Solar

First Solar to invest $1B in new U.S. module factory

First Solar to invest $1B in new U.S. module factory
First Solar's module manufacturing facility in Ohio (Courtesy: First Solar)

First Solar plans to invest more than $1.2 billion to build a new module manufacturing facility, and increase capacity at its existing operations, in response to credits for U.S. solar manufacturing that were included in the Inflation Reduction Act, the company announced.

First Solar plans to invest up to $1 billion in a new, 3.5 GW module factory in the Southeast, while an additional $185 million will be dedicated to adding nearly 1 GW of new manufacturing capacity to the company's facility in Ohio.

Pending regulatory approvals, First Solar said it expects the new factory to come online in 2025. First Solar expects the investment to create "at least" 850 new manufacturing jobs, bringing the company's U.S. employment total to more than 3,000 people in four states by 2025.

“In passing the Inflation Reduction Act of 2022, Congress and the Biden-Harris Administration has entrusted our industry with the responsibility of enabling America’s clean energy future and we must meet the moment in a manner that is both timely and sustainable,” First Solar CEO Mark Widmar said in an August 30 statement. “This investment is an important step towards achieving self-sufficiency in solar technology, which, in turn, supports America’s energy security ambitions, its deployment of solar at scale, and its ability to lead with innovation."

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First Solar said it also intends to expand capacity at its Perrysburg and Lake Township, Ohio facilities by 0.6 GW to 3.6 GW. The company will also expand a third Ohio factory, expected to be commissioned in the first half of 2023, to 3.5 GW.

Taken together, First Solar expects the investments to total over $3 billion with a cumulative annual production capacity of over 7 GW by 2025. The company expects to have over 10 GW of U.S. manufacturing capacity by 2025.

On a July call with investors, First Solar announced it had a "record" bookings backlog of 44.3 GW.

Widmar signaled that "further investments" could be announced in the future, depending on market demand.

Baked into the Inflation Reduction Act are provisions of the Solar Energy Manufacturing for America Act, which incentivizes U.S. production throughout the solar value chain. The incentives would provide new certainty for domestic solar manufacturers and developers, who seek a 'Made in America' product that is difficult to source.

Elements include:

  • 11 cents/watt for integrated modules
  • 7 c/w for non-integrated solar modules
  • 4 c/w for cells
  • $12/sq. m. of wafer
  • $3/kg of polysilicon
  • 40 c/sq. m. of polymeric backsheet

"First Solar’s citing the IRA in their decision makes clear how powerful a tool the IRA is in supporting the development of a resilient, sustainable solar supply chain," said Michael Parr, executive director of the Ultra-Low Carbon Solar Alliance, which advocates for sustainable solar manufacturing. "We look forward to many more announcements from other manufacturers to build out a low-carbon solar supply chain in the U.S." 

The passage of the Inflation Reduction Act has already led to a flurry of solar supply chain announcements.

First Solar's announcement follows a previous commitment from QCells parent company Hanwha to double its U.S. module manufacturing capacity through a "multi-billion dollar" investment. Bloomberg reported on Aug. 15 that Hanwha QCells was recently scouting potential factory locations in Texas.

SPI Energy Co. said it signed a letter of intent to secure a 1.5 GW solar wafer manufacturing equipment. The company is targeting delivery and production of the solar wafers in the U.S. by 2023. It said it also plans to increase its solar wafer manufacturing capacity to 3 GW by 2024.

In its announcement, the company also cited the Inflation Reduction Act of 2022 which created incentives for companies to produce solar wafers and solar modules in the United States. Solar wafer manufacturer will receive $12 per square meter of each solar wafer it produces.

“I am very grateful to see the bill passed,” as it will boost U.S. manufacturing and create jobs, said Xiaofeng Denton Peng, chairman, and CEO of SPI Energy. 

Days after the bill was signed into law, REC Silicon and Mississippi Silicon said they had committed to negotiating a raw material supply agreement and helping establish a low-carbon U.S. solar supply chain— a partnership the companies said is possible because of the legislation.

The companies said in a statement they will expand their relationship to support the development of an "end-to-end U.S. solar supply chain" from raw silicon, to polysilicon, and fully assembled modules.

"We are hopeful that with the passage of the Inflation Reduction Act… the entire solar supply chain in the US will be fully established and placed in a position to flourish," REC Silicon CEO James A. May II said.

GO DEEPER: Former SEIA CEO Rhone Resch, Heliene president Martin Pochtaruk, and Ultra-Low Carbon Solar Alliance executive director Michael Parr discussed what it will take to scale U.S. solar manufacturing capacity in a recent episode of the Factor This! podcast. Subscribe wherever you get your podcasts.

The urgency to scale U.S. solar manufacturing centers around President Joe Biden's two-year pause on new tariffs on solar modules imported from Southeast Asia.

The U.S. Dept. of Commerce is investigating whether solar modules imported from Malaysia, Thailand, Vietnam, and Cambodia are circumventing trade duties against China. These four countries now account for more than 80% of the solar modules imported into the U.S.

The Commerce investigation of the Auxin Solar petition continues. Any duties levied against Southeast Asian module imports would be imposed after the 24-month period expires in June 2024, the agency said in a statement.