Following the Inflation Reduction Act, which encourages local production, First Solar declared on Tuesday that it would construct a new solar panel manufacturing facility in the United States.
The corporation aims to develop a new facility in the Southeast of the United States and will invest up to $1 billion in it. The recently announced facility will be the fourth fully integrated U.S. production for the panel manufacturer.
Additionally, on Tuesday, First Solar said that it would invest $185 million in Ohio to upgrade and expand its current facilities.
The company decided to build another production in the U.S. rather than looking abroad, according to CEO Mark Widmar, who cited the IRA as the major motivator.
According to him, the financial packages bring about a “long-term view and understanding of the industry, and policies aligned to that industry,” for the first time.
“With that level of clarity, we stepped back and evaluated the alternatives or the options of where we could go with our next factory and when we looked at it comprehensively the U.S. was a very attractive option,” he said.
According to Widmar, this is the first time that incentives have been applied to every step of the supply chain, starting with the manufacturer and ending with the final customer.
“With that type of alignment, you can create partnerships and opportunities to grow together collectively and more of a win-win type of structure than maybe we had before the implementation of the IRA,” he said.
By 2025, according to First Solar, the new factory will produce 3.5 GW of solar modules annually, with the company’s Ohio sites having a combined annual production capacity of over 7 GW by that time.
By way of perspective, the Solar Energy Industries Association reports that the U.S. increased its solar capacity by 3.9 GW in the first quarter of 2022. According to SEIA, the nation’s overall solar industry currently has a capacity of 126.1 GW, which can power 22 million homes.
Since the end of July, when Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va., announced their unexpected agreement on the climate, health care, and tax measure, shares of First Solar have increased by 65%.
First Solar benefits in a number of ways from the legislation, which was rapidly passed by the House and Senate and signed into law by President Joe Biden. This includes the domestic manufacturers’ production tax credit. The largest solar panel manufacturer in the United States, First Solar, specializes on utility-scale panels.
The announcement of the plant comes as First Solar struggles to meet the surge in demand. First Solar stated that it has a 44 GW backlog and is sold out through 2025 during its second quarter conference call.
First Solar, according to Widmar, aims to complete the construction of its new factory swiftly. A location that is as near to being shovel ready as feasible is one of the factors the organization takes into account. The kind and availability of labor in the area are other considerations.
The location should be known by the end of the current quarter, according to First Solar.
“I think the industry is in the best position it ever has been…for growth beyond any expectations that anyone would have envisioned,” Widmar said.
