First Solar joins Desertec solar project

First Solar said it was the first pure photovoltaic (PV) company to join the 400 billion euro ($546.6 billion) project, set to be the world's biggest, that proposes sending energy created in the Sahara to local markets and to Europe.

The project had previously focused on the solar thermal technology championed by leading utility members of the project, including E.ON and RWE, where sunrays heat up liquids to power turbines.

As a result, the opening up of the project to smaller PV-focused companies, whose technology turns sunlight directly into electricity, came as something of a surprise to analysts.

"I was very surprised to see a photovoltaic company join for this one," Jon Sigurdsen, manager of the Renewable Energy fund at Carlson, a unit of Norwegian DnB Nor Group, said.

"If there should be one, it makes sense that it is First Solar, based on the data we have now. But who knows what technology is most cost competitive in future years, when this (possibly) will be built?."

The Arizona-based company, which grew to become the world's biggest maker of solar cells in 2009, said on Tuesday it had joined Desertec for an initial three-year period and would contribute utility-scale PV expertise in project working groups.

Additional details on the agreement were not disclosed.

BOLD SOLUTIONS

"The challenges of energy security and global warming demand bold solutions and Desertec certainly provides an ambitious vision," Stephan Hansen, managing director of First Solar's European sales and customer service unit for Europe, the Middle East and Africa, said in a statement.

At 1345 GMT, Frankfurt-listed shares in First Solar were 0.4 percent higher, after rising as much as 1.5 percent, in line with the FTSE cleantech index.

Twelve member companies -- mostly German ones including Siemens and Deutsche Bank -- support the Desertec Industrial Initiative, launched at Munich Re headquarters in July last year.

Leaders of the project, which would advance in stages with the first phase operational within a decade, have made a push in recent months to diversify the countries involved in it.

They have said more energy falls on the world's deserts in six hours than the world consumes in a year.

First Solar, which uses cadmium telluride rather than polysilicon to make its thin film cells, has the lowest production cost in the industry, though its cells are not as efficient as those made by rivals such as Suntech Power Holdings and SunPower Corp.

The company has built utility-scale solar power plants in desert conditions in the United States and United Arab Emirates.

($1=.7318 Euro)

(Additional reporting by Christoph Steitz in Frankfurt; editing by Simon Jessop)