First Solar, Inc.

Overview

First Solar is the largest solar panel manufacturer headquartered in the United States and the only large-scale maker of thin-film photovoltaic modules in the Western world. It designs, manufactures, and sells cadmium telluride thin-film panels mainly to utility-scale developers and independent power producers. The global solar industry is dominated by Chinese manufacturers producing crystalline silicon panels; First Solar uses a fundamentally different technology and a manufacturing footprint concentrated in the United States and, more recently, India. It employs about 7,800 people.

Founded in 1999, First Solar pioneered large-scale CdTe thin-film manufacturing. CEO Mark Widmar has held the role since 2016 and has overseen a large expansion of manufacturing capacity and a transformed financial profile, driven substantially by the Inflation Reduction Act of 2022, which created production tax credits for domestically manufactured solar modules and components. Those credits flow almost entirely to First Solar, given its domestic footprint and non-Chinese supply chain.

The customer base is almost entirely large utility-scale developers: NextEra Energy, Lightsource bp, Intersect Power, and a range of independent power producers. Modules sell under long-term contracts signed years ahead, which gives First Solar unusual revenue visibility and lets it plan capacity expansions with confidence. At year-end 2025 the contracted backlog was about 50 gigawatts, roughly $15 billion, down from a 2023 peak above 78 GW after net de-bookings in 2025, and still several years of production at current capacity.

Cadmium telluride thin-film

First Solar's CdTe technology differs materially from the crystalline silicon modules that dominate the market. In a CdTe panel, a thin layer of cadmium telluride semiconductor is deposited onto glass substrates in a highly automated continuous process. That approach uses significantly less energy and raw material per watt than silicon manufacturing, runs on a production line with relatively few steps, and produces modules with a smaller carbon footprint per watt of capacity.

The flagship product is the Series 7 module: a large-format glass panel of roughly 2.4m by 1.3m, nameplate capacity in the range of 500 to 600-plus watts, and conversion efficiency in the 19% to 22% range. It is designed for utility-scale ground-mount installations and optimized for low installation cost and high energy yield in hot, sunny conditions, where CdTe's lower temperature coefficient against silicon is an advantage.

The supply chain is central to First Solar's geopolitical position. Tellurium, a rare trace element recovered as a byproduct of copper refining, is not sourced from China in meaningful quantity, and cadmium is similarly available from non-Chinese sources. In the language of the Inflation Reduction Act and its 2025 amendments, First Solar's panels are free of foreign entities of concern in their supply chains, a distinction that grows more valuable as tariff and trade policy raises barriers for Chinese-made solar products in the U.S. market.

Business model

Financial performance

First Solar reported FY2025 revenue of approximately $5.2 billion, up roughly 24% from $4.2 billion in FY2024 on a 24% increase in third-party module volume. Net income was approximately $1.53 billion, a net margin of around 29%, which is extraordinary for a solar manufacturer and reflects both the IRA production tax credits and a strong pricing environment. Diluted earnings per share reached a record $14.21, operating cash flow was about $2.1 billion, and the company ended 2025 with a net cash position of roughly $2.4 billion.

That performance sits against a solar manufacturing industry devastated by a glut of low-cost Chinese silicon panels that pushed global average selling prices to historic lows. Many crystalline silicon manufacturers, including U.S.-listed Maxeon and Canadian Solar, saw severe margin compression. First Solar was largely insulated by its U.S. footprint, its CdTe differentiation, and the IRA's domestic content preferences, and its margins expanded through a brutal global oversupply cycle.

The company is investing heavily in capacity. It opened its Alabama factory in 2024, commissioned a Louisiana factory in 2025, and in November 2025 announced a new U.S. plant in South Carolina to onshore FEOC-compliant final production. It also runs a 3.3 GW facility in India. Global nameplate capacity is around 25 GW, with U.S. capacity rising toward roughly 17.7 GW by 2027. Capital expenditure has moderated from its 2024 peak to about $0.9 billion in 2025, and strong cash generation has funded the expansion without meaningful balance sheet stress.

Strategy & outlook

The strategy rests on three pillars: technology leadership in CdTe thin-film, continued U.S. manufacturing expansion, and capturing the structural advantages created by U.S. trade and industrial policy. On technology, the CuRe copper replacement program aims to lift energy yield and cut manufacturing cost per watt to hold competitiveness as silicon module prices fall. Through its 2023 acquisition of Swedish specialist Evolar, First Solar is also researching perovskite and CdTe tandem cells, which could in theory exceed 30% efficiency, well above current commercial limits for any single-junction technology.

First Solar has bet heavily on the durability of U.S. domestic manufacturing policy. The 45X credit and the tariff regime on Chinese solar products created an environment where domestically produced modules command a meaningful price premium over imports. Its U.S. factories are positioned as the primary beneficiaries for the foreseeable future, since building new domestic thin-film capacity at scale takes years and significant capital, which is a real barrier to competition.

The India factory in Tamil Nadu gives First Solar a cost-competitive base for markets where U.S. domestic content requirements do not apply and labor cost matters more. India is also a fast-growing solar market in its own right, and the local presence positions the company to serve demand as the country pursues its renewable targets. The facility is expected to produce approximately 3.3 GW annually when fully ramped.

Key considerations

Policy is the dominant swing factor, and its shape changed in 2025. The One Big Beautiful Bill Act preserved First Solar's 45X manufacturing credit through 2032 and added foreign-entity rules that favor its China-free supply chain, which reduces the risk that its core credit is repealed outright. The pressure moved to the demand side: OBBBA sharply accelerated the phase-out of the 48E investment and 45Y production credits that First Solar's utility-scale customers depend on, requiring most solar projects to begin construction by mid-2026 or enter service by the end of 2027. That compression contributed to roughly 8.3 GW of contract terminations in 2025 and flat-to-lower 2026 revenue guidance. Any significant weakening of tariffs on Chinese solar imports would also narrow the price premium its modules command.

Chinese manufacturers keep driving technology improvements and capacity expansion at a pace that is structurally hard for Western competitors to match. Their panels face tariffs in the U.S. and scrutiny in Europe, and their cost per watt keeps falling, with the global market still dominated by Chinese production. U.S. trade policy has continued to tighten: new antidumping and countervailing cases against crystalline-silicon imports from India, Indonesia, and Laos opened in August 2025, with preliminary duties in 2026, extending the tariff wall that supports U.S.-made module pricing. If those barriers weaken, or if Chinese manufacturers relocate to third countries that qualify for favorable treatment, First Solar's relative cost position deteriorates.

The backlog and the scale of U.S. solar deployment still give medium-term visibility. The EIA and private forecasters project continued rapid growth in utility-scale solar through the decade, with permitting reform, grid investment, and the AI data center buildout adding demand. A contracted backlog of about 50 GW, down from the 2023 peak after 2025 de-bookings, implies several years of committed production against roughly 25 GW of annual global capacity. In a sector otherwise defined by oversupply and thin margins, First Solar stands apart on scale, profitability, and a China-free supply chain, while carrying concentrated exposure to U.S. policy.

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