US Solar Maker Fights Back With Govt Loan

By newsdoug on September 7, 2011

US solar cell makers are showing that their Chinese rivals aren’t the only ones who can count on government support to boost sales, with First Solar (Nasdaq: FSLR) announcing a big new deal with strong backing from Washington. Based in the sun-baked state of Arizona, First Solar said it will provide a hefty 100 megawatts worth of solar modules to India’s Reliance Power, with $85 million in financing for the project’s first phase coming from the policy-driven US Export-Import Bank. (company announcement) The deal marks a rare piece of good news for US-based solar makers, who have been battered over the last year by a global sector downturn and stiff competition from Chinese manufacturers like Suntech (NYSE: STP) and Trina (NYSE: TSL), which enjoy not only lower costs but also a wide array of economic incentives from Beijing. The tough conditions have claimed a number of US victims in the last month, with Evergreen Solar and SpectraWatt both filing for bankruptcy and another firm, Solyndra, expected to file shortly. (English article) This Ex-Im Bank loan for First Solar is relatively small, but any lifeline the US solar makers can get at this point is clearly welcome. They could also get another lifeline soon, following President Obama’s naming over the summer of a new commerce secretary with strong ties to the energy sector and a mandate to jumpstart more installation of alternate energy in the US. (previous post) If that effort moves forward, and the dwindling field of US solar makers get more government support, one or two may ultimately survive the current downturn, and even find a Chinese partner or two to boost their competitiveness in the sector’s ongoing shake-up.

Bottom line: First Solar’s big new sale backed by US government financing marks a rare piece of good news for battered US solar firms, who will need more support to survive the sector’s current downturn.

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