First Solar plans to cash in on the new climate bill and invest up to $1.2 billion in US manufacturing

• Tax breaks under the new climate law prompted First Solar to expand its US operations.
• The Inflation Reduction Act includes more than $60 billion in clean-energy tax credits.

A month ago, First Solar CEO Mark Widmar didn't think it made sense to manufacture more solar panels in the US.

His calculus changed under the new climate law, which authorizes upwards of $60 billion in tax breaks over the next decade for companies that make renewable-energy technologies in America.

President Joe Biden signed the Inflation Reducation Act, which includes the climate provisions, into law in August.

Widmar said First Solar plans to spend up to $1.2 billion to expand its US operations and build a fourth factory in the Southeast, creating at least 850 manufacturing jobs. The location hasn't been selected.

"We believe that with the Inflation Reduction Act we have a durable industrial policy foundation, one that we've long been advocating for," Widmar said during a call with reporters. "It creates a demand for us to add incremental capacity to best serve our customers and partners here in the US market."

The White House and its allies in Congress hope the new climate law will shift clean energy supply chains away from China to the US while creating jobs in solar, wind, electric vehicles, and battery manufacturing.

The law could also put the US on track to reduce greenhouse gas emissions by about 40% this decade, according to several estimates. That level falls short of Biden's campaign promise to cut emissions in half by 2030, though it still marks the most significant climate action in US history.

First Solar is well positioned to quickly cash in as one of few American solar panel makers in an industry dominated by China. The company's decision could be a harbinger of new investment. Bank of America last week upgraded its rating on First Solar's stock and estimated the company will receive up to $3 billion in tax credits by 2026 from the climate law.

Widmar said a new manufacturing plant in the Southeast and the expansion of an existing facility in Ohio would produce enough panels to generate nearly 4.5 gigawatts of clean energy by 2025. First Solar has a backlog of more than 44 gigawatts and could announce more expansion plans in the US, though no decisions have been made, Widmar added.

The company also has factories in Vietnam and Malaysia, and is building its first factory in India that is scheduled to start running in the second half of 2023.