Green friendly house with solar panels

Why First Solar Is Building a New Factory in the Southeastern US

Boosting Domestic Production

First Solar is the nation’s largest solar-panel maker. It just announced plans to invest $1.2 billion in an effort to boost its US manufacturing capacity by 75%. Included in that plan is a $1 billion new factory that will be built in the southeastern US, on top of a $185 million expansion at factories based in Ohio.

First Solar expects to have 6 gigawatts of panel-making capacity in the US next year. As a result of these new investments, that’s anticipated to reach 10.6 gigawatts by 2025. All this on top of the company’s 10 gigawatts of manufacturing capacity outside the US, which will be achieved next year when First Solar’s factory in India comes online.

Change of Direction

The legislation focused on climate, taxation, and healthcare that was recently signed into law by President Biden impacted First Solar’s decision to build a US factory. CEO Mark Widmar recently argued the legislation makes solar an asset class worth investing in.

As part of the spending plan’s focus on boosting green energy, hundreds of billions of dollars of incentives are available for companies who make clean-energy equipment in the US. That could translate to between $140 million and $630 million in tax credits each year for First Solar, once its new plant is constructed. The company says its location will be announced sometime before the start of the fourth quarter.

Start of a Trend

The new laws that incentivize US production and soaring demand for clean energy suggest this is the start of a major domestic expansion. Lawmakers are also concerned about being overly reliant on China for things like solar equipment, given ongoing tensions between Washington, DC and Beijing.

At present, China controls over 80% of the global solar manufacturing supply chain. But international firms are beginning to invest further in the US. South Korea’s Hanwha Solutions announced plans to build an alternate supply chain in the US back in March. It stands to reason that other companies will look to follow suit as the entire sector expands domestically.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

TLS 1.2 Encrypted
Equal Housing Lender