FTC Solar's revenue plummets from 2021 as it condemns US import constraints for dampening demand
- US solar tracker manufacturer FTC Solar has actually reduced its net losses compared to last quarter and also Q2 2021 however has seen its revenue collapse, condemning a hostile solar market environment in the US that has seen project hold-ups and also cancellations, which it stated it now hoped was pertaining to an end.
In its Q2 2022 financial results, the Texas-based tracker supplier recorded a net loss of US$ 25.7 million, below US$ 27.8 million last quarter and also US$ 52.4 million from Q2 2021. At the same time, its revenue dropped from US$ 50 million in Q2 2021 to US$ 30.7 million last quarter.
"This revenue level reflects the lower demand environment in the United States amidst the governing environment and also solar module availability constraints," FTC Solar claimed, "as well as represents a decrease of 38% compared to the previous quarter as well as a reduction of 39% year-over-year, driven by lower volume and partially balanced out by a greater ordinary asking price (ASP)".
In spite of being on the "cusp of profitability" in March, FTC Solar in May revealed that it was withdrawing its advice for the year as well as warned of material unpredictabilities triggered by the US AD/CVD examination. This has considering that been prevented by US President Joe Biden's executive order that enforced a two-year freeze on new tariffs on solar imports from Southeast Asia "that basically gets rid of the AD/CVD tariff danger for 24 months".
"Following the President's executive order on clean power in June, we have actually observed a substantial uptick in consumer project discussions," said FTC Solar's chief executive officer Sean Hunkler.
Hunkler said developers and EPC customers were "excitedly functioning to secure sufficient module supply for both delayed 2022 projects along with a strong funnel of 2023 projects" which, based on this, the firm believes that "successfully browsing the Uyghur Forced Labor Prevention Act (UFLPA) import restrictions on solar modules stays the last difficulty for the market to get rid of to ensure an extremely strong recuperation in 2023 ″.
On 21 June, the UFLPA came into force in the United States and also assumed that any kind of items "completely or partially" made in China's Xinjiang area are a product of the region's declared labour camps for ethnic minorities, implying they are banned from getting in the United States.
Amid "all the governing uncertainty of 2022", FTC Solar said it was "focusing on those points we control", including cost-reduction initiatives, operational improvements and also calculated R&D.
Hunkler said the firm was making "good progress" on future agreements, including US$ 141 million to contracted as well as granted orders given that 9 May, bringing its total amount to US$ 774 million.
Yesterday (9 August), FTC Solar introduced that it had actually partnered with power professional AUI Allies to give solar tracking options for distributed generation (DG) projects under 20MW within an eight week period as it considers better development in the DG sector.
Nevertheless, it anticipates Q3 to "represent the low-water mark in regards to revenue", which the business claimed "reflected a continuation of mostly prior-period module-supply relevant consumer project hold-ups".
"Our assumption for gross margin reflects the reduced revenue base to absorb above expenses and also incremental low-margin logistics revenue previously expected in the second quarter," the firm claimed of its Q3 outlook, although it is targeting a "substantial rebound" in Q4.
An additional prospective boon for Q4 efficiency would be the passing of the Inflation Reduction Act (IRA) in the United States House of Representatives, expected this Friday, Hunkler claimed on a call with experts.
"Another potential change that is on the table is the recommended Rising cost of living Reduction Act, that includes motivations as well as an expansion of the investment tax obligation credit. While there are already several underlying vehicle drivers of growth in the solar industry, our company believe this bill would certainly offer to additional bolster as well as extend future demand," he stated.