First Solar, Inc. (NASDAQ:FSLR) is facing a significant challenge in the form of slowing growth in utility-scale solar projects. About 65% of the company’s revenues come from sales of energy from large solar farms to utilities. But the Tempe, Arizona-based company’s best customers have bought almost all the green energy they need for now, reports Christopher Martin of Bloomberg.

First Solar

First Solar missing out on booming rooftop solar demand

On the other hand, First Solar, Inc. (NASDAQ:FSLR) is missing out on the booming residential solar market, which is dominated by Elon Musk-backed SolarCity Corp (NASDAQ:SCTY). Analysts are concerned that First Solar may be left behind as growth in big solar projects slows. Goldman Sachs analyst Brian Lee said in a research note that First Solar is poorly positioned as it has almost no exposure to the rapidly growing rooftop solar sector.

However, the company CEO Jim Hughes isn’t sitting idle. He has carved out a strategy that focuses on overseas sales growth. Last year, First Solar, Inc. (NASDAQ:FSLR) acquired Japan-based TetraSun that has a presence in Japanese residential solar markets. U.S. utilities have been purchasing solar projects because they have to. Twenty-nine states require utility companies to generate a certain percentage of their total energy from clean energy sources. Most utilities have already exceeded state requirements.

First Solar focusing on Asian and South American markets

First Solar, Inc. (NASDAQ:FSLR) is currently developing 3.7GW of projects in the U.S. That includes the Topaz Solar Farm, which the company estimates to complete this year. The 550MW project will supply power to 160,000 homes. Cowen & Co. analyst Rob Stone says that big projects like Topaz are unlikely to be repeated. Another thing working against First Solar is its technology. The company’s thin-film panels use a technology that’s less-efficient than polysilicon panels. That’s why it’s panels are not well-suited for rooftops.

Goldman Sachs anticipates the utility-scale solar projects to grow at only 8% annual rate between 2013 and 2016. First Solar, Inc. (NASDAQ:FSLR) is trying to get more sales from overseas markets. TetraSun is targeting rooftop business in Japan, which is expected to become the second largest solar market after China by the end of this year. Jim Hughes is pursuing more deals in South America, India, Australia and the Middle East. At the end of 2013, First Solar recognized 10.66GW of potential bookings. Of that, 5.9GW of opportunities are outside the United States.

First Solar, Inc. (NASDAQ:FSLR) shares were trading up 2.48% to $57.92 as of 11:31AM EDT today.