Shares of First Solar dropped significantly on Wednesday, hit hard by pressure from tariffs imposed during the Trump administration and a noticeable decline in demand for clean energy solutions.
The solar panel manufacturer saw its shares fall by 13.6%, following a disappointing revenue forecast for the year. First Solar now anticipates revenues to be between $4.9 billion and $5.2 billion, falling short of analysts’ expectations of $6.2 billion.
The company faced a setback when a major order from Lightsource BP, the largest solar developer in Europe, for 6.6 gigawatts was canceled. This cancellation came amid BP’s ongoing attempts to sell part of its solar subsidiary, reflecting a broader shift in the oil and gas sector’s approach to renewable energy.
First Solar’s CFO, Alexander R. Bradley, highlighted that many players in the industry are reallocating capital away from renewable energy projects in the U.S. back to their core operations.
Additionally, the company’s guidance was affected by changes in the U.S. tariff structure. Since late 2025, manufacturing operations in Asia—including India, Malaysia, and Vietnam—have faced export tariffs ranging from 20% to 50%. This situation has forced the company to sell its products domestically at reduced prices and even close some production facilities as it looks to relocate operations back to the U.S.
Chris Dendrinos, a clean energy analyst at RBC Capital Markets, explained that it has become financially unviable for First Solar to export to the U.S. market. While plans are in place to shift some manufacturing from Southeast Asia back to the U.S., this transition won’t be complete until the end of the year, causing the company to miss valuable market opportunities.
In negotiations aimed at reducing tariffs, India and the U.S. had made some progress, lowering tariffs on exports from 50% to 18%. However, discussions have stalled following the recent U.S. Supreme Court ruling that overturned the previous tariff regime. The company now anticipates costs between $125 million and $135 million due to the 15% tariffs imposed following the court decision.
The ongoing challenges extend to the manufacturing side, where long-standing import taxes on critical components, such as aluminum, have also taken a toll. Analysts warn of a considerable long-term hurdle as the demand for solar energy struggles to keep pace with an increasing need for steady, continuous electricity, essential for industries like data centers and manufacturing.
Energy expert Jed Dorsheimer pointed out that the electrical grid requires more consistent power sources rather than variable renewable energy options, indicating a fundamental challenge for the solar sector moving forward.