One year ago, General Electric delayed its plan to build the world’s largest solar plant in Colorado, saying it would focus instead on out-innovating its primary competitor in thin-film technology, First Solar.
Now, its plan for the 400 megawatt (MW) manufacturing facility is officially dead under a multi-pronged partnership announced this week with its former rival.
Terms weren’t disclosed, but under that transaction, First Solar has acquired GE’s global cadmium telluride solar technology portfolio, essentially what used to be PrimeStar Solar.
The two will combine their research and development resources in this area. In exchange, GE has received 1.75 million shares of First Common stock, which it has agreed to keep for at least three years.
That makes GE one of First Solar’s top 10 investors.
The deal also includes a commercial coup for First Solar. GE, which already has about 34 gigawatts (GW) of renewable energy globally, will buy First Solar panels for future deployments. Meanwhile, First Solar will use GE’s inverter technology for its future installations.
“We are creating an exciting synergy with this deal,” say Jim Hughes, First Solar’s CEO “The addition of GE’s PV thin film technology and R&D resources will advance our technology roadmap, while realizing cost reduction in our manufacturing process.”
GE’s decision to back away from the thin-film business isn’t all that surprising, given the cutthroat margins for solar manufacturers. It has also been busy establishing itself as a leader in wind turbines, where it is giving serious competition to long-time industry leader Vestas Wind systems.
First Solar just reported a lackluster second quarter — it sales were just $520 million, off $438 million from the year-earlier period, primarily because of lower module-only sales.
Still, the deal with GE is the latest postive development for the company, which started out as the leader in thin-film PV for non-residential applications but has diversified dramatically in the past two years.
First Solar moved aggressively into commercial development for utility-scale projects more than two years ago. It added to its portolio this week by buying almost 1.5 gigawatts (GW) in development pipeline from Element Power. The acquisition includes a number of utility-scale projects in the Mexican state of Sonora.
“The Mexican project pipeline strategically positions First Solar for our entry into the market,” says Tim Rebhorn, senior vice president of business development for the Americas, First Solar. “The mix of projects in emerging US regions and an optimized pipeline in established markets will better position First Solar to secure customer off-take agreements.”
Aside from Mexico, the transaction includes projects in California, Arizona, Texas, Georgia, North America, Colorado, Louisiana and Illinois.
First Solar expanded into the residential market in April 2013 through its acquisition of TetraSun.
It is also poised to benefit from development in other emerging markets: It moving aggressively into South American through its Solar Chile buyout and into India, where it hopes to claim up to 20% of the market.
On the thin-film front, First Solar boasts efficiencies of 16.1% for its technology. It plans to begin commercial-scale manufacturing in the second half of 2014 and is building a 20 to 50 megawatt (MW) plant in Japan.