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First Solar: The Future Looks Bright

May 02, 2018 5:46 PM ETFirst Solar, Inc. (FSLR)23 Comments
Dan Paoloni profile picture
Dan Paoloni


  • 2018/19 brings investment and operational expansion.
  • A better entry position is on the horizon. Be patient.
  • Backlog creates an enticing global growth opportunity.

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I'm confident in the future outlook of First Solar (NASDAQ:FSLR) and the growth initiatives proposed by management. The new factory in Perrysburg, Ohio will bring economies of scale to FSLR's largest total addressable market (TAM). We should expect some volatility in the stock as management navigates the Series 6 investment phase. FSLR is well positioned to capitalize on global growth in the solar industry.

Operational Expansion

FSLR set the tone of the earnings call by announcing plans to build a new Series 6 manufacturing facility in Perrysburg, OH. The factory will be completed in late 2019 and fully ramped by the end of 2020. It will provide an additional 1.2 gigawatts (GW) of Series 6 nameplate capacity. FSLR currently has 600 megawatts (MW) of Series 6 capacity located in Perrysburg. The new factory effectively triples the capacity in Perrysburg to 1.8 GW, making FSLR the largest solar module manufacturer in the U.S.

Management notes three benefits to building the new facility in the United States:

  1. Tax reform and favorable local/national business environment,
  2. Series 6 low cost of labor per watt mitigates the benefits of outsourcing production, and
  3. Leverage the experience and R&D of the nearby factory.

I would like to focus on the third benefit - leveraging the experience and R&D at the nearby factory. As an Ohio native, I'm familiar with Perrysburg, and it's not a giant city (approx. 20k people). Building a second factory in the same town will be extremely beneficial and provide economies of scale. FSLR can easily move managers and other highly skilled employees when

This article was written by

Dan Paoloni profile picture
Focused on aerospace/defense, technology, and renewable energy companies. Portfolio is mainly structured around dividend growth stocks. Emphasis is placed on growing passive income while reducing risk. All forms of debate are encouraged.

Analyst’s Disclosure: I am/we are long FSLR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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