First Solar Gunning for $1B More in 2024 Sales

First Solar Inc. reported strong pricing and record production that helped push up fourth quarter profits, but the company has even more ambitious plans for 2024.

The solar module manufacturer forecasts 2024 net sales of between $4.4 billion to $4.6 billion, with annual volumes sold ranging from 15.6 gigawatts (GW) to 16.3 GW. It anticipates earnings per share (EPS) of between $13 and $14 this year.

That sales target, at the midpoint, is $4.5 billion, which would be a 36% increase over First Solar’s 2023 net sales of $3.3 billion.

But the company has showed sustained growth: last year’s sales were a 27% increase over 2022’s $2.6 billion.

“We entered 2024 with new capacity of our most advantaged Series 7 product coming online, increased R&D investment and capabilities and continued momentum across the business driven by a focus on our points of differentiation and a balanced business model focused on growth, liquidity and profitability,” First Solar CEO Mark Widmar said Feb. 27.

Growth is anticipated as the transition to lower carbon energy continues to accelerate, with solar outpacing other renewable energy sources for utility-scale electricity generation backed by favorable tax credits. Though solar panel manufacturers have been impacted by a massive module ramp up in China, which led to a market oversupply and lower prices, moves by the U.S. to limit imports—coupled with incentives in the Inflation Reduction Act—aimed to support domestic manufacturing efforts.

“Despite industry macro challenges such as global oversupply and pricing volatility, we continue to see strong mid- to long-term demand, especially in the United States, as shown with 2.3 gigawatts of net bookings since the previous earnings call at an [average selling price] of $0.318 per watt excluding adjusters or $0.334 per watt, assuming the realization of our technology adders,” Widmar said. “Our total contracted backlog now stands at 80.1 gigawatts, with orders stretching to the end of this decade.”

First Solar reported 28.3 GW of net bookings in 2023 and record volumes sold of 11.4 GW.

For fourth-quarter 2023, net sales were about $1.16 billion, up 16% compared to a year earlier. Net profit for the quarter was about $349 million, compared to a loss of $7.5 million a year earlier.

Full-year 2024 guidance includes a gross margin of between $2 billion to $2.1 billion, including $1 billion to $1.05 billion of Section 45X tax credits, according to CFO Alex Bradley.

Manufacturers opting to develop solar parts in the U.S. can pursue the advanced manufacturing production tax credit (45X) for photovoltaic modules and its subcomponents as well as inverters, tracking systems and other components.

“We forecast Section 45X tax credits of approximately $190 million in Q1, $230 million in Q2 and $600 million in the second-half of the year,” Bradley said. “With an operating expense profile roughly evenly split across the year, this results in a forecasted operating income and earnings-to-share profile of approximately 15% in the first quarter, 25% in the second quarter and 60% in the second-half of the year.”

Capex in 2024 is expected to range from $1.7 billion to $1.9 billion as First Solar continues to scale with expectations of hitting 14 GW of annual nameplate capacity in the U.S.

Capacity expansions are underway at First Solar’s Ohio facility, where commercial shipments are set to begin in the first half of the year. And a new Alabama manufacturing facility where commercial shipments are slated to start in the second half of the year, Widmar said.

“Once these projects are completed, we expect to exit 2024 with over 21 gigawatts of global nameplate capacity, approximately half of which is forecasted to be local in the U.S.,” Widmar said. “Our new Louisiana facility is also on track and is expected to commence commercial operations in late 2025, bringing our expected total nameplate capacity to over 25 gigawatts by the end of 2026 with 14 gigawatts in the U.S.”

Bradley said about two-thirds of First Solar capex is for capacity expansion and one-quarter relates to its R&D center and technology replication, with the rest mainly related to maintenance and logistics.

“Our year-end 2024 net cash balance is anticipated to be between $0.9 billion and $1.2 billion,” he said.

Analysts see strong results

Analysts seemed to react favorably to the company’s result and outlook.

Evercore analysts said the company’s solid execution and pricing momentum is driving a strong outlook. In a Feb. 27 note, Evercore analyst James West said strong pricing has been key for First Solar.

“As the company continues to navigate through the next couple of years with its capacity sold out until 2026, it is important to note 1) that FSLR will continue to prioritize customers with long-term contracts and 2) the company expects to finance its current capex program without the need to raise new capital,” West said. “We continue to believe that First Solar is one of the U.S. solar manufacturers best positioned for the IRA provisions, especially the domestic content adder; its Series 7 product has all components sourced domestically.”

Piper Sandler analysts said First Solar delivered inline GAAP EPS and beat core EPS with strong pricing on subdued bookings.

“Overall, a good update from FSLR given better 2024 core EPS relative to Street expectations and strong pricing on incremental bookings,” Piper Sandler analyst Kashy Harrison said in a note. “If FSLR delivers a 1.0x book/bill with ~30c/W [about 30 cents per watt] pricing this year, then that would be positive versus expectations.”