Company building La. solar panel factory sells $700M in tax credits
8th January 2024 · 0 Comments
By Wesley Muller
Contributing Writer
(lailluminator.com) — A major American solar manufacturer is selling $700 million worth of tax credits the company earned under the Biden administration’s Inflation Reduction Act (IRA), marking the first significant transfer of its kind in the solar industry and establishing the value and marketability of tax credits included in the act.
First Solar Inc., which produces American-made solar modules, announced in a press release last week it struck two separate deals to sell $500 million and up to $200 million to the financial tech provider Fiserv Inc., headquartered in Wisconsin. Under the terms, Fiserv will pay 96 cents per $1 of tax credits. According to the press release, the deal is believed to be the first major tax credit transfer of its kind in the solar energy sector.
The influx of cash is expected to strengthen First Solar’s liquidity as it expands its manufacturing footprint with a $1.1 billion investment on a new facility in Louisiana, in addition to other investments in Alabama and Ohio.
The company earned the tax credits by selling photovoltaic solar modules it produced in 2023 with domestic components at its factories in Ohio and California.
The credit transfer agreements were signed eight days after U.S. Department of Treasury and Internal Revenue Service regulators proposed rules to implement 2023 Advanced Manufacturing Produc-tion tax credits under the IRA.
“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,” First Solar CEO Mark Widmar said. “This agreement establishes an important precedent for the solar industry, confirming the marketability and value of Advanced Manufacturing Production tax credits.”
First Solar is unique among the world’s 10 largest solar manufacturers as being the only U.S.-headquartered company and not manufacturing in China. By using tellurium-based semiconductors in its modules, the company is able to avoid dependence on Chinese crystalline silicon supply chains.
Based in Iberia Parish, the proposed Louisiana facility is expected to create more than 700 new jobs and tap into research from the University of Louisiana-Lafayette’s solar energy laboratory – one of the largest outdoor solar testing facilities in the southeastern United States. Construction of the New Iberia plant began in September and is estimated to be completed in 2026.
The company’s fully-integrated factories can turn a sheet of glass into a fully-functioning solar panel in about four hours, according to the press release.
Signed into law in 2022, the IRA became the nation’s largest ever investment in clean and renewable energy and provided significant reductions in health care costs for people covered under the Affordable Care Act and Medicare.
Democrats, economists and industry leaders in Louisiana predicted the legislation could jumpstart the state’s green energy economy due to the state’s large industrial manufacturing sector.
Among a long list of energy-related provisions, the IRA most notably extends and expands the investment tax credit and production tax credit on clean energy projects including solar, wind, hydroelectric, geothermal, nuclear, hydrogen produced by renewables, stand-alone energy storage such as utility-scale lithium batteries, and other forms of emission-free electricity generation.
It also creates a manufacturing tax credit for equipment such as solar panels, wind turbines, battery cells and other components produced in the U.S., extends the carbon capture tax credit to 2033 and lowers the requirements to allow more facilities to qualify. The act further expands offshore oil and gas leasing while imposing certain fees for the release of excess emissions.
Louisiana saw advancements in several of those sectors last year, including solar, wind, lithium-ion battery production, and carbon capture and sequestration.
This article originally published in the January 8, 2024 print edition of The Louisiana Weekly newspaper.
