US cadmium telluride (CdTe) thin-film module manufacturer First Solar has reached a module backlog of 71.6GW and sold all its allocated US capacity through 2026.
Since its last earnings call the company secured a further 4.8GW of net bookings, bringing the total for the year to 12.1GW.
However, net sales for the starting quarter of 2023 decreased by US$454 million from the previous quarter to US$548 million in Q1 2023 due to a lesser volume of modules sold. However, First Solar started its Q1 2023 stronger in terms of net sales than it did in 2022 when it registered US$367 million.
During Q1 2023, the cadmium telluride (CdTe) manufacturer produced 2.5GW of modules – more than it did for the whole of 2017 when it produced a little bit over 2GW that year –, a 21% increase from Q1 2022 and continues to increase its production capacity for a fifth quarter in a row. The company’s next generation of modules, the large-area series 7 accounted for 170MW of the 2.5GW modules produced in Q1 2023.
As the company ramps up the expansion of several of its facilities across the US, it was recently awarded a US$7.3 million grant from the US Department of Energy for the development of a cdTE/silicon tandem module aimed at the residential solar market.
“We entered 2023 in a significantly stronger commercial, operational, and financial position than the previous year, setting the stage for growth and improved profitability in 2023 and beyond,” said Mark Widmar, CEO of First Solar.
Outside of the US, the thin-film manufacturer was recently awarded in the second round of India’s Production Linked Incentive for a module facility with an annual capacity of 3.4GW, while the facility is expected to be operational and ramp up activities in the second half of this year.
Regarding a possible expansion in India, which is an important market for the company, First Solar is looking to grow further into it, said Widmar during the earnings call, adding: “As we scale up this factory, we’ll continue to assess opportunities for additional investments and further fact expansion in India.”
Guidance for 2023 remains unchanged with a target of modules sold between 11.8-12.3GW and net sales of US$3.4 billion to US$3.6 billion.
Module and glass supply agreements
On the same day First Solar released its financial results for Q1 2023, the company secured a 2GW supply agreement with solar developer Leeward Renewable Energy. Modules are expected to be delivered between 2026 and 2027.
This increases the ongoing supply agreement both companies have when a year ago they signed a multi-year procurement agreement for 1GW of First Solar’s thin-film modules. The solar developer has since acquired a total of 6GW of modules to be delivered by 2028.
Furthermore, First Solar has entered into an agreement with glass manufacturer Vitro for the manufacturing of float glass, an important component for the manufacturing of thin-film solar panels. Vitro will invest US$93.6 million to rebuild and modernise a production line in Pennsylvania to support the thin-film manufacturer’s growing manufacturing footprint in the US.
Production of the float glass components is expected to start in the second quarter of 2025.
Mike Koralewski, chief supply chain officer at First Solar, said: “Our fully vertically integrated factories must be served by robust, domestic supply chains that produce vital components such as glass and steel and even wooden crates, while supporting thousands of American jobs.”
Analyst commentary from Seeking Alpha.