American solar module manufacturer First Solar reported net sales of $794 million in Q1/2024 as its net income improved by $194 million to $237 million. However, the net sales dropped by over 31% annually due to historical seasonal low demand for solar modules. 

The management reported a gross profit margin of 43.6% for the reporting quarter, with a sequential increase of 0.2% and a year-over-year (YoY) improvement of 23.1%. Due to capital expenditures on manufacturing capacity expansions in Alabama, Louisiana and Ohio, First Solar’s net cash decreased to $1.4 billion from $ 1.6 billion at the end of the previous quarter. 

It produced 2.4 GW of Series 6 modules during the reporting quarter and 1.2 GW of Series 7, and sold 2.7 GW capacity. It also entered 2.7 GW of new contracts during the quarter, taking its total backlog to 78.3 GW with an aggregate value of $23.4 billion, extending through 2030. 

Total booking opportunities of First Solar stood at 72.8 GW, out of which 29.4 GW is at the mid-to-late stage. Of the latter, 25.8 GW is in North America and 3.2 GW in India. The management is not recognizing signed contracts in India as bookings till it receives full security against offtakes. 

The management has reiterated its annual guidance for 2024 as 15.6 GW to 16.3 GW of solar modules and net sales of $4.4 billion to $4.6. billion. 

However, it has increased its capital expenditure forecast for 2024 from a range of $1.7 billion to $1.9 billion to $1.8 billion to $2.0 billion as it invests in capacity expansion and technology improvements. 

Net sales and cost of sales profile exclude the benefit of Section 45X tax credits which it expects to be approximately 35% to 40% in H1 and 60% to 65% in H2. 

“We forecast Section 45X tax credits of approximately $400 million in the first half of the year and $620 million in second half of the year,” stated the manufacturer. 

On a call with analysts following its financial results announcement, First Solar said it is positioned strongly vis-à-vis competition, touting its cadmium telluride (CdTe) technology as a differentiated technology when compared to highly commoditized crystalline silicon modules. 

CEO Mark Widmar added that the difference in its technology becomes all the more significant in the wake of various TOPCon solar cell technology patent infringements and intellectual property rights. It casts doubts on numerous crystalline silicon producers having the freedom to legally manufacture and sell this technology, he added. 

Additionally, he pointed to First Solar factories operating at near nameplate capacity in Q1/2024 while the average large Chinese solar manufacturing facilities are cutting down their capacity utilization rate due to overcapacity in the market.  

First Solar, along with some other solar PV manufacturers in the US, recently filed a set of antidumping and countervailing duty (AD/CVD) petitions with the US government to investigate ‘potentially illegal trade practices’ by Cambodia, Malaysia, Thailand and Vietnam. This is a bid to curb imports from Chinese manufacturers. 

Meanwhile, in India where the company operates a 3.3 GW module manufacturing facility, First Solar has been added to the Approved List of Models and Manufacturers (ALMM) on April 29, 2024. 

During the call with analysts, Widmar pointed to the need to stop dumping of solar cells and other upstream products in India as these undermine the country’s ability to scale vertically integrated manufacturing capacity. He added, “With this in mind, we are seeking an investigation into the dumping of solar cells in the India market. We believe that investigation is necessary to unfair, market-distorting behavior that denies domestic manufacturers in India a level playing field on which to compete as the industry scales.”