First Solar still sold out into 2020


First Solar booked 1.9 GW of new solar module sales in April. And not even all of April – just through the 26th. That’s a strong month for sales.

The headlines from First Solar’s investor call focused on yet another new manufacturing facility, this time stateside in Ohio. This new 1.2 GW plant will bring the company to 7.6 GW of manufacturing capacity by the end of 2020. Notably though the company currently has 2.6 GW of solar module production ongoing versus 5 GW in the planning and construction stages.

The company said that building factories in the United States was less economically challenging due to high levels of automation – measured as lower labor costs per watt – in its future Series 6 factories. This is evidenced by the suggestion that it will take only 500 employees to manufacture the 1.2 GW per year of product. Due to the integrated nature of thin film manufacturing by First Solar, this factory replaces polysilicon production, wafer cutting, solar cell production and solar panel assembly in the crystalline silicon solar value chain.

First Solar is optimistic about the increasing efficiency of the products rolling off its assembly lines:

Current production entitlement yields 90% of the modules being produced at or above 400 watts with the top band of distribution at 420 watts. Over the next 90 days, we see a clear path to an average production band of 415 watts and a top band of 425 watts. Furthermore, the early module wattage gives us confidence in our long-term roadmap which takes us beyond 425 watts per module.

The company currently has 10.6 GW of solar modules booked for sale, adding 1.9 GW of that in the past month alone. It was suggested in the earnings call that 14.5 GW of booked sales were a reasonable target based upon the current opportunity pipeline.

First Solar’s manufacturing capacity is currently sold out through the middle of 2020, taking into account its new facilities. The company said 1.2 GW more of bookings would sell them out through the end of 2020, and they felt strongly that this would occur soon.

As evidence of the possibility of meeting these new growth goals, a 750 MW module supply agreement was recently signed with a leading U.S. developer. This brings recent signings within this group to 1.2 GW since the start of 2017.

The company also pointed out that there is far more opportunity for sales. The below chart notes 8.3 GW of mid- to late-stage development opportunities that First Solar has identified.

The company is returning to its previous revenue stream diversification with a renewed focus on its engineering, procurement and construction (EPC) and operations and maintenance (O&M) services. First Solar is targeting 1 GW of EPC services per year, and management expressed they expect to hit that number soon, for the first time. Additionally, the company is optimistic that it can gain the O&M revenue stream from many of these projects.

First Solar ended the period with $2.4 billion in cash, which gives them plenty of runway to spend $400 million on their new Ohio factory. The company’s quarter-over-quarter revenue increased significantly, but was down year-over-year.

Right now, it seems First Solar cannot manufacture the solar panels that people want to give them cash for fast enough.

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