First Solar, Inc.
FSLR
recently inked a supply agreement with Scout Clean Energy for delivering 378 megawatt-direct current (MWdc) of its advanced, responsibly-produced thin-film photovoltaic (PV) solar modules. First Solar’s modules will be used by Scout to begin the construction of several late-stage projects, which are expected to start operations in 2024.
Notably, the company has already invested over $2 billion in its U.S. manufacturing footprint, which must have enabled the company to frequently ink supply deals for its solar modules like the latest one.
First Solar’s Long-Term Plans
First Solar is the largest solar module manufacturer in the United States and its continuous efforts to expand its PV solar manufacturing capacity add impetus to its growth. The company is currently investing $680 million with an aim to expand America’s domestic PV solar manufacturing capacity by 3.3 GW annually.
The company intends to achieve this by building its third U.S. manufacturing facility in Lake Township, OH and anticipates it to be operational by the first half of 2023. Once operational, the project would inexorably expand its Northwest Ohio footprint to a total annual capacity of 6 GW, thus taking First Solar one step ahead in its long-term goal. This is likely to make it the largest fully vertically integrated solar manufacturing complex outside China.
In a bid to accomplish its objectives, First Solar is also investing and developing facilities outside the United States. In this regard, it is imperative to mention that the company is already operational with its facility units in Vietnam and Malaysia and is also eyeing investment opportunities in India, wherein the company intends to build a 3.3 GW factory. The facility is expected to be operational by the second half of 2023.
Through substantial investments in numerous projects worldwide, First Solar intends to double its nameplate manufacturing capacity to 16 GW by 2024. Such expansion plans will enable First Solar to ink more such module supply agreements across the globe, which in turn, are likely to boost its operational performance in the long haul.
Growth Opportunities
Per a Wood Mackenzie report, global solar PV installations are projected to grow at an annual average of 8% from 2022 to 2031 and cumulative solar installations are expected to surpass the 1,000 GWdc threshold, thus providing massive opportunities for solar players like FSLR.
Many solar players are increasingly expanding their footprint in this lucrative market.
For instance, in April 2022,
Enphase Energy, Inc.
ENPH
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 sales suggests growth of 50% from the prior year’s reported figure. The same for 2022 earnings implies growth of 41%.
In May 2022,
SunPower
SPWR
announced a collaboration 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 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 consensus estimate for SPWR’s 2022 sales indicates growth of 20.8% from the prior-year reported figure.
In May 2022,
Canadian Solar
CSIQ
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 185% 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 12.5% compared with the
industry
’s decline of 25.9%.
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
.
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