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Just a few days into the new year and we are already getting a small taste of what the year might be like for solar stocks.
First Solar (Nasdaq: FSLR ) is spreading its wings in China, signing a memorandum of understanding for phase 1 of the 2-gigawatt Ordos facility announced in 2009. This phase is only 30 MW, but it is a small step in a key project for First Solar.
With Chinese manufacturers like Trina Solar (NYSE: TSL ) and Yingli Green Energy (NYSE: YGE ) already in China, why wouldn't China choose a homegrown manufacturer? The answer comes down to expertise. U.S.-based First Solar has a history of building large solar projects and the Chinese can learn from that in this first go-around.
The Chinese are known for bringing in experts to teach them industry-leading techniques and then taking over themselves when they've learned enough. Think Lenovo, when you think a U.S. company may be taking hold in China.
The next frontier: Canada
With everyone worried that solar demand will die down this year, we may need to focus our attention on an unlikely source of demand from Canada. Ontario is becoming a hotbed for solar investment, opening the 80-MW Sarnia Solar Project last year and becoming a renewable energy mecca.
Yesterday, First Solar found a buyer for 50 MW of projects in Ontario that will start construction this summer. Plutonic Power Corp. and GE (NYSE: GE ) will purchase the power plants with First Solar arranging the debt.
Last year, SunPower (Nasdaq: SPWRA ) agreed to sell a 20-MW project in Ontario, so the Canadian love is being spread around the solar industry.
These sales don't really tell us if solar is going to fall off a cliff in 2011, but they at least get us off on the right foot. Solar companies will have to prove they can take a few more steps before Wall Street buys into the solar story this year.
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