First Solar buys OptiSolar's pipeline of projects for $400M

Another solar technology company has sold off its pipeline of projects as it struggles with the tightened financing market.

Hayward, Calif.-based OptiSolar said today it sold its projects under development and in negotiation to Tempe, Ariz.-based thin-film giant First Solar (Nasdaq: FSLR). The $400 million, all-stock transaction is expected to close in the second quarter of 2009.

First Solar entered the solar utility market in late 2007 with the acquisition of Turner Renewable Energy (see First Solar buys Turner Renewable Energy). The company since constructed a 10-megawatt solar power plant in El Dorado, Nev., with Sempra Generation (see First Solar, Sempra in solar power project). And in October 2008, First Solar teamed up with Edison Mission Energy to develop and construct utility-scale solar generation in California. First Solar has secured the development rights to three solar projects for Southern California Edison (see Powering California green).

But OptiSolar's pipeline dwarfs First Solar's previous deals.

OptiSolar has one project in development: a $1 billion, 550-MW thin-film solar plant to generate energy under a power-purchase agreement with California utility Pacific Gas & Electric (see PG&E mega solar deal sparks industry). OptiSolar says it's in negotiations for 1,300 MW of solar projects with utilities in the Western region. The deal also gives First Solar the land rights to approximately 136,000 acres with the potential to deploy up to 19 gigawatts of utility-scale solar power projects.

The announcement comes off the heels of other good news for First Solar. The company said last week it was able to produce thin-film panels for less than $1 per watt. First Solar expects to reach 1,100 MW manufacturing capacity in 2009.

Meanwhile, OptiSolar laid off half its employees in January after it failed to raise a new round of funding (see Solar layoffs continue with OptiSolar). The company said it planned to seek a loan from the U.S. Department of Energy. OptiSolar has reportedly raised about $300 million (see Two funds expand cleantech plans and Cleantech investment breaks all-time record).

First Solar says it expects development for the 550 MW project to begin on-schedule in 2010. Core OptiSolar employees responsible for assembling and executing the solar projects are expected to join First Solar.

"OptiSolar has created an impressive and well-designed development pipeline," said First Solar CEO Mike Ahearn in a news release. "As First Solar continues to drive down its manufacturing and EPC costs, OptiSolar’s project pipeline and the ability of our team to continually expand our existing pipeline will enable us to bring solar energy on-line quickly."

OptiSolar is the third solar technology developer to step away from a significant pipeline of utility-scale projects in recent weeks. The credit crunch has dried up sources of funding for many large-scale projects (see Record 2008 for cleantech with $8.4B in investments).

Last week, Pasadena, Calif.-based eSolar signed a $10 million deal for Princeton, N.J.-based NRG Energy (NYSE: NRG) to develop its pipeline of 500 MW of solar power plants in California and the Southwest. eSolar is changing its focus from being a project developer to a technology and equipment provider (see NRG Energy, eSolar sign 500 MW solar deal).

Solar thermal startup Ausra took a similar step in January (see Ausra shaves staff as it chases immediate revenue).

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