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In its second major investment in the solar sector this month, MidAmerican Energy Holdings has signed a deal with NRG Energy to buy a 49% interest in the Agua Caliente project under construction in Yuma County, AZ. The Berkshire Hathaway unit announced Dec. 7 that it had purchased the 550MW Topaz solar farm project in San Luis Obispo County, CA, from First Solar.
There has been a wave of changes at First Solar over the last few months, indicative of the challenging business environment and the return of Mike Ahearn as interim CEO after the ousting of former CEO Rob Gillete. A less than complimentary view of the way the CEO had been running the company was aired by the chairman in the Q3 conference call.
Blaming weaker than expected revenue earnings on poor weather and other factors, First Solar lowered its 2011 revenue guidance and separately announced a restructuring of its core business groups with the exit of TK Kallenbach, President of the Components Business Group, at the end of the year. Restructuring will lead to a workforce reduction of approximately 100 associates, around 1.5% of its workforce, according to the company. First Solar revised 2011 guidance in the range of US$2.8 to US$2.9 billion, down from a prior guidance range of between US$3.0 and US$3.3 billion.
David Brady, First Solar’s VP of Treasury is also taking over the role of Investor Relations, reporting to Mark Widmar, Chief Financial Officer. Former investor relations officer, Larry Polizzotto remains within the company, though no formal position has been chosen. Reasons for the shuffle were not given.
The challenging market conditions faced by all PV manufacturers in 2011 have led to many claiming poor visibility into business expectations next year. In recent third quarter conference calls many tier 1 suppliers refrained from giving any 2012 insight, with guidance provided near or during fourth quarter financial results early next year. However, market leading thin-film producer, First Solar is set to become the first player to guide 2012 in a conference call set for December 14 at 8:00 a.m. EST.
First Solar revealed that since it began commercial production in 2002, the company had officially reached a cumulative production of 5GW, or 66 million solar modules. “This milestone helps advance our mission of providing clean solar electricity at affordable prices. Our ability to scale high-volume production has been a key factor in reducing the cost of renewable energy,” said Tymen DeJong, First Solar senior vice president of global manufacturing.
The number of preferred suppliers its currently uses may be reduced, according to Phoenix Solar’s CEO, Dr Andreas Hänel in a conference call to discuss third quarter results. He also noted that his company was considering a purchasing shift away from dealing directly with US and Chinese suppliers and dealing with suppliers regional warehouse systems in an effort to streamline operations and reduce lead-times. Phoenix Solar has been heavily impacted by inventory build and rapidly falling prices that have required €29 million in cumulative write downs and losses of €13.2 million at the firm in just the third quarter.
First Solar has begun construction on what will be Australia’s first utility-scale PV project once it reaches completions, Located near Geraldton, the 10MW (AC) Greenough River Solar Farm will be built over a nine-month period, with local civil contractor WBHO Civil providing Phase 1 construction services. Civil work on the project began November 4, with on-site construction for structural supports and above ground electrical work following soon.
Capacity expansions are out, improving manufacturing line efficiencies and productivity is in, according to First Solar’s chairman Michael Ahearn, who took over the CEO role from ousted Rob Gillete last week. Capacity expansions had seen average module efficiencies rates increase modestly in 2011; on the downside, production cost per watt merely flat-lined. Almost unheard of was the fact that manufacturing line utilization rates had dipped below 100% as capacity outstripped demand. Back at the helm, Ahearn said that First Solar would re-focus on markets without energy subsidies such as the Middle East as well as markets with critical energy needs such as India, North Africa and China.
NRG Energy and First Solar will be collaborating on the development of NRG’s 66MW Alpine solar project in Lancaster, California with First Solar agreeing to provide engineering, procurement construction, operation and maintenance services for the solar array. First Solar’s thin-film PV modules will be utilized in the installation, which is expected to start installation work before the end of the year and be completed by Q3 2012. The Alpine project will see the electricity it produces sold under a 20-year PPA with Pacific Gas and Electric.
