First Solar's U.S. Ambitions Slowed

It could be that First Solar decided these projects don't make sense strategically or fiscally, or that the company doesn't have a big enough development team on its staff to handle all the projects on its plate.

The company didn't immediately respond to a request for comment.

However, Wedbush's Hersey is cautioning investors about the cancelled contracts, since that shelved project pipeline comprises about 2.6 gigawatts of the seven acquired from OptiSolar. At the time, First Solar trumpeted the additional wattage as a key part of the deal.

"It's curious to me that First Solar would let 2.6 gigawatts lapse," Hersey said. She added that the cancelations don't change her financial models for the company, since projects typically aren't included in such models until power-purchase agreements are signed and electricity is actually sold.

Hersey maintains a neutral rating on First Solar shares, but she says the cancellations should raise a red flag for investors.

Even beyond First Solar, the cancellation of five big alternative-energy projects calls into question the expected rise of the large-scale solar market in the U.S., Hersey said.

"To me, it underscores the overarching theme that analysts and investors cannot expect the U.S. utility market to be a big market [for solar companies] in the next few years," she went on. "These projects are hard to develop and are loaded with permitting and transmission issues."

So far, the only OptiSolar project with which First Solar has reached a power-purchase agreement has been the 550-MW Topaz project -- a deal not subject to oversight by the Bureau of Land Management.

What's more, the sidelining of the utility-project build-out in the U.S. comes ahead of Germany's expected cut in subsidies (or "feed-in tariffs") for the solar industry there. Many analysts believe the tariff reductions will hurt Germany's ground-based solar business the most, a space where First Solar is a huge player.