Zacks_Analysts' Blog : First Solar Finds Ways to Compete - Analyst Blog

Solar cell company  First Solar Inc. (FSLR) has decided to trim its cost of production and increase efficiency of solar cells in order to compete with Chinese solar cell producers.

The Chinese solar cell producers are now leading the worldwide solar cell market, backed by financing from the Chinese Bank and  advancements in technology to tap solar energy.

In order to remain competitive with its Chinese peers, First Solar has developed a cell that has the capacity to transform 17.3% of solar energy into electricity, which incidentally is the highest conversion rate till date in Photovoltaic technology. Such know-how when utilized for mass production would yield a conversion rate of 15.3%.

We note that in the second quarter, the company produced cells, which had a conversion capacity of 11.7%. The newly developed high-powered solar cells with high efficiency will ultimately lower the cost of production, potentially making it more popular among the consumers.

We appreciate the initiatives undertaken by First Solar to stay abreast of competition in a fast developing renewable energy sector. Solar cells are used to produce green power but the initial investments are high compared to other forms of alternate energy.

We believe this high-powered solar cell will not only allow them to overcome Chinese competition but will also place the company in a favorable light vis-à-vis alternate power production.

First Solar currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The company competes with Suntech Power Holdings Co. Ltd. (STP) and Trina Solar Ltd. (TSL)

Tempe, Arizona, based First Solar Inc. designs, manufactures, and sells solar electric power modules using a proprietary thin film semiconductor technology. The company's solar modules employ a thin layer of cadmium telluride semiconductor material to convert sunlight into electricity.