First Solar (NSDQ: FSLR) said Wednesday it has signed a deal to build a 48-megawatt power project for Sempra Generation, which intends to sell the electricity from the plant to a utility.
The deal marked the second time Sempra hired First Solar to build a solar power plant. First Solar, whose primarily business is making thin-film solar panels, built a 10-megawatt project next Sempra's existing, 480-megawatt natural-gas power plant about 40 miles southeast of Las Vegas.
Sempra started selling the electricity from the 10-megawatt plant to the Pacific Gas and Electric Co. in Northern California in January this year (see PG&E to Get Solar Power for the First Time).
The announcement isn't a surprise. Sempra's CEO Michael Allman said earlier this year that it intended to expand its solar power plant holdings this year, and financial analysts have guessed that First Solar would get at least another contract. Mark Bachman, a senior equity analyst at Pacific Crest Securities, toured the 10-megawatt site in March and wrote in a research note that Sempra was likely only weeks away from signing a power plant construction contract with First Solar.
First Solar, based in Tempe, Ariz., plans to build the 48-megawatt power project next to the 10-megawatt plant. Construction is scheduled to start this year, and the power plant should be up and running by late 2010, Sempra said.
The project, called Copper Mountain Solar, will go forward only if Sempra can find a utility buyer for the electricity, First Solar said. Sempra Generation is a subsidiary of San Diego-based Sempra Energy, which also owns the utility San Diego Gas & Electric in Southern California.
Snagging the Copper Mountain project is a nice win for First Solar, which is eager to boost its power plant development and construction business. It also means the company will have to juggle the project with a slew of other pending projects, including a 550-megawatt power plant that First Solar bought from OptiSolar earlier this year.
First Solar spent about $400 million to buy the 550-megawatt project along with another 1.3 gigawatts worth of projects that were under negotiations with utilities from OptiSolar (see First Solar Buys OptiSolar's Power Projects). First Solar has said that it plans to start building the 550-megawatt project, to be located in California, in 2010.
First Solar bought Turner Renewable Energy in 2007 as a move to get into the project development business. Before First Solar bought OptiSolar's project pipeline, the 10-megawatt project for Sempra last year was the largest undertaking by First Solar.
First Solar's shares inched up less than 1 percent to reach $148.33 per share in recent trading.
Solar
First Solar to Build 48MW Power Plant for Sempra
The project marks the second power project construction deal between First Solar and Sempra Generation. First Solar is taking on a project at a time when it also is developing a 550-megawatt plant and other projects that came with its acquisition of OptiSolar’s project pipeline.
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