Solar stocks have faced an uphill battle in 2025 as President Donald Trump’s administration has sought to remove clean energy tax credits and redirect attention and funding from wind, solar, and hydrogen initiatives.
These actions against clean energy mark a stark difference from the landscape under former President Joe Biden and have culminated in Trump’s “One Big Beautiful Bill Act,” his tax-and-spending bill.
Solar stocks are largely expected to suffer as a result of the legislation, which passed the House of Representatives today following a Senate vote earlier this week. But First Solar (FSLR) may be an unlikely beneficiary.
Thanks to First Solar’s vertically integrated, U.S.‑based production, it qualifies for a carve‑out in the bill that preserves tax credits on certain American‑made components of larger renewable energy projects. Wolfe Research says this appears “intended” to help First Solar.
Based in Tempe, Arizona, First Solar is America’s leading utility-scale solar manufacturer, known for its U.S.-based supply chain and thin-film technology.
Valued at $18.3 billion by market cap, shares of FSLR have recently recovered their year-to-date losses and are now up 5% for 2025. Shares initially struggled ahead of the phase out of lucrative tax credits, tariffs on imported solar panel components, and a demand slowdown amidst higher financng costs.
However, FSLR exhibits an attractive valuation profile. Its price-earnings ratio is 11.2x, a 53% discount compared to the sector median, indicating the stock is relatively cheap.
The “One Big Beautiful Bill Act” introduces sweeping changes that are expected to send shockwaves through the solar industry.
The version passed today by the House and headed for Trump’s signature eliminates the residential solar tax credit after this year. Commercial solar projects leveraging the 45Y or 48E tax credits must have started construction by 2026 in order to be eligible or be in service by the end of 2027 if construction starts later.
Together, these changes create significant headwinds for solar developers, potentially rendering projects after 2027 economically unfeasible.
However, First Solar might have a better shot at survival than its peers. Its core business serves the commercial market, so the immediate phase out of the residential solar tax credit is less impactful. And, an update this week in the legislation makes “subcomponents in renewable projects eligible for tax credits if they are produced in the same facility as the larger component into which they are integrated and at least 65% of the total costs of the larger component are domestic.”
