"First Solar bought the Macho Springs project from Element Power Solar, according to a statement today. El Paso Electric Co. (EE) agreed to buy the electricity for 5.79 cents a kilowatt- hour, according to a Jan. 22 procedural order from the New Mexico Public Regulation Commission."
Can someone help explain this to me? It seems extremely low? Is FSLR still making money?
If they are anywhere close to break even, we will see plenty more installations. Not to be a cheerleader, but FSLR just broke the solar parity barrier, not broke but smashed it, it seems !!!
I would expect that FSLR stock shoot up from this news! That is just a simple elementary school math: First Solar have bought 50- megawatt solar energy for 5.79 cents a kilowatt- hour, and can sell it for 12.8 cents per kilowatt-hour average price for coal plants, and then they can make 50 x 1,000,000 x (12;8 - 5.79 ) / 100 = $350,5000. While this is not much moneywise, but it is greatly significant since it a turning point for the fact First Solar actually can get cheap solar energy than the currently dominantly-used coal energy, they will gradullay take energy market share from traditional coal energy manufactories. FSLR reached $311.14 /share on Mar 12, 2008 when solar energy just showed some promise, and now the promise evidently becomes a reality. It is definitely a great time to buy into FSLR, sooner is better, on my opinion.
Obviously there is more to the story. Yet the Bloomberg reporters can't be bothered to get it. If the price is half that of coal, the profit must be in lower costs or some subsidy. Get the complete story before you decide if FSLR management made a good or bad decision.