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First of all, FSLR did not build or design the Macho Springs Project, so they did not break the solar parity barrier. It does not use FSLR panels or components.
They are selling the power at below cost, and are losing money. This is one of those "feel good" projects, and they may gain some kind of tax credit to help subsidize or offset the low power price.
The previous owner was losing money, thats why it was for sale in the first place. Rather then lose their shirt and file bankruptcy, they cut their losses and sold it to FSLR.
FSLR wanted to sell the power for a considerably higher price, but there were no buyers. In the real world, no one wants to buy solar power because it is unreliable and only works during the day.
You need to learn how to perform due diligence.
Sentiment: Strong Sell
Yes "project2069" - FSLR was forced to buy the project and lose money. That is why FSLR makes over $4/share in earning in 2012.... by making deals that lose money... What a friggin idiot post.
$4 share in earning is due to projects booked in 2008 and 2009 - high margin projects when poly prices where over $400/kg. Pply prices are now $16/kg - do the math and you'll see why margins are declining and your sweeping generalizations are downright laughable - much like your Seeking Alpha "article".
" no one wants to buy solar power because it is unreliable and only works during the day. "
Don't you love UNDER-educated wallstreet people. without their short hedge fund firm, these pups could NOT, put on their underwear correctly.
hurry off to your morning cleaning !!
First solar will build the project and diliver AC power to the electricity plant from the buyer .
De buyer from the plant will convert the power to DCpower.Its cheaper to transport AC power at long distencense and ......................
Yes you can use a AC rated bulb on DC, When using an AC bulb on 110volt DC you would need to double the wattage of the bulb to get the same amount of light output. So if you need 50 watts of light you would need to use a 100 watt bulb on 110 volt DC. One benfit of using DC is the bulbs last longer! Hope this helps.
It is important to understand that 110 volts AC is also referred to as "effective
voltage" or "DC equivalent voltage". In reality, the true voltage at the wall outlet is
anywhere from 311 to 340 volts peak to peak alternating current in the U.S. at 60
cycles per second. A cycle is a sine wave starting at zero volts at the short slot on
the outlet swinging negative to approximately 160 volts negative in respect to
neutral or ground then going to approximately 160 volts above ground or neutral 120
times per second. The 110 volts is derived by dividing the peak to peak voltage by
two, then multiplying .707 root mean square, which equals the term 110 to 120 volts
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This could be the answer to bucketonickels So 0.0597*2=12 cents
AC /DC lets rock and roll
All you guys are way off. This is a very typical situation. A developer bids on a utility RFP, and low balls it below cost to get the project. This is very common of "no name" developers to just get the project and get a reasonable sized project under their belt. When they win they project, the go out for financing and no one will touch it, so they can't get the project financed. The only options are to sell it or walk away. At least by selling it, they can make their money back and maybe a small profit. But, at 5 cents no one can make money. And its not cheaper than coal ! Coal is a 1.5-3.5 cents depending on the age of the plant and type of coal being used. But solar doesn't compete with coal anyway. FSLR has been installing plants for as little as $2.50, and at 5 cents they still can't make money. But, this is where the industry is - buying projects to move product and people employed. This is what I have been saying for a long time here - this is exactly where the industry is right now - and as FSLR moves down the pipeline to new projects the margins decline - and now the new projects have negative margins. Also, notice how FSLR is buying pipeline ? Its because they can't compete in price competitive solicitations anymore. So, no FSLR is not making any money on this project, buy gets to move inventory, and yes they will use FSLR panels. As for FSLR wanting to sell at higher price ? NO - the project was bought with a pre-existing PPA in place with El Paso. As for the project being approved ? Most likely it will - a contract is a contract and the PUC and El Paso doesn't care if the developer loses money - utilities will sign PAs all day long 5 cent solar power - but the industry can't sustain itself at those levels.
While there is some truth in what you are saying, those bidders who might be winning the competative bids are not profiting at the price they won over FSLR with. If there is a margin, it is because they are using tier 3 modules. The problem FSLR and other Tier 1 manufacturers face is that is will take time for investors to realize that this strategy will come back to bite them. Will FSLR be able to ride through this timeframe? Who knows , but that is what the longs are betting on isn't it ? One other thing. While there is fossil that costs .02, it is from plants built long ago. New coal plants faced with current regulations is closer to .12 and in fact many older plants who will have to embrace BART in order to stay in production will see their costs be closer to .10 going forward.
I am not buying this argument that First Solar is engaging this project to potentially move inventory as a loss. According to the Q3 presentation FSLR produced 490MW of modules for the quarter. 66MW from the pipeline at some point in the future isn't going to to make a real bid dent in inventory or cash flow.
Probably what is going on here is FSLR trying to make nice with El Paso Electric. That would be a much better argument IMO.
dimondboy..... another idiotic, unsenseable, baseless post of vomit. How are your puts doing that you posted back 9 months ago at $12/share ??? I was buying like mad and you were shorting and putting like made. Guess we know how that turned out.... FSLR is not going to buy into a deal that is unprofitable to them, what friggin planet do you come from??? I will be the first to say the margins are going to shrink with future projects, but you got to get your head on straight at some point. FSLR management are not flaming idiots like yourself. Thank god you don't go into business for yourself. BTW. we are basing out here at 28... We might even test 26 area going into the anouncement. The big news will be the 2013 guidance given. Some of the estimates are a little high IMO. I would say we will be around $3.00 to $3.50. This will support a $30 to $40 range in 2013.
Of course with your outstanding knowledge of the Solar Industry, you do know when the most power is consumed.....................lol You also made the assumption that FSLR would buy a project at a loss to help out a friend? NOT!!!!!!