One Up One Down in Solar?

The solar energy market is seeing mixed signals. BrightSource Energy’s IPO may appear to be the darling of the cleantech industry as it is widely seen as the benchmark for other cleantech companies vying for cash in the public marketplace. BrightSource looks very attractive. Its project in the Mojave Desert, Ivanpah, is expected to generate 392 megawatts and deliver power to PG&E and Southern California Edison.

However, the hopes of BrightSource and many potential investors may be dashed by the desert tortoise. The Bureau of Land Management recently concluded that the project would kill or displace the desert tortoise. The Ivanpah project is to be completed in phases, and although the first phase will continue, there is uncertainty about the likelihood of completion of the other two phases.

As hopes for a strong performance for BrightSource’s IPO soar, another solar company saw profits shrink last quarter. FirstSolar recently reported a 1st quarter profit of $166 million on revenue of $567 million. During the same quarter last year, the company had a profit of $172 million on revenue of $568 million. The company attributed the decrease in profits attributed to lower margins, though this was partially offset by increased module production and lower module cost per watt.

While the bright lights of Wall Street are squarely focused on BrightSource, despite a drop in 1st quarter profit, FirstSolar may have a brighter long term future. Despite the unique technology that BrightSource brings to the table, utility scale projects face increasing scrutiny because such projects are proposed on land that is environmentally sensitive and far removed from where the energy generated from the project will actually be used thus requiring additional transmission lines to be built. FirstSolar, on the other hand, may be the long term winner as there will likely be more focus on localized projects.

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