Construction has started in earnest at the Topaz Solar Farm on the Carrizo Plain, the second solar project to be going up on the eastern edge of San Luis Obispo County.
Workers are installing thousands of posts at the Topaz farm upon which the solar panels will be mounted. Installation of the panels themselves is expected to begin later this month.
Ground was broken on the sprawling, 550-megawatt solar power station in November. When complete, it will be the nation’s largest solar electric power plant, owners say.
Initial construction activities consisted of building roads and installing fencing.
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The posts resemble the poles that hold up highway guard rails, said Alan Berrnheimer, First Solar spokesman. Atop each post is a bracket that will hold the solar panel.
The solar installation is being built and will be operated by First Solar. The facility is owned by MidAmerican Solar.
Early activity at the facility also concentrated on biological monitoring and other work to comply with the many environmental protections required by the county. The main concern is protecting the San Joaquin kit fox, a federally protected species.
Construction is expected to take three years and will employ 400 people. Economists estimate construction will generate nearly $417 million in economic activity.
The solar farm is located around the intersection of Highway 58 and Bitterwater Road. A separate 250-megawatt solar facility is also under construction along Highway 58 to the east.
In separate news, First Solar Inc. said Thursday that it lost $449 million in the first quarter, mostly because of a restructuring announced last month that will eliminate 30 percent of the company’s workforce and close a newly expanded plant in Germany. Revenue fell to $497 million. In the year-earlier quarter, the company earned $115 million on revenue of $567 million.
Along with other makers of solar panels, First Solar is struggling to adjust to a dramatic plunge in panel prices. A boom in construction of solar panel factories, especially in Asia, coincided with lower demand in Europe, the world’s biggest solar panel market. This created a glut of panels and sent prices tumbling. European demand fell because cash-strapped governments there reduced renewable energy subsidies.
In addition, First Solar is wrestling with a unique problem — an enormous cost advantage over its competition has eroded. As a result, the company’s stock has fallen to about $18 per share, from $140 a year ago.
First Solar sells solar panels made with a thin film that were far cheaper to produce than those made from crystalline silicon. Though a thin-film panel is less efficient in turning the sun’s rays into electricity than a crystalline silicon panel, a solar farm with thousands of First Solar’s thin films could produce the same of amount electricity at a lower total cost.
Now, the cost of the raw material for crystalline silicon panels has plummeted, making it easier for these more efficient panels to compete with First Solar’s thin film on price.
First Solar anticipated that solar panel prices would decline, so the company aggressively expanded its project development operations in hopes that lower panel prices would fuel a boom in solar installations.
In addition to the solar farm in San Luis Obispo County, First Solar is now building some of the biggest solar panel farms in the world in Arizona and Nevada, too.
Construction of these projects is expected to buoy the company’s results for the rest of this year and much of next year.
Aaron Chew, an analyst at Maxim Group, notes that those projects have locked in relatively high power rates because they were designed before panel prices had fallen so far. Chew and other analysts worry that future projects won’t be nearly as profitable — and whether First Solar will be able to compete for those big projects now that competing panels are as cheap, or cheaper.
The Associated Press contributed to this report.