First Solar, Inc. FSLR has successfully sealed a 15-year power purchase agreement (PPA) with Cleantech Solar, marking a significant milestone for the renewable energy industry. Under the terms of the agreement, Cleantech Solar will develop 150 megawatts (MW) of photovoltaic (PV) solar and 16.8 MW of wind capacity in India’s Tamil Nadu.
The Agreement in Detail
Upon full commissioning, expected by the third quarter of 2024, the solar and wind assets of Cleantech Solar are anticipated to supply about 7.3 gigawatt-hours (GWh) of power to First Solar’s cutting-edge 3.3 GW solar manufacturing plant also located in Tamil Nadu. This will cater to nearly 70% of the facility’s electricity requirements.
As part of the deal, Cleantech Solar has committed to acquiring 150 MW of advanced, India-made Series 7 thin film solar panels from First Solar for the solar PV segment of the PPA. The modules are scheduled for delivery in the first half of 2024.
First Solar’s Growing Footprint in India’s Solar Market
First Solar is gaining traction in India’s burgeoning solar market. The company launched the production of Series 7 modules at its inaugural manufacturing facility in the country. The facility boasts a capacity of 12,000 module/day and a top module wattage of 535.
Looking ahead, First Solar envisions immense opportunities in India’s solar sector, predicting a total of 10.9 GW, including 3.8 GW of mid-to-late-stage opportunities. The solar plant in Tamil Nadu stands out as the world’s first net-zero water withdrawal solar manufacturing facility, highlighting First Solar’s commitment to sustainability. It also houses India’s initial PV solar recycling plant.
With the solar market in India projected to reach 195.11 GW by 2029 according to a report by Mordor Intelligence, First Solar’s expansion plans in the country seem poised to bolster its revenue prospects significantly.
Moving in Tandem with Industry Peers
Besides First Solar, major players such as Enphase Energy and Canadian Solar are also making inroads in India’s solar space.
Enphase Energy has a manufacturing facility in Chennai, Tamil Nadu and recently commenced shipments of IQ8 Microinverters in India to support high-powered solar modules. The company has demonstrated strong growth potential with a long-term earnings growth rate of 18.3% and an average earnings surprise of 11.97% in the last four quarters.
Canadian Solar has a robust presence in the Asia-Pacific region and recorded a 12% contribution to total revenues in the third quarter of 2023. The region, excluding China and Japan, boasted a 2,226 megawatt-peak solar development project pipeline as of Sep 30, 2023. The Zacks Consensus Estimate for CSIQ’s 2024 sales indicates a rise of 19.9% over the previous year’s figure, with an average earnings surprise of 67.89% in the last four quarters.
Stock Performance and Outlook
Over the past year, shares of FSLR have observed a 6.1% increase, outperforming the industry’s 39.4% decline.
Image Source: Zacks Investment Research
Assessment of Zacks Rank & Key Picks
Presently, First Solar holds a Zacks Rank #3 (Hold). For a complete list of today’s Zacks #1 Rank (Strong Buy) stocks, click here.
Nextracker Inc. (NXT), another player in the same industry, stands as a better-ranked stock with a Zacks Rank #2 (Buy). NXT flaunts a long-term earnings growth rate of 35.2%. The Zacks Consensus Estimate for its fiscal 2024 sales predicts a rise of 23.2% over the prior year’s reported figure.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
