First Solar nears decision on yieldco

First Solar will make up its mind on whether or not to launch a yieldco within the next three months, chief executive James Hughes told investors on Tuesday.

“We are nearing the end of our decision-making process,” Hughes told analysts after First Solar reported its second-quarter results. “We expect to make a final decision near term – by the next earnings call at the latest.”

The largest US-based PV manufacturer, and among the world’s largest solar EPC players, First Solar has long been suggested as a prime candidate for a yieldco. Rival US solar giant SunEdison launched its yieldco, TerraForm Power, several weeks ago.

Stressing that no decision has yet been made, Hughes made clear that First Solar is confident in its ability to pull off a yieldco, but says the company has not yet decided whether such a model would be in the best interest of shareholders.

“We’re obviously close observers of the marketplace,” he says. “We know what characteristics it takes to have a successful offering and a [yieldco] company that trades successfully in the marketplace.”

“It’s not something we would even be considering unless we felt we had the capability to deliver those characteristics.”

The decision will be made within three months unless there are “dramatic changes in market conditions, in investor appetite”, Hughes says.

First Solar shares fell 5% in after-hours trading following the release of its second-quarter results, with revenues and earnings down sharply due in part to delays at the Desert Sunlight project in California.

First Solar also lowered its full-year shipment guidance to 1.8GW-1.9GW, from its prior guidance of 1.9GW-2GW, due to production downtime as the company rolls out its Series 4 modules.

Yet Hughes insisted the deferred revenue from the second quarter will be recognised during the third quarter, saying “there’s no lost economics” and that the engineering challenges at Desert Sunlight are “not something we’re particularly alarmed about”.

First Solar maintained its full-year guidance for sales ($3.7bn-$4bn) and operating income ($290m-$340m) – and upped its guidance for gross margin to 18%-19%, from 17%-18% previously.

Also on Tuesday, First Solar announced a new lab-certified conversion efficiency record for its cadmium-telluride thin-film cells of 21% – topping the 20.4% record it set this February.

The record represents the highest efficiency level ever recorded for a single-junction thin-film cell, topping the 20.9% record for CIGS.