First Solar Is Forecast to Install 1.1 GW of Solar or PV Power Systems in 2013

First Solar is forecast to install 1.1 gigawatts (GW) of solar or photovoltaic (PV) power systems in 2013, more than double the 516 megawatts (MW) in 2012, according to IMS Research, now part of IHS. This high rate of growth will allow First Solar to maintain its leadership in the engineering, procurement and construction (EPC) business for the year, despite even faster growth from China-based rivals China Power Investment (CPIC) and GD solar.

EPCs, sometimes called system integrators, are vertically integrated contractors that build large-scale solar projects. Companies like First Solar are capable of a full range of installation tasks, including designing installation projects, procuring materials and building assignments. First Solar and a number of companies build projects developed in-house, generating revenue from the sale of completed PV power plants. Others focus on EPC for third-party developers, sometimes in combination with in-house development.

First Solar's growth is built on its strategy to cultivate a pipeline of PV projects, in which it takes on major undertakings, sells them to other firms and then uses the proceeds to buy other large-scale installations.

For example, First Solar in May announced the sale of the Campo Verde Solar Project, which is under construction in Southern California. Campo Verde will have a nameplate capacity of 139MW of alternating current (MWac) when it is completed at the end of 2013. With the money it made from the sale, First Solar expanded its pipeline with the acquisition of three other projects under development with a total capacity of 260 MWac, due for completion by the end of 2015. With the company's solar module business suffering because of falling prices, this is turning out to be a winning approach for First Solar.

"First Solar's successful strategy of acquiring, installing and divesting projects will keep the company among the world's leading solar system integrators over the next years," said Josefin Berg, senior analyst for downstream solar research at IHS. "This approach not only offers a sales outlet for modules, but more importantly also generates project-sales revenue that cushion the company when seeking new growth markets."

In January, First Solar took a major step toward expanding its business outside the US when it acquired Chilean PV developer Solar Chile and its early-stage 1.5GW project.

SunEdison is the other US-based company that will place among the top-5 system integrators in 2013, IHS forecasts. The company is also one of few leading system integrators to boast international activity in 2013 through its projects in India, Chile and South Africa, in addition to 340MW in North America.

Propelled by incentive schemes such as the Golden Sun program as well as political will to offset declining module exports to Europe, China is creating opportunities for locally entrenched system integrators. IHS expects CPIC to install 700MW in 2013, a 119% annual increase, which will move the company to second place, up from fourth, among global system integrators.

CPIC's construction activity represents 10.4% of the non-residential installations for 2013 in China, anticipated at 6.8GW. IHS forecasts that six Chinese companies will rise in 2013 to rank among the top-10 global EPC companies in 2013, three of which will place among the Top 5.

Both the US- and China-based solar capacity installation figures are dominated by projects larger than 50MW, which is why winning just a few projects is enough to place a system integrator high in the rankings. In Japan, predicted by IHS to be the second-largest market in 2013, PV systems display a wider range of sizes, resulting in a more fragmented competitive landscape.

Source: IHS, compiled by Digitimes, August 2013