First Solar sees future on rooftops

First Solar yesterday highlighted a major strategic pivot towards commercial and industrial (C&I) rooftops that it believes will drive up earnings in the years ahead, as part of a suite of announcements that added more than $1bn to the company’s market valuation in 19 March trading.

First Solar says that it expects its earnings per share to rise from $2.20-$2.60 this year to $4.50-$6.00 in 2015.

The more than 20% gain in First Solar shares allowed the company to reclaim the title of the most valuable publicly-traded US solar energy company from SolarCity, whose shares have been on a tear since its December 2012 initial public offering.

First Solar’s thin-film modules, based on Cadmium Telluride (CdTe) technology, have long been viewed as better suited for ground-mount projects than for rooftops, given their lower conversion efficiency than modules based crystalline silicon (c-Si) technology.

In recent years, First Solar has sold an ever-increasing amount of its modules into its own in-house EPC business – which has thrived as US states in the desert southwest have raced to meet Renewable Portfolio Standards.

That business model – which has included building and maintaining the 250MW Agua Caliente project in Arizona for NRG Energy and MidAmerican, among many others – partially cushioned the company against the broader PV market downturn of the past few years.

However, as US states meet their renewables targets, utilities are no longer in the market for mega-PV projects, and the still-booming US solar market is pivoting decisively towards rooftops.

At an analyst day yesterday in New York, First Solar’s top executives outlined plans to become a major player in the Commercial & Industrial rooftop segment.

Chief operating officer Georges Antoun flagged up a recent IHS prediction that 47% of the global PV market in 2016 will be directed towards C&I rooftops – compared to 16% for residential rooftops and 35% for utility-scale projects.

“We can get back into [the C&I market] and become a major player,” Antoun says.

Antoun claims First Solar’s push into the C&I segment will benefit from the company’s strong balance sheet, brand recognition and institutional relationships.

The company is currently in the running for 15 C&I orders totalling 45MW, and has been shortlisted for five of the projects (totalling 15MW), Antoun reveals.

First Solar’s C&I plan is contingent on its ability to drive up the efficiency of its CdTe modules.

First Solar modules installed at the end of 2013 had an average conversion efficiency of around 13%, but chief technology officer Raffi Garabedian claims that figure will exceed 17% by 2017 – a level that it can only meet in laboratory conditions at present.

First Solar is also in the process of ramping production in Malaysia at a 100MW pilot for its new c-Si subsidiary, TetraSun – with first production of 300W, 60-cell modules expected in late 2014.