First Solar adds 6.8GW of module capacity in 2023

First Solar produced 12.1GW of modules in 2023, up from 9.1GW in 2022. Its US manufacturing plants produced 4.4GW last year, an increase from the 2.6GW registered in 2022. International manufacturing plants excluding India produced 7.1GW of modules, up from 6.5GW in 2022.

The manufacturing plant in India produced 0.6GW of modules last year.

“The growth was driven by manufacturing excellence at our Series 6 factories, which produced 9.7GW in 2023, an increase of 600MW compared to 2022, and the successful ramping of our new Series 7 factories in the US and India, which combined to produce more than 2.4GW in 2023. Our top production bin for Series 6 was 475W, and our top production bin for Series 7 was 545W,” said Mark Widmar, CEO of First Solar.

Aside from module production capacity, First Solar’s backlog for 2023 also increased from 61.4GW in 2022 to 78.3GW with an aggregate value of US$23.3 billion or approximately $0.298 per watt. The company sold 11.4GW of modules but received 28.3GW of net bookings last year. In the first two months of the year, until 27 February 2024, First Solar added an extra 1.8GW of net bookings, increasing its backlog to 80.1GW.

Looking ahead, First Solar’s module sale is expected to be in the range of 15.6GW-16.3GW, with 5.8GW-6.1GW to be produced in the US. In India, First Solar will produce and sell 2GW-2.2GW of modules.

The company’s global average selling price (ASP) is expected to be US$0.282 per watt, including domestic India sales.

“From a cost perspective, the full year 2024 cost watt produced is forecast to be in the range of US$0.187-US$0.189 per watt, an approximately 2% to 3% improvement versus 2023. This is driven by expected improvements in throughput, yield and reduced inbound freight and variable costs, as well as the benefit of an increased mix of lower-cost India production, partially offset by increased costs related to the rollout of our bifacial product,” said Alex Bradley, CFO of First Solar.

The company also aimed to increase its nameplate capacity to over 21GW by the end of 2024. Widmar added: “Our new Louisiana facility is also on track and is expected to commence commercial operations in late 2025, bringing our expected total nameplate capacity to over 25GW by the end of 2026 with 14GW in the US.”

As the company continues to increase its annual nameplate capacity of CdTe thin-film modules, Finlay Colville, head of research at Solar Media, forecast last November that First Solar could be the only module manufacturer not to be affected by a looming solar PV manufacturing downturn in 2024.

Recently, First Solar published a study which stated that First Solar’s plans for 14GW of domestic US module production in 2026 would add an “estimated” US$4.99 billion to the value of the US economy and US$10.18 billion in “output”, the value of products produced by the economy per year. This is in addition to around US$2.78 billion in labour incomes from around 30,000 direct, indirect and induced jobs, which the report estimated would result from First Solar’s operations by 2026.

Financial performance

Last year, First Solar’s net sales reached US$3.32 billion, up from US$2.62 billion in 2022 driven by higher module volumes sold and ASPs. In 2024, First Solar expects its net sales to be in the range of US$4.4-4.6 billion.

The company also turned its business around by recording US$830.8 million of net income for 2023, up from a net loss of US$44.2 million in 2022.

Lastly, First Solar’s operating income is forecasted to be between US$1.5 billion and US$1.6 billion, including production startup expense of US$85-US$95 million, under utilisation costs associated with factory ramp up of US$40-US$60 million, and Section 45X tax credits of US$1-US$1.05billion. Last December the company secured a US$700 million tax credit transfer agreement on Section 45X, which the company claimed was the first of its kind in the solar manufacturing industry.

Analyst commentary from Motley Fool.