First Solar enters two TCTAs to sell $500M, $200M tax credits to Fiserv

First Solar (FSLR) announced that it entered into two separate Tax Credit Transfer Agreements, or TCTAs, on December 22 to sell $500M and up to $200M, respectively, of 2023 Inflation Reduction Act, or IRA, Advanced Manufacturing Production tax credits to Fiserv (FI) subject to satisfaction of certain conditions. Under the terms of the agreements Fiserv will pay a price of 96c per $1 of tax credits to First Solar during the first half of 2024, inclusive of fees and commissions paid by First Solar to the placement agent. Citigroup Global Markets is the placement agent for First Solar on the transaction, which is believed to be the first significant credit transfer of its kind in the solar manufacturing industry. The agreements were signed just eight days following issuance of notice of proposed rulemaking by the US Department of Treasury and Internal Revenue Service to implement the Section 45X credits. The tax credits result from the sale of photovoltaic, or PV, solar modules produced in 2023 by First Solar’s operational manufacturing footprint in the United States, including its third Ohio factory, which was commissioned earlier this year. The company’s fully vertically integrated solar manufacturing facilities produce thin film wafers, cells, and modules in a single integrated process that sees a sheet of glass transformed into a fully functional solar panel in approximately four hours. As a result of its vertical integration, First Solar is eligible for Advanced Manufacturing Production tax credits allowed for the production of PV wafers, cells, and modules under Section 45X of the IRA. The solar technology and manufacturing company expects to invest over $2B in new manufacturing facilities in Alabama and Louisiana, while also expanding its existing Ohio footprint, and expects to have 14 gigawatts of fully vertically integrated US solar manufacturing capacity by 2026. Additionally, First Solar is investing up to $370M in a dedicated R&D innovation center in Perrysburg, Ohio, expected to be completed in 2024.