Back to top

Image: Bigstock

First Solar (FSLR) Inks Agreement to Sell Japanese Platforms

Read MoreHide Full Article

First Solar, Inc. (FSLR - Free Report) recently inked an agreement with PAG Real Assets for the sale of its two Japanese platforms comprising 293 megawatts (MW) of a utility-scale solar project development platform and a 665 MW solar operations and maintenance (O&M) platform.

The transaction, subject to regulatory approvals,is anticipated to reach completion in the second quarter of 2022 for the project development platform and the second half of 2022 for the O&M platform.

The latest sale agreement marks the completion of First Solar’s strategic shift to focus on developing, scaling and selling its advanced module technology.

First Solar’s Long-Term Plans

To meet the increasing solar demand worldwide, FSLR has been consistently expanding its manufacturing capacity. In sync with this, in August 2021, First Solar broke ground with its third manufacturing facility in Ohio, which comes with a 3.3 (Gigawatt) GW capacity.

Currently, the company is in the process of expanding its manufacturing capacity by 6.6 GW by constructing its third manufacturing facility in the United States and its first manufacturing facility in India. These new facilities, which are expected to produce First Solar’s next-generation Series 7 modules, are currently under construction and expected to start operations in the first half of 2023 and the second half of 2023, respectively.

Further, with hefty investments in several projects, First Solar aims to double its nameplate manufacturing capacity to 16 GW by 2024. Such expansion plans will enable First Solar to maintain its position as the largest U.S. solar module manufacturer and fulfill its expanded manufacturing capacity targets. This, in turn, is likely to bolster its performance in the long haul.

Growth Opportunities

Per a report from Mordor Intelligence, the United States is likely to witness a CAGR of 17.3% in the solar energy market over the 2022-2027 period. Such abounding growth prospects are likely to provide ample growth opportunities for solar players like FSLR.

To reap the benefits of robust growth in the solar energy market of the United States, many solar players are increasingly expanding their footprint in this lucrative market.

For instance, in April 2022, Enphase Energy, Inc. (ENPH - Free Report) announced a partnership with ADT Solar, per which the latter intends to exclusively offer Enphase IQ8 Microinverters as part of its comprehensive home energy solution across the United States.

The Zacks Consensus Estimate for Enphase’s 2022 earnings suggests growth of 41.1% from the prior year’s reported figure. ENPHreturned 23.3% in the past year.

In May 2022,SunPower (SPWR - Free Report) announced that it collaborated with IKEA US, through which members of the IKEA Family customer loyalty program will be able to purchase home solar solutions, available through SunPower, to generate and store their own renewable energy and live more sustainably.

The Zacks Consensus Estimate for SunPower’s 2022 earnings suggests a solid growth rate of 414.3% from the prior year’s reported figure. The Zacks Consensus Estimate for SPWR’s 2022 sales indicates growth of 20.8% from the prior year’s reported figure.

In May 2022, Canadian Solar (CSIQ - Free Report) announced that the Louisiana Public Service Commission approved a power purchase agreement for the 132 MW dc/ 98 MWac Bayou Galion solar project at Morehouse Parish in Northeast Louisiana.

The Zacks Consensus Estimate for Canadian Solar’s 2022 earnings suggests a whopping growth rate of 192.9% from the prior-year reported figure. The Zacks Consensus Estimate for CSIQ’s 2022 sales indicates growth of 37.7% from the prior year’s reported figure.

Price Movement

In a year, shares of First Solar have dropped 12.3% compared with the industry’s decline of 20.6%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

First Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.