A major American solar manufacturer is selling $700 million worth of tax credits the company earned under the Biden administration’s Inflation Reduction Act, or IRA, reports Louisiana Illuminator. It marks 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 and is building a facility in Iberia Parish, announced in a press release last week that 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 Production 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 says. “This agreement establishes an important precedent for the solar industry, confirming the marketability and value of Advanced Manufacturing Production tax credits.”
First Solar’s proposed Louisiana facility is expected to create more than 700 jobs and tap into research from UL Lafayette’s solar energy laboratory—one of the largest outdoor solar testing facilities in the Southeast. Construction of the New Iberia plant began in September and is estimated to be completed in 2026. Read the full story about the transaction from Louisiana Illuminator.