American solar technology company First Solar, Inc. (NASDAQ:FSLR) recently informed its stakeholders about the plans to increase its manufacturing capacity in the United States by investing around $1.2 billion. The company aims to set up a new 3.5 gigawatts, direct current (GWdc) manufacturing facility in the southeast region of the U.S. by spending around $1 billion. First Solar will spend an additional $185 million to upgrade and grow its Northwest Ohio manufacturing unit.
Subject to certain approvals, First Solar expects the operations of its new manufacturing facility to begin in 2025. Further, with the investment, First Solar’s production capacity of American-made solar modules for the U.S. solar market is expected to rise to over 10 GWdc by 2025.
First Solar also targets to invest $185 million to expand its Northwest Ohio manufacturing facility by 0.9 GWdc. The investment will raise First Solar’s total spending at its Ohio production facility to over $3 billion. The Northwest Ohio manufacturing facility is expected to have a cumulative annual production ability of more than 7 GWdc by 2025.
The American solar technology company also runs manufacturing facilities in Vietnam and Malaysia. It is also constructing its first manufacturing unit in India, which is expected to commence operations in the second half of 2023. According to the company, it will expand its annual global manufacturing capacity to over 20 GWdc in 2025, upon completion of its growth plans in the United States and India.
Is First Solar Stock a Good Investment?
First Solar stock seems to be a decent investment option. FSLR stock carries a ‘Perfect 10’ Smart Score on TIpRanks, which implies that it has strong potential to outperform the market.
Further, financial bloggers and retail investors look positively inclined toward the stock. While financial bloggers are 94% Bullish on FSLR stock against the sector average of 65%, retail investors have increased their holdings in the company by 14.6% in the last 30 days.
Contrary to bloggers and retail investors, analysts on TipRanks are cautiously optimistic about FSLR stock, which carries a Moderate Buy consensus rating based on nine Buys, seven Holds, and one Sell. First Solar’s average price forecast of $121.75 implies 0.5% downside potential to current levels.
Final Thoughts
First Solar’s initiative could have been triggered by the $430 billion Inflation Reduction Act (IRA), which comprises $370 billion of investments toward clean energy and climate initiatives. These initiatives include tax credits for consumers to boost the adoption of renewable energy. The legislation also extends benefits to encourage the domestic production of solar panels, wind turbines, and batteries.
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