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First Solar (FSLR) Commences Louisiana Facility Construction

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First Solar, Inc. (FSLR - Free Report) recently commenced the construction of its fifth fully vertically integrated manufacturing facility in the United States. The facility, located in Louisiana and backed by an investment of $1.1 billion, boasts a manufacturing capacity of 3.5 gigawatts (GW). Such capacity additions should further boost FSLR’s position in the U.S. solar market.

Details of the Facility

The facility is claimed to be the largest solar manufacturing footprint in the Western Hemisphere and will cover more than two million square feet. The project will also assist in optimizing the manufacturing base as it will be designed to transform a sheet of glass into a ready-to-ship Series 7 module in approximately 4.5 hours, producing more than one dozen new Louisiana-made solar panels every minute.

Further, once the facility reaches commercial operation in the first half of 2026, it will put First Solar’s step ahead toward reaching its ultimate nameplate manufacturing capacity goal of approximately 14 GW in the United States and 25 GW globally in 2026. Such a vast manufacturing base, coupled with efficiency in streamlining the production of large quantities, will improve FSLR’s productivity and assist the company in meeting the strong demand proactively.

First Solar’s Other Expansion Plans

First Solar is investing heftily in ramping up its manufacturing capacity to meet the nation’s rapidly growing solar demand. Apart from recent developments, its expansion plan includes expanding and upgrading its Ohio Series 6 factories to achieve an additional aggregate annual throughput of 0.9 GW, with the additional capacity expected to come online in 2024.

Similarly, its new Alabama facility is also on schedule for completion by the end of 2024, with commercial operations ramping up through 2025. This facility is expected to add 3.5 GW of annual nameplate capacity once fully ramped. When fully operational, these expansions in Ohio and Alabama are expected to increase its annual nameplate capacity in the United States to more than 10 GW by 2025.

Such an investment strategy, including the facility in Louisiana, should enable First Solar to maintain its position as the largest U.S. solar module manufacturer, thereby bolstering its revenue generation prospects in the days ahead.

Growth Prospects & Peer Focus

Per the latest report from the U.S. Energy Information Administration, developers plan to add nearly 35.2 GW of new capacity in the second half of 2023, out of which solar is likely is contribute 55% of total new capacity. Such bright prospects align with First Solar’s commitment to expanding its manufacturing capabilities.

Other solar players in the industry that have indulged in the expansion strategy to meet the growing demand in the United States are as follows:

Enphase Energy (ENPH - Free Report) : The company is actively looking at expanding manufacturing capacity in the United States. It plans to open four to six manufacturing lines in this nation by the second half of 2023.

Enphase boasts a long-term earnings growth rate of 23.2%. The Zacks Consensus Estimate for ENPH’s 2023 sales suggests a growth rate of 15.8% from the prior-year reported figure.

Canadian Solar (CSIQ - Free Report) : In June 2023, the company announced that it is building its first manufacturing facility in the United States for producing solar photovoltaic modules. The company has picked up Mesquite, TX, as the location for its first-ever manufacturing base in the nation.

The Zacks Consensus Estimate for Canadian Solar’s 2023 earnings calls for a growth rate of 80.5% from the prior-year reported figure. The Zacks Consensus Estimate for CSIQ’s 2023 sales implies a growth rate of 15.6% from the prior-year reported figure.

SolarEdge (SEDG - Free Report) : The company is currently planning to establish manufacturing capabilities in the United States by using contract manufacturers and establishing its manufacturing facility. SEDG expects to ramp up the shipments of inverters from a contract manufacturer's U.S. manufacturing site toward the end of 2023.

The long-term earnings growth rate of SolarEdge is 24.4%. The Zacks Consensus Estimate for its 2023 sales suggests a growth rate of 22.9% from the prior-year reported figure.

Price Movement

In the past year, shares of First Solar have rallied 26.7% against the industry’s decline of 36.1%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

First Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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