The Only Solar Stock Worth Buying Is...SPWR), SolarCity (SCTY), and SunEdsion (SUNE) ended the year in the red. However, First Solar (FSLR), being the most profitable solar company, was up considerably last year and has continued its trajectory this year as well. Throughout the past three years, First Solar has displayed the exquisite enhancement in solar panel efficiency, which has been the key to its increasing profitability.
According to the most recent quarterly results, average solar panel efficiency reached 16.1 percent, which clearly indicates that its solar panels are now at same level with multicrystalline solar panels.
Apart from this, First Solar has its own manufactured Cd-Te technology reach uniformity with the conventional silicon panel technology. Escalating efficiency has led to enhanced production capacity and reduced costs. As compared to the prior year, the production capacity escalated 36 percent. First Solar has an enchiridion to further surge its solar panel efficiency, so as to reduce more costs in the coming years.
Moreover, as of February 2016, the module shipment balance was 4.4 GW. These bookings have a prospective value of approximately $7 billion. First Solar has also been diversifying into areas other than the USA and won huge module sales contracts in India, Africa, Australia, Turkey and Japan. One of the major risks for the company was over-dependence on the United States market. But now that the company has shifted its focus to other growing markets, the risk has been reduced.
On the other hand, potential booking prospectives have also reached 20.3 GW, up 6.8 from 13.5 GW as compared to the last year, mainly due to ITC extension in the United States and geographical diversification. The tube carries on growing with record booking of 3.4 GWs previous year.
For 2015, First Solar’s operating profit was $517 million, beating the high-end guidance of $490 million. Also, the company decreased cost across its system as well as product divisions due to operational enhancements. Furthermore, First Solar has managed to continuously enhance both financial as well as operational metrics during the prior few years.
I have always liked First Solar due to its earnings power. While other companies in the solar sector have struggled and are piling on losses, First Solar has continued to improve its profitability. Now that the company has a diversified revenue source, I think First Solar is still a great long-term buy for investors looking to profit from the growth of renewables.
Published on Apr 20, 2016By Akshansh Gandhi