First Solar (Nasdaq: FSLR) used to be a highflier in the solar industry. It was a shining example of how a company could turn a relatively new technology into a profitable business.

Well the company's high aspirations were shot down this year as the price of polysilicon tumbled and traditional multicrystalline modules became more cost competitive. Suddenly, First Solar's lower-cost, lower-efficiency modules didn't look quite as attractive.

So it's time for First Solar to think about changing strategic direction to unlock the value that's left in the company. Here are three viable options.

Sell out
A few weeks ago, I brought up the possibility of a buyout of First Solar by General Electric (NYSE: GE) as a good option for both companies. They're pursuing similar thin-film technologies and GE would be able to leverage First Solar's manufacturing base and power plant pipeline with its bigger balance sheet.

The companies may also be able to put their collective research and development heads together to develop a higher-efficiency module than they make today. As module costs become a lower percentage of an overall installation's cost, efficiency becomes more important, which is why thin film will continue to fall behind in its current state.

Split up
First Solar really has two distinct businesses: module manufacturing and power plant development. At the stock's current price, some analysts say the manufacturing business is being valued at $0.

So one alternative is to spin off the power plant development business and allow it to purchase whatever modules are most feasible for any development. This would be a highly risky move, but could allow the company to focus more clearly.

Buy up competitors
What I really think First Solar should do is get aggressive and buy a couple of its competitors. The company had $679 million in cash on hand at the end of the last quarter, enough to buy Canadian Solar (Nasdaq: CSIQ), ReneSola (NYSE: SOL), and Suntech Power (NYSE: STP) with their current market caps.

These may not be the optimal candidates, and I would much prefer First Solar go for a single high-quality manufacturer like Trina Solar (NYSE: TSL), but the point is First Solar has the balance sheet to grow beyond flat film. The company may also be able to buy a venture-backed firm with technology that First Solar could leverage.

At least in buying competitors First Solar wouldn't be taking these punches lying down. I would much rather see the company fight to expand while solar stocks are down.

What do you think First Solar should do? Leave your thoughts in our comments section below.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.