First Solar is targeting 6.6 GW of nameplate Series 6 capacity by the end of 2020. The newly announced 1.2 GW Ohio factory is a key pilar in the process.(Source: First Solar, Inc.)
- First Solar will be setting up a 1.2 GW new production facility in the US, next to its current 600 MW annualized production site in Perrysburg, Ohio
- Construction will begin in mid-2018 and production is scheduled to start in late 2019
- The new facility will produce its new Series 6 modules
- Expected increase in Series 6 global nameplate capacity will be 6.6 GW as it exits 2020
- Net sales for Q1/2018 increased sequentially to $567 million thanks to the sale of its projects in India and Japan, and the sale of Rosamond project in the US partially offset by lower third-party module sales
- Guidance for 2018 largely remains unchanged: net sales for the year will be in the range of $2.45 to $2.65 billion and shipments are expected to be around 2.9 to 3.0 GW
Analysts See Transition Phase As Earnings Grow And Revenue Dip, But Are Positive On Long-Term Growth
(28. April 2016)
First Solar, Inc. has revealed plans to establish a new 1.2 GW module manufacturing facility in Ohio, US. It will be dedicated to producing its new Series 6 thin film modules. This will be its second facility in the US, and will be located in Lake Township, in the vicinity of its existing facility in Perrysburg, Ohio. Construction is set to begin in mid-2018.The new facility is scheduled to start module production in late 2019.
This new production capacity, along with its current capacity of 600 MW at Perrysburg, will take its total annualized US based manufacturing capacity for its CdTe thin-film modules to 1.8 GW once the new facility is operational. In 2017, First Solar spent $175 million for tweaking the Perrysburg plant to produce its Series 6 line. It continues to produce its current Series 4 modules on one of the production lines.
“Strong demand in the US for advanced solar technology, along with recent changes in US corporate tax policies, have encouraged our decision to grow First Solar’s US production operations,” said Mike Koralewski, First Solar’s senior vice president of Global Manufacturing.
The new fab will require capital investment of around $400 million and will need 500 associates in the process. Koralewski said the company may go in for further manufacturing expansion in the future, depending on demand in the US. The company also has production facilities in Malaysia and Vietnam.
US consultancy GTM Research says since First Solar produces CdTe technology, their modules do not fall in the purview of the 30% import tariff the current US administration has announced for imported crystalline silicon based cells and modules (see Trump Slaps 30% Tariff On Imported Cells & Modules). SunPower, another US company with production facilities abroad, just announced to acquire SolarWorld Americas which will help in avoiding the trade tariffs (see SunPower Acquires SolarWorld Americas).
First Solar’s announcement for production expansion was made to coincide with its Q1/2018 results, which were very positive. Net sales increased by $228 million sequentially to $567 million. Sale of its projects in India and Japan, as well as the sale of its US Rosamond project was partially offset by lower third-party module sales.
Year-to-date net bookings reached a cumulative of 3.3 GW, with 2 GW booked since last quarter.
“Our earnings for the quarter were supported by the sale of both domestic and international projects, combined with efficient management of core operating expenses,” ” said CEO Mark Widmar. He pointed out that customer demand for our Series 6 product continues to be strong as evidenced by our year-to-date net bookings of 3.3GWDC. “We also achieved significant technology milestones this month with the start of Series 6 production in Ohio and the first commercial module shipments to systems projects,” he emphasized.
Total nameplate capacity of First Solar’s production will be around 7.6 GW at the end of 2020. This will include 1 GW for its Series 4 capacity and 6.6 GW of its Series 6 production capacity, shared the management.
Guidance basically untouched
First Solar left most part of its previously announced guidance for 2018 untouched, but it did bring down net cash guidance by $100 million owing to higher capital expenditures for additional Series 6 capacity. Net sales for the year will be in the range of $2.45 to $2.65 billion, with gross margin of 21.5% to 22.5%. Shipments are expected to be around 2.9 to 3.0 GW.
First Solar’s continued growth has earned it praise from analysts. “The company is nearly three years sold out, and we expect the company to continue to book volumes well in advance given its deep partnerships with its customers,” said Philip Shen of Roth Capital Partners. “The company is effectively playing a different game now vis-a-vis its competition. Looking ahead, we see more potential for capacity expansion and upside from a systems business that we expect to win share ahead with its differentiated technology.”