First Solar has warned of a challenging year ahead as shipping delays, costs and reliability issues are expected to weigh heavy on 2022 revenues.
First Solar closed the year with around 7.7GW in module shipments, 2.1GW of which were achieved in the fourth quarter. That total figure for the year stood towards the low end of its guidance, which the company largely attributed to protracted issues with the cost and reliability of shipping and freight.
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Total revenue for the year stood at US$2.9 billion, up 7.4% year-on-year.
The company’s warnings of a challenging year ahead from an earnings perspective are borne out in its forecasts for 2022. While module shipments are expected to increase to 8.9GW to 9.4GW, First Solar’s revenue forecast is lower for the current financial year and expected to fall to US$2.4 – US$2.6 billion.
Challenges with shipping and logistics have been well documented in the previous 12 months, with PV Tech Premium’s PV Price Watch feature continuing to monitor shipping price forecasts and delays.
First Solar said it finished 2021 with 1.2GW of modules still in hand and a further 675MW still in transit, the latter figure falling between the company’s recognition of modules shipped and revenues recorded. That figure still in transit is indeed lower than the 800MW+ reported at the firm’s Q3 2021 results, but still higher than historic averages.
First Solar chief executive Mark Widmar remarked that transoceanic freight issues had spiked again as 2021 drew to a close, with shipping times increasing by a matter of weeks and reaching double the normal duration. Furthermore, congestion at US ports had exacerbated those challenges, while around 30% of planned sailings were being cancelled at the turn of the year, drastically reducing the reliability of shipping internationally.
But despite the challenging shipping environment, First Solar said it was continuing to make progress in bookings and sales opportunities, with its booking opportunities pipeline having swollen from 45GWdc at the end of Q3 to 53.6GWdc at the end of the year. The manufacturer’s total bookings pipeline now stands at 17.5GWdc, nearly 12GWdc of which had been locked in since the firm’s Q3 2021 results in November.
That momentum has continued into 2022 with 4.8GWdc of bookings secured so far this year, and the company also formally announced a 1.5GW module deal with US developer SB Energy at the time of its results disclosure.
In total, First Solar has around 26.2GWdc of future expected shipments, with the manufacturer remaining sold out in 2022. 10.7GWdc of shipments is contracted for 2023, 3.4GWdc in 2024 and 2.4GWdc in 2025, a considerable increase on its future shipments guidance issued at the Q3 results call.
Capacity expansion and technology development
First Solar is pursuing a capacity expansion strategy to accommodate future orders, with its forthcoming Ohio facility expected to come onstream in H1 2023 and its facility in India expected by the end of that same year. First Solar expects to have 16GWdc of total annual manufacturing capacity by the end of 2024, however factory upgrades at the manufacturer’s existing facilities have meanwhile led to higher downtime, under utilisation and lower production rates in the short term.
The manufacturer finished the year having increased its Series 6 top bin by around 21% to 465W and stressed there was a path to increasing this further to 470 – 475W this year. However the new facilities are set to establish a mid-term goal of producing modules with outputs of up to 570W, power ratings which Widmar said would “lead the fleet” when ready.
Pilot programmes for bifacial CadTel modules are also continuing, having first been announced at the company’s Q2 2021 results. From initial programmes the manufacturer expects a mid-term target of producing a 490W bifacial CadTel module, and is continuing to work on commercialising the platform with performance tests ongoing.
Widmar also provided an update regarding First Solar’s CuRe enhancement programme, indicating that the company’s schedule to integrate CuRe across its lead lines by the end of Q1 2022, with a fleet-wide integration update set to be provided when that lead line integration is complete.
“Since the previous earnings call, we have conducted a series of CuRe runs on high volume production lines in Ohio. And while the trends are for improving module wattage and degradation appear favorable, we are still working to realize the full performance entitlement in high volume manufacturing conditions,” Widmar told analysts yesterday.
First Solar shares fell by around 16.5% in post-close trading yesterday after its results were disclosed.
