First Solar unveiled plans Wednesday to double its US manufacturing capability by building a new state-of-the-art factory in Ohio.
First Solar said it believes this will be the largest fully integrated solar manufacturing complex in the world — outside of China. It will be capable of making one solar module every 2.8 seconds. And it will primarily supply America’s booming market for clean energy.
“This investment really helps us position the United States on solid footing to achieve its objectives of energy independence and security — and having US manufacturing enable it,” First Solar CEO Mark Widmar told CNN Business.
China’s grip on the solar industry
“China largely dominates the PV supply chain,” Widmar said.
First Solar stressed that — unlike many other major solar manufacturers — it is not dependent on China. That’s because the company’s thin-film PV panels do not rely on the popular crystalline-silicon technology that is made mostly in China.
“Renewables created this great promise of liberation and energy independence. But the dominance of the Chinese has taken over this industry,” Widmar said. “It really undermines the opportunity we created when renewables became reliable.”
Research published last month presented troubling evidence that the solar panel supply chain is tainted by forced labor in China’s Xinjiang region. The report indicates forced labor is used in the mining and processing of quartz, a raw material used at the beginning of the solar panel supply chain.
In a statement, Energy Secretary Jennifer Granholm hailed First Solar’s investments in American-made solar technologies as the “perfect embodiment” of Biden’s strategy to build out domestic manufacturing and supply chains. Granholm noted that First Solar has been a partner in the Energy Department’s solar program since 2003 and received a loan from the agency in 2012.
“This company is a great example of how investment and innovation can build the clean energy future right here at home—shoring up American competitiveness and bringing good-paying jobs to all pockets of the country,” Granholm said.
If they build it, will the workers come?
After completion of the 1.8 million square foot facility in Ohio, First Solar expects that about half of its solar panels will be made in America, up from roughly one-third today. US operations are expected to begin in the first half of 2023 and hit full capacity two years later.
“There clearly is a shortage of qualified workers. It is a concern of ours,” Widmar said.
First Solar plans to hire 500 people for the new Ohio factory, but that is a relatively modest amount given the size of the expansion. For context, First Solar currently employs 1,600 people (including administrative staff) at its existing Ohio complex. Even though the company’s manufacturing capacity will double, its headcount will only rise by about a third.
Due to the “constrained” labor market, Widmar said First Solar plans to lean more on automation than it normally does. In addition to robots, First Solar plans to use automated and guided vehicles to move materials. For example, Widmar said the fork lifts at the new facility will all be automated.
Taxes and tariff question marks
Widmar said First Solar is considering adding more manufacturing capacity in the United States as well as overseas in India and perhaps in Europe as well.
The solar industry is racing to catch up to surging demand as power plants shift away from coal and major companies pledge to move to 100% renewable energy.
First Solar has a record high backlog of contracted work that stretches for multiple years, Widmar said.
However, Widmar expressed concern about Biden’s proposal to unwind the Trump tax cuts by lifting the corporate rate to 28%, compared with 21% today.
“If that’s the only thing that happens, it clearly has an adverse impact as you think through investment decisions to add manufacturing capacity in the United States,” Widmar said.
Not surprisingly, First Solar is in no rush to see the solar tariffs go away.
“Tariffs play a role,” Widmar said. “If there isn’t fair trade, there has to be a mechanism to address that.”