First Solar Turns To New World for Solar Growth

In 2009, First Solar (FSLR-$105.90) generated almost 65 percent of its $2.06 billion in sales from German photovoltaic (PV) projects, from roof-top panels to arrays of solar panels on farms, according to its annual regulatory filing. In 2010, the cadmium-telluride (CdTe) thin-film module manufacturer will still derive about 40 percent to 50 percent of module sales from German customers, despite best efforts to open windows to other sunshine markets. Most of its business from Germany will be front-loaded, CEO Robert Gillette said on the fourth-quarter ending 2009 earnings call, to beat the planned June 1 feed- in subsidy cuts.

Contrary to optimism expressed by First Solar management on its earnings call, installation volume capacities in other European markets, such as France (12 percent of its business) or Italy (6 percent of sales), were too small to absorb lost mega-watt sales from Germany.

“For the big players, there is no real way around Germany, to be honest,” SES Research analyst Karsten von Blumenthal told Reuters.

First Solar expects to ramp up aggregate manufacturing capacity to 34 production lines by 2012, with annual worldwide production capacity of approximately 1.8 gigawatts. Longer-term performance could be hampered by obstacles in other markets outside Europe.

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Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.