First Solar cements US dominance with planned $285m acquisition

Nasdaq-listed solar developer First Solar moved to cement its dominance of the burgeoning US solar market yesterday, announcing that it has agreed to acquire rival solar farm developer NextLight in a cash deal worth around $285m.

The thin film solar panel specialist said the acquisition, which will be finalised in the autumn subject to closing conditions, will give it access to a 1,100MW solar project pipeline in the southwestern US and will solidify its position as the largest solar utility operator in North America.

Through the deal the company will take control of 570MW-worth of NextLight projects for which power purchase agreements have already been signed, including a number of deals with influential Californian utility Pacific Gas & Electric, as well as a further 530MW of projects in various stages of development.

The deal is the latest move in a long-running acquisition drive by First Solar, which began back in 2007 with the acquisition of Turner Renewable Energy and continued with the purchase of project pipelines from OptiSolar last year and Edison Mission Group earlier this year.

Rob Gillette, First Solar chief executive, said the acquisition drive coupled with the company's existing operations had left it well positioned to dominate the growing utility-scale solar market.

"Success in today's competitive solar market requires a complete solution for our customers' renewable energy needs," he said. "First Solar is uniquely positioned to deliver utility-scale solar power plants, including project development, module manufacturing, engineering, procurement and construction (EPC), project finance expertise and operations and maintenance."

The deal gives First Solar the largest solar project pipeline in the US by some distance and will reinforce its position as a number of emerging China-based solar firms begin to take their first tentative steps into the US market.

The announcement came as the company also announced yesterday that it had exceeded analysts' forecasts for the year-to-date and was upgrading its financial expectations for the full year.

The Arizona-based company said that it expects its full year earnings to reach between $6.80 and $7.30, marking a significant improvement on the $6.15 forecast from analysts.

It also reported that first quarter revenue rose 36 per cent year-on-year to $568m, while net income also climbed from $164.6m a year ago to $172.3m.

The results will bolster confidence that the global solar market can ride out the effects of an expected drop in demand from Germany, where government solar incentives are due to be scaled back later this year.

Earlier yesterday, silicon producer Renewable Energy Corp (REC) similarly predicted that sales in the second half of the year would show an improvement on the first half, while SunPower chief executive Tom Werner told Reuters that he expected demand to remain robust even if the price of solar panels is likely to fall.