First Solar, Inc (NASDAQ:FSLR) – Acquiring TetraSun to take-on the Land of the Rising Sun
Northern, WI 04/10/2013 (gdpinsider) – The solar manufacturer First Solar, Inc (NASDAQ:FSLR) (Current: $39.35, Up by 45.53%) is acquiring a company that develops technology for rooftops. Close to two thirds of the company revenue comes from the construction and sale of large power plants to various utility services. The company is buying a startup named TetraSun which develops high-efficiency solar panels that are used for small rooftop systems. Jim Hughes the Chief Executive Officer said that First Solar has plans of producing and marketing TetraSun products in Japan. The terms of the acquisition have not been disclosed yet.
This was always a segment that First Solar had a gap in as it doesn’t market its own panels for rooftop solar systems. In addition to this, it also gives the Arizona –based company an opening to Japan which is projected to be the second largest market in 2013. With this deal the largest producer of thin-film solar panels will be deviating from its territory, as the TetraSun technology makes the use of silicon. Hughes said that Japan was a space-constrained market and thus a high-value one and starting there was a logical thing to do. The TetraSun proprietary design has the capacity to convert over 21 percent of solar energy into electricity.
Silicon is used in the making of its solar panels. Almost all photovoltaic solar manufacturers including the dominant Chinese producers use this material. The company said that the TetraSun panels are lower in cost as the electrodes are made of copper instead of the traditional silver ones. Hughes said that the TetraSun deal affords it with complementary technology that opens up the entire market to the company. The First Solar panels are made out with cadmium- telluride which is sandwiched in glass-sheets. TetraSun is being bought from JX Nippon Oil & Energy Corp, the TetraSun management and a few other investors. All the 14 employees will continue being in the employ of the San Jose, California company.
Hughes said that in the pipeline is a factory that will be producing around 25-50 megawatts of TetraSun panels by 2014 with the Japanese market being its target. The decision about the location of the plant has not yet been finalized. Initially, the plant will produce close to 100 megawatts on panels on an annual basis. Its sales are slated to be in the range of $3.8 billion to $4 billion. Close to 64 percent of the $1.08 billion of its fourth-quarter sales came from the business systems unit which constructs large solar farms and then sells them to its utility customers. The remainder of sales came from the sales of panels.