First Solar Sells 250MW Plant to NextEra - Analyst Blog

First Solar Inc. FSLR sold its 250-megawatt MW Silver State South power project to an affiliate of NextEra Energy Inc. NEE for an undisclosed amount. The share price crept up 1% to $61.87 on May 28, 2014.

NextEra Energy will sell the solar energy produced at the Silver State South power plant to Southern California Edison under a long-term power purchase agreement.

First Solar will provide engineering, procurement and construction (EPC) service related to the plant. The largest solar panel maker in the U.S. was also the developer and designer of the Silver State South project. This amply reflects the vertically integrated capabilities of First Solar.

Located in Clark County, NV this project will span nearly 3,000 acres of land. During the peak construction phase, this venture is expected to create over 500 full-time jobs in the region. Construction of the plant is expected to be complete by 2016. This project also sits near the 50 MW Silver State North project, which was developed and built by First Solar and commissioned in 2012.

Globally, utilization of renewable energy is on the rise primarily due to its clean nature and a growing awareness among the masses regarding its benefits. The U.S. Energy Information Administration EIA projects utility-scale solar capacity to expand by about 56% between year-end 2013 and year-end 2015 in the U.S., in tandem with considerable consumption growth in renewables for electricity and heat generation purposes.

Despite intensifying competition in the space we believe First Solar will be able to develop economically sustainable businesses due to its established expertise in all areas of the solar value chain, such as, project development and engineering, procurement and construction capabilities besides its traditional role of a solar module and panel maker.

Recently, First Solar came up with bright first quarter 2014 earnings, which beat the Zacks Consensus Estimate by 120.0%. Earnings also jumped 66.6% year over year. The solid start to the year supported by new bookings encouraged First Solar to lift its guidance for 2014.

Currently, First Solar holds a Zacks Rank #3 (Hold). However, other solar companies with a bullish Zacks Rank are JA Solar Holdings Co., Ltd. JASO and Yingli Green Energy Holding Co. Ltd. YGE. While JA Solar Holdings holds a Zacks Rank #1 (Strong Buy), Yingli Green Trina carries a Zacks Rank #2 (Buy).