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For a while First Solar looked like a “Liberation Day” winner. Now its first quarter results suggest otherwise.
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.
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Biden’s Secretary of Energy argues that if Trump wants to achieve his goals, preserving his predecessor’s manufacturing incentives is the only way.
What if — despite the news — America is in fact the world’s most promising country to invest in right now? What if now is actually the best time to build a manufacturing facility in the U.S., particularly for the new energy economy? What if hundreds of communities could be rejoicing in fresh opportunities to work in future-facing industries?
And what if the reason comes down to the combined efforts of Joe Biden and Donald Trump?
I’ve always said that to reshore and rebuild manufacturing in America, we have to play two parts offense and one part defense. The Inflation Reduction Act, which Biden signed into law in 2022, is the biggest offensive play the U.S. has ever made, with tax credits and incentives that are unleashing a clean energy arms race right here at home. Tariffs can be defense, provided they’re phased in and negotiated smartly to allow for U.S. supply chains to develop.
We now face a choice: Abandon our offensive strategy by gutting those IRA tax incentives, or play to win by building on the work we did during the Biden administration. It’s that simple — to achieve true energy dominance, America needs the IRA. And then over the next three years the Trump administration will have the honor of cutting the ribbon on all those new factories.
But the time is urgent. Congress is debating the federal budget over the next few weeks, and the fate of the IRA — and all of those factories and jobs — hangs in the balance.
The fact is, the IRA is working. When I was Secretary of Energy, the department partnered with businesses on over 500 new energy projects, from hydrogen hubs to nuclear power supply chains. Syrah Technologies is scaling up graphite refining in Louisiana. Lithium Americas just snagged a more than $2.2 billion loan to tap Thacker Pass in Nevada. Qcells opened the first major U.S. solar panel factory since the IRA became law. Fifty gigawatts of solar module capacity have been announced just this year.
This isn’t a blue-state fever dream. As you have no doubt heard, red states are raking in 85% of the investment and 68% of the jobs. Georgia, Texas, South Carolina, North Carolina — these places aren’t debating the IRA, they’re building it. In steel. In solar. In wages. In futures. That’s not “someday.” That’s happening now in the Heartland, in manufacturing towns, in places that haven’t heard the word booming in decades.
That’s how you build dominance — by making the U.S. the place where the world’s energy future gets manufactured. By making the U.S. irresistible for energy investment.
This isn’t just about being “green.” It’s about geopolitics. It’s about making sure the electrons that power our homes, our tanks, and our data centers come from American soil, not authoritarian states. China currently dominates clean energy supply chains — 70% of battery manufacturing, 80% of solar cell production, almost 100% of critical mineral processing. That’s not coincidence; it’s strategy.
The IRA isn’t just correcting a trade imbalance — it’s rewriting the global energy map. Whether or not you believe in climate change, the rest of the world is buying and building the products to reduce greenhouse gas emissions, which will become a $34 trillion global market by 2050. Without the IRA, we lose our shot to beat China and the EU in innovation. We lose those jobs. We lose low-cost energy. And we give away the opportunity to power artificial intelligence-driven growth with American electrons.
And let’s talk about AI for a second, because data centers are now part of national security. In 2024, the U.S. used 45% of the world’s data center power. That number’s going to double by 2030. Our AI doesn’t run on hopes and vibes — it runs on power. And if it’s not our power, we’re exposed. We lose data centers to countries that are eager to power the AI economy, and we lose our national security right along with it.
The IRA makes that energy surge possible, and quickly. It’s catalyzing the hundreds of gigawatts of clean power slated to be added to the grid over the next three years.
Since the IRA passed, DOE counted over 950 factory and project announcements, promising almost 800,000 jobs by 2030. A recent Rhodium Group report showed that the IRA has more than tripled investment in solar, wind, batteries, and electric vehicle manufacturing since its passage, triggering a U.S. manufacturing boom. But in Q1 2025, due to the uncertainty over tax credits and tariffs, almost $7 billion of that investment has been canceled — the highest quarterly cancellation rate on record. Freyr Battery killed plans to build a $2.6 billion battery cell manufacturing plant in Georgia. In Arizona, Kore Power scrapped its gigafactory. Dominance shrivels when policy is weak.
Repealing the tax credits would raise electric bills on working families by 7% to 10%. That’s $6 billion out of the pockets of American families by 2030, and over $9 billion by 2035. Strip the IRA, and we lose supply chains. We lose factories. For what? To make China stronger? To make our grid weaker? To raise bills on the very communities who finally have something to look forward to?
Here’s the truth: You can’t be energy “dominant” if you gut the energy sources that are projected to add 80% to 90% of new gigawatts to the U.S. grid between now and 2030. Clean power is projected to add a whopping 463 gigawatts of power to the grid by 2030, according to the Energy Information Administration. That’s the equivalent of 230 Hoover Dams — but only if the IRA stays. And you can’t claim dominance when you gut the means to manufacture those products at home. Saying that the U.S. is striving for energy dominance except in the clean energy sector is like opening a steakhouse and forgetting the meat. What happened to “all of the above”?
If we’re serious about reclaiming energy dominance, the path isn’t theoretical, it’s legislative. It’s the IRA. It’s our biggest shot at securing the grid, reshoring supply chains, lowering bills, and out-innovating everyone else.
Energy dominance requires a no-holds-barred battle plan; let’s not surrender our most powerful weapon as we make America irresistible for investment again.
The views expressed here are the author’s own and not necessarily those of the DGA Group.
Current conditions: Flash flood warnings remain in place today throughout the south-central U.S.• Israel has requested international assistance in fighting large fires that have broken out in the hills near Jerusalem • May in Europe is off to a warm start, with temperatures in the mid-80s in Paris.
1. Tesla board began search for Musk’s replacement: report
Tesla’s board initiated a search for a chief executive to replace Elon Musk, The Wall Street Journal reported Wednesday night. With stock prices “vaporized,” car sales floundering, and dealerships becoming targets for public frustrations with the government, the board reportedly warned Musk that he needed to shift his focus from reform efforts in Washington and back to Tesla. At the time of the conversation, which happened “about a month ago,” Musk “didn’t push back,” the Journal writes, although Musk subsequently told investors on Tesla’s earnings call last week that he’d be “allocating far more of my time to Tesla.” While the board had reportedly advanced its search for Musk’s successor to the point of having “narrowed its focus to a major search firm,” the current status of the effort to find Musk’s replacement “couldn’t be determined.”
Musk has complained to those close to him that he is “frustrated to still be working nonstop” at Tesla, and has made public comments about his compensation. He spent more than $250 million on Trump’s re-election campaign, although his company faces substantial hurdles due to the president’s policies, including a significant hit from tariffs and a loss of competitive advantage if California’s ability to set vehicle emission standards stricter than the federal government’s, which has generated significant revenue for Tesla in the form of compliance credits it’s sold to other automakers, is revoked.
2. House strikes down California’s clean truck rule, cueing up clean air vote
The House of Representatives voted 231 to 191 on Wednesday evening to revoke California’s ability to incentivize clean truck purchases, a prelude to Thursday’s vote over whether or not the state can set stricter auto emission standards than the federal limits. Thirteen moderate Democrats, including Henry Cuellar of Texas, Susie Lee of Nevada, and Tom Suozzi of New York, joined Republicans in voting to block California from requiring truck dealers to sell an increasing number of zero-emission medium- and heavy-duty vehicles over time. In a separate vote on Wednesday, the House revoked another of California’s standard-setting capabilities, designed to cut down on nitrogen oxide emissions, which Republican Morgan Griffith of Virginia described as “an effort to truly vilify diesel engines.” The measures will now be sent to the Senate.
California’s authority to set these rules comes from waivers it’s been granted by the Environmental Protection Agency under the Clean Air Act, which otherwise compels states to adhere to federal standards. The Clean Air Act also allows other states to adopt California’s standards, giving the state extraordinary influence over the automotive market.
The marquee vote, however, will come on Thursday, when the House will vote to end California’s vehicle emissions waiver, which some critics have erroneously characterized as an electric vehicle mandate. Many are skeptical, however, that Congress has the authority to revoke the waiver under the Congressional Review Act. Senate parliamentarian Elizabeth MacDonough has previously said the waivers do not qualify under the CRA and “ignoring that ruling would buck decades of precedent under presidential administrations of both parties, and would lay the foundation for potentially tricky legal fights down the road should a future president decide to grant California a new waiver,” journalist Clark Mindock writes for Landmark.
3. Debate rages over whether Spain’s renewable energy dependence caused Iberian blackout
Pablo Blazquez Dominguez/Getty Images
Monday’s 18-hour blackout across Spain and Portugal has sparked a fierce and ongoing debate over whether the Iberian Peninsula’s heavy reliance on wind and solar energy is to blame. While the investigation into the cause of the blackout is still ongoing, we do know that at the time of the outage, Spain’s grid “had little ‘inertia,’ which renewables opponents have seized on as a reason to blame carbon-free electricity for the breakdown,” my colleague Matthew Zeitlin explains. In essence, gas turbines and nuclear plants have inertia that comes from spinning metal, such as a turbine, which can provide the system with a little more momentum if a generator drops off the grid. “Solar panels, however, don’t spin,” Matthew adds — hence the current line of attack by energy transition skeptics.
On Wednesday, the president of Spain’s national grid operator, Red Eléctrica, insisted that “linking what happened on Monday to renewables isn’t correct.” Spain’s prime minister, Pedro Sánchez, has likewise claimed that “Those who link this incident to the lack of nuclear power are frankly lying or demonstrating their ignorance.” But as Matthew writes, it wouldn’t necessarily be a surprise to learn that a renewables-heavy grid struggled with maintaining reliability due to low inertia — nor is it an insurmountable challenge. Read more about how inertia may have played a part in the blackout here.
4. Equinor considers ‘legal options’ against the Trump administration over canceled wind farm
Equinor, the Norwegian state-owned energy company behind Empire Wind, is reportedly considering suing the Trump administration after the Department of the Interior canceled its Long Island offshore wind farm last month. As my colleagues Emily Pontecorvo and Jael Holzman reported at the time, Empire Wind was “the second fully permitted offshore wind project” to be targeted by the administration, and its potential cancellation represents “a huge blow to New York State’s climate and clean energy goals.”
Equinor has already spent nearly $2 billion on Empire Wind, which was almost a third complete at the time Interior Secretary Doug Burgum ordered an immediate halt to construction. The company is now “considering its legal options,” The Guardian writes, and “may take Donald Trump’s administration to court.”
5. India braces for potentially deadly slate of spring heatwaves
India is preparing for a series of heatwaves in May that could potentially strain power grids and lead to dangerous blackouts, Bloomberg reports. The warning — issued on Wednesday by the director general of India’s Meteorological Department, Mrutyunjay Mohapatra — follows what was already a difficult April in the country, with temperatures in New Delhi spiking above 100 degrees Fahrenheit earlier in the month. In Jaipur, temperatures have already broken 110 degrees, leading outdoor laborers to suffer from heatstroke. Mohapatra confirmed that above-average temperatures are expected to persist over most of the country between now and the onset of the monsoon season in June, except in some parts of the southern and eastern states. Spring heatwaves in India have been linked to climate change, with Gianmarco Mengaldo, a climate expert at the National University of Singapore and author of one such report, telling The Guardian, “Many of the events predicted for 2050 or 2070 are already happening. We underestimated the speed of change.
Ministers in the UK are considering a new rule that would require almost all new homes to have rooftop solar.
Spinning turbines have it, but solar panels don’t.
Spain and Portugal are still recovering from Monday’s region-wide blackout. The cause remains unknown, but already a debate has broken out over whether grids like Spain’s, which has a well-above-average proportion of renewables, are more at risk of large-scale disruptions.
At the time of the blackout, Spain’s grid had little “inertia,” which renewables opponents have seized on as a reason to blame carbon-free electricity for the breakdown. If the electricity system as a whole is a dance of electrons choreographed by the laws of electromagnetism, then inertia is the system’s brute force Newtonian backup. In a fossil fuel-powered grid, inertia comes from spinning metal — think a gas turbine — and it can give the whole system a little extra boost if another generator drops off the grid.
Solar panels, however, don’t spin. Instead, they produce direct current that needs to be converted by an inverter into alternating current at the grid’s frequency.
“If a power plant goes out, that frequency starts to drop a little bit because there’s an imbalance in the power between supply and demand, and inertia provides a little bit of extra power,” Bri-Mathias Hodge, an electrical and energy engineering professor at the University of Colorado and a former chief scientist at the nearby National Renewable Energy Laboratory, explained to me. Inertia, he said, “just gives a little bit more wiggle room in the system, so that if there are big changes, you can sort of ride through them.”
Of course, blackouts happen on grids dominated by fossil fuels — the 2003 Northeast Blackout in the U.S and Canada, for example, which plunged several states and tens of millions of people into darkness. Even on renewable-heavy grids, blackouts can still come down to failures of fossil fuel systems, as with Texas’ Winter Storm Uri in 2021, when the natural gas distribution system froze up. Much of the state had no electricity for several days amidst freezing temperatures, and over 200 people died.
But Bloomberg’s Javier Blas was nevertheless fair to the Iberian blackout when he bestowed on it the sobriquet, “The first big blackout of the green electricity era.”
Spain has been especially aggressive in decarbonizing its power grid and there’s some initial evidence that the first generators to turn off were solar power. “We started to see oscillations between the Iberian Peninsula and the rest of the European power grid, and this generally means that there’s a power imbalance — somebody’s trying to export power that they can’t, or import power that they can’t because of the limits on the lines,” Hodge told me. “The reason why people have gone on to say that this is a solar issue is because where they’ve seen some of those oscillations and where they saw some of the events starting, there are a couple large solar plants in that part of southwestern Spain.”
While Spanish grid and government officials will likely take months to investigate the failure, we already know that Spain and Portugal are relatively isolated from the rest of the European grid and rely heavily on renewables, especially solar and wind. Portugal has in the past gone several days in a row generating 100% of its power from renewables; Spain, meanwhile, was boasting of its 100% renewable generation just weeks before the blackout.
Last week, Spanish solar produced over 20,000 megawatts of power, comprising more than 60% of the country’s resource mix. Spain’s seven remaining nuclear reactors — which still provide about a fifth of its electric power — are scheduled to shut down over the next decade (though officials have indicated they might be open to extending their life), while its minimal coal generation is scheduled to be retired this year.
“Spain and Portugal have been relatively early adopters of wind and solar power. The Iberian Peninsula is actually relatively weakly connected to the rest of Europe through France. And so that’s one of the tricky parts here — it’s not as well integrated just because of the geography,” Hodge said.
The disturbances on the grid started on the Spain-France interconnection, but a European power official told The New York Times that transmission issues typically don’t lead to cascading blackouts unless there’s some major disturbance in supply or demand as well, such as a power plant going offline.
Spain’s grid had issues before Monday’s blackout that can be fairly attributed to its reliance on renewables. It often has to curtail solar power production because the grid gets congested when particularly sunny parts of the country where there’s large amounts of solar generation are churning out power that can’t be transmitted to the rest of the country. Spain has also occasionally experienced negative prices for electricity, and is using European Investment Bank funds to help support the expansion of pumped-hydro storage in order to store power when prices go down.
On Monday afternoon, however, solar power dropped from around 18,000 megawatts to 8,000, Reuters reported. At the time the blackout began, the grid was overwhelmingly powered by renewables. Spanish grid operator Red Electrica said it was able to pinpoint two large-scale losses of solar power in the southwestern part of the country, according to Reuters.
That a renewables-heavy grid might struggle with maintaining reliability thanks to low inertia is no surprise. Researchers have been studying the issue for decades.
In Texas — which, like Spain, has a high level of renewable generation and is isolated from the greater continental grid — the energy market ERCOT has been monitoring inertia since 2013, when wind generation sometimes got to 30% of total generation, and in 2016 started real-time monitoring of inertia in its control room.
That real time monitoring is necessary because traditionally, grid inertia is just thought of as an inherent quality of the system, not something that has to be actively ensured and bolstered, Hodge said.
As renewables build up on grids, Hodge told me, operators should prepare by having their inverters be what’s known as “grid-forming” instead of “grid-following.”
“Right now, in the power system, almost all of the wind, solar, battery plants, all the inverter-based generation, they just look to the grid for a signal. If the grid is producing at 60 Hertz, then they want to produce 60 Hertz. If it’s producing at 59.9, then they try to match that,” Hodge said. This works when you have relatively low amounts of [renewable generation]. But when [renewables] start to become the majority of the generation, you need somebody else to provide that strong signal for everybody else to follow. And that’s sort of what grid-forming inverters do,” he said.
Grid-forming inverters could hold back some power from the grid to provide an inertia-like boost when needed. Right now, the only sizable grid outfitted with this technology, Hodge said, is the Hawaiian island of Kauai, which has a population of around 75,000. Spain, by contrast, is home to nearly 50 million.
The other key technology for grid-forming inverters to provide stability to a power system is batteries. “Batteries are actually the perfect solution for this because if you have a battery system there, you know most of the time it’s not producing or charging and totally full output or input. So the vast majority of time you’re going to have some room to sort of move on in either direction,” Hodge said.
But this requires both technology and market structures that incentivize and allow batteries to always be ready to provide that instantaneous response.
“The entire stability paradigm of the power grid was built around this idea of synchronous machines,” Hodge told me. “And we’re moving toward one that’s more based on the inverters, but we’re not there yet. We have to fix the car while we’re driving it. We can’t turn off the grid for a couple years and figure everything out.”