The U.S. Clean-Energy Company That Hit the Subsidies Jackpot

Of all the beneficiaries of the U.S.’s green-energy push, few have hit the jackpot like First Solar.

The Arizona-based solar-panel manufacturer expects to receive as much as $710 million this year—nearly 90% of forecast operating profit—from subsidies the U.S. government rolled out a year ago to encourage domestic renewables production. One analyst estimates the incentives could be worth more than $10 billion for the company over the next decade.

First Solar expects to have as much as a 60% share of the U.S. market for large-scale solar installations this year, largely a result of government policies that are pushing clean-energy developers to buy more made-in-America components. 

The company’s shares have more than doubled to $208.40 in Friday trade since the beginning of 2022, despite a string of earnings disappointments during that period. Since the passage of the Inflation Reduction Act last August, First Solar has promised so far to plow more than $2.8 billion into new manufacturing and research facilities in the U.S., including a new factory announced on Thursday. 

Some industry executives attribute the company’s good fortune to luck and sharp elbows as it pushed for policies that would give it an advantage against low-cost competitors from countries such as China, which controls more than 80% of the global supply chain for solar panels.

First Solar Chief Executive Mark Widmar credits persistence and smart strategy, saying the company has worked for years to build factories and a supply chain in the U.S. He says the current U.S. energy policy is helpful. 

The Biden administration’s signature climate legislation could ultimately provide $1 trillion in support for clean-energy projects, largely through tax credits tied to benchmarks such as the amount of wind power generated or solar panels produced. So far, it has helped spur around $110 billion in announcements for factories and other facilities to make everything from wind turbines to battery components, according to an analysis by The Wall Street Journal. 

Most of those projects involve overseas clean-energy giants; many won’t be finished for years. First Solar is one of a handful of big U.S.-based manufacturers with sizable U.S. factories that are already eligible for the incentives.

“Lots and lots of companies are trying to get on the gravy train—in the solar industry, in the battery industry, in lithium mining,” says Pavel Molchanov,

Making solar panels, like a lot of other clean-energy components, is a commoditized, low-margin business where companies vie to drive down prices. For years, that meant factories fled to low-cost places such as China or Southeast Asia.

First Solar, which was founded in 1999, makes solar panels using a technology called thin-film, where layers of photovoltaic chemicals are spread onto glass in a process that is faster, cheaper and simpler than the procedure for common silicon-based panels. That technology helped the company compete with the big Chinese solar-panel makers and their suppliers.

First Solar also changed business models when needed, says Widmar, who joined the company in 2011 and has steered it through several slumps. The company built factories in cheaper locations such as Malaysia and Vietnam, where it hosted more than 80% of its manufacturing capacity as late as 2018. 

At the same time, the company lobbied in the U.S. against cheap Asian imports, pushing to slap duties on solar components made by Chinese companies. Some in the industry say such policies have boosted solar costs in the U.S. and could slow the rollout of renewables. 

Those protectionist measures combined with pandemic shipping bottlenecks to boost First Solar’s U.S. sales. The company is likely to provide more than half of the panels sold for large-scale solar installations in the U.S. this year, compared with around a third before the pandemic, Widmar estimates.

During the first three months of this year, as the U.S. government considered green tax-credit details, the company spent $270,000 on lobbying—nearly 80% of its entire 2022 spend, according to data collated on OpenSecrets.org.

First Solar’s lobbying efforts have primarily been aimed at securing a level playing field versus cheap Chinese manufacturers that get subsidized by their government, Widmar says. The U.S. needs to focus on goals beyond lowering panel costs, such as energy security, he says. “We believe that this should not be an environment of solar at any cost.”

Rules governing the tax credits are still being completed. First Solar says it should be able to qualify for a series of lucrative credits linked to its U.S. panel production. The credits could be worth $11 billion over the next decade, according to a report by

First Solar hasn’t received any credits yet, but it is already counting future credits’ value on its books.

A key question is the definition of a U.S.-made solar panel for tax-credit purposes, which could unlock a lucrative incentive meant to spur renewables developers to buy more homemade equipment. Rules favoring First Solar could help boost the company’s sales further, because the company estimates 90% of the pieces that go into its newest panel are already made in America.

First Solar is trying to take advantage of its moment. The company is tapping into buyers’ demand for U.S.-made equipment by amending contracts to stipulate that its panels will be produced domestically, charging a premium for that feature. It is pushing customers hungry for panels to sign multiyear contracts, accumulating an order backlog the company estimates at more than $20 billion.

The company also is investing heavily in research into new solar technologies, and it is building new factories fast. First Solar expects to have more than 20 gigawatts of global manufacturing capacity by the end of 2025, four times what it had at the end of 2018 and one-and-a-half times the amount of large-scale solar the U.S. installed last year. Nearly half of that will be in the U.S. 

“It’s a moment of opportunity,” Widmar says.

—Scott Patterson contributed to this article.

Write to Phred Dvorak at [email protected]