First Solar Betting Big on Utility Solar Market

Building solar plants has become a big business as solar energy has become more affordable around the world. But it's not an easy business; it requires a design that's easy to install and panels that efficiently turn the sun's energy into electric power.

That's why First Solar's (NASDAQ: FSLR  ) announcement that it is launching pre-engineered solar plant solutions that range in size from 800 kW to 3.8 MW is such a big deal. SunPower (NASDAQ: SPWR  ) also makes a pre-engineered product for its Oasis power plants that is 1.5 MW per block. As two of the largest solar power plant builders in the world, these consistent designs allow for plants to be built quickly, unlike the custom designs once common in solar.

SunPower's Oasis system lowers balance of system costs, leading to lower cost per kW-hr of electricity. Source: SunPower.

Closing the efficiency gap
A new power plant design is great, but what First Solar really needs is increased efficiency. That's why First Solar's Series 4 module that was also announced yesterday is probably more important than pre-engineered power plants.

First Solar's fleet average conversion efficiency was just 13.5% last quarter, compared to 15%-17% for most Chinese manufacturers, or 21.5% for SunPower's X-Series. Higher efficiency allows project builders to generate power from a smaller area, lowering what's called balance-of-system costs.

Large utility projects like this one are First Solar's bread and butter. Source: First Solar.

That's why it's key for the company to hit its goal of 14.9% conversion efficiency by the end of 2014, and 19.5% by the end of 2017. Without those improvements, even the most efficient power plant design would be too costly versus competitors.

Betting on utility scale solar
While residential solar is getting most of the attention, utility scale solar is a much bigger business. According to GTM Research's recently released Q1 2014 U.S. Solar Market Insight report, 873 MW of utility scale solar was built last quarter compared to 232 MW of residential solar. Last year, 60% of all solar installed in the U.S. was utility scale.

These utility scale projects are where First Solar lives, and lowering costs by pre-engineering systems and increasing efficiency is key to staying competitive.

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  • Report this Comment On June 01, 2014, at 3:56 PM, ranko wrote:

    Another bright spot in this area is Solar Wind Energy Tower Inc. They are developing promising new high tech towers that can generate economical electricity in the arid areas of the world

  • Report this Comment On June 01, 2014, at 9:50 PM, vet212 wrote:

    which half of the country will be plated over with solar cells and which half covered in windmills

  • Report this Comment On June 02, 2014, at 5:44 AM, NoiTall wrote:

    Which will leave another

    half of the country covered by farms

    one more half covered by roads

    half covered by urban sprawl

    half covered by suburban houses


    half covered by industrial plants and warehouses


    what's your point?

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Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

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