One of the side effects of being in the development business is that you take on risks - and they're risks that don't necessarily make sense for a solar panel manufacturing company. For example, if you develop a project that you think will be profitable at a 7% Internal Rate of Return (IRR), but interest rates rise before you sell it and suddenly buyers are demanding a 9% IRR, you can wind up underwater.
Utilities and banks, not solar panel manufacturers, should be thinking about these interest rate risks, and with rates rising, both of these solar companies have seen the downside of interest rate exposure.
A move to providing solar components and solutions will allow First Solar and SunPower to focus on where they have discernible competitive advantages. When it comes to competing with solar panel manufacturing giants like Canadian Solar and Jinko Solar, being able to offer components beyond the panel can make their solutions more attractive to customers. Utilities and other developers may not want to become experts in designing and assembling solar systems; if they can lean on First Solar or SunPower for that expertise, they can focus on the areas where they excel, like generating new business and proper financing.
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