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’ve reached your free article limit

Subscribe to Heatmap News for unlimited access to daily energy and climate coverage.
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
Politics

Pity the Next Insurance Commissioner of Oklahoma

The state’s market is in such disarray, a Democrat actually stands a shot at winning the office.

Large hail.
Heatmap Illustration/Getty Images

In the waning weeks of the midterm election cycle, the question of who will serve as Oklahoma’s next insurance commissioner is unlikely to be a topic of intense speculation at dinner tables around the country — or in Oklahoma, for that matter.

For one thing, it’s about as down-ballot a race as you can get, another bubble to be filled in alongside state treasurer and superintendent of public instruction. For another, it’s difficult to imagine it will be much of a competition: It’s been two decades since a Democrat last won statewide office in Oklahoma.

Keep reading...Show less
Blue
AM Briefing

Big Gulfs

On Canadian retrofits, Polish nuclear, and Latin American hydro

A Louisiana LNG terminal.
Heatmap Illustration/Getty Images

Current conditions: Tropical Storm Simon is expected to intensify into a Category 4 storm as it tracks northeast into Mexico and Texas from the eastern Pacific • Further north in the Pacific, Tropical Storm Rachel is barreling toward Southern California and northern Mexico • Hurricane Isaias, the first major storm of the Atlantic hurricane season, is poised to make landfall as a Category 2 sometime between 8 p.m. ET and 1 a.m. and somewhere between Alabama’s Dauphin Island and Destin, Florida.


THE TOP FIVE

1. Hurricane Isaias shuts down nearly two-thirds of U.S. Gulf oil production

With swells topping 7 feet, Hurricane Isaias has forced almost two-thirds of U.S. oil output in the Gulf of Mexico offline, as the storm cuts a path through one of the most productive regions of the sea. Of the 371 manned drilling rigs in the Gulf, 121 were evacuated as of Thursday night, representing a third of all platforms, according to data from the Department of the Interior’s Bureau of Safety and Environmental Enforcement. But those rigs represent 1.3 million barrels per day of production, or roughly two-thirds of the Gulf’s crude output. Almost 1.2 million cubic feet per day of gas production, representing over 57% of U.S. production in the Gulf, is also offline.

Keep reading...Show less
Blue
Daily Briefing

Permitting Reform’s Battle Lines Are Taking Shape

Many nonprofits representing the environmental and climate movement are split.

The Capitol.
Heatmap Illustration/Getty Images

This is Heatmap Daily, an evening digest written by our executive editor.

It’s now been just over a week since a gang of four bipartisan senators released the Bipartisan American Affordability and Jobs Act, or BAAJA. The permitting reform proposal would make too many changes to federal law to summarize cleanly here — read our explainer for that — but suffice it to say it creates a messy group of winners and losers. Utilities, data centers, and the Trump administration would lose; electricity ratepayers, clean energy companies, long-distance transmission lines, and natural gas pipeline builders win. (As would geothermal startups, virtual power plant providers, and a few other climate tech subsectors that my colleague Katie Brigham recently detailed.)

Keep reading...Show less
Green