Takeaways

• Trade and policy uncertainties are prompting First Solar to expand its U.S. manufacturing capacity.
• The company plans to add new production lines and shift operations away from heavily tariffed regions.
• Despite contract disputes, First Solar maintains a strong bookings pipeline through 2030.

First Solar Inc. is ramping up its U.S. manufacturing operations in response to growing trade and policy challenges affecting imported solar components. The company’s third-quarter earnings presentation on October 30 highlighted several “headwinds” impacting solar panel imports, including potential new Section 232 tariffs on polysilicon components and possible retroactive duties on certain imports following an August trade court ruling.

Another major uncertainty comes from pending Treasury Department guidance on what qualifies as domestic content under the clean energy provisions of the Inflation Reduction Act, which could determine the level of tax credits available to solar manufacturers.

In a statement, First Solar CEO Mark Widmar said these developments are creating difficulties for many in the industry but are also strengthening First Solar’s competitive position. “While trade and policy developments have introduced new challenges for many in our industry, we continue to differentiate ourselves by offering pricing and delivery certainty,” Widmar said.

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During an investor call the same day, he emphasized that these external pressures reinforce the company’s decision to expand U.S. production and strengthen its domestic supply chain. “We believe this enhances the value proposition of our vertically integrated facilities and of expanding our U.S. manufacturing and production while reshoring supply chains,” he noted.

Manufacturing Expansion and Future Plans

First Solar produced 3.6 gigawatts (GW) of solar equipment in the third quarter, with 2.5 GW coming from U.S. factories. Its newest manufacturing plant began operations in Louisiana in August, and the company plans to launch additional finishing lines with a combined annual capacity of 3.7 GW at a new location to be announced soon.

Widmar also hinted that more U.S. investments could follow as First Solar continues to move production away from Southeast Asian markets, which face higher tariffs. “We are very excited about getting the first two lines up and running here next year,” he said.

Contract Dispute with Lightsource BP

First Solar is also pursuing legal action against Lightsource BP, a renewable energy company backed by BP. The developer terminated a 6.6-GW supply contract last year, which First Solar said was part of a larger pullback by oil-and-gas majors from renewable projects. The company has already booked $61 million in revenue from the deal but is seeking an additional $324 million in damages.

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Healthy Bookings Despite Challenges

Despite ongoing disputes, First Solar reported 54.5 GW in net bookings through 2030, reflecting steady demand in the U.S. market. Chief Financial Officer Alexander Bradley said that while the Lightsource BP termination accounted for most of the recent cancellations, some customers have already re-booked orders for future delivery.

As trade barriers rise and domestic manufacturing incentives evolve, First Solar appears well-positioned to capitalize on the shift toward made-in-America solar production.

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Source: ESG Dive