest substantial amounts to develop and upgrade their renewable utility assets to meet the environmental legislations.

Globally, utilization of renewable energy is rising primarily due to its clean nature and a growing awareness among the masses regarding its benefits. These influence utility providers to shift their mode of power generation to solar, wind and water.

First Solar is continuously receiving orders from domestic as well as international clients for solar modules and other allied services. In 2012, the company inked several deals with Chinese, Indian and Indonesian organizations.

We view this growing demand of solar powered energy as a catalyst for First Solar’s future operating as well as financial results.

First Solar currently has a Zacks Rank #3 (Hold). Besides the company, the Zacks Rank #2 (Buy) stocks of STR Holdings, Inc. (STRI - Snapshot Report) and ReneSola Ltd. (SOL - Analyst Report) are worth considering.

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