In a move that will bring thin-film solar panels to the U.S. residential market, First Solar has signed a deal to provide installer SolarCity with 100 megawatts’ worth of solar arrays over the next five years. First Solar is also investing $25 million into SolarCity, the Silicon Valley startup backed by Tesla Motors founder Elon Musk.
This is First Solar’s initial foray into the home market — and apparently the first of any thin-film solar module maker. Thin-film solar panels are made by depositing solar cells on sheets of glass or flexible material and use little of the expensive silicon that forms the heart of more bulky conventional solar modules. That makes thin-film panels cheaper, although they are less efficient at converting sunlight into electricity. And thin is in for homeowners who prefer less-obtrusive panels on their roofs.
SolarCity CEO Lyndon Rive told Green Wombat that First Solar’s more economical panels will allow the company to expand to the East Coast and other areas that do not heavily subsidize solar. SolarCity installs solar panels at no cost to the homeowner and then leases them back for a monthly charge. “What matters is not efficiency but cost per kilowatt-hour,” Rive says, noting that solar programs like California’s reduce rebates to panel makers as the number of installations increase. “We need solutions that address declining subsidies.”
Added SolarCity communications director Jonathan Bass: “When we talk to customers their four biggest priorities are cost, cost, cost and aesthetics.”
Beginning in early 2009, SolarCity will start receiving 20 megawatts’ worth of First Solar panels a year. Rive won’t disclose how many megawatts SolarCity currently installs annually, but 20 megawatts would seem to represent a significant expansion of the startup’s operations. Over the past two years, SolarCity has installed solar arrays for 2,500 homes and small businesses and a spokeswoman says the First Solar deal would supply enough panels for about 5,000 homes a year.
The deal also marks a move to diversify on the part of Tempe-Ariz.-based First Solar (FSLR) — known as the Google (GOOG) of solar for its once-stratospheric stock price. The company, backed by Wal-Mart’s (WMT) Walton family, had primarily focused on the overseas commercial rooftop market. This year though First Solar has signed deals to build thin-film solar power plants for utilities like Southern California Edison (EIX) and Sempra (SRE).
First Solar on Wednesday reported that third quarter revenues rose 30% to $348.7 million from the second quarter and was up 119% from the year-ago quarter. Profit spiked 42% to $99.3 million from the second quarter and increased nearly 116% from a year ago.