First Solar reversed its recent string of quarterly losses in the third quarter of 2019, with lower revenue from its U.S. projects offset by growing sales and margins for its new Series 6 larger-format solar panels.
First Solar also announced Thursday that it has retaken the crown of largest solar panel manufacturer in the U.S., and thus the Western Hemisphere, with the early opening of its second factory in Ohio. Start of production at the Perrysburg factory three months ahead of schedule brings the company's U.S. Series 6 manufacturing capacity to 1.9 gigawatts (DC), and its global Series 6 capacity to 5.4 gigawatts.
First Solar has faced challenges on various fronts in recent quarters, including increases in operating costs. Last month, it announced it was transitioning away from its internal engineering, procurement and construction model in the U.S. and will instead rely on partners to build projects, with about 100 jobs set to be cut as a result.
But the quarter’s turn to profitability marks a turnaround for the thin-film solar PV market leader. First Solar reported third-quarter net income of $30.6 million on revenue of $547 million, compared to a loss of $18.5 million on net sales of $585 million in the second quarter. And the Arizona-based company continues to grow its module business, with third-quarter bookings at 5.4 gigawatts, up from the second quarter’s 4.3 gigawatts and the first quarter’s 2.3 gigawatts.
“The third quarter represented our strongest quarter of the year in terms of third-party module sales,” CEO Mark Widmar said during Thursday’s earnings call. Total expected shipments and bookings for the year grew by 1.1 gigawatts to stand at 12.4 gigawatts as of late October.
First Solar offered an update on its progress toward its target to cut its Series 6 production costs by 30 percent over the course of 2019. From July to October, megawatts produced rose 8 percent while capacity utilization rose 6 percentage points to hit 100 percent, Widmar said.
Still, the company is facing "near-term headwinds," related to retooling and ramping up production, that have led to setbacks in hitting its targets.
First Solar unveiled
plans for the new factory in April 2018 amid a slew of new U.S. solar
factories being built by companies including Hanwha Q Cells, Jinko and LG Solar, in response to the Trump administration’s 30 percent tariff
on imported crystalline-silicon PV cells and modules. (Hanwha Q Cells briefly held the title of largest U.S. solar panel manufacturing capacity last month, when it opened its 1.7-gigawatt
facility in Georgia.)
First Solar’s thin-film cadmium telluride solar panels are exempt from the Section 201 tariffs, giving them a competitive advantage
against many foreign-made modules. But the Trump administration's import tariffs are set to decline, eroding that advantage.
The unpredictability of Trump administration tariff policy has been a challenging variable for global solar and wind manufacturers to manage. A short-lived exemption for bifacial modules was abruptly reversed
earlier this month, eliminating any advantage for the technology in U.S. projects.
All manufacturers are benefiting from the ongoing U.S. solar boom, driven by continuing cost declines and burgeoning demand from projects racing to capture the value of the soon-to-decline
federal Investment Tax Credit for solar modules.
Continued growth in key markets such as California and Arizona, along with unexpectedly rapid growth in solar markets like Florida and Texas, led Wood Mackenzie Power & Renewables to revise its U.S. solar market forecast this summer, adding 1.2 gigawatts of utility-scale solar to a predicted 13+ gigawatts
of capacity additions for the year.
This would represent 25 percent growth compared to last year's 10.6 gigawatts, or the second-biggest year of all time.
First Solar has been reaping the rewards of this market growth along with its competitors. Last month, it landed a 1.7-gigawatt order
to supply projects being developed by Intersect Power and built by Signal Energy in Texas and California, with deliveries to begin in late 2020 and end by 2021.
The company maintained its previous 2019 full-year guidance of $3.7 billion to $3.9 billion in revenue and $2.25 to $2.75 in earnings per share, and year-end net cash guidance of $1.7 billion to $1.9 billion. But it increased its full-year operating income guidance and reduced its operating expense guidance, based on shifts in production startup costs and other factors.