Investors often talk about looking for a competitive moat that protects a business. In long-established businesses like Coca-Cola or McDonald's, a moat is easy to identify, but in the fast-changing solar business, it's harder to identify what's a lasting competitive advantage and what's a fleeting technology.
One company has managed to build a moat that has about as much staying power as any company in solar can claim, and that company is First Solar
Years ahead of the curve
For years, First Solar's competitive advantage has been its industry-leading cost per watt. With module costs of just $0.75 per watt in the first quarter, First Solar is miles ahead of the competition. Trina Solar
Cost per watt is not the only factor that goes into the cost of energy, but First Solar's lead is so wide right now it isn't even within shouting distance of competitors.
Improving every day
In the last year, First Solar has spent $94.8 million on research and development to improve its products. That dwarfs competitors and will help First Solar lower costs and improve efficiency. Just last week, the company announced it had set an efficiency record for CdTe solar cells at 17.3%, 0.6% better than the old mark.
Developing its own demand
Another advantage First Solar has is a large project team that can create internal demand for the company's panels. SunPower
Fool contributor Travis Hoium owns shares of First Solar and SunPower and has sold puts in SunPower. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.
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