As the largest solar manufacturer in the U.S., Arizona-based First Solar (FSLR) has long advocated for reduced reliance on Chinese supply chains.
Now, it’s investing $680 million to build out the largest solar manufacturing complex outside of China, in one of the largest bets on the domestic industry.
Speaking to Yahoo Finance Live, CEO Mark Widmar said the new facility in Lakestownship, Ohio, will expand the company’s manufacturing capacity to churn out solar panels that produce just over 3 gigawatts of power annually, enough to power roughly 570,000 homes, nearly doubling its output.
Combined with its two plants, Widmar said First Solar will have the capability to generate 6 gigawatts of power annually by 2025.
‘If you look across the balance of the competition or the capability here in the U.S., there'll be about 11 gigawatts of capacity here, which is still a little bit less than 50% of the market,” Widmar said. “But as we indicated in our announcement, we're more than able and willing, given the right policy backdrop and commitments to expand beyond where we are right now.”
The 1.8 million-square-foot facility is scheduled to begin operating in the first half of 2023, once necessary permits and local approvals are secured. Widmar said the factory will create roughly 500 jobs and produce an enhanced thin film PV module for large-scale installations, resulting in higher efficiency and lower cost.
It comes as the Biden administration moves aggressively to make the U.S. electric grid carbon-free by 2035. In a statement, Energy Secretary Jennifer Granholm touted First Solar as an example of how “investment and innovation can build the clean energy future right here at home.”
“There's been a pretty significant inflection point in demand near term and as we see it, across the next several years,” Widmar said. “The demand has been stronger than it ever has been. “We're sitting right now with a record backlog, and we're continuing to see very strong engagement and interaction with our customers. With the new factory I think that'll only accelerate.
First Solar remains largely an outlier in the domestic industry, as a manufacturer that produces panels in the U.S., with components largely sourced from America. Because it doesn’t use polycrystalline silicon — a critical raw material used in solar panels — it sources less than 1% of its supplies from China.
Globally, China maintains a tight grip on solar panel production, with more than 70% of the world’s polycrystalline silicon manufactured there. More than half of that production comes from the troubled Xinjiang region, where the U.S. has accused China of carrying out a genocide. That reliance has raised concerns among lawmakers who have called for a ban on federal funds being used to purchase solar panels manufactured in China.
Widmar said his new factory creates a template of sorts, for the U.S. to "decouple from any dependency on China." But he also admits, a larger shift away from manufacturing overseas may not come at scale, without tax incentives to bring production back home. He’s calling for manufacturing tax credits, to spur long-term changes in the solar industry.
"[Companies] have to have the capability to compete and compete on their own merits and not be disadvantaged because of another country's desire to dominate a particular industry and heavily subsidize it, and create challenges for any new company to scale up and to compete," Widmar said. "We think that the Manufacturing Tax Credit, enables that level playing field. That will then create the cycles of innovation that will then allow for the next generation evolution of PV, which needs to happen to continue to move this industry forward."
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita
