First Solar has lowered its annual sales and profit forecasts due to near-term tariff-related challenges, weak U.S. residential solar demand, and metering reforms in California.
U.S. trade officials recently finalized steep tariffs on most solar cells imported from Southeast Asia, following complaints of unfair pricing, yet module prices have not risen as expected due to high inventory from increased imports in 2023.
First Solar has reported net income of $209.5 million for Q1 2025, an 11.4 percent decline from the previous year.
First Solar has posted sales of $844.6 million, up 6.4 percent year-over-year but down $0.7 billion from the prior quarter due to seasonal factors.
Average selling price per watt fell 2.6 percent to 30.5 cents.
Revised full-year sales are expected between $4.5 billion and $5.5 billion, down from earlier guidance of $5.3 billion to $5.8 billion, while 2025 earnings are forecasted at $12.50 to $17.50 per share, below the prior $17.00 to $20.00 range.
U.S. residential solar demand
Looking ahead, U.S. solar capacity is expected to more than triple to 739 GWdc by 2035, SEIA said in its recent report.
In 2024, the U.S. solar industry installed a record 50 GWdc of capacity, a 21 percent increase from 2023, accounting for 66 percent of all new electricity-generating capacity added to the grid.
Domestic module manufacturing surged 190 percent, reaching 42.1 GW by year-end and surpassing 50 GW in early 2025, with significant capacity in Texas and Georgia. Texas led in new installations with 11.6 GWdc, followed by California and Florida.
Residential solar declined 32 percent, its lowest since 2021, due to high interest rates, policy uncertainty, and company bankruptcies.
In contrast, commercial solar set a new record with 2,118 MWdc, up 8 percent, while community solar grew 35 percent to 1,745 MWdc, led by New York. Utility-scale solar saw the largest growth, installing 41.4 GWdc — a 33 percent year-over-year increase — with over 16 GWdc installed in Q4 alone.
Metering reforms in California
California’s Net Energy Metering 3.0 (NEM 3.0), approved by the Public Utility Commission in 2022, reduced compensation for excess solar energy sent to the grid by 75 percent, from $0.30/kWh to about $0.08/kWh, shifting payments from retail rates to avoided cost rates. The policy also incentivizes battery adoption for meaningful savings. While the CPUC claims solar system payback should still occur within nine years, developers and advocates warned of reduced installations, job losses, and longer payback periods. Since the announcement, the California Solar and Storage Association reported a 77–85 percent decline in sales, with widespread industry losses. Legal challenges continue, and in April 2024, the California Supreme Court agreed to review a lower court decision that upheld the CPUC’s policy.
First Solar said its cash position decreased to $0.4 billion from $1.2 billion due to capital expenditures for its Louisiana facility and higher inventory.
Despite these pressures, First Solar remains confident in long-term U.S. market demand, citing its domestic manufacturing strength, vertical integration, and proprietary CadTel semiconductor technology.
Baburajan Kizhakedath