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Solar stocks have faced an uphill battle in 2025 as President Donald Trump’s administration has sought to remove clean energy tax credits and redirect attention and funding from wind, solar, and hydrogen initiatives.
These actions against clean energy mark a stark difference from the landscape under former President Joe Biden and have culminated in Trump’s “One Big Beautiful Bill Act,” his tax-and-spending bill.
Solar stocks are largely expected to suffer as a result of the legislation, which passed the House of Representatives today following a Senate vote earlier this week. But First Solar (FSLR) may be an unlikely beneficiary.
Thanks to First Solar’s vertically integrated, U.S.‑based production, it qualifies for a carve‑out in the bill that preserves tax credits on certain American‑made components of larger renewable energy projects. Wolfe Research says this appears “intended” to help First Solar.
About FSLR Stock
Based in Tempe, Arizona, First Solar is America’s leading utility-scale solar manufacturer, known for its U.S.-based supply chain and thin-film technology.
Valued at $18.3 billion by market cap, shares of FSLR have recently recovered their year-to-date losses and are now up 5% for 2025. Shares initially struggled ahead of the phase out of lucrative tax credits, tariffs on imported solar panel components, and a demand slowdown amidst higher financng costs.
However, FSLR exhibits an attractive valuation profile. Its price-earnings ratio is 11.2x, a 53% discount compared to the sector median, indicating the stock is relatively cheap.
First Solar’s Strategic Advantage Amid Looming Tax Credit Cuts
The “One Big Beautiful Bill Act” introduces sweeping changes that are expected to send shockwaves through the solar industry.
The version passed today by the House and headed for Trump’s signature eliminates the residential solar tax credit after this year. Commercial solar projects leveraging the 45Y or 48E tax credits must have started construction by 2026 in order to be eligible or be in service by the end of 2027 if construction starts later.
Together, these changes create significant headwinds for solar developers, potentially rendering projects after 2027 economically unfeasible.
However, First Solar might have a better shot at survival than its peers. Its core business serves the commercial market, so the immediate phase out of the residential solar tax credit is less impactful. And, an update this week in the legislation makes “subcomponents in renewable projects eligible for tax credits if they are produced in the same facility as the larger component into which they are integrated and at least 65% of the total costs of the larger component are domestic.”
First Solar satisfies these requirements, and is in a better position than rivals who source components from China. These imported components will face an additional new excise tax, further hampering their finances.
FSLR Misses Estimates, Slashes Outlook in Q1
In its first quarter of 2025, sales rose 6.4% to $844 million. However, revenue missed the consensus estimate for $847.9 million.
First Solar reported net income of approximately $209.5 million, or $1.95 in earnings per share, marking an 11% year-over-year drop. The company said new tariffs presented “near-term challenges” that impacted its business. As a result, the company lowered its full-year outlook.
The company now expects revenue of $4.5 billion to $5.5 billion, down from $5.3 billion to $5.8 billion. It now expects operating income of $1.45 billion to $2 billion, down from $1.95 billion to $2.35 billion. Investors should note that the tax-and-spending bill had not been passed at the time this guidance was issued, and the new legislation could force the company to further revise its outlook for the year.
Is FSLR Stock a Buy Now?
Wall Street analysts remain confident about First Solar’s growth prospects, assigning the stock a consensus rating of “Strong Buy.” Among the 31 analysts covering the company, 25 rate it as a “Strong Buy,” two as a “Moderate Buy,” three as “Hold,” and one as a “Strong Sell.”
The average price target of $205 implies upside potential of 10.8% from current levels.
