The U.S. government is looking to provide fast track approval for seven solar and wind projects including First Solar‘s (NASDAQ:FSLR) 350 MW Silver state south project in Nevada.  The move will be overseen by Office of Management and Budget and is aimed at making the permitting and review process for renewable projects more efficient. First Solar is depending on its systems development business to drive its revenues and profits as its panel manufacturing business is hit by a sharp drop in prices.
We have a $22 price estimate for First Solar, which is at a 5% premium to its current market price.
First Solar presently has a 2.7 GW pipeline of solar projects under construction and recorded revenues from the sale of multiple projects in Q2 to boost its revenues and earnings in the period. (See: First Solar Reports Profits on Project Sales; Sustainability in Focus) Analysts have warned that the company must ramp up the development of projects to sustain the growth in business. Solar projects require multiple permits and the company reported a hiccup back in February when it had issues in obtaining a construction permit for the Antelope Valley Project, delaying its loan withdrawal from Department of Energy. The company had warned that issues with obtaining the construction permit could force it to repurchase the project from Exelon. The administration is now making the permit process more efficient, which could make things simpler for First Solar.
The Silver State South project is among the seven projects that have been selected for a fast track approval and could add 350 MW of capacity to First Solar’s project pipeline. Some of these projects could receive permits by the end of the year. The fast tracking is a seen as a part of a wider effort from the Obama administration to promote the use of federal land for the generation of renewable energy.  The efforts could result in a boost for First Solar’s systems business in the long term.Notes:
- U.S. to Expedite Seven Renewable-Renewable Energy Plants, Bloomberg [↩] [↩]