First Solar (NASDAQ:FSLR) is collaborating with Sir Ratan Tata Trust, one of India’s oldest philanthropic organizations, for a pilot project that will provide drinking water and irrigation to rural communities in Uttarakhand, a state in northern India. 
The goal of this pilot project is to develop solar power solutions for rural communities that are simple to install, operate and maintain. To begin with, First Solar will donate 100 solar modules which will be used to power water pumps that move water from spring sources into village storage tanks to provide drinking water supplies. If successful, the project will be replicated in hundreds of villages across India.
India is a promising market for solar firms like First Solar, which are facing increasingly difficult market conditions in developed economies such North America and Europe.
Indian Solar Market Presents Exciting Opportunities
Like many other large economies, India primarily depends on thermal sources for power generation. However, the country faces an acute shortage in generation capacity, with the demand exceeding supply by as much as 14% during peak hours. 
Given the burning need for capacity growth, solar power looks like an increasingly attractive means for satiating part of the country’s power deficit. The rapidly declining cost of solar panels and the abundance of solar resources in the country will make solar power a viable alternative to other forms of energy like wind and hydro power.
Solar power will also play an important role in the off-grid market. Solar power is already cheaper than diesel-generated power, making it attractive for industrial applications. Many companies, including India’s largest cellular phone operator, Bharti Airtel, are replacing their diesel-powered generators with solar panels. 
Cumulative installed solar capacity in India stood at around 427 MW in 2011, or about 0.6% of global capacity . The Indian government has set a target of achieving 20 GW of solar capacity by 2022, translating to a capacity growth rate of over 40% every year.
First Solar Well Positioned For Indian Growth
First Solar manufactures panels based on Cd-Te thin film technology. This technology is likely to be well-suited for India’s climatic and economic conditions. First Solar manufactures panels at prices that are among the lowest in the world, with production costs as low as $0.75 per watt. These panels are also less prone to performance degradation over their lifetime compared to polysilicon based modules. Cd-Te modules also perform better than their polysilicon based peers at higher temperatures, a welcome advantage given India’s scorching summers.  First solar has been making steady improvements in conversion efficiency of its panels, which now reach up to 17%, approaching that of polysilicon-based panels.
We believe that a combination of technological advantages that Cd-Te technology offers and competitive pricing will give First Solar a strong advantage in the Indian market.
We have a price estimate of $22.13 for First Solar, which is about 1% ahead of its current market price.Notes: