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11/13/2012 12:10 PM     print story email story  

First Solar, SunPower Prioritize Emerging Markets News

The two biggest US solar companies, First Solar and SunPower, seem to be moving in tandem these days, accelerating development in emerging markets as revenue from more mature markets slows and projects near completion.

Because of the difficulties in their traditional solar panel manufacturing business, they have both diversified into solar project development, and SunPower into solar leasing.

They are shifting focus from Europe and the US to Africa, Australia, India and Japan where solar project pipelines are growing and business conditions are favorable, according to third-quarter (Q3) earnings statements from both companies.

It's been a volatile year for First Solar, with a tough Q1, a strong Q2, and a 17% drop in revenue for Q3 compared to the same quarter last year. It went through a massive restructuring in its solar panel business, and its jump in project development boosted Q2. But now big projects like the 50 megawatt (MW) Silver State North farm in Nevada is finished and construction has slowed on the 290 MW Agua Caliente project.

First Solar remains profitable, with Q3 net income of $87.9 million, but down significantly from $196.5 million in Q3 last year.

SunPower, meanwhile, reported an 8% drop in sales to $649 million, mainly because of unfavorable business conditions in Europe. Its Americas business rose 36% because of project development, such as the 250 MW California Valley Solar Ranch.

SunPower reported a loss of $48.5 million for the third quarter, compared with $370.8 million last year. It too is restructuring.

"Europe remains a very challenging market and we are implementing a number of initiatives to prudently manage our expenses and improve our long-term profitability in that region," says Tom Werner, SunPower president and CEO. "In Asia, our focus remains on continuing to grow our market share in Japan through our successful partnership with Toshiba and we are exploring opportunities in a number of emerging markets."

First Solar is expanding aggressively into India, where it hopes to supply 20% of the burgeoning solar panel market. In  October, it was selected to build the first solar farm in Dubai - a 13 MW project that will be the first phase of a $3.3 billion development plan. It's also involved in Australia's two biggest solar PV projects, and is focusing attention on Thailand and Indonesia.

From its new global operations center in Arizona, First Solar will be able to monitor and control its solar projects around the world.

SunPower's recent projects include the biggest solar system for the Navy and Apples's 40 MW solar plant in North Carolina.  

SunPower also anticipates substantial growth in India and Australia, and it is prioritizing China, Israel and Japan – its shipments into the latter country rose 30% in Q3 from the previous quarter, Werner told analysts on the company's Q3 earnings call.

Since Japan's renewable energy feed-in tariff took effect July 1, there has been a frenzy of development  – solar accounts for almost 83% of that activity because installations can be built much more quickly than wind farms, geothermal or biomass plants.

Since April, the country has added 912 MW of renewable energy as it seeks to reduce its dependence on nuclear power. By March 2013, there should be almost 10 gigawatts (GW) of solar capacity.

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