The dust over solar earnings has finally settled, and now it's time to take a closer look at the long-term prospects of solar companies. First Solar (Nasdaq: FSLR) kicked off earnings season by surprising the Street with an early release. The company remained in the news for a few negative reasons, and its stock has been swinging up and down.

Falling from grace
On average, over the past five years, First Solar's revenues have grown at a rate of 95% annually. However, this takes into account the period when the industry was booming and the company was rising with it. Subsidy withdrawals in Europe and oversupply have led to a rapid decline of average selling prices, and First Solar got caught in the whirlpool.

The company saw its earnings fall almost 20% on a 12-month basis, as rising costs and falling prices weighed on margins. There was a time when I used to say that First Solar was one of the most cost-efficient companies in the industry. However, with the rise of Chinese players like Yingli Green Energy (NYSE: YGE), JA Solar (Nasdaq: JASO) and Trina Solar (NYSE: TSL), which sell their products at discounted rates made possible by subsidies in China, First Solar's margins have taken a hit.

But the best bounce back
First Solar is the leading producer of solar modules in the world and has produced 66 million modules in the last nine years, putting it ahead of the pack. I have said in my previous articles that the solar industry is in shakeout mode and that only the best will survive. Well, considering that First Solar is still profitable in these tense times and has maintained positive cash from operations within the past year, I feel that it is one of the best long-term bets the industry has.

The company has some more good news in store for investors. First Solar will be supplying solar modules to Germany-based Solarhybrid for a 1.5-gigawatt installation in California. Furthermore, the recent complaint by some U.S. solar companies against their Chinese counterparts, which accused them of dumping products at low prices in the U.S., could lead to some parity in prices if tariffs are imposed against the Chinese players.

The Foolish takeaway
As of now, odds are stacked against the industry's revival, and the same goes for First Solar. However, considering the company is present across geographies and is one of the major brands in the industry, First Solar will hopefully be able to tackle this downturn and scale new heights when the industry is up and running. Solar is the next energy frontier, and First Solar may well become one of its torch bearers in the future.

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