First Solar, Inc. (FSLR) Q4 2021 Earnings Report, Transcript and Summary

Good afternoon everyone and welcome to First Solar’s Fourth Quarter 2021 Earnings Call. This call is being webcast live on the Investors Section of First Solar’s website at investor.firstsolar.com. At this time, all participants are in a listen-only mode. As a reminder, today’s call is being recorded. I would now like to turn the call over to Mitch Ennis from First Solar Investor Relations. Mr. Ennis, you may begin.

Thank you. Good afternoon everyone and thank you for joining us. Today the company issued a press release announcing its fourth quarter and full year 2021 financial results as well as its guidance for 2022 [phonetic]. A copy of the press release and associated presentation are available on First Solar’s website at investor.firstsolar.com. With me today are Mark Widmar, Chief Executive Officer; and Alex Bradley, Chief Financial Officer. Mark will begin by providing a business update. Alex will then discuss our financial results for the fourth quarter and full year 2021. Following his remarks, Mark will provide a business and strategy outlook. Alex will then discuss our financial guidance for 2022. Following their remarks, we will open the call for questions. Please note this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management’s current expectations including among other risks and uncertainties the severity and duration of the effects of the COVID-19 pandemic. We encourage you to review the safe harbor statements contained in today’s press release and presentation for a more complete description. It is now my pleasure to introduce Mark Widmar, Chief Executive Officer. Mark?

Thank you, Mitch. Good afternoon and thank you for joining us today. I would like to begin by expressing my gratitude to the entire First Solar team for their hard work and perseverance in a year where much of the solar manufacturing industry faced supply chain, logistics, cost, and pandemic-related challenges. Despite these dynamics, we have continued to scale our manufacturing capacity and adapt our business model in a constantly evolving market. Through our points of differentiation, which include our cad-tel thin-film module technology, a vertically integrated continuous manufacturing process, a strong balance sheet and a commitment to the principles of responsible solar, we have traded a growth-oriented business model, which we believe positions us to be successful over the long term. While Alex will provide a more comprehensive overview of our 2021 financial results, I would like to highlight that our full year EPS results of $4.38 per diluted share came in above the midpoint or guidance range we provided at this time during our third quarter earnings call. Of note this EPS result, despite an unprecedented challenging freight environment is also solidly within the original guidance range we provided last February. Beginning on slide three, I’ll highlight some of our key 2021 accomplishments, which we believe positions us for sustainable growth. To begin, we had an excellent year from a commercial perspective securing a record 17.5 gigawatts of net bookings in 2021, more than double our prior annual record. This momentum has carried into 2022 with 4.8 gigawatts of net bookings year today, which brings our total since the previous earnings calls to 11.8 gigawatts. As we secure this very significant volume for delivery into the future, we have been employing a contracting strategy which enables our customers to benefit from the evolution of our product and technology platform, while also partially de-risking our position around sales freight [phonetic]. I will discuss this approach later in the call. We produced 7.9 gigawatts in 2021, delivering against our near-term commitments, despite pandemic-related challenges. Moreover, we reduced our cost per watt produced water by 6% between the end of 2020 and 2021, despite inflationary pressures, rising commodity costs, and as a result of the COVID-19, the inability to implement as planned several module cost reduction program. Expansion has been an important thing in 2021. As we set the foundation to reach approximately 16 gigawatts of capacity in 2024, we added our sixth Series 6 factory, our second factory in Malaysia in early 2021, announced plans for new factories to produce our next generation of solar panels, which we are calling Series 7 in India and Ohio. As a reminder, the two Series 7 factories are expected to come online in 2023 and combined with combining with their benefit of locating supply near to demand, reducing the cost of sales freight, are expected to increase gross profit per watt by approximately $0.01 to $0.03 relative to our existing Series 6 fleets. On the technology front, we increased our top Series 6 production bin to 465 watts, which represents a 21% [phonetic] increase year-over-year as in line with our guidance provided last February. We reduced our 30-year warranted power output degradation rate from 0.5% to 0.3% per year. This meaningful improvement can result in the module yield we’ll have to 4.4% more energy on a lifecycle basis. And finally, we completed the sale of our US project development and North American O&M businesses. In summary, each of these achievements are the result of our intent to focus on our greatest competitive advantage, which includes our differentiated technology and manufacturing process. Turning to Slide 4, I will next discuss our most recent shipments and bookings in greater detail. We shipped approximately 2.1 gigawatts and 7.7 gigawatts for the fourth quarter and full year 2021 respectively, which was within but towards the lower end of our guidance range that we provided during the Q3 earnings call. As a reminder, we generally define shipment as when the delivery process to a customer commences and the module leaves one of our facilities, whereas revenue recognition or volume sold occurs this transfer of control of the modules to the customer, which is commonly upon the arrival at the destination port of the project size. Now, extended transit time due to container availability constraints contributed to our full year 2021 shipments being towards the lower end of our guidance range. The global freight market continues to experience record levels of scheduled delays and reliability issues, which has worsened since the previous earnings call. Due these challenges, we ended the year with 1.2 gigawatts of inventory on hand and 675 megawatts of shipments in transit not recognized as revenue. While the volume in transit declined quarter-over-quarter, it was meaningfully above the trailing 12-quarter average. Several logistic challenges trended unfavorably in Q4. Firstly, total transit times for transoceanic freight increased by a factor of weeks between Q3 and Q4 reaching levels nearly double historic norms. Secondly, congestion continues to be challenging at US ports, which are further exasperated in advance of the holiday season. Thirdly, reliability was a significant issue as three in 10 planned sailings were canceled around the turn of the year. Finally, over the road trucking is constrained from a capacity perspective with load to truck ratios at the highest level in several years. In summary, we are experiencing a two-front impact related to freight in terms of both higher costs and worst carrier performance. With regard to bookings, momentum has accelerated with 11.8 gigawatts of net bookings since our November earnings call. We continue to see an increase in multi-year module sale agreements, driven by our customers need for certainty in terms of the technology they’re investing in and the suppliers’ integrity and ethics. Representative of this, we have executed an agreement with our highly valued long-term partner SB Energy to supply 1.5 gigawatts of deployment in projects in 2023, 2024, and 2025. As we are accounting for shipments of approximately 2.1 gigawatts during the fourth quarter, our future expected shipments which extended into 2025 are 26.2 gigawatts, including our year-to-date bookings, they’re sold out for 2022 and has 10.7 gigawatts, 3.4 gigawatts, and 2.4 gigawatts for planned deliveries in 2023, 2024, and 2025 respectively. Next, I would like to provide an update on our project development and O&M platform in Japan. Today, our remaining offerings outside of our core module business includes project development in Japan, O&M outside of North America, and our continued ownership of certain power generating assets. Of these remaining businesses, our Japan platform is the most prominent in terms of perspective, scale and profitability. In late 2021, we received an unsolicited offer to acquire our Japan project development in O&M platform. We believe that potential purchase stretch strategy to scale a leading solar platform in Japan, coupled with the participation of complementary asset classes could unlock the full potential of our Japan platform. Accordingly, we are in advanced stage negotiations to sell our Japan project element and O&M platform. While there is no certainty that we will execute a definitive agreement with this counterparty, we believe that the contemplated transaction value is compelling, though, if we do not complete this transaction, we expect to either continue our approach of selling down our contracts or projects over time, or consider an alternative buyer for the platform. And I’ll turn the call over Alex, who will discuss our Q4 and full year 2020 results. Alex?

Thanks Mark. And before discussing our financials results for the quarter and full year 2021, I’ll first provide an update on our segment reporting. With potential sale of our Japan product development and O&M platform, the revenue and margin opportunities outside of our core modules business lie largely with a relatively small pool of existing O&M contracts outside of Japan in North America, power generating assets for projects that we previously developed, and any legacy obligations as a result of our prior systems activities. Accordingly, we’ve changed our reportable segments to align with our internal reporting structure and long-term strategic plan. Going forward, our module business will represent our only reportable segment but for comparative purposes, the prospective module segment is fully comparable to prior periods. Any revenue or margin associated with activities or historically calculated with our systems business are now presented as other in our segment. Starting on Slide 5, I’ll cover the income statement highlights the first quarter and full year 2021, which was presented in this manner. Net sales in the fourth quarter were 907 million, an increase to 324 million compared to the prior quarter. This was primarily a result of the sale of three projects in Japan and increased module volume sold in Q4. For the full year 2021, net sales were 2.9 billion compared to 2.7 billion in 2020. Relative to our guidance expectations, net sales were within but towards the lower end of our guidance range, due to delays in module sales, revenue recognition, as a result of the aforementioned freight and logistics challenges. Gross margin was 27% in the fourth quarter versus 21% in the third quarter. For the full year 2021, gross margin was 25%, which is unchanged from the prior year. 2021 guidance assume the completion of two project sales in Japan. The results could be three project sales in Q4, our Q4 gross profit for our residual business operations was 102 million, approximately 25 million above the high end of our guidance range for Q4 and full year ‘21. Module segment gross margin was 21% in the fourth quarter, which is unchanged from the prior quarter. For the full year 2021, our module segment gross profit came in below the low end of our guidance range by approximately 12 million. Additionally, fully 2021 module segment gross margin of 20% was down 5 percentage points from 25% in 2020. This was due to with several items. Firstly, sales freight continued to adversely impact financial results, reducing gross margin by 6 percentage points in 2020, 11 percentage points full year 2021, and 13 percentage points in Q4 of 2021. Note as a reminder, many of our module peers report freight costs as a separate operating expense. For comparison purposes, we encourage you to consider this factor when benchmarking our module gross margin percent relative to our peers. Secondly, 2021 volumes fell below our full year expectations due to the aforementioned oceanfreight reliability issues, port congestion, and over the road trucking capacity constraints. The year end 2021 modules in transit number of 675 megawatts remains above historic norm. Thirdly, factory upgrades in 2021 resulted in higher downtime and under utilization and lower production. The full year 2021 ramp and underutilization related expenses of 19 million were 1 ne percentage point of gross margin. Finally, we reduced our cost to watt produced by 6% between the end of 2020 and 2021. We faced a cost of watt produced headwinds in 2021 as a result of higher inbound freight and other costs. In light of the circumstances, although the module segment gross profit and gross margin came in below 2021 expectation, we are pleased with how we navigated the current environment and delivered solid module segment performance. SG&A, R&D and production staff expenses total 73 million in the fourth quarter, an increase of approximately 1 million relative to the third quarter. This increase was primarily driven by 1 million increase in production staff expense from the addition of our third factory in Ohio, a 4 million increase in R&D expense predominately related to CuRe testing, which will partially offset by payment charge related to a certain development project that occurred in the prior period. SG&A, R&D and production staff expenses totaled 290 million in 2021 versus 357 million in 2020. Overall, we’re pleased with operating expense results of 290 million, which was within our full year guidance range of 285 million to 300 million, and represents a significant year-over-year reduction. Operating income was 173 million in Q4 and 597 million for the full year 2021. Income tax expense was 103 million for the full year 2021. Fourth quarter earnings per share was $1.23, compared to $0.42 in the prior quarter. For full year 2021, earnings per share was $4.38 compared to $3.73 in 2020. Our 2021 EPS result came in above the midpoint of the guidance range we provided on the third quarter earnings call, and is also within the original range we provided last February. Although several unexpected challenges and benefits we faced last year, our overall performance reflects the strength of our business model and ability to navigate a challenging environment over the course of the year. So in the Slide 6, our cash and cash equivalents, restricted cash and marketable securities balance at year end was 1.8 billion, a decrease of 109 million from the prior quarter. Our year end net cash position, which includes cash and cash equivalents restricted cash marketable securities, less debt, was 1.6 billion, a decrease of 71 million in prior quarter. Our net cash balance is higher than our guidance range due to lower than expected project spend on Japanese development projects and the timing of cash payments for capital expenditures that were delayed in 2022. Cash flows for operations was 238 million in 2021 versus 37 million in 2020. Capital expenditures were 195 million in the fourth quarter compared to 165 million in the third quarter and CapEx was 540 million in 2021 compared to 417 million in 2020. With that, I will turn the call back to Mark to provide a business and strategy update.

Thank you, Alex. Turning to slide seven, I would like to begin by providing an update on our CuRe program. Over five years ago, we announced the acceleration of our Series 6 transition, which transformed our manufacturing process and significantly increased our module wattage. While the outcome of the Series 6 program has been a great success, as reflected by our record 22 gigawatt backlog as of the end of 2021, it is easy to lose sight of the initial challenges we faced when scaling high volume manufacturing with respect to module wattage, throughput and manufacturing yield. Through persistence, resilience and ingenuity, our manufacturing associates methodically resolved these challenges, enabling Series 6 to be the success as is today. Looking forward, CuRe represents an anticipated enhancement to our module performance, which is expected to increase efficiency and lifecycle energy. On the November earnings call, we indicated that we had demonstrated CuRe’s for performance entitlements in a lab setting and are working to realize the entitlement in high volume manufacturing conditions. As a result, we have revised our integration schedule to lead line implementation by the end of Q1 2022 with fleet-wide replication timing to be determined upon completion of the lead line. Since the previous earnings call, we have conducted a series of CuRe runs on high volume production lines in Ohio. And while the trends are for improving module wattage and degradation appear favorable, we are still working to realize the full performance entitlement in high volume manufacturing conditions. Over the coming weeks, we intend to conduct further testing, which we believe will informed our views on lead line implementation timing. Again, this lead line implementation timing will in turn inform fleet-wide replication timing. As highlighted on our Q2 2021 earnings call, our technology team continues to create new optionality in our technology roadmap. This optionality enables us to partially mitigate the effects of CuRe delays through the enhancement of our current Series 6 technology with our top production bin reaching 465 watts at our Ohio and Malaysia factories. In addition to this improved efficiency and module wattage, Series 6 now has a significantly improved long-term degradation rate. Using the improvement metrology to measure degradation at our test sites, and further validated by third-party analytic methods and customer site data, the current Series 6 platform now has a 30-year warranted power output degradation rate of 0.3% per year, which is 40% below our previous warranted and represents a potential 4.4 increase in life cycle energy. While the improved Series 6 nameplate wattage allows us to achieve our targeted exiting 2021, with a top production bin of 460 to 465 watts, the expected overall lifetime energy performance of the current Series 6 program remains under that of CuRe, primarily due to differences in warranted degradation rate and temperature coefficient. That said, looking into 2022, we believe there is a path for Series 6 module to increase the top production bin to 470 watts with an upside potential of 475 watts exiting the year. Furthermore, we are also working on our Series 6 modules, under the current program, to achieve a temperature coefficient similar to what is expected under our CuRe program. I’ll discuss additional optionality in our technology roadmap, including bifaciality and opportunities to drive to higher levels of efficiency later in the call. While CuRe implementation has been delayed, the significant improvements in efficiency and degradation of Series 6 has been beneficial to more closely meet our customers’ expectations. In connection with our CuRe obligations this year, as discussed on our November earnings call, we have either mandate or in an advanced stage negotiation to amend certain customer contracts utilizing CuRe technology by substituting our enhanced Series 6 product. We expect these amendments to impact 2022 revenue and gross margin by approximately $60 million, which is reflected in our guidance. Note, we are still working to finalize certain CuRe-related contract amendments, relative to our contracted backlog disclosure, approximately 40% of the 60 million is in our contracted backlog disclosure as of December 31, 2021. The balance will be reflected once the remaining contract amendments are completed. These amendments coupled with the existing and forecasted improvements to our current Series 6 program related to efficiency, module wattage degradation rate, and temperature coefficient, as well as other potential enhancements under our technology roadmap, which I will discuss momentarily, have reduced the requirements to implement our CuRe program by a particular deadline. Looking into 2022, we are pleased to enter the year with a record backlog and a growth plan well underway with capacity expansions in the US and India. However, 2022 is expected to be a challenging year from an earnings standpoint, both due to external factors and the near-term impact of factory startup costs associated with our growth plans. The most significant driver impacting the year is the freight market. Ocean freight costs for contracted volumes have risen 200% to 300% from pre-pedantic levels. With our recently concluded carrier negotiations, we expect our 2022 contracted freight rates to increase by more than 100% year-over-year. This compares to a pre pandemic historic annual percentage increase in the mid-to-upper single digits. At the same time, transit times have significantly increased and reliability and availability have significantly worsened, pushing more volume into a higher price spot market. Despite record profitability across the shipping industry, this situation currently shows no sign of improving in 2022. We increasingly are monitoring the growing calls for accountability. In particular, from Georgia Senator Warnock, who has demanded an investigation into the apparent price gouging of ocean carriers. We expect sales freight for 2022 to increase to approximately $0.05 a lot. This is a combination of contracting and premium rates. Year-on-year, we expect a better mix of contracts and premium rates but with the substantial increase in contract rates, we expect sales freight costs to increase by approximately $200 million to $240 million year-on-year. Note, our anticipated 2022 shipments were largely booked prior to the shocking increase in freight rates. Relative to our expectations at the time of the negotiation, the module ASP freight rates have more than doubled. Externally, there have been a number of events that have adversely impacted our module cost reduction roadmap. Firstly, the aforementioned freight market disruption has resulted in higher shipment costs for inbound raw materials. Secondly, the increase in inflation and commodities has both directly and indirectly affected our bill of materials and costs of production. The cost of aluminum, which has increased over 40% between the start and end of 2021, has been a strong headwind against our module costs. We have partially offset this headwind by implementing our Series 6 Plus at our Malaysia and US factories, which reduced the aluminum content of our frames by 10%. Thirdly, COVID-19 constraints including travel quarantine restrictions for both First Solar associates and third-party equipment installers have impacted the timing of our Series 6 Plus and throughput upgrades in Vietnam. While we are expecting to see a loosening of travel restrictions this year, this uncertainty present ongoing risks to the timing of upgrades at our labs factory in Vietnam to Series 6 Plus, which is expected to be completed in early Q2. COVID-related constraints has also delayed the fleet rollout of our glass optimization program. As mentioned previously, our 2021 cost per watt declined by 6% versus our target of 11%. The shortfall reflective of the items noted above resulted in us missing our cost per watt target reduction by approximately $0.01 per watt. While we expect to continue to improve our cost per watt in 2022, we will not be able to offset a number of the headwinds experienced in 2021. And therefore, our module costs will be higher than our roadmap by approximately $0.01 per watt. This expected to negatively impact 2022 gross margin by approximately $100 million. While, there are better sources for expert perspectives on the most recent activities in Ukraine and Russia, and the resulting invocation on geopolitics, from our perspective, we are watching closely the tragic events unfold. As of today, our supply chain has not been impacted by the crisis and we have no current tier one suppliers in the conflict area. It is reasonable to anticipate natural volatility and various supply markets such as metals or fuel, should the conflict continue to escalate. We will continue to monitor this situation daily. Internally, the current limitation delays and the expected module wattage improvements will adversely impact our expected cost per watt reductions. And finally, capacity growth decisions made in 2021 will provide long-term benefits in 2023 and beyond, but provide a headwind to the 2022 P&L starts due to startup expenses of $85 million to $90 million. We will continue to navigate these headwinds with a focus on the future. As we invest in realizing the full value of our differentiated thin film technology, this pivotal year will evolve around continuing significant investments in R&D, new products, manufacturing expansion, and employing new contracting strategies, all of which we believe will set the stage for sustained growth in 2023a And beyond. As relates to R&D, our team has been cultivating optionality and our roadmap across energy attributes, including efficiency, degradation, temperature coefficient, and bifaciality, along with product attributes, including Series 7. More specifically, on the Q2 2021 earnings call, we highlighted that we are deploying prototypes of early stage bifacial cad-tel modules at our test facility and we’re pleased with the initial results. Since then, we have continued to run performance tests on both our current and CuRe device platforms, and has gathered more field data, with the results implying the potential for an increase in specific energy. Adding bifaciality on cad-tel adds to the well-understood and valued temperature coefficient, spectral response, and partial shading and long-term degradation energy advantages. With a mid-term target of a 490 watt bifacial module, we’re working diligently to commercialize this technology across our future platforms. We believe the commercial and financial perspective, prospects of bifacial cad-tel are compelling due to the anticipated higher energy yield with limited CapEx or retooling required in order to integrate a transparent back contact across the fleet. Turning to Slide 8, as it relates to expansion, construction of our Series 7 factories is underway and the schedules are on track, with the US factory expected to commence initial production in the first half of 2023 and the India factory by the end of 2023. Once scaled, these factories are expected to lead the fleet in terms of module wattage, efficiency and cost per watt. With a mid-term goal of 570 watt by monofacial Series 7 module, we see the potential for meaningful improvement in our module performance. As we significantly increase our nameplate capacity, we believe this anticipated growth when balanced with liquidity and profitability will drive contribution margin expansion, given our operating expense cost structure is 80% to 90% fixed. As a reflection of this expansion roadmap and continued optimization of the existing Series 6 fleet, we have summarized our expected exit nameplate capacity in production for 2022, 2023, and 2024 on Slide 9. As it relates to our contracting strategy, a feature of our newer framework agreements is the customers entering into a contract today can benefit from the potential realization of our technology roadmap. For approximately 7.3 gigawatts of bookings secured prior to the end of the calendar year, we’ve structured the ASP and product expectations on a baseline wattage and energy performance roadmap without the full anticipated benefits of our technology roadmap. To the extent, we realized future module technology improvements including new product design and energy enhancements beyond what is specified in the baseline agreement, the incremental value is expected to result in a corresponding increase ASP. Our ability to contract in this manner provides our customers with clarity of pricing, product availability and delivery timing enabling them to underwrite PPAs from position of strength, with lower risk to the expected project returns. From our perspective, there is also strategic rationale to contract in this manner, as it provides us confidence in our ability to sell through our expected supply and provides visibility into an expected profit per watt with the potential for meaningful upside to the extent we realize these anticipated technology improvements. This framework allows us to understand the price certainty, the value of our investments across different product enhancements. Based on these potential technology improvements, there’re approximately 7.3 gigawatts of contracted module volumes as of December 31, 2021, such adjustments if realized could result in additional revenue of up to 22 billion, majority of which would be recognized in 2023. Note this contracting approach has been incorporated in our 2022 bookings year-to-date. From a sales freight contracting perspective, last year, we began employing module contract structures, which mitigate our exposure to sales freight. As we continue to look in two to four years into the future, these arrangements provide a balanced risk profile for us and our customers, where we are incentivized to minimize sales freight costs that generally provide a cap above which customers are obligated to pay. We started employing these structures in Q2 2021 and approximately one-third of our expected 2022 volume includes the provisions. In 2023 and beyond, we anticipate a significant majority of volume will include these types of provisions. Across our contracted backlog, these contracts provide greater clarity into an expected gross profit per watt, thus providing freight relief through a hiring ASP, if rates remain above pre-pandemic levels. In addition to our contracting approach, our expansion strategy, including our third Ohio plants and our new India plant are expected to further de-risk our exposure to transoceanic freight costs by bringing manufacturing closer to demand. At the factory scale, our production mix exposed to transoceanic freight risk is expected to decrease by approximately 30 percentage points between 2022 and 2024. Overall, from a pricing perspective, the strong demand we are witnessing for our differentiated cad-tel module has enabled us to secure 10.7 gigawatts of bookings for planned deliveries in 2023, at a baseline ASP that is only $0.003 below our planned deliveries in 2022. It is important to note that ASP is essentially composed of two components, the module plus sale freight. The baseline ASP generally assumes sales freight will be approximately $0.025 per watt. To the extent that the actual sales freight is above the baseline, the ASP will increase to cover most of, if not all of, the incremental sales freight. When including this variable pricing adjustment, and assuming 2022 sales freight environment, we expect our 2023 sales freight adjusted ASP to be approximately $0.01 higher than 2022 on a like basis. In addition, as we secure the significant volume for delivery in 2023, we have been employing a contracting strategy which enables our customers to benefit from the evolution of our technology and product platform. Realizing the entirety of the benefit of this platform will increase our baseline ‘23 ASP by up to $0.02 cents a lot. Turning to Slide 10, we continue to see active customer engagement and high levels of interest in both individual projects, as well as a multi-year and multi-gigawatt agreements across key markets in the United States and India. Our total bookings opportunities of 53.6 gigawatts remain very robust, with 27.7 gigawatts in the mid to late stage customer engagement. This opportunity set coupled with our contracted backlog gives us confident as we continue scaling our manufacturing capacity. Incrementally we continue to evaluate the potential for future capacity expansion. As referenced on the Q3 earnings call, we have started to engage with certain suppliers to ensure we have line of sight on critical path tools for further expansion. We believe strong demand for our cad-tel modules, a dynamic technology roadmap, a strong balance sheet, and largely fixed operating expense cost structure are each catalyst, as we evaluate expansion. While this potential expansion may be in the US, India or beyond, we are seeking clarity on domestic solar policies to ensure such expansion is well positioned. Note, we have made no such decision at this time and any capacity expansions are unlikely to contribute to our 2023 production plan. I’ll turn the call back over to Alex who will discuss the financial outlook and provide 2022 guidance.

Thanks Mark. Before discussing ‘22 financial guidance, I’d like to provide an update on our cost roadmap. As initially presented our February 2021 guidance call, we forecasted the year end 2020 to year end 2021 cost watt produce reduction of 11%. In November, we revised our reduction assumption to 5% based on increased inbound freight could last [phonetic] aluminum and adhesive costs a final year-over-year reduction in payment of 6% to 7%. So, of note, the 5% difference between our original assumption and our year end result remains a headwind in 2022 and is expected to impact full year 2022 cost per watt by approximately a $0.01. On a cost per watt sold basis, our original year-over-year forecast reduction of 8% was revised to 3% in November, and our final full year result cost per watt sold remained flat year-over-year. This is despite a year-over-year increase in sales freight per watt of 70%. Excluding the effect of the sales rate, our cost of watts sold declined by approximately 8% for the same period. Looking at 2022, from a glass perspective, we’ve largely stabilized this cost through long-term predominantly fixed price agreements with domestic suppliers that have economic benefits, as we achieve high levels of production. On the Q3 2021 earnings call, we highlighted COVID-related delays impact the startup timing of new glass facilities to support our Malaysia and Vietnam sites. In addition to competitive pricing, the facility is expected to reduce the cost of inbound freight for our international sites. Given recent improvement in the COVID situation in Southeast Asia, we anticipate this new facility will commence production and begin benefiting cost per watt in the first half of this year. The race to aluminum, we anticipate framing costs will be elevated relative to historical norms. We highlighted during our Q3 earnings call that we had a commodity swap contract in place, which covered the majority of our US consumption in 2021. Note, many of our aluminum contracts with supplier Malaysia and Vietnam factories reference aluminum trade on the Shanghai Futures Exchange, which makes hedging a challenge, given foreign investors cannot access the market without a registered local entity in China. While aluminum pricing remains above pre-pandemic levels, going forward, and for both domestic and international sites, there are several strategies and process to reduce framing cost in the near term. Firstly, by differentiating the frame design and reducing costs for modules installed in certain geographies and parts of the array are exposed to standard versus high mechanical loads; secondary, by optimizing the mounting interface for our Series 7 module; and finally, by evaluating alternative materials for the construction of our frame, including a steel back rail for our Series 7 modules in India. As it relates to logistics, outbound sale trade is expected to be approximately $0.05 per watt in 2022. In context prior to recent dislocation the Global Freight market, sales freight per watt was generally between $0.02 and $0.025 per watt in 2020. Note, the aforementioned sales freight contract provisions are expected to provide approximately half a penny [indiscernible] on a fleet wide basis in 2022, which is reflected in our guide. On a fleet-wide basis, relative to where we acted in 2021, we anticipate reducing our costs per watt produced by 4% to 6% by the end of 2022. Despite an expected 25% to 40% increase in sales freight per watt, we anticipate our cost per watt sold will be flat between the end of 2021 and 2022, respectively. Excluding the effect of sales freight, we anticipate our cost per watt sold decline by approximately 5% to 8% over the same period. Note, the expected 25% to 40% increase in sales per watt in 2022 is expected to partially offset by contract provisions for sales rate recovery, which cover approximately one-third of our shipments in the year. By 2023, similar sales rate recovery provisions are expected to cover a significant majority of our shipment. Turning to slide 11, looking forward, despite near term inflationary pressure around certain commodity and logistics costs, we believe our revised midterm roadmap will enable us to continue reducing our Series 6 costs per watt. Starting with efficiency, our midterm goal is a 490 watt bifacial and 500 watt monofacial model. As a reminder, improvements in module watts is generally provided benefits each component of cost per watt including our variable, fixed and sales freight costs. Secondly, we’re tracking to increase throughput by 9% to 11% in the mid-term on our existing manufacturing base, resulting in a fixed cost solution benefit. Thirdly, we continue to see a positive increase in our Series 6 manufacturing yield to 98.5% in the midterm. Fourth, we see opportunities to reduce our bill of material costs by 10% midterm, primarily across framing and glass. And finally, we believe culmination of fitting our module profile, transport optimization, and employing risk sharing mechanisms in our customer contracting, could lead to a 40% to 50% reduction in net sales freight cost. Note, this expected reduction includes a combination of cost recaptured through the aforementioned sales rate customer contracting strategy, and increased modules to shipping container. Separately, as it relates to Series 7, we anticipate both India and Ohio factories to have cost per watt once fully ramped lower than our current lowest cost factories in Vietnam. Combined with the benefit of locating supply near to demand and reducing the cost of sales freight, Series 7 is expected to reduce cost per watt and net sales freight costs in total by approximately $0.01 to $0.02 cents relative to Series 6. With that context in mind, I’ll discuss the assumptions included in our 2022 financial guidance. Turn to Slide 12. Starting with legacy systems items, we are pleased with the potential value and long-term benefits of selling planned development and O&M platform. While there’ll be no assurance that we will enter into an agreement for a transaction, our guidance assumes a gain of approximately 270 million to 290 million, which would be recognized as a gain on sale of businesses, which lies between gross margin and operating income on the P&L. As we previously assumed ongoing asset sales from the development portfolio, which benefit gross margin, this change in assumption is a headwind to gross margin in 2022. Furthermore, until any sale is closed, overhead costs associated with this planned platform will also continue on impacting operating expenses. In addition, we signed an agreement to sell remaining international O&M contracts outside Japan, up on closing which is expected in the first half of 2020, we expect to recognize a pre-tax gain on sales shown in the income statement between gross margin and operating income of approximately 10 million. As it relates to power generating assets, we’re evaluating whether to continue holding or lose on multi-asset in Chile, whether it’s a series sales this project. Considering such a sale would require coordination with the project lenders, as previously discussing on November earnings call, could result in impairment charge in the future, if we are unable to recover our net carrying value in the project. No impact from any profitable sales of this project is included in our guidance for 2022. 2022 shipments are expected to be between 8.9 and 9.4 gigawatts, which exceeds our production plan for the year of 8.2 to 8.8 gigawatts due to higher than expected inventory levels in year-end 2021. Our factory expansion and factory upgrade roadmaps are expected to impact operating income by approximately 95 million to 105 million. This comprises the startup expenses of 85 million to 90 million, primarily incurred by our new factories in Ohio and India. As previously mentioned, we’re planning to implement Series 6 class upgrades in Vietnam and other upgrades in 2022. These upgrades require downtime resulting in estimated underutilization losses of 10 million to 15 million. We anticipate these improvements will contribute meaningfully by 2023 production plan. Our liquidity position has been a strategic differentiator in an industry that’s historically prioritized growth without regard to long-term capital structure. For example, we’re one of the few solar companies that both entered and exited the last decade and our strong balance sheets enabled us to weather periods of volatility and also to pursue growth opportunities. Additionally, we were able to self fund our Series 6 transition whilst maintaining our strong liquidity position ending 2021 with 1.6 billion of net cash. Based on our existing liquidity position, coupled with expecting operating cash flows from existing Series 6 factories, we believe we can self finance our expansion roadmap. However, based on the opportunity to secure a competitive term and strategic benefits of a partner, when entering to new market, we may raise that financing for the construction of our new factory in India. I will cover 2022 guidance ranges on slide 13. Our net sales guidance is between 2.4 billion and 2.6 billion, which is predominantly module segment revenue. Gross margins expected to be between 155 million and 215 million, which includes 155 million to 225 million of module segment gross margin and negative 10 million impacts from other legacy activities. Module segment gross margin includes underutilization losses of 10 million to 15 million. As discussed, we anticipate sale freight will be a significant headwind in 2022 and we anticipate sales freight will reduce our module segment gross margin by 18 to 20 percentage points for the full year of 2020. SG&A expense is expected to total 170 million to 175 million, compared to 170 million in ‘21 and 223 million in 2020. As indicated on the guidance call last February, we anticipated the sale of our US product development business to results in annualized savings of approximately 45 million to 50 million of which approximately 60% sits in the operating expense line. We’ve tracked well relative to this cost reduction plan and pleased with expect the savings on a go-forward basis. R&D expense is expected to total 110 million to 115 million versus 99 million and 94 million in 2021 and 2020, respectively. As we continue to grow our manufacturing capacity, we also intend to add additional headcount to our R&D team to further invest Advanced Research Initiative. SG&A and R&D expenses combined totaled 280 million to 290 million and total operating expenses, included 85 million to 90 million production staff expense, are expected to be between 365 million and 380 million. Operating income is expected to be between 55 million and 150 million, inclusive of an expected approximately 280 million to 300 million gain on sale related to the aforementioned Japan project development and international O&M transactions and 95 million to 105 million of combined under utilization costs and planned startup expenses. So the non-operating items effects interest income, interest expense and other income to net negative 20 million to 30 million, which is predominant driven by FX and interest expense related to Japanese project. Full year tax expense is forecast to be 35 million to 55 million. This results in full year 2022 earnings per diluted share guidance range zero to $0.60. And note from an earnings cadence perspective, we anticipate our earnings profile will improve gradually over the course of the year with a significant impact in the quarter, in which any sales of a pan-developed platform were to close. Capital expenditures in 2022 is expected to range from 850 million to 1.1 billion as we advance the construction of our Ohio and India plant and upgrades to the fleet and invest in other R&D related programs. Our year end 2022 net cash balance is anticipated to be between 1.1 and 1.35 billion. The decrease from our 2021 year end net cash balance is primarily due to capital expenditures associated with the building of our Ohio and India manufacturing plants, which we expect will be partially offset by financing proceeds. Turning to slide 14, I’ll summarize the key message from today’s call. Demand has been robust, with 11.8 gigawatts net bookings from previous earnings call. Our opportunity pipeline continues to grow with a global opportunity set at 53.6 gigawatts including mid to late stage opportunities of 27.7 gigawatts. On the supply side, we continue to expand our manufacturing capacity and expect to exit 2024 with approximately 16 gigawatts of capacity. We see significant mid-term opportunity for improvements in our modular efficiency cost and energy metrics. We ended 2021 was full year EPS with $4.38 cents and are forecasting full year 2022 earnings per share of $0 to $0.60. With that we complete our prepared remarks and open the call for questions. Operator?

[Operator Instructions] Our first question is from Philip Shen with ROTH Capital Partners.

Hi, everyone. Thanks for taking my questions. First one is on pricing. As you think through your pricing for ‘22 and ‘23 with the backdrop of the contracting strategy and the recent bookings, do you think the blended pricing in ‘22 could be possibly $0.30 or higher or do you expect both ‘22 and ‘23 to be in the high $0.20 per watt? And also was wondering if you could speak to what the expected margins might be for ‘23, especially as you drive some cost down in ‘23, maybe some of the headwinds abates a touch and then your pricing can stay relatively flattish? And then finally talked about new products in your OpEx investment, through some of your work, it seems like you might be exploring some eg and resi solar opportunities, so I was wondering if you might be able to talk through whether or not you see some concrete opportunities there? Could that be a new product for you as you roll out the new plant in Ohio? And if so, what kind of volume could that be? It is a nice market with healthy ASPs, so any color there would be very helpful. Thanks.

Alright, so, Phil, I guess, on the pricing, there’s a little bit of potential pricing upside in 2022, but not overly significant to the extent that the sales, there are about 30% of the volume we have in 2022, has some sales rate adjustments, which will appropriately take -- comply with the obligations under the contract and, therefore, adjust if the cost is above the capital, which we agree to, so that could impact it. If we are able to, for example, improve the temp coefficient on our current product, then there’s potentially some opportunity that can be monetized in 2022 but there’s not a significant increase in ASP opportunities off of what you see. And I think the contracted backlog that will show up in the K is going to be somewhere right around I think $0.27 or something like that. And that relates to the 22 gigawatts or so that we do have contracted. As you go into 2023, I will take that, look, I what I said in the call is that, essentially, the ASPs are relatively flat; I think we’re down about three tenths of a cent or something like that in ‘23 relative to ‘22. But there’s about $0.03 of adjustment, there’s a penny or a little bit north of a penny on the sales rate, I want to make sure that’s understood. Again, our pricing includes not only the module but the delivery of the module, so if you think about what our pricing or net pricing is today, at least for the module, you take cost $0.27 or so which is in the K at the average, and you pull $0.05 out of that. So that effectively says that our net module pricing is about $0.22. If you do that same analysis for the revised contracting structure that we have, you would take the $0.27 and back off about $0.025, so you’re going to see an increase of ASP just from that structure. There’s a potential of $0.025 of higher ASP monetization in 2023, than we have in 2022 because of how we structured the contract. Now, only about 70 or so percent of the contracts in 2023 have that structure, all of the bookings that we’ve done, that whole 12 gigawatts that we just referenced, as an example, have a modification formula actively embedded in that or a customer may accept export type of pricing, therefore, we don’t take the freight risk, and they’re responsible for it as an example. So, there’s opportunities, if you take the $0.27 and if you include the sales freight, and if you include the price adjusters for the technology, which could be by [indiscernible] could be higher bid and so on, that you could see significant increases in ‘23 over ‘22. You can do the math, you can sort of make your own assumptions, does it get into the 30s or not, there’s the potential to start pushing upwards of that. But again, depending on how we structured the risk profile on the sales freight, you can see individual opportunities that will have three handles on them for various reasons and how we structure and how we contract it. As it relates to expected margin, I can’t give you the absolute numbers on that but what I can say is that, there’s upward opportunity in ASPs based on what I referenced. Alex indicated that will continue, we just took 6% of cost per watt down in 2021 over 2020 and then there’s other you single digit types of opportunity of reducing ‘22 over ‘21. So if you just do your math, carry it forward, you can see that there is still a trajectory. Even in the environment that we’re dealing with right now that is very challenging, there’s a trajectory that can still drive to a lower cost per watt. So you can do the margin around in terms of what is the expected margin is by doing the math and how we’ve described it during the call on ASP as well as the cost side. On the comment about Digi that we’ve been saying for a while now that we are looking at tandem structures and high efficiency modules that drive an opportunity to expand there are traditionally utility scale segment of the market which we currently serve. As we think through that roadmap and that product evolution, then clearly it does open a Digi [indiscernible] type of opportunity that could enable an entitlement of higher ASPs. But Phil, as you know, I mean, we are on a path to get 16 gigawatts. I mean, if we’re dealing, let’s say, 500 megawatts, maybe even a gigawatt, yes, it’s a great market, we want to participate, we’ve got some great services, we’ve had some conversations in that regard, but still going to be, relatively small percentage of the overall business.

So just one thing to add on the ‘22 to ‘23 on top of the ASP and cost indication that Mark gave is that when you get into ‘23, we’re going to have call it one or two gigawatts of Series 7 come on line. As we indicated that Series 7 has an ASP entitlements, as you can assume, already reflected in the backlog in some cases, but in some cases, it may not be and maybe some upside from that. It also has a $0.01 to $0.02 cost advantage based on [indiscernible] sales freight. So you are going to get the benefit of that coming through as well in 2023.

Thank you. Our next question is from Joseph Osha with Guggenheim Partners.

Hello, gentlemen, congratulations on continuing to represent American solar manufacturing so well. Two questions for you. First, I’m wondering, given the relatively recent shift in policy, we’ve seen the vis-à-vis 201 in the bifacial exemptions. Have you seen that manifest in terms of pricing conversation for your more recent bookings? And then secondly, Mark, I – perhaps you could clarify, obviously, you’re sort of pushing forward with Ohio, but I think I heard some comments in the vis-à-vis in 2023 and some maybe fluidity to the plans there, depending on policy. If so, if you could clarify that, that would be great.

Yeah. On the other policy, just in general, around 201 and clearly, we were disappointed with the bifacial exemption that was provided. The reality is, for me, the way I look at this, the model has many different attributes but every module basically takes photons and electrons. And how you choose to do that, we talk about our attributes a lot, we talk about our spectral response and our ability to be damaged as relates to moisture in the air and humidity. We talk about our temperature coefficient, we talk about our shading response as an example. Those are all attributes, which take advantage of your technology beyond just the labeled watts and turning photons into electrons and bifaciality is nothing more than that. It is just another attribute that allows for additional energy generated from a module that takes photons and makes electrons. So there to me is no common sense rational reason why bifacial modules would be exempt. It’d be no different than if somebody to any attribute, it could be long-term degradation, our long-term degradation where you could say that, if you have a long-term degradation rate that’s below x, then you’d be exempt from the 201 duties, which, to me wouldn’t make any sense, nor does the bifacial exemption in itself make any sense. As it relates to our customers, our customers, they value that the relationship with First Solar. They value our willingness to deliver and to honor our contracts and to stand by them in times they were challenged in right now. And that’s why we refer to our customers as partners, and we partner in times of when things are going well and when things are more are more challenging, right. We’re going to work together and we’ll find solutions that we can enable each other success. As we look to this is, again, a marathon, a long-term journey, of which we’re different front end as a world of electrification. And all that world of electrification starts by turning photons into electrons and we’ll do that better than anyone else and so our partners want to work with us. And so yes, there’s some policy angst, ebbs and flows, but nobody can look around the corner and say for certain that any of our competitors, again, vastly Chinese competitors will be able to stand by our partners through their journey, and the uncertainty of things that could happen. So it does play to our strengths. Just look at our -- we just booked 12 gigawatts. We have a mid-to late-stage pipeline of 27 gigawatts. After those 12 gigawatts were booked, we got to -- including early stage, we got 55 gigawatts, both of those pipeline metrics are up about 10 gigawatts from what we talked about during the last earnings call, and we just booked 12 gigawatts. So there’s lots of opportunities. I think our value proposition, our uniqueness, our technology, our growth plan, our expansion, being America’s solar company along the lines, Joe, what you’ve referenced means a lot in the market that we’re in right now. So I think it plays to our strengths. As relates to growth, what I meant to, we talked before about growth, we’ve got capacity expansion for two new factories, one here in Ohio and another in India. We mentioned that we are working to evaluate further expansion, and if this pipeline -- our backlog of bookings, and then pipeline of opportunities continues to grow, we get to a point where we’re going to need to start evaluating expansion beyond what we’ve already committed to, and is there another factory of 3 gigawatts or is there another two factories that could be 6 gigawatts to be determined, but it’s all driven often by fundamentals of demand in the marketplace, our relative position, and our ability to sell forward. So we’ll keep you updated. All we’re trying to do is to let people know that, hey, we’re working through that and we’re working very closely with our tool suppliers to enable that opportunity, if it were to come about.

Thank you. Our next question is from Keith Stanley with Wolfe Research.

Hi. Thank you. First, just some clarifications on the 2022 guidance and appreciate the detail you’ve given. Much of the Japan and O&M [phonetic] business operations contribute to earnings for the year separate from the gain you’ve noted and I just want to confirm the year-end cash balance includes the planned sales.

Yeah, so there’s very limited assumed contribution from the O&M business and the Japan business, the assumption is we wouldn’t sell any assets this year, all of that will be reflected in the sale of the business and come through in the gain on sale. So you’re seeing that full number be 270 to 290 and there’s about an additional 10 million value associated with the sale of the O&M business. We’re seeing limited addition of ongoing revenue and earnings. For the time that we keep that business we view that begin -- that gets all lumped in to gain on the sale. From a cash perspective, yes, the assumption is the value and the cash from that sale is in the cash number a year end.

Perfect, thank you. And our next question is from J.B. Lowe with Citi.

Hi, Mark and Alex. Question was, Mark, you mentioned previously about your 2023 ASPs being down about 0.003, but on a net basis from freight, it would be up about $0.01. I’m just wondering if you could just walk through the puts and takes of that piece. And then my other question was just on, given what we have seen so far out of Europe, in terms of responses to the ongoing crisis over there, have you -- I know it is only few days or the like, have you guys been engaging with customers in Europe potentially? I mean this goes kind of to the expansion question. But even ahead of that, have you been engaging any further with customers in, I guess, new or unexpected places, since this all started? Thanks.

So on the ASP, the way we look at it, again, there’s about 30% of our contracts in 2022 that have some freight adjuster. Again, just to put it back in perspective, to look at where we were a year ago, in Q1 of 2021, sales freight we reported in our number was about $0.025. So we’ve gone from $0.025 in Q1 of last year to $0.05 a lot. So we didn’t really -- and we generally have assumed historically around $0.02 that’s kind of what our implied assumption is, that’s what it’s been historically and as we continue to drive lots up, it dilutes the average freight balance, it improved [indiscernible] a lot and everything else. So we saw this dramatic shift starts to happen in kind of Q2 of 2021, so we started modifying our contracts such that we weren’t carrying that entire freight risk. And so there’re adjusters, now not all of the benefits that just flow into ‘22, they flow -- they start to flow into a much higher percentage, about 70% or so. At ‘23, we’ll have freight adjuster and really everything forward from ‘23 will have some form of freight adjuster associated with them. So when you think about it, you got $0.05 as a headwind in this year’s results that you’re going to recover some nominal amount back from the customer and so you will see some adjustments to ASP as we progress throughout the year, maybe it ends up being about a penny and a half, somewhere -- or excuse me about a half a penny. So you’re going to see our ASP will trend up from what’s in our backlog right now as these sales rate adjusters are reflected for 2022 shipments. But we do that same math and looking how we structured our freight right, there’s about a penny and a half that will come through in 2023. So the year-on-year, when you look at apples-to-apples, the ASPs, because of that recovery on the sales rate, it is going to go up about a penny. So you’re -- thinking about your 27 this year is probably going to deploy you closer to 27.5, and then you got about a penny of that upside for that ASP going into 2023. Now, this all assumes that sales rates stays at $0.05, if it goes up to $0.06, well, then that adjuster is going to be higher, because I’m still only really caring about $0.025 of the total sales rate risk my customer is going to pay me and accompany me for anything above and beyond that. And then the other piece that will be accretive to ASP as we go into 2023 is we refer to them as these technology or platform adjusters, right. So we’ve contracted with customers, just to look at a baseline product, the baseline product, basically, is what we’re producing today, call it a 465 [phonetic] standard CuRe product. But we do anything about that, the bins get better. If the [indiscernible] gets better, the LTR gets better, it becomes bifacial, whatever it may be Series 7 will have a premium on it and that starts flowing into 2023, as well. So, all those become incremental to the ASP. And because -- while they’re structured contractually that way, we don’t have certainty out of the exact product that will be delivered, we can’t reflect it into our contracted backlog. Those will be realized over time and then you’ll see those benefits improve in contracted backlog. That’s the point we’re trying to make.

Thank you. Our next question is from Ben Kallo with Baird.

Hi. Thanks for taking my question. Has any of this the freight costs doubling, has that changed any of your thoughts around doing long-term contracts, as you look out into ‘24? And can you talk to us about how you’re selling products from India? Is it more localized when you get out that far? And then my third question and final question is just can you talk to us about going to bifacial and how you make that decision and what it means on both ASP and a cost perspective? Thank you.

Yeah, so let -- one thing before, Ben, as we get to your question I want to go back to the last question asked about Europe and were we seeing anything about Europe. There’s been an – and I left to answer, I just answered the ASP. As it relates to Europe, there’s been -- we’ve had ongoing discussions with Europe and Europe is evolving in their journey similar to what we saw in India, as well as what we’re seeing here in the US around creating domestic capabilities around manufacturing. So we are engaged, we have some -- we’ve had conversations in Europe around manufacturing there. So it’s one of the opportunities that we are evaluating along with the US and India, for example, for any further expansion, we got to cover that one. So then on our freight costs, again, what we’re doing, just think of it, I’m telling the customer that our base price is X, and we’ll take $0.025. So as we go into volumes and go on into ‘24 and ‘25, any volatility to that number really results in a variable ASP, so that it stays at $0.05 cents, as I go out into 2024 and 2025, there’ll be an incremental ASP such that our customer will actually then covered that incremental sales rate cost, so largely ours is fixed at $0.025. We think that’s a manageable position to take as we contract forward and our partners see it the same way that there should be some element of risk sharing, and given the uncertainty of what’s going on in the market, and who knows how long it will continue. So I do think that we’ve come to a reasonable balance approach around how we’re thinking about sales freight and how we’re contracting as we go forward. India pipeline, there’s a lot going on, there’s a lot of opportunity. India, it doesn’t generally book out in as far as of horizon, you’re normally going to see them maybe booking to secure modules about a year out terms of when the expected deliveries are needed. We’re still looking second half of ‘23, so we’re more than a year out to when the factory will be up and running and we’re being a little careful with loading the front end production with selling out volume through at this point, just because it could be potential delays, unanticipated events could happen that could delay the project or the construction schedule or the tool installed, that we don’t want to comment to volume with our customer. So we’re leaving the front end and say the first quarter is kind of open right now until we have a higher level of certainty, we’re further along in the construction as well as the install of the tools to commit to volumes with our customers. But it’s not for lack of interest in demand, we’ve got a lot of opportunities in the pipeline, and I think you’re going to see multiple gigawatts of bookings before the end of the year for India. Bifacial, it’s really -- it’s an energy gain, right. If you look at it, it should get -- let’s say, our bifaciality is going to be a little bit lower than where crystalline silicon is right now but we’re still going to give probably in the range of 1% to 2% of energy and energy, depending on what markets sharing is worth, say three quarters of a penny to about a penny and a half. So you’ve got an ASP opportunity premium for bifaciality and you call it in the range of, if you get 2%, it’s going to be a penny and a half; if you get $0.015 for 1% of energy, it’s going to be close to $0.03. So, you are somewhere between a penny and a half and, and $0.03 on ASP. No different than critical silicon, there’ll be some trade-offs, some of the balance system costs because of [indiscernible] and other things that you may need to do that to capture the full benefit of the bifaciality, there may be some incremental BLS costs which will actually then pull from that ASP entitlement. But as we currently see it right now, it would be accretive, it’ll drive higher ASP and it’s another value of energy and we sell energy. It’s not labeled loss, it is the actual energy profile that comes out of the module.

Thank you, presenters. That’s all the time that we have for today. This concludes today’s conference. Thank you again for your participation and have a wonderful day. You may all disconnect.