First Solar still edging up

The first company to set up volume production of thin-film photovoltaics is still on the rise after going public Friday.

First Solar (NASDAQ: FSLR) was trading as high as $26 USD at midday Eastern Time today on volume of 699,957 shares - a gain of 30%. Its initial offering was priced at $20.

Other companies producing thin film photovoltaics include DayStar Technologies, Global Solar Energy and United Solar Ovonic (Uni-Solar); not far behind are Nanosolar and Miasole, both of which are located in Silicon Valley and expect to begin production soon.

These companies are all pursuing alternative solar cell production material that, while lower efficiency than silicon, promises to be substantially lower cost and quicker to manufacture.

First Solar's photovoltaic modules are intended for large scale, grid-connected solar power plants and are sold to leading solar project developers for use in commercial PV projects. While the company claims to be currently manufacturing its cells at a cost of $1.42 USD per watt, it believes its cadmium telluride, or CdTe-based technology, will support costs "well below" $1 per watt. Conventional electricity costs about $.75 per watt to produce.

In contrast with the supply shortages in conventional silicon, First Solar says it "is not currently constrained by and do not foresee a shortage of cadmium telluride, our most critical semiconductor material."

The company is not yet profitable. It lost about $5.9 million in the quarter ended April 1st, 2006. In 2005, it reported a net loss of $6.4 million on revenues of $48.1 million.

First Solar has production lines up and running that produce 75 megawatts of photovoltaics per year, and another factory under construction that will add another 100 megawatts.

If the forecast manufacturing levels of First Solar and its competitors are to be believed, by early 2008 they could be producing nearly 1.0 gigawatts of photovoltaics per year. In 2005, the entire world production of photovoltaics was only 1.6 gigawatts.

Credit Suisse, Morgan Stanley, Piper Jaffray, Cowen and Co., First Albany Capital, and ThinkEquity Partners LLC underwrote First Solar's IPO.