Both companies are going to profit as solar power consumption increases in the coming years. The Energy Information Administration estimates U.S solar power consumption is expected to rise by more than 60% in the next couple of years. Despite this staggering projected rise in consumption, First Solar estimates its earnings per share will average at $2.60, which is roughly 30% lower than last year.
First Solar anticipates stronger competition will continue driving down solar panels prices. In the second quarter, First Solar's earnings per share fell to 4 cents a share, although most of this drop in earnings was mostly due to project delays, for which the company expects getting paid in the coming months.
Despite the lack of growth in earnings, the company is still priced relatively low for a solar panel company as its enterprise to earnings before interest, taxes, depreciation and amortization ratio is only at 7.67. SunPower's ratio is at 14.43 and the power sector average is at 9.78. So for now the company's valuation isn't high even when considering its lack of growth in earnings this year.