First Solar sees gains amid tax credit support in 2024
- First Solar's stock has increased by approximately 14% year-to-date, outperforming its sector peers.
- The company has benefited from regulatory support and an expanding demand for solar energy, reporting 3.6 gigawatts of bookings from January through July.
- Looking ahead, First Solar's long-term prospects remain strong despite potential risks from easing legislative tailwinds.
First Solar, a prominent player in the solar energy sector in the United States, has seen its stock rise by roughly 14% this year, outpacing many of its competitors. The company's growth can be attributed to robust demand for solar solutions and its strategic focus on manufacturing domestic solar panels, which has been bolstered by U.S. government incentives. The Section 45X tax credit under the Inflation Reduction Act has played a significant role in enhancing profitability and improving operational efficiency for First Solar. From January through July 2024, First Solar recorded approximately 3.6 gigawatts of new bookings, leading to a sizable backlog of 75.9 gigawatts. This demand visibility suggests strong future revenues as large-scale projects move forward. Despite a turbulent macroeconomic environment and previous years of stock volatility, the company's financial performance has shown resilience due to easing supply chain constraints and an uptick in profit margins. However, analysts caution that the current political climate and the potential for legislative changes may impact long-term growth. The financial markets face uncertainty surrounding rate cuts and geopolitical tensions, which could mirror previous downturns experienced by First Solar. Although challenges lie ahead, First Solar's ongoing investment in innovative solar technologies and its commitment to scaling production in line with demand position it well in a growing industry, ensuring a favorable outlook as renewable energy continues to become a vital part of the global energy landscape.