With plummeting solar module prices and renewable energy subsidies, the U.S. solar market is finally ready to blast off in the first half of 2010, says FBR.
In the second half of this year, the government will be flooding solar companies with enough cash for them to get new installations up and running. The Treasury Department has a grant program ready to roll and the DOE is going to approve loan guarantees.
FBR took an in-depth look at three major solar companies, First Solar (FSLR), Suntech Power (STP), and SunPower (SPWRA) to figure out who will win. The four criteria FBR used were cost of land, financing and cost of installed system.
In everything but the cost of installing the system, First Solar (FSLR) comes out on top. Interestingly, with solar prices in free fall, the good news is that we might see grid parity a lot sooner.
FBR picks First Solar to get there this year, with the competition joining them in a year or two.
First Solar's cells aren't as good at converting energy compared to the other two companies, so cheap land is crucial. If First Solar can procure an inexpensive tract of land, it wins big.
As long as land costs less than $0.60 per square foot, FBR says, the company's internal rate of return clobbers Suntech and SunPower.
'Insulation' determines how effective each company's panels are at producing energy in different weather conditions. The crappier the panel, the more of them you need. First Solar wins this one, FBR says.
FBR says that the 'fundamental driver' of the solar industry is the cost of capital.
FBR assumed a cost of equity of 14% for First Solar and 12% for SunPower and Suntech. In each instance, First Solar gets a better rate of return.
While everyone likes to go gaga for First Solar's low manufacturing costs, there's a bigger picture when it comes to installing solar panels.
Here is where SunPower is in better shape. It can install panels at a lower price boosting its internal rate of return above First Solar and Suntech.
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