First Solar Lowers 2024 Guidance Amid Declining Bookings and Production Challenges

US Solar

First Solar, a leading US-based solar module manufacturer, has revised its 2024 guidance downward, reflecting a significant 13% decrease in expected sales volume. The company now anticipates producing between 14.2GW and 14.6GW, a decrease from the previously projected 15.6GW to 16.3GW. This adjustment is largely attributed to waning quarterly bookings and challenges related to manufacturing issues.

Despite the lowered forecast, First Solar’s third-quarter results showed a 17% increase in profits year-over-year, reaching $313 million. The company’s solar module production also reached new heights, with a record-breaking 3.8GW produced during the quarter. However, bookings were down by a stark 88%, with only 0.9GW booked, marking a significant dip due to the company’s selective contracting approach.

Key Factors Behind the Revised Guidance

The primary reason behind the lower guidance is a decline in bookings, which dropped by nearly 90% compared to the same period last year. Mark Widmar, First Solar’s CEO, attributed this slowdown to the company’s highly selective contracting strategy, which limits its order volume but aims to secure more stable, long-term contracts.

Moreover, manufacturing issues have prompted First Solar to set aside funds for a product warranty reserve charge, further impacting the company’s financial outlook for 2024. However, production remains strong, with the Series 6 module manufacturing at 2.6GW—a 4% increase over the previous year—and the Series 7 module seeing over double the production year-over-year at 1.5GW.

Ongoing Expansion and Technological Innovation

Despite the challenges, First Solar continues to push forward with its expansion plans. The company recently began commercial operations at its new 3.5GW/year facility in Alabama, and its Louisiana expansion is on track to begin production in late 2025. These expansions will elevate First Solar’s US production capacity to 14GW/year, with a total global capacity of 25GW/year.

Additionally, the company has made strides in solar technology with the development of CuRe technology, which aims to reduce reliance on copper by using alternative materials for doping. Production of the CuRe product will begin in the fourth quarter of this year, with plans to produce up to 0.4GW through the first quarter of 2025.

Financial Snapshot and Future Outlook

In terms of revenue, First Solar’s third-quarter sales fell by 12% compared to the previous quarter, reaching $888 million, though they saw a 10% increase compared to the same quarter last year. The company has a substantial backlog of 73.3GW, expected to sustain production through 2030, giving it a long-term growth outlook despite current challenges.

While the short-term outlook has been tempered by lower-than-expected bookings, First Solar’s strong production capabilities, strategic expansion, and cutting-edge technology position it well for future growth in the global solar market.