First Solar's Strategic Bet: Assessing the Economic and Financial Viability of US Solar Reshoring

First Solar's expansion is not just a corporate plan; it is a blueprint for a new kind of industrial strategy. The scale of its projected impact is staggering. By 2027, the company's U.S. operations are forecast to support 39,320 jobs, a surge from 29,605 jobs in 2025. This growth will translate directly into economic output, with the company's estimated contribution to U.S. GDP projected to climb from $5.8 billion in 2025 to $7.8 billion in 2027. The study, conducted by the University of Louisiana at Lafayette using IMPLAN economic modeling software, quantifies the multiplier effect, showing that this expansion will generate an almost $1 billion increase in labor income, from $3 billion to $4 billion, over the same period.

The methodology behind these numbers is key. The IMPLAN model captures not just direct factory jobs but the full web of indirect and induced employment-suppliers, construction crews, and the spending power of workers. This approach reveals a workforce earning at a premium, with the study finding a fully-loaded average of $101,145 per worker in 2025, more than double the national median. This high-wage, high-impact profile underscores the strategic value of reshoring.

This economic engine is part of a broader, policy-driven shift. For the first time in over a decade, the U.S. is capable of producing all the major components in the solar supply chain. First Solar's thin-film technology is a critical differentiator within this new ecosystem, providing a domestic alternative to dominant Chinese cell and module production. The company's projected 18 gigawatts of annual nameplate capacity by 2027 is a cornerstone of this reindustrialization effort, aiming to deliver on national priorities of energy dominance and economic prosperity. The thesis is clear: the economic promise is now quantified, but its conversion into sustainable profitability for First Solar remains the central financial challenge.

The Competitive and Policy Catalysts

First Solar's strategic bet is built on a rare competitive moat and a policy environment that is both a powerful catalyst and a source of ongoing uncertainty. The company's primary advantage is its unique position: it is the only US-headquartered company and not manufacturing in China among the world's ten largest solar manufacturers. This isn't just a geographic distinction; it is the foundation for a vertically integrated thin-film technology platform. Its Cadmium Telluride (CadTel) modules are produced through a streamlined process that requires only 1-2% of the semiconductor material needed for conventional silicon, resulting in faster production, superior traceability, and a smaller environmental footprint. This technology allows First Solar to create a fully functioning panel without the separate, energy-intensive steps of carving wafers or etching silicon cells, a key differentiator in an industry dominated by Chinese cell and module production.

This competitive edge is now being reinforced by a major capital investment. The company's new $300 million, 3.7GW US plant, with production ramping through 2027, is explicitly designed to improve its financial profile. The project aims to reduce tariff charges and logistics costs associated with importing finished goods, directly targeting gross margin pressure. More importantly, it is engineered to produce modules that are fully compliant with forthcoming FEOC guidance. This alignment with evolving federal rules is critical, as the project's viability is directly tied to policy catalysts. The Inflation Reduction Act's tax credits, including domestic content bonuses, are a major driver for U.S. manufacturing, but they are now subject to the new rules that block tax credits from going to "foreign entities of concern". First Solar's homegrown supply chain is its passport to these incentives.

The broader U.S. solar manufacturing landscape underscores First Solar's outlier status. While the country has made strides to produce all the major components in the solar supply chain for the first time in over a decade, capacity remains a constraint. First Solar's expansion is a direct response to this gap, but it operates in a policy environment layered with new uncertainties. The company's recent reduction in overseas production highlights the volatility of trade flows, while pending investigations into polysilicon and other components threaten to introduce new tariffs. In this context, First Solar's bet is clear: its domestic technology and supply chain are not just a competitive choice but a necessity for accessing the financial incentives that will fund its growth. The policy catalysts are powerful, but their precise mechanics and timing remain the central variable for the company's financial model.

Financial Execution and Forward Scenarios

First Solar's near-term financial trajectory is being powered by robust demand, but the path to sustained profitability hinges on flawless execution of its new U.S. capacity. The company's Q3 2025 results provide a clear snapshot of this dynamic. It shipped 5.2GW of modules that quarter, pushing net sales to $1.6 billion. This output was drawn from a substantial backlog, with the company reporting a 54.5GW backlog at the end of the period. For the first nine months of 2025, it had already shipped 11.8GW, demonstrating strong order visibility and customer commitment. This demand is the fuel for the expansion, but the critical test is converting it into higher-margin domestic revenue.

The primary catalyst for that margin improvement is the successful ramp of the new U.S. plant. The company's $300 million, 3.7GW US plant is forecast to begin production at the end of 2026, with the ramp-up continuing through the first half of 2027. This project is explicitly designed to onshore the finishing of Series 6 modules, thereby reducing the tariff and logistics costs that have pressured gross margins. Its completion will be the key event that determines whether the company's financial model can transition from a high-cost, imported-goods profile to a more favorable domestic one. The backlog provides the volume, but the new plant must deliver the cost structure to unlock the promised margin profile.

Yet significant risks loom over this execution. The company has already shown vulnerability to supply chain disruptions, as evidenced by the production reduction at its Vietnam and Malaysia facilities in Q3 2025. This included a specific disruption with its Alabama glass supplier, a reminder that even a vertically integrated strategy faces operational hurdles. More broadly, the entire growth thesis is exposed to policy uncertainty. The new rules that block tax credits from going to "foreign entities of concern" are a major incentive, but their implementation is pending formal guidance. Simultaneously, pending trade investigations into polysilicon and other components could introduce new tariffs, while the broader reshoring effort faces a capacity shortfall for key precursor materials. The company's ability to secure long-term contracts at favorable prices will be tested in this volatile environment.

The bottom line is that First Solar is navigating a classic "build and prove" scenario. It has the demand and the strategic rationale, but its valuation will be determined by its ability to hit the production ramp on time, manage costs effectively, and secure the policy tailwinds it needs. The next 18 months are a critical proving ground for the financial viability of its reshoring bet.