Everyone seems to love solar energy these days, and that’s good news for First Solar, a Valley-based producer of relatively low-cost, thin-film solar panels.
With Al Gore warning of the dangers of global warming and gasoline prices soaring, it’s a perfect environment for a company like First Solar. And the investment community has taken notice. The company’s stock has soared by a factor of 10 since its initial public offering in November 2006, topping $240 a share this week.
According to MarketWatch, First Solar’s market value is greater than General Motors.
In the latest quarter, the company announced revenue of $159 million, quadruple its sales in the same quarter a year ago. Net income was $46 million, or 58 cents a diluted share, up 10 times from a year ago.
Fueling the company’s rapid growth are new contracts totalling $6 billion pouring in from Europe, where generous government subsidies are encouraging the development of large-scale solar projects.
The company has doubled its number of customers this year to 12, and First Solar bills itself as the largest thin-film solar manufacturer in the world.
“These long-term agreements will allow us to scale up our business and reduce costs in preparation for wider market adoption,” said Michael Ahearn, First Solar chief executive.
To meet the demand, First Solar is building four plants in Malaysia, which will add to the firm’s existing capacity in Ohio and Germany.
In Arizona the company operates its corporate headquarters at 4050 E. Cotton Center, Phoenix. In the spring the company will move to larger offices in Tempe.
The company struck gold by developing proprietary technology that reduces the high cost of solar energy.
The firm manufactures photovoltaic panels made by coating a glass substrate with a semiconducting material called cadmium telluride, which creates an electric current when exposed to sunlight.
The material is less efficient in converting sunlight to electricity than conventional silicon, but it’s also less expensive. By 2012, First Solar figures the per-watt cost of its technology will be no greater than conventional electricity, eliminating the need for subsidies, said Jens Meyerhoff, chief financial officer.
The company hopes to achieve its cost-reduction goals by increasing the energy efficiency of its modules and by taking advantage of economies of scale and cheaper labor in Malaysia, he said.
Ahearn said the company has high hopes for the United States market because government regulations are encouraging utilities to produce more electricity from renewable sources.
Analysts are encouraged by First Solar’s outlook. Credit Suisse analyst Satya Kumar gives the company an “outperform” rating, citing its acquisition announced Nov. 30 of Turner Renewable Energy, a company in which media mogul Ted Turner invested that has experience in deploying commercial solar projects.
The Associated Press contributed to this report.