First Solar Signs Agreements for Sale of up to $700 Million in 2023 IRA Advanced Manufacturing Production Tax Credits
December 27 2023 - 9:00AM
Business Wire
- Deal with Fiserv, Inc., believed to be the first significant
Section 45X credit transfer in the solar industry
- Tax Credit Transfer Agreements signed eight days following
issuance of notice of proposed rulemaking by the US Department of
Treasury and Internal Revenue Service to implement the Section 45X
credits
- The Section 45X credits transacted at a price of $0.96 per $1
of 2023 tax credits, inclusive of fees and commissions paid by
First Solar to the placement agent
First Solar, Inc. (Nasdaq: FSLR) today announced that it entered
into two separate Tax Credit Transfer Agreements (TCTAs) on
December 22, 2023, to sell $500 million and up to $200 million,
respectively, of 2023 Inflation Reduction Act (IRA) Advanced
Manufacturing Production tax credits to Fiserv, Inc. subject to
satisfaction of certain conditions. Under the terms of the
agreements Fiserv will pay a price of $0.96 per $1 of tax credits
to First Solar during the first half of 2024, inclusive of fees and
commissions paid by First Solar to the placement agent.
Citigroup Global Markets, Inc. is the placement agent for First
Solar on the transaction, which is believed to be the first
significant credit transfer of its kind in the solar manufacturing
industry. The agreements were signed just eight days following
issuance of notice of proposed rulemaking by the US Department of
Treasury and Internal Revenue Service to implement the Section 45X
credits.
“This is the IRA delivering on its intent, which is to
incentivize high value domestic manufacturing by providing
manufacturers with the liquidity they need to reinvest in growth
and innovation,” said Mark Widmar, chief executive officer, First
Solar. “This agreement establishes an important precedent for the
solar industry, confirming the marketability and value of Advanced
Manufacturing Production tax credits.”
“The liquidity generated as a result of this transaction is
expected to accelerate the timing of enhancing our cash position in
the US through the monetization of the Section 45X credits, further
strengthening our balance sheet and allowing us to continue
investing in key aspects of growth, such as research and
development,” said Alex Bradley, chief financial officer, First
Solar. “As it relates to the 2023 financial year, we expect a pre-
and post-tax impact of up to $28 million, resulting in a reduction
of our diluted earnings of up to $0.26 per share for the year.”
The tax credits result from the sale of photovoltaic (PV) solar
modules produced in 2023 by First Solar’s operational manufacturing
footprint in the United States, including its third Ohio factory,
which was commissioned earlier this year. The company’s fully
vertically integrated solar manufacturing facilities produce thin
film wafers, cells, and modules in a single integrated process that
sees a sheet of glass transformed into a fully functional solar
panel in approximately four hours.
As a result of its vertical integration, First Solar is eligible
for Advanced Manufacturing Production tax credits allowed for the
production of PV wafers, cells, and modules under Section 45X of
the IRA. The solar technology and manufacturing company expects to
invest over $2 billion in new manufacturing facilities in Alabama
and Louisiana, while also expanding its existing Ohio footprint,
and expects to have 14 gigawatts of fully vertically integrated US
solar manufacturing capacity by 2026. Additionally, First Solar is
investing up to $370 million in a dedicated R&D innovation
center in Perrysburg, Ohio, expected to be completed in 2024.
For more information on this transaction please visit
www.firstsolar.com/2023TCTA.
About First Solar, Inc.
First Solar is a leading American solar technology company and
global provider of responsibly produced eco-efficient solar modules
advancing the fight against climate change. Developed at R&D
labs in California and Ohio, the company’s advanced thin film PV
modules represent the next generation of solar technologies,
providing a competitive, high-performance, lower-carbon alternative
to conventional crystalline silicon PV modules. From raw material
sourcing and manufacturing through end-of-life module recycling,
First Solar’s approach to technology embodies sustainability and a
responsibility towards people and the planet. For more information,
please visit www.firstsolar.com.
For First Solar Investors
This press release contains various “forward-looking statements”
which are made pursuant to safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements concerning:
(i) the sale of up to $700 million of 2023 Inflation Reduction Act
(IRA) Advanced Manufacturing Production tax credits at a price of
$0.96 per $1 of tax credits; (ii) our expectation that the two
transactions for $500 million and up to $200 million will reduce
our full-year 2023 pre- and post-tax earnings by up to $28 million,
resulting in a reduction of 2023 diluted earnings by up to $0.26
per share; (iii) our expectation of having 14 gigawatts of fully
vertically integrated US solar manufacturing capacity by 2026; (iv)
our expected investment of over $2 billion in new manufacturing
facilities in Alabama and Louisiana; and (v) our investment of up
to $370 million in a dedicated R&D innovation center in
Perrysburg, Ohio and the expectation that it will be completed in
2024. These forward-looking statements are often characterized by
the use of words such as “estimate,” “expect,” “anticipate,”
“project,” “plan,” “intend,” “seek,” “believe,” “forecast,”
“foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,”
“will,” “could,” “predict,” “continue” and the negative or plural
of these words and other comparable terminology. Forward-looking
statements are only predictions based on First Solar’s current
expectations and First Solar’s projections about future events and
therefore speak only as of the date of this release. You should not
place undue reliance on these forward-looking statements. First
Solar undertakes no obligation to update any of these
forward-looking statements for any reason, whether as a result of
new information, future developments or otherwise. These
forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause First Solar’s
actual results, levels of activity, performance, or achievements to
differ materially from those expressed or implied by these
statements. These factors include, but are not limited to, the
expected timing and likelihood of completion of the transaction;
the risk that the parties may not be able to satisfy the conditions
to the transaction in a timely manner or at all; and the matters
discussed under the captions “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” of our most recent Annual Report on Form 10-K and our
subsequently filed Quarterly Reports on Form 10-Q, as supplemented
by our other filings with the Securities and Exchange
Commission.
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Media Reuven Proença
First Solar Media media@firstsolar.com
Investors Richard
Romero First Solar Investor Relations
investor@firstsolar.com
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