said it plans to invest up to $1.2 billion to scale its U.S. solar panel manufacturing capacity in a bid to capitalize on the influx of capital and government funds designated for clean energy.
First Solar (ticker:
) intends to spend $1 billion to build a fourth domestic factory in the U.S. southeast, with an annual capacity of 3.5 gigawatts. The factory is expected to begin operations by 2025. The company also will invest $185 million to upgrade its Northwest Ohio manufacturing plants.
With the new addition, First Solar projects to have more than 10 gigawatts of panel-producing capacity by 2025 as demand for solar panels increases. At its last earnings call in July, executives said the company reached a record bookings backlog of 44.3 gigawatts.
The company is slated to be one of the big beneficiaries of the Democrats’ Inflation Reduction Act, which provides $369 billion in funding for climate change initiatives.
“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,” said Mark Widmar, chief executive of First Solar. “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.”
In addition to its Ohio plants, First Solar operates factories in Vietnam and Malaysia, and is building a new facility in India. Rather than scaling its presence in the U.S., the company previously had planned to expand its capacity in India, or shift manufacturing to Europe, in a bid to reduce costs.
But the recent legislation made the company do an about-face. One analyst estimates that the climate change bill could enable over $3 billion in cash on the company’s balance sheet by 2026.
First Solar Stock rose 2% to $124.10 in premarket trading on Tuesday. The shares have gained nearly 40% this year.
Write to Sabrina Escobar at firstname.lastname@example.org