If you tuned in to First Solar's (Nasdaq: FSLR) conference call yesterday, you probably couldn't help notice the frequent use of the word "buffer." The word popped up in one form or another seven times.

First Solar's business actually sports several buffers, but the one in the spotlight today was the firm's systems segment. This is the project development arm that builds solar projects and then sells them to folks like Southern (NYSE: SO) and Enbridge (NYSE: ENB). As the company made clear at its investor day last year, First Solar isn't in the EPC business to make money -- not directly, anyway. The segment is a conduit for module sales, ensuring an end market in times of market turbulence. It's a buffer, in other words.

One of the most notable points made on the quarterly results call was that module demand is looking so strong this year that First Solar has pushed development projects into 2011. The company described itself as "capacity constrained throughout the year," based on its current expectations. The firm is even adding a new four-line factory in a yet-to-be-announced location.

Investors tend to get excited whenever First Solar accounces a capacity addition, and today is no exception, with the stock up around 17% as I write. The expansion isn't the only piece of news that could be pushing shares higher, either. First Solar's gross margins improved dramatically this quarter, and its per-share earnings guidance has lifted, largely on account of firmer pricing and the aforementioned shift in favor of the module business over the systems business.

I said that First Solar has other buffers aside from the "captive pipeline" of projects in the systems segment. These include the company's rock-bottom cost structure, at $0.81 per watt produced, and pristine balance sheet, with over $1 billion in cash and a debt-to-equity ratio of 6%. All of these aspects make First Solar a formidable competitor for shops like Suntech Power (NYSE: STP) and SunPower (Nasdaq: SPWRA).

First Solar mentioned today that it's targeting 30% long-term market share in the solar space. The company seems to have the defenses required to ride out the choppiness of this market and achieve that goal. Does the solar company you've invested in have buffers like these?

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