First Solar announced on Tuesday that it would build a new solar panel manufacturing facility in the United States in response to the Inflation Reduction Act, which promotes local manufacture.
The company plans to invest up to $1 billion in the construction of a new facility in the Southeast of the country. The recently announced facility will be the panel manufacturer’s fourth fully integrated U.S. production.
A further announcement made by First Solar on Tuesday was that it would spend $185 million upgrading and expanding its current facilities in Ohio.
The choice to build another production here rather than abroad was made by the corporation, according to CEO Mark Widmar, in large part because of the IRA.
He claimed that the financial packages for the first time result in “a long-term view and understanding of the business, and policies aligned to that industry.”
After careful consideration, the U.S. turned out to be a very alluring option, he remarked. With that level of clarity, we went back and considered the alternatives or potential directions for our future facility.
The application of incentives to each stage of the supply chain, beginning with the manufacturer and finishing with the final consumer, according to Widmar, has never been done before.
“You can develop relationships and opportunities to grow together as a community and more of a win-win type of framework than we may have had before the establishment of the IRA,” he continued.
First Solar estimates that by 2025, the new factory will have the potential to produce 3.5 GW of solar modules annually, giving the company’s Ohio facilities a combined annual production capacity of over 7 GW.
To put things in perspective, according to the Solar Energy Industries Association, the United States’ solar capacity climbed by 3.9 GW in the first quarter of 2022. The nation’s total solar industry currently has a capacity of 126.1 GW, enough to power 22 million homes, according to SEIA.
Shares of First Solar have gained by 65% since the end of July, when Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va., announced their surprising agreement on the climate, health care, and tax legislation.
First Solar gains in several ways from the legislation, which was swiftly approved by the House and Senate and made law by President Joe Biden. Included in this is the production tax credit for homegrown firms. Utility-scale panels are First Solar’s area of expertise; they are the country’s largest solar panel manufacturer.
First Solar is having difficulty keeping up with the demand boom as of the introduction of the facility. During the conference call for the second quarter, First Solar said that it has a 44 GW backlog and is sold out until 2025.
Widmar claims that First Solar wants to get the building of its new factory done quickly. The organisation takes into consideration a place that is as close to being shovel ready as is practical. Other factors include the type and availability of labour in the area.
By the conclusion of the current quarter, First Solar will have discovered the spot.
I think the industry is in the best position it has ever been for development beyond any hopes that anyone would have predicted, according to Widmar.