First Solar posts lower sales, revises down end-of-year forecast, in Q3 results

“As we approach the end of 2024, we remain pleased with the progress made across our business, navigating against a backdrop of industry volatility and political uncertainty, with a continued focus on balancing growth, profitability, and liquidity,” said First Solar CEO Mark Widmar.

“We expect that our disciplined, long-term approach will allow us to work through the outcomes of the upcoming US elections as well as the continued volatility across the solar manufacturing industry.”

Looking ahead, First Solar expects its sales backlog to reach 73.3GW of modules through 2030, and complete the expansion work at its Louisiana manufacturing facility in the first half of 2026, as scheduled. The company also plans to launch its CuRe series of modules, cadmium telluride (CdTe) products that aim to minimise degradation rates, and advance its perovskite research for testing in “manufacturing like conditions”, in the fourth quarter of this year.

Module production versus sales performance

First Solar’s sales declines contrast to its growth in module production. The company noted that expenses associated with operating its new factories in Alabama, which began commercial production last month, had affected its financial performance, but has also expanded its module manufacturing capacity.

The graph below shows how, in the past nine years, First Solar’s quarterly module production has increased, as net sales have fluctuated. In the third quarter of this year, the company produced 3.8GW of modules, and has now produced a greater capacity of modules in the first three quarters of this year than any other complete year in the company’s history, save for 2023.

The final point on the 2024 net sales line reflects the company’s forecasts for its end-of-year sales figures, which it expects to reach from US$4.1-4.25 billion. This is a revision down from its earlier forecast, from US$4.4-4.6 billion.

The company has also revised down its forecast for its end-of-year figures for gross margin, from a peak of US$2.1 billion to a peak of US$2 billion, and its volume of modules sold from a high of 16.3GW to a high of 14.6GW.

This uncertainty is perhaps to be expected, as the US solar sector, particularly its module manufacturing component, undergoes rapid change. Last month, a report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie noted that since the passage of the Inflation Reduction Act (IRA), the US’ solar module manufacturing capacity has nearly quadrupled, a dramatic change in the country’s solar supply chain.

Many of the financial incentives offered under the IRA also continue to play a key role in the performance of the US’ solar companies. First Solar’s results note that as much as US$1.05 billion of its gross margin will be derived from Section 45X manufacturing tax credits, which First Solar expects to constitute more than half of its gross margin at the end of the year.

A report from Crux found that advanced manufacturing technologies, such as those covered by the 45X tax credit, accounted for the majority of investment tax credit support offered by the US government, and the continued presence of these tax credits could encourage further investments into the manufacturing space, and further disrupt the current US solar sector.