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First Solar’s stock took a hit on Wednesday due to pressures from Donald Trump’s tariffs and a decrease in demand for clean energy impacting the industry.
The solar panel company’s shares closed 13.6% lower after announcing lower revenue projections for the year at $4.9bn-$5.2bn, falling short of analysts’ expectations of $6.2bn.
Investors were concerned by the cancellation of a major order from Lightsource BP, Europe’s largest solar developer, for 6.6 gigawatts.
BP has been seeking to sell a minimum of 50% of its solar subsidiary for almost a year as part of a broader shift in the oil and gas sector away from renewable energy endeavors.
First Solar’s CFO, Alexander R Bradley, noted a strategic shift among certain players, particularly oil and gas companies and European utilities, reallocating capital from renewable projects in the US to core businesses.
The company’s guidance was impacted by changes in US tariff policies, with its Asian manufacturing operations in India, Malaysia, and Vietnam subject to export levies to the US ranging from 20-50% since late 2025.
The company has had to sell its production in domestic markets at reduced prices and temporarily shut down some capacity while working to bring operations back to the US.
Analysts estimate that the company incurred costs of $125mn-$135mn due to the 15% tariffs imposed by the US president following a recent ruling.
The company also faced challenges from longstanding import taxes on critical components like aluminum affecting manufacturing operations.
Experts suggest that the solar energy sector may encounter ongoing obstacles due to the rising demand for “baseload power,” which intermittent sources such as solar and wind struggle to meet for energy-intensive industries like data centers and manufacturing.
“I think it’s a physics issue,” said Jed Dorsheimer, head of energy and power technologies at William Blair. “What does the grid actually need? Not more variable assets, it needs more baseload.”