U.S.-based solar module manufacturer First Solar announced its financial results for the third quarter (Q3) ended September 30, 2024, revealing a mixed performance amid industry volatility and operational challenges.

In Q3 2024, First Solar reported earnings per share (EPS) of $2.91, missing the projected $3.10, and revenue of $887.7 million, below the expected $1.07 billion. This shortfall resulted from lower sales volumes and a $50 million warranty charge. However, revenue still grew by 10.8% year-over-year, showing strong demand.

The company has updated its 2024 guidance, projecting net sales between $4.10 billion and $4.25 billion and an EPS range of $13.00 to $13.50. This is slightly below prior expectations due to market volatility and expenditures on new U.S. factories.

Net income for the quarter was $313 million, a 16.6% YoY increase from $268.4 million.

The company’s gross profit for Q3 2024 was $445.3 million, an 18.4% improvement from the year-ago quarter’s $376.2 million.

This increase was attributed to termination payments from certain customers in the U.S. and India and a higher sales mix of modules qualifying for advanced manufacturing production credits.

Operating income for the quarter was $322 million, up from $273 million in the same period last year, despite a 19.2% YoY increase in total operating expenses to $123.3 million.

First Solar’s IP and TOPCon Patent Portfolio

First Solar has notified Tier 1 solar manufacturers about potential infringement of its TOPCon patent portfolio. The company acquired this portfolio through the 2013 acquisition of TetraSun.

The TOPCon patent portfolio includes patents and applications in multiple countries, including the U.S., China, Europe, and several Asian nations, with patent terms extending to 2030.

While First Solar has no TOPCon patent in India, it can assert patent rights in jurisdictions that source India-bound cell manufacturing and exports.

Manufacturing Challenges

First Solar achieved a record production of 3.8 GW in Q3 of 2024. However, its financial performance was impacted by a $50 million product warranty charge related to manufacturing issues with the initial production of its Series 7 product.

The issues were primarily attributed to variability in the effectiveness of the glass cleaning process at the beginning of the production line and an error in predicting the engineering performance margin. First Solar has identified these issues and taken action to address them.

The company inaugurated its new $1.1 billion Alabama facility, which, when fully scaled, will add 3.5 GW of vertically integrated nameplate solar manufacturing capacity.

Construction of the Louisiana facility is ongoing and remains on track to begin operations in the second half of 2025. With these new facilities, First Solar will likely achieve its projection of over 14 GW of annual U.S. nameplate capacity and over 25 GW of global nameplate capacity by 2026.

India Plans

The company expressed concern over China’s solar cell imports into India, which have led to artificially low average selling prices (ASPs). The Indian government has responded with an anti-dumping investigation to address this issue, although domestic ASPs remain low. First Solar’s recent India bookings reflect an ASP of approximately $0.19 per watt.

To mitigate these challenges, the company plans to leverage the updated U.S. IRA Safe Harbor guidelines, shift India’s production from fixed tilt to tracker products, and ship a portion of its future Indian-manufactured products to the U.S. market at higher ASPs. This strategic shift is expected to improve gross margins, as the U.S. offers a more favorable pricing environment than the currently depressed Indian market.

Operational Performance

First Solar reported year-to-date net bookings of 4 GW, with 0.4 GW added since the second quarter. The company’s expected sales backlog now stands at an impressive 73.3 GW, indicating strong future demand for its solar modules.

Mark Widmar, CEO of First Solar, emphasized the company’s resilience in navigating industry volatility and political uncertainty. He highlighted First Solar’s disciplined, long-term approach to addressing challenges posed by the upcoming U.S. elections and ongoing volatility in the solar manufacturing industry.

The company said it continues prioritizing sustainability in its operations, offering advanced thin-film photovoltaic modules as a competitive, high-performance, and lower-carbon alternative to conventional crystalline silicon PV panels.

First Solar was among the companies that led the annual solar module manufacturing capacity additions in the calendar year 2023, according to Mercom’s India Solar Market Leaderboard Report 2024.