First Solar Upgraded on Strong Business Model

ThinkEquity analyst Colin Rusch Wednesday morning upgraded First Solar (FSLR) to Buy from Accumulate, lifting his price target to $188, from $180. He also raised his 2010 EPS estimate for the company to $8.99, from $8.55, above the consensus at $8.52.

“Given the recent sell-off of solar stocks and FSLR’s 29% move lower from its May high, we believe investors can begin to get constructive on the stock in anticipation that the company meets Q2 estimates, reiterated 2009 guidance, and the potential for consensus 2010 estimates to increase on higher system sales,” he writes in a research note.

Rusch adds that he thinks FSLR has “the only unquestionably sustainable business model in the solar industry,” and contends the company is “actively taking market share despite the weak business environment.”

FSLR Wednesday is up 74 cents, or 0.5%, to $145.48.

Original post

Comments

[Mad Hedge F...:]

For the latest news from the front trenches of the solar industry,listen in to the all day analyst meeting given in Las Vegas by FirstSolar (FSLR) by clicking here. If you don’t want to wade through six hours of data that could onlyarouse a bachelor engineer, here are the highlights. The headline isthat the cost of solar is now down to ten cents per kilowatt hour,versus three cents for coal. But the Clean Energy Act of 2009 iscertain to make solar cheaper and coal more expensive. The industrywill face a completely new set of challenges gearing up from a fewrooftop panels on environmentalist rooftops to becoming a major portionof the US power supply. For a start, solar energy is most abundantwhere there are no people, because these areas were uninhabitable untilair conditioning came along. That means building a huge network ofpower lines from scratch, something that will require Federal EnergyRegulatory Commission (FERC) shepherding. Unlike other power sources,solar is highly variable, hour by hour and even minute by minute. Not aproblem when you are running a freeway sign, but a big problem whenrunning a large regional network, so “smart” grids will be the order ofthe day. The technology to do this on a large scale hasn’t even beeninvented yet. The ongoing credit crisis is a major problem, since onegigawatt of capacity will cost $800 million in capex. Nevertheless,this industry now has a huge global tailwind and should remainpermanently on your radar. Consider FSLR on the next big dip. For more,see my earlier piece .

Jul 08 01:51 PM

[Idiotbuster:]

Mad Hedge
It is not all about comparing solar and coal , costs and cents ,etc.. What is really about is the availabilty of any kind of energy source right now as the sun shines... The time that will be required to implement the whole manufacturing and installation of solar widgets will take decades ... Our economy is not able to take off again simply because we are well aware that we cannot depend on oil , the old stand by , to power our economy back to the recovery phase without igniting insane skyrocketing prices.. Oil traders are trigger happy to bid up oil prices at every glimmer of economic recovery news, this is something really new and unlike in the past cycles.. Coal is readily available and able to power our economy forward once again without any concerns of sudden inflationary purges rippling all over any time soon. Sure, coal prices will inch upward as our economy recovers and we will regain poliitical confidence to resume our work on clean coal technology.. I am not saying to belittling any alternate energy programs and any government involvement there, but I have , as you should , witnessed weak commitments toward alternate energy since the peak days of solar stocks and whatnots. We were wrong to assume that alternate energy must be coupled to skyrocketing fossil fuel prices in order to succeed. We are more interested in goosing maximum profits from alternate energy than to maximize growth paces of alternate energy.. First Solar, for instance, last announced major expansions of manufacturing capacities more than a year ago. First Solar is the largest manufacturer , yet it is only one gigawatt /hour worth of solar modules a year which is a drop in the bucket as far as energy supplies is concerned... By now, First Solar ought to be ten gigawatts or more , given the consideration of the Herculean task of replacing fossil fuel with green energy sources.. First Solar is the spearhead of the green movement , yet it is still just a small dart hurling toward the board.. Coal is here and ready to lead the world economy out of the recession. China is already doing it with coal and is not wasting time... America is still dallying around with the luxurious thinkling that profits must be seen before any growth in green energy programs can be forged.. America is wasting too many precious days, weeks, and months if not years already..

Jul 08 02:42 PM

[madasheck:]

As a great Philosopher once said: "what me worry?"

A. E. Neuman.

Jul 08 02:47 PM

[Idiotbuster:]

Mad Hedge
Moreover, we are well aware that we will hasten the climate change with more coal combustion. We can minimize coal impact on the climate with total ban of firewood burning, farm/ranch burnings, charcoal , careless forest fires, etc.. Coal is a apparent higher priority than firewood... Nobody has the luxury to burn firewood while riducluing at dirty coal.. Coal is far cleaner than firewood . Our sense of priorities as far as climate change goes is totally distorted.. Otherwise, nobody is really believing in the climate change issues... at all..

Jul 08 02:48 PM

[Idiotbuster:]

First Solar appears to be losing competitive edges against silicoin type manufacturers chiefly due to the lack of growth in solar installations. Once the demand return with the boost of government assistance, silicoin prices will skyrocket due to limited supplies . I am not sure which is more plentiful: silicoin or cadmium telluride?? Who knows, anybody?? I am talking about tens of gigawatts of new manufacturing capacities that is expected to come on stream in the coming decades... even with tens of gigawatts , it is still a drop in the energy bucket...

Jul 08 02:52 PM

[Idiotbuster:]

Even if solar remaiins a minor player in the energy picture, it will be big enough to blunt any major surges in fossil fuel prices in the future by posing as a competitive threat to take more of the business away from fossil fuel producers should they start thinking about manipulating the market in the future.. The real bottom line issue is the availability of energy that our economy will require to function and paying taxes to the government. If we waste time debating over climate change and clean coal, our economy will pay far less taxes to the government and in turn we will not be able to do much about green energy anyhow..

Jul 08 02:56 PM

[Idiotbuster:]

Local governments are already ordering job furloughs and job cutbacks etc simply because our economy is still at a standstill . Our economy stop simply because it is basically out of fuel.. not money..

Jul 08 02:57 PM

[Idiotbuster:]

what makes you think our economy will push the car toward the solar filling station instead of the coal filling station?? Never mind firewood and charcoal,, they ought to be banned tomorrow..

Jul 08 02:58 PM

[Idiotbuster:]

If I get hired to air weather news at a TV station, I would scream at TV camera " Stop burning firewood, morons!"

Jul 08 03:01 PM

[Idiotbuster:]

I just dont understand what the fuss is all about ... Sales of solar stuff is stymied by a long list of reasons... for indivdiual home rooftop installations, the government tax credits is kind of slow in coming.. For huge solar farms that will be owned by utilities, there is a host of reasons ranging from access to the grid system to property rights squabbles over where to string along the new high voltage powerlines needed to link to the existing power grid across America... There is one overlooken niche of market that should be doing briskly even though it might not be thought of before.. Look at thousands of small towns and hamlets with small populations ranging from 500 to 5000 dotting across America, anyone should know that there is already at least a high voltage line running through almost all of those towns and hamlets. Town halls or local leaders there can assemble locals to find a local small acreage to install solar arrays to sell electricity back to the local utility. It can be only an acre to ten acres each town or hamlet. Every bit counts.. there is gigawatts of market there.. that can be undertaken so quickly.

Jul 08 04:35 PM

[Windsun33:]

One footnote about solar subsidies that is kind of funny/sad.

California's solar rebate program is now paying off in IOU's....

Jul 09 11:32 AM

[Fred W:]

Coal is far cleaner than firewood??? Comparing forest fires to 1000MW coal plant--you have lost ALL credibility.
How much NOx, SOx and heavy metals come from burning wood?...Coal?
You need to back to 8th grade science class.


On Jul 08 02:48 PM Idiotbuster wrote:

> Mad Hedge
> Moreover, we are well aware that we will hasten the climate change
> with more coal combustion. We can minimize coal impact on the climate
> with total ban of firewood burning, farm/ranch burnings, charcoal
> , careless forest fires, etc.. Coal is a apparent higher priority
> than firewood... Nobody has the luxury to burn firewood while riducluing
> at dirty coal.. Coal is far cleaner than firewood . Our sense of
> priorities as far as climate change goes is totally distorted..
> Otherwise, nobody is really believing in the climate change issues...
> at all..

Jul 09 12:02 PM

[Fred W:]

Have you experienced this directly or just "heard" of it?


On Jul 09 11:32 AM Windsun33 wrote:

> One footnote about solar subsidies that is kind of funny/sad.
>
> California's solar rebate program is now paying off in IOU's....

Jul 09 12:03 PM

[Fred W:]

You analysis is way off. We haven't even seen the full supply of raw Si coming to market...takes a couple of years to build them. Oversupply will be the case through 2010--FSLR will continue to suffer


On Jul 08 02:52 PM Idiotbuster wrote:

> First Solar appears to be losing competitive edges against silicoin
> type manufacturers chiefly due to the lack of growth in solar installations.
> Once the demand return with the boost of government assistance, silicoin
> prices will skyrocket due to limited supplies . I am not sure which
> is more plentiful: silicoin or cadmium telluride?? Who knows,
> anybody?? I am talking about tens of gigawatts of new manufacturing
> capacities that is expected to come on stream in the coming decades...
> even with tens of gigawatts , it is still a drop in the energy bucket...

Jul 09 12:06 PM

[Fred W:]

Cadmium is very rare and getting harder to "find" as it is found during the mining of copper...Silicon is sand, I think we can all agree that there is a lot of sand...takes a lot of energy to process the silicon though.


On Jul 08 02:52 PM Idiotbuster wrote:

> First Solar appears to be losing competitive edges against silicoin
> type manufacturers chiefly due to the lack of growth in solar installations.
> Once the demand return with the boost of government assistance, silicoin
> prices will skyrocket due to limited supplies . I am not sure which
> is more plentiful: silicoin or cadmium telluride?? Who knows,
> anybody?? I am talking about tens of gigawatts of new manufacturing
> capacities that is expected to come on stream in the coming decades...
> even with tens of gigawatts , it is still a drop in the energy bucket...

Jul 09 12:08 PM

[Windsun33:]

it was a report from one of our customers


On Jul 09 12:03 PM Fred W wrote:

> Have you experienced this directly or just "heard" of it?

Jul 09 12:31 PM

[Road Runner:]

Mad Hedge Fund, You said "solar energy is most abundant where there are no people, because these areas were uninhabitable until air conditioning came along".

This is not entirely accurate. Southern California has 10s of millions of people and it has an excellent solar profile. The flat roofs on the many thousands of warehouses and office buildings in the area are perfect for solar, and they don't require any additional electric grid because they are right where the electricity is used. This is where one of utilities (the name escapes me) is starting to build mini rooftop solar farms now. Thin-film works well on these warehouse and commercial rooftops.

I generally agree with the rest of what you said.

Jul 09 03:55 PM

[Idiotbuster:]

Cadmium comes as a byproduct of zinc mining not copper. Go back to your MasterBusinessAdminstr... 401...or 901 or even 101 First Solar can produce a 60-70 watt solar module in two hours and half. The cost of material be it SI or CD is not the whole point. Plus, First Solar already has a built in cost program for recycling old or defective modules. First Solar modules start generating electricity earlier in the day and keep generating until late into the dusk while Si modules are late risers and fast to sleep long before the dusk..


On Jul 09 12:08 PM Fred W wrote:

> Cadmium is very rare and getting harder to "find" as it is found
> during the mining of copper...Silicon is sand, I think we can all
> agree that there is a lot of sand...takes a lot of energy to process
> the silicon though.

Aug 14 05:56 PM

[Idiotbuster:]

There is no pollution controls whatsoever in all chimneys and stove pipes. None whatsoever! What is worse, it is closer than it "appers" like your rear view mirror. Why does people keep on thinking that chimneys and stove pipes is far enough like coal fired powerplants.. Become a better driver!! Be aware of the close by firewood smoke that you "enjoy" smelling and dusting the interiors of your house so often. You will wonder why the dust appears so blackish?? Duh??????????????????? Uggggghhhhhh!!!!!!!!!


On Jul 09 12:02 PM Fred W wrote:

> Coal is far cleaner than firewood??? Comparing forest fires to 1000MW
> coal plant--you have lost ALL credibility.
> How much NOx, SOx and heavy metals come from burning wood?...Coal?
>
> You need to back to 8th grade science class.

Aug 14 06:00 PM

[Idiotbuster:]

100 or 200 gigawatts worth of coal powerplants even after recent cancellations are still in planning for the next decade while far less is planned for solar installations. Our economy has to stop and wait for the solar players in whole to finally start producing enough to help power our economy forward once again. Meanwhile, millions of people are still out of jobs simply because businesses do not want to reignite soaring fossil fuel prices again. I mean oil & gas not coal . Coal is a fossil fuel but in ample supplies and far more price stable. Our economy just cannot withstand another $4.50 gasoline again or it will simply fall apart. Whether firewood is clean or not is largely besides the point, why add firewood smoke while denying coal . This just doesnt jive.. Why are farmers and ranchers still allowed to ovtain permits to burn crop wastes, deadwood, etc and add to the gunk in the air?? It is not all about sicence, it is about common sense. 7 billion people are burning anything they can get their hands on.. why anything but coal?? This is stir crazy...


On Jul 09 12:06 PM Fred W wrote:

> You analysis is way off. We haven't even seen the full supply of
> raw Si coming to market...takes a couple of years to build them.
> Oversupply will be the case through 2010--FSLR will continue to suffer
>

Aug 14 06:07 PM

[Idiotbuster:]

I really enjoy getting readers blindsided with my firewood argument and watching them reacting irrationably.. I am more than happy to give you plenty of time to digest my point or two.. People tend to keep thinking that they got all the answers . NOT! People got to understand that with 7 billion people on Earth, there is no room to get around even little things .. Every little real thing got to be dealt with fairly. As for now, we are going coal for now.. Investors can dally around solar or green ideas all day they want. Time is running out fast. Solar makers are not expanding as fast as I expected for a host of reasons and plenty of conflicts still ongoing. There is lack of cohesion among ourselves.. we went out in all directions and keep getting blindsided by ever new arguments like mine. I am not trying to block anything but to make people think really hard before they start talking garbage!!!

On Jul 09 12:02 PM Fred W wrote:

> Coal is far cleaner than firewood??? Comparing forest fires to 1000MW
> coal plant--you have lost ALL credibility.
> How much NOx, SOx and heavy metals come from burning wood?...Coal?
>
> You need to back to 8th grade science class.

Aug 14 06:13 PM