UPDATE 2-First Solar taps Honeywell executive as CEO

* Former Honeywell Aerospace CEO to start Oct 1

* Ahearn to remain as chairman, will focus on policy

* Stock firms 1 percent (Adds analyst comment, background, updates share activity, adds LOS ANGELES dateline)

NEW YORK/LOS ANGELES, Sept 3 (Reuters) - Solar power company First Solar Inc (FSLR.O) named the head of Honeywell International Inc's (HON.N) aerospace business as its new chief executive on Thursday to replace current CEO Michael Ahearn.

Robert Gillette, who was CEO and president of Honeywell Aerospace for the past 4-1/2 years, was chosen after a four- month search. He will take up the post on Oct. 1.

Prior to running Honeywell's $11 billion aerospace business, Gillette served in a number of management positions at the U.S. manufacturer since 1996. He previously spent more than 10 years at General Electric Co (GE.N)

First Solar is one of the world's largest makers of photovoltaic solar systems that turn sunlight into electricity and has performed better than most of its peers in a market downturn that has hurt demand for renewable energy sources.

Still, even with the lowest-cost solar panels in the industry, First Solar has not been immune to weakness in the sector, and its shares are down 13 percent this year.

ThinkEquity analyst Colin Rusch said the choice of Gillette should be positive for First Solar shares because of his history managing a large, multinational technology business.

"The significance of that is indicating to investors that their plans are to continue growing as one of the leading clean energy providers globally," Rusch said. "At first blush, (Gillette) looks like a very good choice."

Ahearn, who has been CEO and chairman since August 2000, will serve as the company's executive chairman. He has said he intends to focus on policy issues in his new role.

During Ahearn's tenure as CEO, he oversaw First Solar's launch of commercial production in 2002 and its meteoric rise from a small start-up to one of the biggest global players in renewable energy. He also shepherded the company through its 2006 initial public offering. It now has a market capitalization of more than $10 billion.

Separately, Honeywell named Tim Mahoney as the new head of its aerospace business. [ID:nN03105472]

First Solar shares were up 98 cents at $119.30 in early afternoon trading on the Nasdaq. (Reporting by Matt Daily; additional reporting by Nichola Groom and Laura Isensee in Los Angeles; editing by Matthew Lewis and Andre Grenon)