First Solar announced Thursday it plans to open a new solar module manufacturing plant near its existing facility in Perrysburg, Ohio. The 1.2 gigawatt factory will produce the company's Series 6 thin film PV modules, with construction slated to begin in mid-2018 and full production mode expected in late 2019.
The plan, unveiled moments before First Solar's first quarter earnings call, is contingent on confirmation of state and local incentive packages currently under negotiation. If approved, the 1 million square foot facility in Township, Ohio is forecast to create 500 new jobs in the state.
The announced expansion, combined with First Solar's current Series 6 manufacturing capacity of 600 megawatts, will bring the company's annualized U.S. manufacturing capacity for thin film PV solar modules will total 1.8 gigawatts. For comparison, Tesla's solar Gigafactory is expected to have 1 gigawatt of annual capacity by the end of 2019, and 2 gigawatts at some point in future.
“Strong demand in the U.S. for advanced solar technology, along with recent changes in U.S. corporate tax policies, have encouraged our decision to grow First Solar’s U.S. production operations,” said Mike Koralewski, First Solar’s senior vice president of global manufacturing, in a statement. “State and local officials and Jobs Ohio have also worked with us to create a business-friendly environment that supported our objectives. These factors, combined with our own economies of scale in high tech manufacturing, make expanding U.S. operations an attractive, win-win opportunity.”
Capital investment for the new factory will be approximately $400 million, with an annual payroll of approximately $30 million. Koralewski said First Solar also has options to pursue additional manufacturing expansions in future, depending on the level of U.S. demand for advanced solar technology.
First Solar is the nation’s largest manufacturer of PV modules. The company has also seen strong growth in its project development business, while competitors have been stymied by new solar tariffs. Last year, First Solar locked down a record 7.8 gigawatts-DC of net bookings and currently holds a 10.6-gigawatt project pipeline, according to the company's latest earnings report.
“With this level of visbility into shipments between now and 2020, combined in our mid- to late-stage pipeline…we feel confident in making the decision to add additional capacity,” said CEO Mark Widmar on the earnings call.
By bucking the trend of making crystalline-silicon photovoltaics (CSPV) several years ago, and pursuing its cadmium-telluride solar technology instead, First Solar was able to avoid the 30 percent tariff placed on imported CSPV cells and modules earlier this year.
That tariff has competitors such as SunPower scrambling to find work-arounds. SunPower, which produces the majority of its high-efficiency CSPV products overseas, is currently seeking a tariff exclusion from Trump administration trade officials. The company also announced plans to buy trade case petitioner SolarWorld Americas, in a bid to boost its U.S.-based manufacturing footprint and bolster its case to win an exemption for its foreign-made modules.
First Solar's U.S. manufacturing announcement comes despite the fact that its foreign-made products are already tariff-free, signaling the company truly sees a compelling U.S. business case. “This is exactly the result we had hoped for, and are delighted that First Solar reacted so quickly,” according to a statement from U.S. Commerce Secretary Wilbur Ross.
Like SunPower, First Solar makes the majority of its products overseas at its production facilities in Malaysia and Vietnam, which are also scheduled to see expansions. The solar manufacturer seeks to reach a total of 7.6 gigawatts of annual manufacturing capacity by the end of 2020, said Widmar. If all goes to plan, First Solar's U.S. facilities will make up about a quarter of that.
“This is a big deal, especially considering the expansions they've planned at facilities in Malaysia and Vietnam,” said Jade Jones, senior solar analyst at GTM Research. “First Solar is getting really aggressive about adding capacity, where historically its been more reserved.”
Source: First Solar Q1 2018 earnings report
In 2017, First Solar invested $175 million into retooling its flagship Perrysburg plant in order to produce its new Series 6 product. This April, the facility re-started an idled Series 4 production line to meet continued demand for that product.
The company claims it has invested roughly $3 billion in Ohio since its inception, including wages paid, manufacturing purchases, R&D costs and taxes. That work has supported more than 4,000 indirect jobs across the state, according to the company.
This story was updated to include additional information from First Solar's Q1 earnings call.
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