OPIS Insights

Watch: Barron’s Senior Energy Writer Laura Sanicola and OPIS Senior Editor of US Solar Colt Shaw discuss what’s ahead for energy this week.

Watch this week’s episode for insights into the effects of the One Big Beautiful Bill’s passage on the U.S. solar policy environment.

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider, and I’m here today with Colt Shaw, senior solar editor at OPIS. Colt, thanks for joining.

COLT SHAW: Thanks for having me.

SANICOLA: Thanks so much. So let’s talk about utility scale solar. We wrote about this last week at Barron’s Energy Insider, specifically looking at First Solar’s advantage in this marketplace now that the policy environment has changed post One Big Beautiful Bill and First Solar reported earnings. And it gave us a little bit of a glimpse into where they’re seeing demand for their products, pricing for their products. Yeah. Let’s let’s just dive in there. What is their backlog telling us about demand for their products after the passage of the One Big Beautiful Bill?

SHAW: There’s lot of eyes specifically on this earnings call. I think it was kind of the first big indication of the demand that was driven by OBBB. They reported record volume sold, and they have a massive backlog over the next few years. But, specifically, the record volume that they sold was sold between the period of the passage of the OBBB and the September second deadline after which companies can no longer safe harbor their tax credits using the five percent spend rule.

So it’s very clear that that demand was driven by those tax credits going away and the kind of shortened runway around that. The other thing is just the average selling price they reported was thirty point nine cents. But once you take out orders that had manufacturing issues, the blended ASP was around thirty two and a half cents, which is basically neck and neck with what OPIS tracks for US modules assembled with imported cells, which were going for about five cents cheaper earlier in the year. First Solar always had sort of a little bit of a premium, but I think now it’s clear that they see where the market is going. They’ve also given some indications that they’ve made some bookings for 2027 that have contingencies that could add an extra four and a half cents and bring an average selling price to thirty six and a half cents. So it’s kinda clear which way the wind is blowing in terms of average selling price, and it’s clear that kind of the protectionism of this last year is playing a big role in that as that’s kind of shifting, you know, supply chains and and kind of trade environment at the moment.

So utility scale solar is getting more expensive, and First Solar’s backlog, as you said, seemed to have really been driven by developers capturing the tax credits that they can.

SANICOLA: But first of all, there’s also building more manufacturing capacity in the US, so that must mean that they’re expecting some continuation of demand in 2026 and beyond. What can you tell us about what they’re manufacturing and what some of their competitors are also manufacturing now that the supply chain is really moving domestic?

SHAW: The domestic content bonus going away is obviously a major kind of change for the industry that they have to make an adjustment to. But, typically, that helped companies that were producing American modules with American sales. There’s not many of them, but they were selling an an average price of forty five to fifty cents, which basically is a nonstarter without a domestic content bonus. But like we said, First Solar is selling now basically on par with just American modules assembled with imported cells.

So I think they’re basically heavily leaning into the the trade environment. They explicitly mention new FIAT guidance, which is going to make it much more difficult for module factories owned or invested in by Chinese interests or using Chinese components, which is a vast majority of crystalline silicon module manufacturers, which, of course, First Solar is not as a thin film cadmium telluride manufacturer. That’s their kind of proprietary tech. So they have kind of an advantage there.

And they mentioned the reciprocal tariffs. They talked earlier in the spring about bringing back a finishing plant. They gave an update to that yesterday. They are bringing about a three point seven gigawatt finishing plant, which they said should be FIAT compliant and also qualify for 45X credits. They said that should be back in the US by 2027. They also said they’re ramping up a three and a half gigawatt Louisiana module plant that has been in the works for a little bit. So by far, they have the biggest manufacturing footprint in the United States for solar.

And it’s clear they see kind of the new normal for trade and the fact that I mean, I didn’t even mention the the two thirty two polysilicon investigation, which basically threatens anyone that uses polysilicon in a module, which is everyone but First Solar. So that’s another plus that’s on the the horizon. We won’t really know probably until the new year given the government shutdown, but there is all of these kind of swirling concerns for people whose supply chain for companies whose supply chains is, like, heavily interconnected overseas. And First Solar does have some in Southeast Asia, but they they have they have kind of a a a perfect thing set up where they can kind of, you know, shield themselves from some of the worst effects of this. And I think they’re they’re kind of investing in that, and it was clear that they feel confident going forward in their kind of position in all of this.

SANICOLA: Well, thanks so much for breaking this down, Colt. It made a lot of sense to me on an otherwise very confusing topic, and thanks everyone for joining. We’ll see you week.