Note 9. Government Grants (Notes)

12 Months Ended

Dec. 31, 2024

9. Government Grants

Government grants represent benefits provided by federal, state, or local governments that are not subject to the scope of ASC 740. We recognize a grant when we have reasonable assurance that we will comply with the grant’s conditions and that the grant will be received. Government grants whose primary condition is the purchase, construction, or acquisition of a long-lived asset are considered asset-based grants and are recognized as a reduction to such asset’s cost basis, which reduces future depreciation. Other government grants not related to long-lived assets are considered income-based grants and are recognized as a reduction to the related cost of activities that generated the benefit.

The following table presents the benefits recognized from asset-based government grants in our consolidated balance sheets as of December 31, 2024 and 2023 (in thousands):


Balance Sheet Line Item	2024		2023
Property, plant and equipment, net	$	166,211	$	146,348
Other assets	5,708		5,860

In February 2021, the state government of Tamil Nadu, India granted First Solar certain incentives associated with the construction of our first manufacturing facility in the country. Among other things, such incentives provide a 24% subsidy for eligible capital investments, contingent upon meeting certain minimum investment and employment commitments. The capital subsidy funding application process begins following the initial period of module production and is expected to be paid in six annual installments thereafter. The timing of cash receipts is subject to the completion of audit certifications, funding applications by First Solar, and review by state government authorities. Module production in India began during the year ended December 31, 2023. Such credit is reflected on our consolidated balance sheets within “Government grants receivable.”

The following table presents the benefits recognized from income-based government grants in our consolidated statements of operations for the years ended December 31, 2024, 2023, and 2022 (in thousands):


Income Statement Line Item	2024		2023		2022
Cost of sales	$	1,009,451	$	659,745	$	—
Research and development	4,186		—		—
Production start-up	484		—		—

In August 2022, the previous U.S. President signed into law the IRA. Among other things, the IRA offers a tax credit, pursuant to Section 45X of the IRC, for solar modules and solar module components manufactured in the United States and sold to third parties. Such credit may be refundable by the IRS or transferable to a third party and is available from 2023 to 2032, subject to phase down beginning in 2030. For eligible components, the credit is equal to (i) $12 per square meter for a PV wafer, (ii) 4 cents multiplied by the capacity of a PV cell in watts, and (iii) 7 cents multiplied by the capacity of a PV module in watts. Based on the current form factor of our modules, we expect to qualify for a credit of approximately 17 cents per watt for each module produced in the United States and sold to a third party. We recognize such credit as a reduction to “Cost of sales” in the period the modules are sold to customers. Such credit is also reflected on our consolidated balance sheets within “Government grants receivable.”

In December 2024, we entered into two agreements with Visa for the sale of $857.2 million of Section 45X tax credits we generated during 2024 for aggregate cash proceeds of $818.6 million. We received initial cash proceeds of $616.0 million in December 2024 and expect to receive the remaining cash proceeds during the first quarter of 2025. In connection with this transaction, we recognized a loss of approximately $39 million during the year ended December 31, 2024, which was reflected in “Cost of sales” in our consolidated statements of operations.

In December 2023, we entered into two agreements with Fiserv for the sale of $687.2 million of Section 45X tax credits we generated during 2023 for aggregate cash proceeds of $659.7 million. In connection with this transaction, we recognized a loss of $27.5 million during the year ended December 31, 2023, which was reflected in “Cost of sales” in our consolidated statements of operations. We received the full cash proceeds during the year ended December 31, 2024.