First Solar Could Benefit As India Plans Solar Overhaul

+8.43%
Upside
149
Market
162
Trefis
FSLR: First Solar logo
FSLR
First Solar

India is an ideal market for solar power given its shortage of electricity, relatively high energy costs and growing concerns about greenhouse gas emissions. However, the country’s solar installations have been slow to take off owing to regulatory issues and challenges related to land acquisition. India installed a total of just about 950 megawatts (MW) of solar power in 2013, compared to China, which installed close to 12 gigawatts (GW) the same year. However, the country’s solar sector could be set for an overhaul, supported by new initiatives by the country’s recently-elected federal government. There have been reports suggesting that the government will revamp the country’s National Solar Mission, targeting installations of 15 GW of new capacity by 2019, up from the existing plan which targets installations of just 3.6 GW by 2017. ((India Pushing The Boundaries Of Solar Ambition, Clean Technica, September 2014)) The government is also planning to set up 25 solar parks, which should increase solar capacity nearly tenfold. [1] Solar parks refer to areas which are specifically earmarked for solar projects and offer project developers common infrastructure such as water access and transmission lines. Solar developments in these areas also typically have more streamlined permitting procedures. The first of these solar projects will be set up by NTPC, India’s largest power company, which intends to seek global bids from equipment manufacturers and project developers. [2]

Trefis has a $68 price estimate for First Solar, which is about in line with the current market price.

See Our Complete Analysis For Solar Stocks First Solar|Trina SolarYingli Green EnergySunPower

Relevant Articles
  1. Down 6% This Year, What’s Happening With First Solar Stock?
  2. Down 17% In The Last Six Months, Will First Solar Stock Recover Post Q4 Results?
  3. Up A Mere 15% In 2023, Is First Solar Stock Poised To Do Better In 2024?
  4. Down 30% From Highs Seen In May 2023, Where Is First Solar Stock Headed?
  5. Why Is The Hydrogen Theme Underperforming This Year?
  6. Why This Renewables Theme Is Underperforming In A Strong Market

First Solar’s Technology and Marketing Advantage

We believe that a jump in solar installations in India could bode well for global solar manufacturers, given that India’s solar manufacturing sector remains in its infancy. Most domestic project developers rely on imported panels (or panels containing imported cells) for their solar farms since they are usually more efficient and reliable. Additionally, projects that use imported panels may also find it easier to secure bank financing, possibly due to the higher energy yield. [3] Among the solar companies that we cover, we believe that First Solar (NASDAQ:FSLR) – a vertically integrated solar player- could stand to benefit the most given its track record in the Indian market and also due to its technology, which is well suited to Indian conditions. First Solar is poised to see its bread-and-butter U.S. utility-scale business slowdown and the company has been looking towards international markets, including Latin America, the Middle East and Asia, to drive growth.

India receives high levels of solar irradiance and witnesses relatively high humidity, which cause the electricity output of silicon-based solar panels to decline. However, First Solar’s panels – which are manufactured using cadmium telluride (Cd-Te) thin film technology – experience a relatively lower level of performance degradation in hot and humid climates, making them well-suited for Indian conditions. First Solar also has a strong marketing reach in India and has won several panel supply contracts in the country in the past, owing in part to a loophole in government policy (which has since been closed) that was advantageous to thin-film producers. While First Solar has primarily supplied panels to projects in India, the company is developing its first independent project with a total capacity of 45 MW and has already signed a power purchase agreement with a local utility company.

Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap
More Trefis Research

Notes:
  1. India Plans an Upgrade of Its Solar-Energy Infrastructure, WSJ, September 2014 []
  2. ref:2 []
  3. First Solar Fights Indian Duty Recommendation in Court, WSJ, June 2014 []