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First Solar (FSLR) to Build Its Fourth U.S. Factory in Alabama

First Solar, Inc. FSLR recently decided to build its fourth U.S. solar module manufacturing facility in Lawrence County, North Alabama. With this development, the company takes a step forward in its goal to scale up its manufacturing capacity in the United States to tap the nation’s rapidly growing solar module market.

The company intends to boost its manufacturing footprint in the United States to more than 10 gigawatts-direct current (GWdc) by 2025. As part of this strategic goal, Lawrence County’s Mallard Fox Industrial Park boasts a capacity of 3.5 GWdc and bears an investment of nearly $1.1 billion. The facility is anticipated to commence its operations by 2025.

First Solar’s Capacity Expansion Plans

First Solar’s strategic plans to boost its manufacturing capacity are mainly to strengthen its capability to meet the increased solar demand in the country for a sustainable green future. Apart from the Alabama facility, the company is investing $185 million in enhancing its Northwest Ohio manufacturing footprint by 0.9 GWdc.

Also, First Solar intends to invest nearly $270 million in the research & development innovation center in Perrysburg, Ohio. Combinedly, these investments will contribute to the company’s total investment in the U.S. manufacturing capacity of more than $4 billion.

First Solar’s continuous efforts to expand its manufacturing capacity should assist the company in maintaining its position as the largest U.S. solar module manufacturer.

U.S. Solar Market Boom & Peer Moves

The intensified apprehension of emissions, coupled with the need for clean energy, is accelerating the evolution of renewable sources of energy away from fossil fuels in the United States.

Further, the Inflation Reduction Act, enacted by the U.S. Government in August 2022, should act as a catalyst for the further expansion of the U.S. renewable energy market. This encourages the widespread adoption of solar-based energy to gain traction in the United States.

In such a scenario, one may conclude that the recent capacity addition by First Solar could be a prudent one and is likely to boost its growth trajectory. Moreover, solar companies that may reap the benefits of the expanding U.S. solar market are as follows:

SolarEdge SEDG is a provider of lithium-ion batteries and integrated energy storage solutions. In May 2022, SEDG announced the opening of Sella 2, which is a two-gigawatt-hour battery cell manufacturing facility. Sella 2 is expected to ramp up production in the second half of 2022.

SolarEdge’s long-term earnings growth rate is pegged at 31.8%. SEDG shares have rallied 20.8% in the past six months.

Enphase Energy ENPH enjoys a valuable position in the solar market by manufacturing fully integrated solar-plus-storage solutions. Moreover, it has a strong position as a leading U.S. manufacturer of microinverters.

Enphase is adding an automated line at Flex's factory in Romania. This line will have a quarterly capacity of approximately 750,000 microinverters, starting in the first quarter of 2023, and will enable a global capacity of nearly six million microinverters per quarter.

Enphase boasts a long-term earnings growth rate of 47.4%. ENPH shares have increased 20.2% in the past year.

SunPower Corporation SPWR is one of the most forward-integrated solar companies, having more than a decade of experience in designing, manufacturing and supplying large-scale solar systems. In September 2022, it announced marginal investment in leading solar dealers, EmPower Solar and Renova Energy, as part of its DealerAccelerator Program.

The Zacks Consensus Estimate for SPWR’s 2022 earnings suggests a growth rate of a solid 357.1% from the prior-year reported figure. SunPower has returned 47.5% to its investors in the past six months.

Price Movement

In the past year, shares of First Solar have rallied 52.5% against the industry’s decline of 15.8%.

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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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