US cadmium telluride (CdTe) thin-film module manufacturer First Solar has highlighted the political and policy uncertainties in the US during its second quarter earning call.
Regarding the upcoming US election – which could see a possible change in the executive administration – Mark Widmar, CEO of First Solar, said: “The impact of this uncertainty became more apparent as the second quarter progressed. We have observed increasing constraints on access to capital, both for early stage solar technology companies seeking to finance the next stage of their growth as well as for the established companies looking to build domestic manufacturing capacity. Our financing parties wait to make investment decisions until they have a clear view of the policy picture.”
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Widmar added that the uncertainty has also impacted developers, who are evaluating project risks and returns, while some oil and gas power companies and utilities are contemplating pivoting from renewables to prioritise fossil projects.
However, the implementation of the Inflation Reduction Act and its benefits for the solar manufacturing industry “significantly” contributed to the economies in many states, “particularly those located in traditionally red states”, said Widmar.
Higher module sales and ASP
Regarding its financial results for Q2 2024, First Solar registered net sales of US$1 billion in the second quarter of 2024.
Due to an increased sales volume of modules – 3.3GW in Q2 2024 versus 2.7GW in Q2 2023 – and a higher average selling price (ASP) per watt, the company reported a net sales increase of 25% from the same period last year. Adding that year-to-date net bookings sit at 3.6GW, of which 0.9GW came since the previous earning call.
Contracted backlog, on the other hand, stands at 75.9GW, with orders up through 2030.
In terms of module production, the company continues to increase its module capacity produced with 3.7GW in Q2 2024, up 33% from the same period in 2023. Currently the Series 6 remains the main driver with 2.5GW of modules produced, while Series 7 represented 1.2GW in Q2 2024. Overall in the first half of the year 2024, First Solar has produced more than the first three quarters of 2022 combined.
The company also recently secured a 620MW module supply agreement with a yet undisclosed US customer.
Manufacturing expansion
First Solar continues to expand its annual nameplate capacity with the Ohio facility expansion completed and commercial shipment already started. The completion of the new phase added 1GW of nameplate capacity in Ohio, bringing the total to 7GW.
In Alabama, the company aims to complete installation of tools and plant certification, and start production during Q3 2024, with the first commercial shipments expected in Q4 2024. Finally, the Louisiana facility remains on track to start commercial operations during the second half of 2025. First Solar is also on track to open its perovskite development line at its Ohio campus in the second half of this year.
Once the plants in Ohio, Alabama and Louisiana all become operational, First Solar expects to have an annual nameplate capacity of 14.1GW in the US alone.
On top of its manufacturing expansion, the CdTe thin-film module manufacturer recently opened its new research and development (R&D) centre in Ohio, after nearly two years of construction. The Jim Nolan Center for Solar Innovation – named after the company’s former director – will focus on developing First Solar’s CdTe thin-film solar cell and module technology alongside prototype tandem products. Investment in R&D from First Solar continues to increase with US$52 million in Q2 2024, 15% higher than Q2 2023.
In tandem with opening the R&D centre, First Solar announced a new “world record” CdTe thin-film solar cell efficiency of 23.1%.
The milestone was reached at its California Technology Centre (CTC) in Santa Clara, California, and certified by the National Renewable Energy Laboratory (NREL), which is under the jurisdiction of the Department of Energy.
TOPCon patents
Although known for its CdTe thin-film modules, First Solar recently revealed the ownership of issued and pending patents of tunnel oxide passivated contact (TOPCon) and crystalline silicon solar cells. Regarding these, Widmar said: “Based on thorough and ongoing analysis, including the engagement of third-party legal and technology experts, we firmly believe in the value and strength of our patents and are investigating several leading crystalline silicon cell manufacturers for potential infringement. If infringement is discovered, we intend to challenge the ability to manufacture, assemble and sell infringing TOPCon technologies by pursuing enforcement, licensing, and other measures to safeguard our rights.”
Financial guidance for this fiscal year remains unchanged with a target to sell modules between 15.6-16.3GW in 2024.
Earnings call commentary was sourced from Motley Fool.
