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Global solar product manufacturer, FirstSolar Inc. (FSLR - Free Report) announced its plans to build four solar plants for New Mexico-based utility company, PNM Resources, Inc. (PNM - Free Report) . The aggregate capacity generation from these plants will be around 20 Megawatts (“MW”). The solar plants are expected to come online by the end of 2013 subject to approval by the New Mexico Public Regulation Commission. The regulatory ruling is anticipated to come by the fourth quarter 2012.

Per the agreement, FirstSolar will deliver engineering, construction and procurement facilities to PNM Resources. It will use its high-tech thin-film photovoltaic modules for the solar farms. These solar plants will provide clean power to about 7000 homes in New Mexico. Besides the current endeavor, FirstSolar had already completed five projects, aggregating 22 MW, for PNM Resources in 2011.

We believe this energy project will enable customers in New Mexico to benefit from clean and reliable solar electricity in the coming years. In addition, with the current depressed macroeconomic environment in the U.S., this solar project would come as a blessing as it is expected to create 450 construction jobs.

With increasing preference for renewable energy, this pro-environment venture by FirstSolar will certainly bode well for the company’s position in the global market. Although lower average selling prices are limiting growth, we anticipate the company’s hardened focus on electricity power projects will counter this weak trend.

Also, the cost of operating the solar plants could be lowered if the solar panels used to generate energy have high conversion rates. FirstSolar is heavily investing in its research and development wing to achieve increasing conversion rates.

FirstSolar, during the second quarter 2012, entered into a power purchase agreement with Pacific Gas and Electric Company (PG&E), a subsidiary of PG&E Corporation (PCG - Free Report) , to sell 72 MW of electricity from its solar photovoltaic power plants currently under development in California.

Prospects from the Agua Caliente project in Yuma County, Arizona, also look encouraging as it has accomplished a peak generating capacity of 250 MW. The series of renewable investments will fetch lucrative returns for FirstSolar in the long run.

The company also invaded the prime Asian market of India where it has made a joint pact with Green Infra Limited for the supply of solar modules for a 25 MW project.  

The company’s closest peer, SunPower Corporation (SPWR - Free Report) recently entered into an agreement with PG&E to supply 100-megawatt power from its Henrietta Solar Project.

First Solar expects pro forma earnings per share in the range of $4.20-$4.70 for 2012. The Zacks Consensus Estimates for the third quarter and full-year 2012 currently stand at $1.10 per share and $4.47 per share, respectively.

FirstSolar presently has a Zacks #2 Rank (Buy Rating). Based in Tempe, Arizona, FirstSolar engages in the design, manufacture and sale of solar modules in the United States and internationally.

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