First Solar said Wednesday that it has selected Alabama as the site for its fourth U.S. solar panel manufacturing facility, after the Inflation Reduction Act and its incentives for domestic manufacturing encouraged companies to onshore production.
First Solar will spend around $1.1 billion on the facility in North Alabama’s Lawrence County. The company announced plans for a new facility in August, but hadn’t yet disclosed the location. First Solar CEO Mark Widmar previously told CNBC that the Inflation Reduction Act was the key catalyst that led First Solar to choose the U.S. for its latest factory.
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The new facility will produce 3.5 gigawatts of solar modules annually by 2025. The company said the site will create more than 700 new jobs.
All told, First Solar plans to manufacture more than 10 gigawatts of solar modules by 2025. The company’s other three facilities – one of which is slated to come online during the first half of 2023 – are in Ohio. With the latest Alabama factory announcement, First Solar said it’s invested more than $4 billion in U.S. manufacturing.
“The passage of the Inflation Reduction Act of 2022 has firmly placed America on the path to a sustainable energy future,” First Solar’s Widmar said in a statement Wednesday.
“This facility, along with its sister factories in Ohio, will form part of the industrial foundation that helps ensure this transition is powered by American innovation and ingenuity,” he added.
The U.S. solar industry now stands at around 126.1 GW, which is enough to power 22 million homes, according to the Solar Energy Industries Association. During the first quarter of this year the country added 3.9 GW of solar capacity, according to SEIA.
First Solar is the largest U.S.-based panel manufacturer, and focuses on utility-scale panels. Shares of First Solar hit their highest level since April 2011 on Wednesday after the IRA reignited interest in renewable energy companies. Still, the company has faced some recent headwinds as rising rates prompt investors to rotate out of growth-oriented areas of the market.
But First Solar has held its gains, outperforming other solar stocks and the market broadly. Shares of the Arizona-based company have advanced more than 80% this year. By comparison, the S&P 500 is down 17% this year while the Invesco Solar Fund has added 6%.
Other solar companies, including SolarEdge and Enphase Energy, have said they are exploring manufacturing in the U.S. following the climate bill. Elsewhere in clean energy, battery maker Freyr and lithium miner Piedmont Lithium are among the companies that have announced new facilities.