Tuesday, June 2, 2009

More on the First Solar/OptiSolar Land Deal (FSLR)

After we posted the L.A. Times story I saw a couple other sites get on board the love train. This morning Environmental Capital takes a look:
Solar Land Grab? First Solar in Spotlight for OptiSolar Deal

Investors in thin-film solar companies already had cause for concern as plunging polysilicon prices made traditional solar panels more competitive.

Now, investors in one thin-film solar company in particular—Tempe, Ariz.-based First Solar—might have a fresh worry: The federal government.

Following up on a citizen’s complaint, the Department of Interior’s Bureau of Land Management is investigating First Solar’s acquisition this spring of smaller rival OptiSolar and its pipeline of solar-energy projects. At issue is First Solar’s purchase of OptiSolar’s applications to use about 130,000 acres of federal land to build new solar-power facilities.

First Solar told the L.A. Times yesterday that the OptiSolar deal was about building a pipeline of new solar projects: “The applications were an important part of it for us,” a spokeswoman said. OptiSolar’s manufacturing division was not included in the $400 million acquisition, completed in April.

At issue is whether the rush to build new sources of clean energy is creating a land grab. Or as Cassandra Sweet of Dow Jones Newswires puts it, “The concern is that such applications [for federal land] could become unofficial currency amid a land rush spurred by increasingly aggressive renewable energy requirements in California and other western states, and as Congress considers a national renewable energy mandate.”>>>MORE

Here's Barron's Tech Trader Daily:

First Solar: U.S. Interior Dept. Probes Opti-Solar Deal
...Actually, what First Solar originally announced was that the deal included the startegic land rights to that acreage. But according to the Times, official from the Bureau of Land Management say that Opti-Solar has only filed applications for the right to develop that land. Applications that had not yet been approved. consider this excerpt from the Times story:

“There is no value associated with a mere application, which could be rejected by us for a variety of reasons,” said Greg Miller, renewable energy program manager for the BLM office in Moreno Valley.

“A company can buy another company along with its applications, as long as those applications are not listed as assets. That would be wrong,” Miller said. “We’re trying to weed out speculators who are filing applications, then waiting for someone to buy them at the highest price.”

As Hapolalim Securities analyst Gordon Johnson notes today, the story has the potential to be “an incremental negative” for FSLR.

That’s for sure.

FSLR today fell $1.23, or 0.7%, to $189.06.

Tuesday the stock is down another couple bucks but doesn't look too wounded.