First Solar Pioneers Solar Tax Credits, Paving the Way for Renewable Growth
Innovative Tax Credit Sale Signals Landmark Move in Solar Industry
In a groundbreaking move within the solar manufacturing sphere, First Solar has etched its name in history by finalizing a monumental $700 million sale of its 45X manufacturing tax credits to financial services giant Fiserv, merely eight days after the release of proposed rules for these credits.
This trailblazing transaction, signed in late December, marks a first-of-its-kind credit transfer within the solar manufacturing domain, orchestrated by Citigroup Global Markets acting as the placement agent for First Solar.
The tax credits stem from First Solar’s sale of solar panels produced in 2023 through its operational manufacturing footprint across the United States, operating at a staggering 6.3 gigawatts of annual production capacity spread across three factories in Ohio.
Mark Widmar, CEO of First Solar, emphasized the significance of this agreement, citing the IRA’s intent to incentivize domestic manufacturing, offering liquidity to propel growth and innovation within the industry. “This establishes an important precedent for the solar industry, confirming the marketability and value of Advanced Manufacturing Production tax credits,” stated Widmar.
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Alex Bradley, CFO of First Solar, highlighted the expected impact of this move on the company’s financial landscape, foreseeing a notable enhancement in their U.S. cash position through the monetization of Section 45X credits. “This liquidity surge will reinforce our balance sheet, enabling sustained investments in pivotal growth areas like research and development,” Bradley commented, projecting a potential impact of up to $28 million on the 2023 financial year.
First Solar’s eligibility for these tax credits, attributed to its thin-film solar vertical integration, reflects its commitment to innovation. The tax credits cater to various production stages, offering incentives for PV wafers, cells, and modules.
The company’s ambitious expansion plans entail investing over $2 billion in two new manufacturing facilities in Alabama and Louisiana while bolstering its existing Ohio factory. These strategic moves are envisioned to elevate First Solar’s U.S. solar manufacturing capacity to an impressive 14 gigawatts by 2026. Furthermore, the company’s investment in a state-of-the-art R&D facility in Perrysburg, Ohio, set to finalize next year, underscores its dedication to advancing solar technology.
First Solar’s bold leap in trading manufacturing tax credits represents not just a fiscal milestone but an enduring commitment to furthering sustainable energy solutions, painting an inspiring picture of innovation and growth in the renewable energy landscape.
Source: Adapted from PV Magazine’s “First Solar sells $700 million in 45X manufacturing credits for cash”
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