On Tuesday, First Solar (Nasdaq: FSLR) announced that it has joined the DESERTEC Industrial Initiative, which seeks to turn the Middle East and North Africa into a solar and wind-powered renewable energy hub. Up until now, the consortium had focused on solar thermal power, the parabolic trough technology embraced by European companies like Siemens (NYSE: SI), Areva, and Solar Millennium. First Solar is the first pure solar photovoltaics (PV) player to join DESERTEC.
Reuters noted that First Solar's entry into the DII "came as something of a surprise to analysts." Well, clearly those analysts need to read more Abu Dhabi newspapers. In January, I alerted Fools to a report that haze and dust were causing problems for CSP (concentrating solar power) installations undergoing testing in the emirate. This led me to consider the possibility of PV players like First Solar and Suntech Power (NYSE: STP) making inroads into this and other solar megaprojects.
In its release, First Solar pointed to its experience with desert conditions in the United States and the United Arab Emirates. That includes the El Dorado plant built for Sempra Energy (NYSE: SRE) in Nevada, which had one analyst claiming that First Solar had hit grid parity. (Sempra's CEO later put a damper on that analysis, saying that the generator's costs were more than double the eager analyst's estimate of $0.075 per kilowatt hour.) First Solar is also in the early stages of a massive 2-gigawatt project in the Inner Mongolian desert, near "China's empty city."
In addition to First Solar's thin-film technology, which appears to perform well in desert conditions, the company also brings valuable project development experience to the DESERTEC table. This engineering/construction angle is one that's becoming more prominent in other solar businesses like SunPower (Nasdaq: SPWRA) (Nasdaq: SPWRB) and LDK Solar (NYSE: LDK), but as with its cost leadership, First Solar is probably at the forefront of solar project management as well.
There is nothing surprising about this company joining the DESERTEC initiative. Wherever there are large-scale deployment opportunities, you can expect to see First Solar making a play.
