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
Climate

AM Briefing: Trump Scythes Grain Belt Funding

On FERC’s ‘disastrous misstep,’ the World Court’s climate ruling, and 127 SMRs

Trump Cuts Off Funding for Grain Belt Power Line
Heatmap Illustration/Getty Images

Current conditions: West African countries including Guinea-Bissau, Guinea-Conakry, Senegal and The Gambia are facing flash flooding from heavy rainfall • The southwestern corner of New Mexico is suffering “exceptional” drought, the highest possible level in the U.S. Drought Monitor. • Already roasting in excessive heat, Des Moines, Iowa, is bracing for thunderstorms.

THE TOP FIVE

1. Energy Department yanks $5 billion guarantee for Grain Belt Express

The Department of Energy canceled a nearly $5 billion loan guarantee for the Grain Belt Express, a transmission project designed to move wind power from Kansas to the industrial upper Midwest. After more than a decade of development, the power line won bipartisan support and secured $4.9 billion in federal financing late last year to fund the first phase of the project, running from Ford County in Kansas to Callaway County in Missouri.

Keep reading...Show less
Yellow
Energy

Bigger Is Better in the Age of Trump, Says NextEra CEO

NextEra CEO John Ketchum projected serenity during the company’s earnings call Wednesday.

A sunglasses emoji amid the NextEra logo.
Heatmap Illustration/Getty Images

The business of renewable energy development in the United States is the business of NextEra. The company’s renewable division is one of the country’s largest and most sophisticated, with almost 30 gigawatts in its project backlog — including 3.2 gigawatts added in the past three months.

NextEra’s financial results and outlook for the future can be a guide to how the sector is thinking — or wants people to think it’s thinking — about the state of the development landscape. Now especially, that landscape looks confusing and contradictory, with power demand increasing sharply alongside hostility to wind and solar development.

Keep reading...Show less
Yellow
Politics

The Electricity Affordability Crisis Is Coming

It sure looks that way, at least. Democrats should start coming up with a plan.

Donald Trump and electricity.
Heatmap Illustration/Getty Images, Chevrolet

For the first six months of President Trump’s term, the big question was about what would happen to the Inflation Reduction Act. We now have something like an answer.

President Trump’s memorably named One Big Beautiful Bill Act repealed many of the IRA’s most important clean energy tax credits, including incentives for wind, solar, and electric vehicles. And while it’s still unclear whether the Trump administration will let developers actually use the tax credits that remain on the books — especially the now-denuded credits for wind and solar — fewer “unknown unknowns” remain about what might come next.

Keep reading...Show less
Blue