WASHINGTON—The biggest American-owned solar-panel maker is set to announce plans Wednesday to invest $680 million in a new Ohio factory, in one of the largest bets on domestic solar manufacturing since China began dominating the industry a decade ago.
First Solar Inc.,
based in Tempe, Ariz., said it plans to begin construction after necessary permits and local incentives have been secured and is aiming to open the plant early in 2023.
The factory, which would be the company’s third in Ohio, is expected to initially produce enough solar panels to produce 3 gigawatts of power annually, or enough to power about 570,000 homes.
Combined, the three plants by 2025 would produce panels that could generate 6 gigawatts of power annually, or a little more than half of all solar panels the company estimates will be produced annually in the U.S. by then, company chief executive
Mr. Widmar said the investment reflected the growth of the American market and what he viewed as bipartisan government commitment to encourage domestic manufacturing in alternative energy.
The pandemic intensified concern about “overreliance on any one country” for imports in industries deemed essential, Mr. Widmar said.
President Biden has said he wants to make the U.S. electric grid carbon-free by 2035 and will seek to give the domestic industry a boost through federal government purchases of made-in-America equipment.
“The Administration is committed to its ambitious ‘Buy American’ goals and creating American-made products, including for solar technologies,” said a spokeswoman for the White House’s Office of Management and Budget.
Chinese firms have dominated the solar market since around 2011, knocking out U.S., European and Asian competitors who had a head start but lacked the large-scale government support and financing provided by Beijing and Chinese local governments.
The fierce Chinese competition pushed down solar panel prices and made solar power competitive with natural gas. Some economists say that has been a boon to consumers.
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“It seems like it’s solar manufacturers vs. the people,” said
an economist at Stanford University.
First Solar, one of the few American solar firms able to remain afloat, has specialized in building panels for large-scale installations in the desert. Chinese firms and others also built panels for the residential market.
Some environmental groups have objected to the mega projects, saying they harm desert ecology.
If planned correctly, the projects can help preserve desert animal life, Mr. Widmar said. “Wildlife emerges around them,” he said. “They can be a safe haven.”
First Solar recorded losses in five of the past 10 years, but has been profitable since 2020.
The highly automated new factory is expected to employ 500 people. Currently First Solar employs about 1,600 people in the U.S. and 5,000 globally.
Even so, First Solar would remain a relatively small player in the expanding U.S. market, where imports have an 85% share, according to the energy consulting firm Wood Mackenzie.
After construction of the new First Solar factory, the company would still import 40% of its panels from its factories in Vietnam and Malaysia.
Mr. Widmar says the company wants to continue to expand U.S. production, which helps it save on freight costs and strengthen the company’s standing as an alternative to Chinese imports.
“We are the only ones to stand up to the onslaught of the Chinese,” Mr. Widmar said. “A lot of people doubt we are enduring; that’s the challenge.”
The company is banking on continued U.S. support through tax breaks and possibly renewing tariffs on imported Chinese panels, as well as growing domestic demand.
Solar generation has grown to about 4.3% of the nation’s electricity supply from 0.1% in 2010, according to
a George Washington University energy expert.
First Solar shares rose 1.27% Tuesday, to $75.96. Shares are down about 25% this year.
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