Citi says earlier-than-expected 45X guide incremental negative for First Solar

Citi analyst Vikram Bagri notes that the Treasury Dept. released 45X Advanced Manufacturing Credit guidance under the IRA this morning, which was earlier than expected following Treasury Department’s request for comments in late October on the original IRA text. SolarEdge (SEDG) and Enphase Energy (ENPH) appear to be able to manufacture components in the U.S., get the credit, and export the goods, so they can earn more credit than anticipated, which was unclear in the initial IRA text, according to the analyst. This could also mean their U.S. manufacturing facilities may be able to run at higher utilization than previously thought, adds the analyst, who views the apparent ability to assemble modules with imported cells as “incrementally negative” for First Solar (FSLR) as it is likely to stimulate increased competition.