Due to two good news, the stock price of First Solar (hereinafter referred to as First Solar) soared.
On May 12, First Solar announced that it plans to pay up to US$80 million to acquire Evolar AB, a Swedish perovskite company. These include a payment of $38 million upon closing of the transaction and up to a payment of up to $42 million upon the achievement of certain technological milestones by Evolar AB.
First Solar is the largest solar module manufacturer in the United States and the largest producer of thin-film solar modules in the world.
After the above-mentioned acquisition news was announced, the company’s stock closed at US$231.69 per share that day, reaching the highest closing price since September 2008; the increase reached 26.48%, the largest daily increase since April 2013. The stock also became the best-performing stock in the S&P 500 on the day.
Since the beginning of this year, First Solar's share price has risen by 54.7%.
Evolar AB, which First Solar acquired this time, was founded in 2019. The founding team is composed of senior personnel in the copper indium gallium selenide (CIGS) industry, and has created a number of thin film efficiency records for cells.
The company is also a solution provider for perovskite tandem solar cells. Using its PV Power Booster technology, a perovskite film can be applied to solar cells to increase the conversion efficiency of the cells by 25%.
According to different technical routes, solar cells can be roughly divided into crystalline silicon cells, thin-film cells, and perovskite cells. The current mainstream photovoltaic cells are crystalline silicon cells.
Perovskite cell technology is the third generation of photovoltaic technology. Compared with crystalline silicon cells, perovskite cells have theoretically higher photoelectric conversion efficiency, with a single-junction theoretical efficiency exceeding 30%, and have the advantage of a shorter industrial chain.
At present, many domestic companies have deployed perovskite batteries. Among them, Longji Green Energy (601012.SH)'s perovskite/crystalline silicon stacked two-terminal battery achieved a battery efficiency of 29.55%. At the 18th China Renewable Energy Academic Conference held on April 2, it was awarded Certified as the highest efficiency of solar cells in China in 2022, ranking among the top three in the world.
However, the large-scale commercial application of perovskite technology is not yet mature. On March 23 this year, Longji Green Energy also stated on the investor interaction platform that perovskite battery technology has not yet met the conditions for large-scale.
After the acquisition, Evolar AB will continue to carry out research activities in its laboratory in Uppsala, Sweden, and cooperate with First Solar's US R&D team. This also marks the first time that First Solar has an R&D facility in Europe.
In October last year, First Solar announced that it would spend US$370 million to build a new R&D center in Perrysburg, Ohio, USA, which will be the largest photovoltaic R&D center in the Western Hemisphere. The center is expected to be completed in 2024 and is expected to accelerate the development and production of advanced thin films.
In addition to the above-mentioned acquisitions, another factor contributing to the surge in First Solar's share price is the new subsidy policy for US solar manufacturers.
On May 12, the U.S. Department of the Treasury issued guidance on incentives under the Inflation Reduction Act (IRA), saying it would provide a 30% tax credit for renewable energy facilities such as solar and wind farms. Additional incentives of 10 percent of the project cost are available if these facilities use domestically produced materials.
The news greatly benefits solar companies that are currently or plan to build plants in the United States in the future.
The "Inflation Reduction Act" will be signed by Biden in 2022 to promote the production and application of green technology in the United States and accelerate the decarbonization of the US power industry.
The U.S. currently has 8.9 GW of solar module capacity, about half of its demand in 2022, according to energy consultancy Wood Mackenzie.
At present, First Solar has three production bases in the United States. It is expected that in 2025, its fourth production base in Alabama, USA, will be completed. This plant is a vertically integrated module plant with an annual capacity of 3.5 GW. By then, First Solar's total production capacity in the United States will reach more than 10 GW. In addition, it is expected that in the second half of 2023, First Solar's Indian factory will also be completed.
In the first quarter of this year, First Solar's net sales were US$548 million, a decrease of about 45% from the previous quarter, mainly due to the decrease in the number of modules sold to third parties; the gross profit margin reached 20.4%, an increase of 14.4% from the previous quarter. The company's net income for the same period was $43 million, compared with a loss of $8 million in the fourth quarter of last year.