One of the goals of the Inflation Reduction Act that was passed in August was to speed up the nation’s transition to renewable energy and electric vehicles. To help jump-start that transition, the bill authorized hundreds of billions of dollars in federal tax credits, grants, and loans that U.S. companies and other organizations can use to expand their clean energy programs.

It didn’t take long for companies to take advantage. A couple of weeks after the bill was signed into law, solar panel manufacturer First Solar announced plans to invest up to $1.2 billion to build its fourth factory in the United States.

The investment, announced on Aug. 30, is due in large part to incentives provided by the Inflation Reduction Act.

The Tempe, Arizona-based company said it will build the factory somewhere in the Southeast, which would be its first plant outside of Ohio. The new plant would produce almost as much annual power-generating capacity as the total capacity put to use at U.S. solar farms and rooftops in the first three months of the year, The New York Times reported.

First Solar, the nation’s biggest solar panel maker, will invest up to $1 billion in the new factory, which is expected to begin operations in 2025. The company also will invest $185 million to upgrade production at its current facilities in northwest Ohio. It estimates that the new investment will add at least 850 new manufacturing jobs, bringing its total number of direct jobs in the U.S. to more than 3,000 in four states. 

First Solar’s decision to put so much money toward expanding its operation was greatly influenced by the Inflation Reduction Act, CEO Mark Widmar said in a press release.

“Congress and the Biden-Harris Administration has entrusted our industry with the responsibility of enabling America’s clean energy future and we must meet the moment in a manner that is both timely and sustainable,” he said. “This investment is an important step towards achieving self-sufficiency in solar technology, which, in turn, supports America’s energy security ambitions, its deployment of solar at scale, and its ability to lead with innovation.”

First Solar’s expansion plans align with U.S. government efforts to bolster domestic production of solar panels and reduce the country’s reliance on imports from China, Malaysia, and other Asian countries.

Other companies have announced similar initiatives. In July, a group of solar energy project developers – including AES Corporation, Clearway Energy Group, Cypress Creek Renewables, and DE Shaw Renewable Investments – formed the U.S. Solar Buyer Consortium, which plans to jointly spend about $6 billion to support the expansion of the domestic solar panel supply chain. The money will go toward recruiting solar panel manufacturers as part of a long-term strategic goal to supply up to 7 gigawatts of solar modules per year beginning in 2024. That’s enough to power nearly 1.3 million homes.

Meanwhile, First Solar could make more expansion announcements of its own in the coming months. 

“While we have made no decisions at this time, we continue to evaluate further investments in incremental capacity and could announce further expansion plans in the future,” Widmar said. “Any such decision would be developed on a solid foundation of strong demand, a repeatable vertically integrated manufacturing template, a proven technology platform, and a robust balance sheet.”