From providing engineering services for solar projects to operations and maintenance of the completed systems, First Solar(NASDAQ: FSLR) is a vertically integrated company that represents one of the most recognizable and respected names in the solar industry. Let’s shine some light and learn a few things that will help to provide a more complete view of the company.
1. Standing out from the crowd
Unlike most solar panel manufacturers that use multi-crystalline silicon technology, First Solar produces thin-film solar modules that contain the chemical compound cadmium telluride. According to First Solar, its thin-film technology affords customers with greater advantages — such as better performance in real world settings as opposed to laboratory — than conventional crystalline silicon modules.
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It’s hard to debate First Solar’s leading position in the industry. In 2017, the company claimed two world records for thin-film cell efficiency and module efficiency of 22.1% and 18.2%, respectively.
2. Shining brightly in the Buckeye State
First Solar produces solar panels at facilities spanning the globe, but it’s the location in Ohio — the company’s flagship plant — that surely glitters the brightest in the company’s eyes. And it’s bound to shine even brighter in the coming year. Expected to enter full production mode in late 2019, First Solar’s new manufacturing facility, located in northwestern Ohio, will have an annualized capacity of 1.2 gigawatts, tripling the company’s current U.S. production capacity. According to PV Magazine, this will represent the largest solar factory by capacity in the Western Hemisphere.
First Solar intends to manufacture its Series 6 modules at the new facility. Laying claim to one of the largest solar panel manufacturing facilities in the world is surely enticing, but investors should be keenly attuned to the company’s construction of the new plant for another reason: increasing profitability. First Solar’s management estimates that the company recognizes a gross margin in excess of 20% on its Series 6 module, whereas sales of the Series 4 module represent a gross margin of 15% to 20%.
3. Trash it? No way
First Solar’s dedication to a greener future isn’t only demonstrated by its enthusiasm for renewable energy; the company is also committed to recycling. According to the company’s website, the company’s recycling facilities ensure that “over 90% of the semiconductor material can be reused in new modules and 90% of the glass can be reused in new glass products.”
4. Celebrating its year in the sun
A cursory glance at the company’s financial performance in 2017 may have disappointed investors, but upon further inspection, a ray of light could have easily been found on the company’s cash flow statement. While First Solar, which reported a net loss of $1.59 per share, suffered from a lack of profitability in 2017, it celebrated a company record, generating $1.34 billion in operating cash flow and $826 million in free cash flow.
5. Helping to power the iCloud
IPhone afficionados, iMac enthusiasts, and millions of other users operating within Apple‘s ecosystem and who rely on the company’s cloud storage will soon have First Solar to thank — in part — for helping them to back up their data. Located in California, Caliente Flats is a 280 megawatt solar facility that First Solar is currently in the process of developing. In addition to powering one of its data centers, Apple intends to help use the solar-generated electricity to keep the lights on at its other facilities in the state.
6. Notability for sustainability
Those who are environmentally conscious revere solar power as a renewable energy source — one that has less of an ecological impact than traditional power sources like fossil fuels. In this regard, however, First Solar outshines not only conventional power sources but also its peers. According to its website, First Solar has the lowest carbon footprint among all photovoltaic (PV) technologies, and the company cites one study that found that the environmental footprint of the Series 6 module is expected to be up to four times lower than the average PV product.
And in terms of water conservation, First Solar is anything but wet behind the ears. In its most-recent 10-K, the company notes that its modules “use up to 300 times less water per MW hour than conventional energy and up to 12 times less water than other solar technologies.”
7. A short history lesson
Tracing its roots back to 1999, First Solar has been demonstrating its solar energy prowess for nearly 20 years, and it has been an option for investors interested in gaining exposure to the renewable energy industry since its initial public offering in 2006.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.
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