First Solar Achieves Record 12.1 Gigawatts of Module Production in 2023

2024-02-28

First Solar, a renowned solar module manufacturer with a rich history, conducted its earnings call for the fourth quarter and full year of 2023 on February 27, 2024. The call was graced by key figures such as Mark Widmar, the chief executive officer, and Alex Bradley, the chief financial officer.

In 2023, First Solar commemorated its 25th anniversary, signifying a significant milestone for the company. Throughout the year, First Solar achieved notable milestones, including the expansion of its manufacturing capacity and the establishment of a new facility in Louisiana. The company also set a record by producing and shipping 12.1 gigawatts of modules, marking a 33% increase from the previous year. Moreover, First Solar bolstered its contracted backlog to unprecedented levels, securing 28.3 gigawatts of net bookings at a base ASP exceeding $0.30 per watt.

The total contracted backlog for First Solar now stands at 80.1 gigawatts, with an average ASP per watt of $0.319 pre-adjuster or $0.339 per watt if contract technology adjusters are realized. This robust backlog, coupled with potential adjusters for the 39.1 gigawatts of contracted volume, could yield an additional revenue of approximately $0.5 billion or around $0.01 per watt.

Financially, First Solar reported net sales of $1.2 billion for the fourth quarter of 2023 and $3.3 billion for the entire year. The gross margin for the fourth quarter was 43%, influenced by factors like the adjustment related to the sale of Section 45X tax credits and a higher mix of modules sold from non-US factories. The full-year EPS for 2023 amounted to $7.74, with the sale of Section 45X tax credits and the impairment of the investment in Cubic PV impacting the EPS by roughly $0.48 per watt.

In 2023, First Solar made substantial investments in expanding its manufacturing facilities, including a $1.1 billion investment in a new facility in Louisiana expected to add 3.5 gigawatts to their nameplate capacity by 2026. Expansion projects were also underway in Alabama and Ohio.

Technologically, First Solar achieved significant milestones in 2023, such as converting the lead line for commercial deployment of bifacial CadTel modules, enhancing their product offerings. Progress was also made in supply chain and logistics operations through agreements with Vitro, OMCO, Ice Industries, and Saint-Gobain for the supply of materials in the US and India.

First Solar's operations had a notable impact on the US economy, supporting over 16,000 direct, indirect, and induced jobs in 2023, with projections to bolster approximately 30,000 jobs by 2026, contributing significantly to labor income and economic output.

Looking forward, First Solar has set ambitious goals for the future, aiming to exit the decade stronger than they entered it by focusing on differentiation, growth, profitability, and liquidity. The company plans to continue expanding its manufacturing capacity, targeting over 25 gigawatts of total nameplate capacity by the end of 2026, including 14 gigawatts in the US.

Acknowledging challenges in the solar industry, such as Chinese subsidization and dumping practices, forced labor in the supply chain, and trade policy loopholes, First Solar remains committed to addressing these issues and maintaining a robust business pipeline. The company prioritizes long-term customer relationships, selective contracting, and endeavors to optimize outcomes during periods of pricing and policy uncertainties.

In conclusion, First Solar's earnings call for the fourth quarter and full year of 2023 showcased their achievements, financial performance, investments, technological advancements, and future aspirations. With a strong contracted backlog, expanding manufacturing capacity, and a proactive approach to industry challenges, First Solar is well-positioned for sustained success in the solar sector.