First Solar CEO: New factory allows the US ‘to think through’ decoupling from China

As the largest solar manufacturer in the USA, First Solar (FSLR), based in Arizona, has long been campaigning for less dependence on Chinese supply chains.
Now the company is investing $ 680 million in building the largest solar production complex outside of China, one of the biggest bets on the domestic industry.
Speaking to Yahoo Finance Live, CEO Mark Widmar said the new Lakestownship, Ohio facility will expand the company's manufacturing capacity to produce solar panels that produce just over 3 gigawatts of electricity annually, enough to power approximately 570,000 homes supply and almost double its output.
Together with its two power plants, First Solar will have the ability to generate 6 gigawatts of electricity annually by 2025, according to Widmar.
"If you look at the competition or the performance here in the US, there is about 11 gigawatts of capacity here, which is still a little less than 50% of the market," said Widmar. "But as we indicated in our announcement, we are more than able and willing, given the right political background and commitment, to expand beyond our current location."
The 1.8 million square foot facility is slated to go live in the first half of 2023, once the necessary permits and local permits are in place. Widmar said the factory will create about 500 jobs and produce an improved thin-film PV module for large-scale systems, which will result in higher efficiency and lower costs.
It comes as the Biden government moves aggressively to make the U.S. electricity grid carbon free by 2035. In a statement, Energy Minister Jennifer Granholm cited First Solar as an example of how "Investing and innovating can build the future of clean energy right here at home". . "
"In the short term, and from our point of view, there is a pretty significant turning point in demand in the next few years," said Widmar. “The demand is stronger than ever. “We are currently sitting a record deficit and continue to see very strong engagement and very strong interaction with our customers. I think the new factory will only speed things up.
First Solar remains largely an outlier in the domestic industry as it is an outlier as a manufacturer of panels in the US with components largely sourced from America. Since it does not use polycrystalline silicon - an important raw material for solar modules - it sources less than 1% of its deliveries from China.
Worldwide, China has the production of solar modules firmly under control, as more than 70% of the polycrystalline silicon produced worldwide is produced there. More than half of this production comes from the troubled Xinjiang region, where the US has accused China of genocide. That confidence has raised concerns among lawmakers who have called for a ban on using federal funds to purchase solar panels made in China.
Widmar said his new factory is creating a kind of template for the US to decouple from any dependence on China. However, he also acknowledges that major relocation away from overseas production may not be possible on a large scale without tax incentives to bring production home. He calls for tax breaks for the manufacturing sector in order to initiate long-term changes in the solar industry.
“[Companies] need to be able to compete and compete on their own, and not be penalized by another country's desire to dominate and heavily subsidize a particular industry, and pose challenges for any new business to grow and compete. Said Widmar. "We believe that the manufacturing tax credit enables this level playing field. That will then create the innovation cycles that will enable the evolution of the next generation of PV that must happen to move this industry forward."
Akiko Fujita is a presenter and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita
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