Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

No Clean Energy Company Is Safe From Tariffs

For a while First Solar looked like a “Liberation Day” winner. Now its first quarter results suggest otherwise.

Donald Trump.
Heatmap Illustration/Getty Images

When Donald Trump unveiled his now-infamous chart of “reciprocal” tariffs, most of the stock market shuddered — but there were a few exceptions, including the American solar manufacturer First Solar. While the market in the days following “Liberation Day” was on a hunt and destroy mission for stocks of renewables companies known to be heavily exposed to Asia or independent power producers, First Solar stayed roughly flat.

It’s not flat anymore. The company reported first quarter earnings on Tuesday that were short of analysts’ expectations and lowered its expected revenue and profit for the rest of the year citing disruptions from tariffs. The stock has fallen more than 9% on Wednesday, and is down a third so far this year.

“While FSLR” — a.k.a. First Solar — “is the US solar manufacturing bellwether, they are not immune to the far-reaching tariff environment,” Andrew Perocco, a Morgan Stanley analyst, wrote in a note to clients. He also estimated that almost half of First Solar’s manufacturing capacity is in Asia.

The company’s sobering results and warnings about how tariffs could affect their business is a sign that the entire green energy business is likely at risk from uncertain trade policy, even the companies thought to be insulated.

First Solar and other companies’ tariff-affected financial results also show that the Inflation Reduction Act has only been partially successful at boosting American production of green energy technology, and that the country’s green industries are still deeply intertwined with Asian and Chinese production.

“We had been expecting negative effects from tariffs for First Solar, but the impact was greater than we expected,” Brett Castelli, an analyst at Morningstar, wrote in a note to clients.

First Solar chief executive Mark Widmar said that the uncertainty about the reciprocal tariffs — set to back into effect in July absent new trade deals — “has created a challenge to quantifying the precise tariff rate that would be applied to our module shipments into and beyond the second half of this year.”

Widmar said the company expects to move its manufacturing facility in India “away from exports to the U.S.,” and instead will have it produce solar panels for the domestic Indian market. Its factories in Malaysia and Vietnam may see reduced production due to “potentially reduced U.S. demand environment for non-domestic product.”

Widmar also called out the ever-evolving policy around Chinese solar imports into the United States. Solar panels from China itself, as well as four Southeast Asian nations face punitive import duties as high as 3,521% after the federal government determined Chinese companies were “dumping” panels on the U.S. market and trying to circumvent tariffs by moving production to neighboring countries. Widmar said there had been a “surge” of cells and modules from Laos and Indonesia.

“We have no doubt that these Chinese manufacturers are also seeking to establish production and other regions around the world, such as Saudi Arabia, forcing us into a continued game of whack-a-mole,” Widmar said.

Several analysts downgraded the company, with Jefferies analyst Julien Dumoulin-Smith writing in a note to clients that there were questions about “about the profitability of its core business.”

That the tariffs have affected First Solar, long held out as a kind of American solar manufacturing national champion, bodes poorly for much of the rest of the renewable industry, which is still often tightly linked to Asian nations and especially China.

There have been some hints that there’s no safe ground from tariffs in the U.S. clean energy industry. The most vertically integrated green technology company in the United States, Tesla, has flagged repeatedly to investors and the public that it’s at risk from tariffs, whether for certain parts of its cars or, especially, for its stationary storage batteries — which, like much of the rest of the storage industry, relies on a Chinese supply chain.

“Given the majority of the [battery electric storage systems] components with some dependency on Chinese supply chain, solar-plus-storage projects in particular may face significantly increased costs,” Widmar said. Morgan Stanley’s Perocco described Widmar’s comments on solar-plus-storage as a “negative read-through for other utility-scale solar and storage exposed stocks,” such as Array Technologies, Shoals Technology Group, and Fluence. Array and Shoals are down 10% and 3% respectively, while Fluence is about flat on the day.

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Energy

11 Takeaways from the DOE’s Big Reorganization

Here’s what stood out to former agency staffers.

The Department of Energy, Chris Wright, and Donald Trump.
Heatmap Illustration/Getty Images

The Department of Energy unveiled a long-awaited internal reorganization of the agency on Thursday, implementing sweeping changes that Secretary of Energy Chris Wright pitched as “aligning its operations to restore commonsense to energy policy, lower costs for American families and businesses.”

The two-paragraph press release, which linked to a PDF of the new organizational chart, offered little insight into what the changes mean. Indeed, two sources familiar with the rollout told me the agency hadn’t even held a town hall to explain the overhaul to staffers until sometime Friday. (Both sources spoke on condition of anonymity out of fear of reprisals.)

Keep reading...Show less
Green
Climate

Where COP30 Is Actually Making Progress

The United Nations climate conference wants you to think it’s getting real. It’s not total B.S.

Luiz Inacio Lula da Silva.
Heatmap Illustration/Getty Images

How to transition away from fossil fuels. How to measure adaptation. How to confront the gap between national climate plans and the Paris Agreement goals. How to mine critical minerals sustainably and fairly.

How to get things done — not just whether they should get done — was front and center at this year’s United Nations climate conference, a marked shift from the annual event’s proclivity for making broad promises to wrestling with some of the tougher realities of keeping global warming in check.

Keep reading...Show less
Green
Spotlight

An Energy Developer Is Fighting a Data Center in Texas

Things in Sulphur Springs are getting weird.

Energy production and a data center.
Heatmap Illustration/Library of Congress, MSB Global, Luminant

Texas Attorney General Ken Paxton is trying to pressure a company into breaking a legal agreement for land conservation so a giant data center can be built on the property.

The Lone Star town of Sulphur Springs really wants to welcome data center developer MSB Global, striking a deal this year to bring several data centers with on-site power to the community. The influx of money to the community would be massive: the town would get at least $100 million in annual tax revenue, nearly three times its annual budget. Except there’s a big problem: The project site is on land gifted by a former coal mining company to Sulphur Springs expressly on the condition that it not be used for future energy generation. Part of the reason for this was that the lands were contaminated as a former mine site, and it was expected this property would turn into something like a housing development or public works project.

Keep reading...Show less
Yellow