First Solar, Inc.
Analysis
First Solar is holding sales back on purpose, letting its order book shrink while it waits for a US tariff ruling it believes will let it charge more. Meanwhile it is moving its factories home. What would the Section 232 ruling actually change for pricing?
- Bookings stay thin because management is choosing price over volume.
It calls the approach "selective and patient": the order book has slipped from 68.5 gigawatts to 45.1, because it will not lock in prices before the pending tariff decision lands. It is betting the wait is worth more than the volume. How much of the 45.1 gigawatt order book is firmly contracted?
- CuRe has gone from a lab result to money in contracts.
CuRe is running in Perrysburg and customers are being notified of the price adjusters tied to it: some $600 million of extra revenue in the backlog, mostly for 2027 and 2028. That is research finally turning into contracted revenue.
- The overseas plants are running near-empty and draining cash.
Malaysia and Vietnam run at about a fifth of capacity while management waits for policy, costing some $30 million a quarter and $200 million a year in storage. If the tariff answer never comes, idle plant becomes a write-off, not an option. How long can the overseas plants keep running at a fifth of capacity?
- The pending tariff ruling arrives and is constructive. Buyers on the sidelines finally sign at higher prices, which is the whole reason the order book was allowed to shrink.
- The $600 million of technology adjusters get collected. That money lands on panels already promised, mostly in 2027 and 2028, so profit rises without selling another module.
- US factories keep running near full while costs come down. More of each panel is made at home, which cuts the freight and tariff costs eating most of a module's profit.
- The tariff ruling slips again or comes out weaker than hoped. The demand waiting on the sidelines stays there, and the overseas plants get shut instead of restarted.
- Another big customer walks away from a signed contract. The lost volume gets stored rather than sold, and the fight over the money takes years in court, as with BP.
- Commodity and freight costs keep climbing. Steel, aluminium and glass cost more, and moving a panel across the US costs about what shipping one from Asia does.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Purchase | ≥$15K | Mar 2 | May 13 |
Donald Trump Republican · Executive | Sale | ≥$100K | Feb 10 | May 13 |
John Boozman Republican · Senate · AR | Purchase | ≥$1K | Aug 13 | Sep 11 |
Ro Khanna Democratic · House · CA-17 | Purchase | ≥$1K | Aug 10 | Sep 4 |
Alan Armstrong Republican · Senate · OK | Purchase | ≥$1K | Mar 27 | Jul 21 |
Congressional trading data provided by QuiverQuant
How First Solar turned $5.2B of revenue into $1.6B of operating income.
| Revenue | ||
|---|---|---|
| Solar Module | $5.2B | |
| Total revenue | $5.2B | |
| Gross profit | $2.1B | 40.6% |
| Operating income | $1.6B | 30.6% |