First Solar's (Nasdaq: FSLR) shares popped yesterday and once again investors have hope that the once dominant solar company will survive the solar shakeout. But yesterday's pop was built on rumor more than improving fundamentals, so is a rumor enough of a sign that First Solar can survive? Below I'll take a look at a few keys for the company.

Modules get a boost
The solar industry is separating itself on two factors -- cost and efficiency. More efficient modules make more sense in residential systems where costs are generally higher and owners will want to squeeze maximum power from the space available. Utility systems, however, are still driven primarily by cost and haven't become as sensitive to efficiency.

According to GTM Research, utility scale solar installations are down to an average cost of $2.60 per watt and every penny matters when costs are that low. With First Solar's cost per watt now at $0.63 in its most efficient plant, the company still leads the industry. This is why the company has shifted strategies to focus on large-scale projects in sustainable markets.

When you consider these things it's no surprise that NextEra Energy (NYSE: NEE) is considering First Solar's modules for a 1 GW system it is planning. Few companies have the capacity to build that many panels and few can even come close on cost.

We've also learned that balance sheets are becoming more important to installers with concerns that service contracts and warranties will be lost from companies that go bankrupt. Few in the industry can come close to First Solar's balance sheet.

Follow the leader in systems
The systems business has been a big part of First Solar for years, but now almost everyone is getting into the game. SunPower (Nasdaq: SPWR) has a large systems business, and now Chinese leaders Canadian Solar (Nasdaq: CSIQ) and Trina Solar (NYSE: TSL) are getting into the systems business in a big way. Canadian Solar has hundreds of MW in systems backlog, and Trina is making a strategic shift by splitting its business into two focuses -- modules and systems.

Building your own systems has become a way to insulate your business from big swings in global demand that have plagued companies. If First Solar is going to stay on top in solar, then this is one of the keys to its success.

Still profitable
In all of the talk about Chinese solar companies, it is often forgotten that First Solar is the only major U.S.-traded solar company that is profitable. The company made a $111 million profit last quarter and it expects to earn $4.20-$4.70 per share this year. That's a big head start even if First Solar's modules aren't as efficient as most other rivals.

It shouldn't be underestimated what an advantage profitability is for companies in emerging industries. If you're playing catch-up on the income statement it can lead to disaster even if your technology is better than the competition's.

Foolish bottom line
Even rumors that NextEra Energy will choose First Solar as one of its suppliers shows the competitive advantages First Solar has in the market. Competitors still can't touch the company's cost per watt -- in utility-scale projects that matters more than anything. The company's balance sheet is also a huge competitive advantage that has emerged as a key differentiator in the last few quarters.

These advantages should keep First Solar relevant in the near future and will provide time to increase efficiency and build a path to the future.

What First Solar will look like in 10 years is anybody's guess, but I've laid out a few possibilities in our premium report on the stock. Investors and bystanders alike have been shocked by First Solar's precipitous drop over the last 12 months, and now the stakes have never been higher for the company. Are they ready for a rebound?If you’re looking for our recommendation on how to play First Solar along with continuing updates and guidance on the company whenever news breaks, we’ve created a brand new report that details every must know side of this stock. To get started, just click here now.