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First Solar tops PwC index of PV manufacturers

Installing First Solar modules at TopazPricewaterhouseCoopers recently released its annual PV Sustainable Growth Index, which looks at how leaders in the solar industry are fairing. The annual guide helps people understand the challenges PV makers are facing at what the investment risks the companies pose. The report ranked First Solar as the top performing this year.

In 2012, the PV market has remained tough for manufacturers but industry leaders are starting to stand out, according to the report. “Many underperforming companies have shuttered their doors (or will soon). This shakeout is the inevitable result of the industry’s maturation,” according to the report. It found that increased competition is allowing the stronger companies with robust operational strategies to makes business gains, while taking away from weaker manufacturers that don’t have a strong integrated plan.

The report ranked the 33 largest publicly traded PV manufacturers worldwide. “First Solar, moved up to the top spot from number two a year ago, thanks largely to its revenue base and EBIT performance relative to its peers, and an emphasis on execution,” the report said. With a score of 56.5, it also was the only company to score under 60 percent risk factor. PwC determined that the company’s efforts to increase operating efficiency have paid off. That and it is vertically integrated and has reduced cost drivers through its value chain after analyzing them.

Last year’s top spot went to Chinese PV-make Trina Solar, which fell to number 2 this year. PwC said it fell because of a drop in EBIT performance. The only other non-Chinese company that broke into the top 10 was the Norwegian Renewable Energy Corporation (REC). SunPower came in 11th in the index.

In determining the scores, PwC analyzes each company’s financial metrics including year-over-year revenue growth, working capital, EBIT percentages, debt-to-equity and other operational measures.

The firm determined that generally the market leaders have three things, vertical integration, differentiated offerings and are relentlessly focused on improving operational efficiency, the report said.

It believed that the trend will continue. “We think the industry will continue to separate into leaders and also-rans.” The ratings firm things the leaders that made the index are best positioned for sustainable and profitable growth.

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