Solar panel maker survives by creating its own market
A field of solar panels.
Quarterly earnings are due out Tuesday for First Solar, Inc. The American solar panel manufacturer has branched out into planning and building large-scale solar power projects -– which, of course, use the company’s products.
That strategy is helping the company rise above plummeting prices for solar panels. From late 2011 to 2012, the average global sales price dropped in half.
Michael Barker, a senior analyst with NPD Solar Buzz, says the plummeting prices are a result of simple oversupply. But he says First Solar has found a way to survive. The company has expanded into project development – not just making parts, but working with cities and utilities to develop big solar generation projects.
“What they’re doing is they’re creating the demand for their products,” Barker says.
The strategy is working well for First Solar, says Jenny Chase, head of solar analysis at Bloomberg New Energy Finance. She says the company was ahead of the curve and is now among the top solar power producers in the world.
“They’ve essentially been able to chase the profits into the engineering and product development space,” she says.
Chase says the big question for investors is whether First Solar can keep lining up a steady stream of projects.