Will the Sun Still Shine for First Solar?

31 Oct

This was an assignment for class and is unrelated to entrepreneurs.

Installed-solar-panels

Image via Wikipedia

As global issues continue to hinder the solar energy industry, first generation technology along with an overly optimistic outlook may be more to blame for First Solar’s problems than macroeconomics.

For years, First Solar was deemed the low-cost alternative to the more expensive polysilicon panel. It banked on continuing to gain traction with businesses and the government even when its more efficient counterparts made headway with customers by dropping the price to mirror First Solar. The company’s rosy outlook turned into reality this week.

On Tuesday, CEO Rob Gillette was asked to step down after failing to reinvigorate First Solar. (FSLR) Since becoming CEO in 2009, shares have fallen over 60% and some speculate Gilligan not disclosing negotiations about a project sale that fell through for Enbridge, a Canadian based company focused on crude oil, natural gas, and green energy, may have been the last  straw.

Gillette’s approach of expanding First Solar’s market of first generation technology was not conducive when the world was demanding second generation. Initially, building its empire using cost-effective but less efficient thin-film solar panels provided a niche market for customers looking for a less expensive solution in comparison to costly polysilicon panels.

As technological advancement progressed, the cost to produce polysilicon decreased eliminating First Solar’s competitive advantage and leaving FSLR with a heap of low-efficient panels and little demand.

With Gillette stepping down, First Solar’s stocks plunged 25% in a day, but rebounded after the company’s early release of third quarter earnings showing $1 billion in revenue.

The tactical move provided short-term relief for investors but as the European market is stalling and the U.S. and other markets are growing, FSLR must prove long-haul strategy in order to stay in the competitive game.

“Europe has accounted for 70 to 80% of solar panel sales in recent years, driven by generous payments from governments encouraging renewable energy. Current austerity measures have forced governments to reduce those payments sharply,”  Paul Torgerson, an analyst at Harbinger Capital, said. “The uncertainty in the region has prevented banks from lending to projects.”

As Europe’s market may be slowing down, the U.S. is looking to gain traction. According to the Solar Energy Industries Association, the demand forecast shows solar panel installation growth will triple by 2015 in the U.S. As California has lead the pack, both Oregon and Mississippi are looking to create more renewable energy sources.

The increase in U.S. demand appears promising for the solar sector, but the competitive landscape doesn’t look promising for FSLR or its U.S. counterparts, as China is seen as the forerunner.

The U.S. has not only seen Solyandra go bankrupt but also Evergreen Solar and SpectraWatt—both Q-Cells and Rec Solar are also on the road to bankruptcy. China has also seen its share of headlines with Suntech writing down bad investments. Yet Suntech, Yingli Green Energy, and Trina Solar have all posted sales increases in the second quarter.

“The biggest issue facing the solar industry is overcapacity, mostly driven by expansions of Chinese companies. The Chinese are able to build capacity much cheaper than anyone else because of land grants and low to no interest loans from local banks,” Torgerson said.

With new markets emerging in warmer climates like Saudi Arabia, India, and Australia, FSLR may be able to beat out competition by capitalizing on their lower cost option because efficiency would play less of a role in hotter temperatures.

Even with quarter four projections down from past estimates, First Solar is still expecting to make it through next year and swing up in 2012, according to analyst reports.

“FSLR will be around in some form but what that form is remains unclear,” Torgerson said.

Tags: , , ,

One Response to “Will the Sun Still Shine for First Solar?”

    Trackbacks/Pingbacks

    1. Thin Film Solar Panels | Wind And Solar - November 20, 2011

      [...] Tuesday, CEO Rob Gillette was asked to step down after failing to reinvigorate First Solar. (FSLR) Since becoming CEO in 2009, shares have fallen over 60% and Paul Torgerson, an analyst at [...]

    Leave a Reply

    Fill in your details below or click an icon to log in:

    Gravatar
    WordPress.com Logo

    You are commenting using your WordPress.com account. Log Out / Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out / Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out / Change )

    Connecting to %s

    Follow

    Get every new post delivered to your Inbox.

    Join 49 other followers

    Powered by WordPress.com
    Togel Online Situs Togel Terpercaya daftar 10 nama situs togel terpercaya situs bo togel 5 bandar togel togel178 pedetogel sabatoto togel158 pragmatic178 novaslot88 Situs Togel Terpercaya Togel178 Togel279 Toto Macau Situs Togel Bandar Togel Agen Togel Bo Togel Daftar Togel Togel279 Toto Macau Toto Togel Sabatoto Sabatoto Sabatoto Togel279 Togel Online Slot88 Situs Togel Prize 123 Bo Togel Terpercaya Togel Online Daftar Akun Togel Resmi Toto Macau Toto Togel Situs Togel Terpercaya Situs Togel Via Pulsa Tanpa Potongan Daftar Togel Via Pulsa Tanpa Potongan Togel BBFS 10 Digit Situs Togel Bonus New Member Situs Togel Togel Pulsa Situs Togel Daftar Situs Togel Situs Togel Terpercaya Situs Judi Togel Slot Olympus Toto Togel Slot 4D Toto Slot 4D BO Togel Terpercaya Slot Mahjong Bet 200 Slot Nuke Gaming BO Togel Hadiah 2D 200rb BO Togel Hadiah 2D 100rb BO Togel 4D Daftar Akun Togel Resmi Togel Gopay Toto Togel 4D Bandar Togel Togel Deposit Linkaja Togel Terpercaya Situs Togel Bri Online 24 Jam Situs Bandar Togel Situs Agen Togel Situs BO Togel Situs Togel Resmi Toto Bandar Judi Togel Daftar Bandar Togel Situs Togel Diskon Daftar Togel Toto Situs Togel Prize 123 Situs Togel Resmi WLA 5 bandar Togel Togel IDN APK Togel Togel Dana Togel Ovo Link Slot Gacor Group BO Togel Situs Judi Togel Online24jam Terpercaya Togel Bebas Invest Slot Anti Rungkat Dadu Sicbo Toto Togel Togel Bet 100 Aplikasi Togel Togel Dana Bo Togel Toto Slot togel e-wallet Togel Online 10 situs togel terpercaya daftar akun togel resmi Pasaran Togel 10 situs togel terpercaya Situs Togel Terpercaya togel online Situs Bo Togel BBFS 10 Digit Kumpulan Situs Togel Link Alternatif Togel Toto situs togel terpercaya prize 123 link alternatif togel terpercaya Situs Togel Bet 100 Perak Daftar Situs Togel Via Dana slot luar negeri Bo Togel Hadiah 2D 200rb Togel Resmi Bandar Togel 4D Aplikasi Togel Situs Togel Deposit Via Ovo Bandar Togel Terbaik situs togel bri online 24 jam Situs Togel Terpercaya Kumpulan Situs Togel Terpercaya Situs Togel Terpercaya Situs Togel Bandar Togel Terbesar Situs Togel Prize 123 Situs Togel Terpercaya Daftar Agen Togel Resmi Aplikasi Togel Terpercaya Situs Togel Terbesar Agen Togel Terpercaya Rekomendasi Bo Togel Terpercaya Togel Resmi WLA Situs Togel Deposit 10rb 10 Situs Togel Terpercaya Togel Bbfs Situs Togel Bet 100 Perak Situs Togel 4D situs togel 8 situs togel terpercaya 5 bandar togel slot demo mahjong aplikasi togel link togel group situs togel situs togel terpercaya judi togel bo togel hadiah 2d 100rb toto macau aplikasi togel bo togel bolak balik bandar togel daftar akun togel resmi togel dana togel pasaran toto togel situs bandar togel BO TOGEL situs togel resmi bo togel terpercaya Slot Luar Negeri bo togel hadiah 2d 200rb Bo Togel Hadiah 2d 100rb bo togel bo togel bolak balik acak dibayar bo togel resmi Dadu Sicbo Online 10 situs togel terbesar situs toto togel 10 situs togel terpercaya daftar akun togel resmi slot demo pragmatic situs judi togel terbaik dan terpercaya no 1 demo slot pg soft pedetogel togel178 togel279 togel158 sabatoto novaslot88 pragmatic178 toto macau roulette online Casino Live slot kamboja togel dana togel bbfs 10 digit togel bebas invest togel e-wallet togel pasaran togel dan slot bandar togel toto macau toto macau resmi toto togel 4d togel dana toto macau 4d Toto Slot agen togel toto togel togel dana cara membuat akun togel di hp android cara pasang togel togel diskon terbesar togel luar negeri togel prize slot nuke gaming toto macau Situs Togel Terpercaya Link Togel Terpercaya Daftar Togel Slot Olympus Slot PG Soft Bandar Togel Hadiah 4D 10 Juta Terpercaya Toto Macau Toto Togel Bandar Togel Terpercaya Toto Macau Togel 4D Situs Togel Via Dana Rekomendasi Togel Terpercaya Daftar Bandar Togel Togel Resmi Terpercaya Situs Togel Bayaran Tertinggi Kumpulan Situs Togel Terpercaya Situs Togel Bet 100 Perak Rekomendasi Togel Terpercaya Situs Togel Bet 100 Perak Situs Togel Terlengkap Judi Togel Online Slot Luar Negeri Toto Macau Togel Via Pulsa Togel Online situs togel bo togel judi togel aplikasi togel bo togel hadiah 2d 100rb situs bandar togel Toto Togel 10 Situs Togel Terpercaya Togel Via Dana Toto Macau Togel Online Toto Togel