Boston, MA 03/19/2014 (wallstreetpr) – Fortunes of companies in the alternative energy space are inextricably linked with the larger debate about global warming and government policies, regulations and subsidies. The story of First Solar, Inc. (NASDAQ:FSLR) is no different. The fear of runaway gasoline and energy prices has vanished with new techniques such as hydraulic fracturing (commonly known as fracking) and new sources of natural gas such as shale gas. With an abundance of natural gas from shale gas, the need for adopting clean technologies such as solar diminishes. It’s then up to government regulations to push and support technologies such as solar power.
States like California are pioneers in promoting the use of solar photovoltaics and the Federal government too offers subsidies to homes and businesses who adopt these technologies.
Thin Film vs. Crystalline
Photovoltaics (PV) comes in two forms: crystalline and thin film. First Solar is exclusively focused on thin film solar based on CdTe (cadmium telluride) technology. It’s the leading global manufacturer CdTe thin film. But thin film comes up short compared to crystalline technology for many applications such as rooftop installations. First Solar, Inc. (NASDAQ:FSLR) needs to get into the crystalline solar PV manufacturing business.
International Dimension
Solar is a global industry that started in a major way in Germany which has been eclipsed by the U.S. in 2013 (ever so slightly). But the undisputed world champion in the game is China. As of 2013, China generates about 20 GW of solar while Germany is the world leader in solar with installed PV capacity of almost 25 GW. Italy has a solar PV installed capacity of almost 17 GW. India intends to produce 20 GW of solar power by 2020. Japan has a solar PV installed capacity of almost 5 GW and this will increase since all the nuclear power plants have been shut down after the Fukushima nuclear disaster.
In this scenario, First Solar, Inc. (NASDAQ:FSLR) needs to aggressively expand its international business in growth markets such as India by finding a way to compete with China. It needs to reverse its declining sales figures which were $768 million in 4Q2013, reflecting a decline of $497 million from 4Q2012 levels.
