Having been canny in the past over expected utility-scale PV projects by First Solar, Pacific Crest’s financial analyst, Mark Bachman, believes a planned solar farm, dubbed Desert Sunlight in Riverside County, CA, is being permitted for a capacity of 550MW (AC) (647MW[DC]). However, the plant was initially announced back in August, 2009 with a 250MW (AC) capacity.
Bachman said in a note to investors that Desert Sunlight has been fast-tracked at the Bureau of Land Management (BLM), which could see the project started in 2010, two years ahead of schedule, and could be operational in 2013.
Although there is a power purchase agreement (PPA) with Southern California Edison for 250MW (AC), Bachman believes that First Solar is already actively negotiating a PPA for the remaining 300 MW.
First Solar has boosted the planned capacity expectations at other solar farms, which is seen as a shorter route to permitting and lower installation costs.
Speculation is running high as to whether First Solar will announce significant capital expenditure plans for 2010 as it prepares to guide 2010 business operations at an investor’s event being held on December 16, 2009.
Currently, the thin film market leader has ramped to full capacity and without new production lines will only be able to increase output by efficiency and fab utilization and throughput gains, severely limiting earnings growth, according to some financial analysts.
In a separate note to investors, Bachman expects First Solar to announce spending on four new factories (16 lines) for a total of US$640 million, with total capex of US$700 million for 2010.
The remaining US$60 million is allotted to the expansion project at First Solar’s Ohio plant, while allowing for maintenance requirements at its 20 production lines in Germany and Malaysia.