First Solar pledges big U.S. factory expansion thanks to climate law

© Reuters. FILE PHOTO: A worker builds a crate for solar panels at First Solar in Perrysburg, Ohio July 8, 2022. REUTERS/Megan Jelinger

(Reuters) - First Solar Inc (NASDAQ:FSLR) will spend $1.2 billion to expand its solar panel manufacturing operations in the United States, creating hundreds of jobs including with a new factory in the Southeast, the company said on Tuesday.

It is among the first major corporate investments announced following the Inflation Reduction Act (IRA), a $430 billion package of policies aimed at combating climate change that President Joe Biden signed into law this month. The IRA includes new tax credits for U.S.-made solar products.

It is also an about-face for the largest U.S. solar panel maker, which said earlier this summer it was unlikely to build its next factory in the United States due to the lack of federal support.

Now, First Solar said it would invest $1 billion in a new factory in the Southeast that will begin operations in 2025. The company plans to select the location later this year.

It will also spend $185 million to expand production in Ohio, where it has two facilities and is building a third.

The expansions are expected to create 850 jobs and bring the company's total U.S. workforce to 3,000.

"We believe that with the IRA we have a durable industrial policy foundation, one that we have long been advocating for, that's comprehensive in its foundation and will enable the solar industry as a whole," Chief Executive Mark Widmar said on a call with reporters.

Some 90% of panels installed in the United States are made overseas, but imports have been constrained by pandemic-related supply chain disruptions, tariff threats and increased border scrutiny to block supplies linked to forced labor.

U.S. project developers, meanwhile, have flocked to First Solar's cadmium telluride products in part because the technology does not rely on polysilicon, a raw material primarily made in China and used in the vast majority of panels.