Could Ontario Be First Solar’s New Germany?
First Solar, the world’s largest maker of thin-film photovoltaic panels, sells a substantial majority of its production on the German market. The company estimates that just for the first half of 2010 about 50 percent of its production will go to Germany.
With the conservative coalition government of Chancellor Angela Merkel tightening the countries generous solar feed-in program, the Tempe, Ariz. company has been working hard to reassure analysts that other markets including, Italy, France and China, will offset an expected declining demand in Germany.
But what about Ontario…? That’s the question Barclays Capital’s Vishal Shah asks this morning in a research note.
Shah highlights that for First Solar, sales of its PV panels to developers, operating under the province’s Renewable Energy Standard Offer Program (RESOP) subsidy program, could translate in sales margins of up to 70 percent.
He writes –(see here for the full report):
Potential systems project buyers may be looking at almost $5/W ASP for Ontario solar projects under the RESOP program, which could potentially result in nearly 70% margins for [First Solar] FSLR modules sold to the captive Ontario pipeline.
First Solar has nearly 112 megawatts of Ontario projects that have not yet started construction, according to Shah.
Of all the renewable energy subsidy programs now in place in North America and beyond, Ontario’s RESOP is probably one of the most popular with developers because their projects are assured to sell their output to the Ontario Power Authority under long-term power purchase agreements. This has made it a lot easier for developers to secure financing for Ontario projects.