Loan Guarantees Help First Solar Shares Beam Higher
It’s hard to keep First Solar (NASDAQ:FSLR) down – this belief held by most investors closely watching the largest US-based solar sector company has only been proven right once again with the U.S. Department of Energy (DOE) granting it loan guarantees worth $4.5 billion recently. [1] First Solar’s share price saw a steady decline from a $170 high in February to less than $120 last month due to concerns about the company’s ability to sell its products at the rate it is producing them. But investor sentiments clearly have improved – indicated by the significant jump in share price since the announcement. First Solar competes with other solar industry giants including Suntech Power (NYSE:STP), SunPower (NASDAQ:SPWRA), LDK Solar (NYSE:LDK) and Yingli Green Energy Holding Com (NYSE:YGE)
We have a price estimate of $144 for First Solar’s stock, implying an 10% premium to market price.
The loan guarantee covers 3 upcoming projects
- Down 6% This Year, What’s Happening With First Solar Stock?
- Down 17% In The Last Six Months, Will First Solar Stock Recover Post Q4 Results?
- Up A Mere 15% In 2023, Is First Solar Stock Poised To Do Better In 2024?
- Down 30% From Highs Seen In May 2023, Where Is First Solar Stock Headed?
- Why Is The Hydrogen Theme Underperforming This Year?
- Why This Renewables Theme Is Underperforming In A Strong Market
The DOE has granted conditional loan guarantees to First Solar for three of its upcoming projects in California. The company’s 230-megawatt (MW) Antelope Valley Solar Ranch 1 project won a $680 million conditional loan guarantee, whereas each of its 550-MW Topaz Solar and Desert Sunlight projects have been granted partial loan guarantees of $1.9 billion. [2]
This is in addition to the almost billion-dollar loan granted to the company by the DOE for its 290-MW Agua Caliente project in Arizona in January.
This consolidates First Solar’s position in the US solar market
The US is expected to be the single largest market for First Solar’s products in the years to come – surpassing Germany which has contributed most to the company’s sales in recent years.
We believe that the company’s sales in the US could grow five-fold over the next 5 years. The continuing focus on renewable sources of energy by the government will be the single largest contributing factor to this growth.
See our full analysis for First Solar stock
Notes:- First Solar Wins $4.5 Billion in Loan Guarantees From U.S.; Shares Climb, Bloomberg, Jun 30 2011 [↩]
- First Solar snags nearly $4 billion in loan guarantees, Reuters, Jun 30 2011 [↩]