This Domestic Solar Stock (FSLR) Could Shine In Your Portfolio If President-elect Donald Trump Imposes Tariffs On Chinese Solar Panels

During his presidential campaign, Donald Trump promised to impose tariffs on certain Chinese imports, such as solar panels. Although economists still debate whether Trump's tariffs will benefit America's economy, domestic solar producers certainly stand to gain if Trump follows through on his promises. One such company is First Solar.

Although Donald Trump is known to be a big proponent of fossil fuels, aspects of his "America First" policies could spur further development in America's green energy. A recent International Energy Agency (IEA) report shows that solar energy is the only renewable energy technology currently being developed quickly enough to help the world make meaningful progress toward achieving net-zero emission targets by 2050.

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That's good news from a climate-change perspective, but many global circles are concerned about the extent to which Chinese solar production is outpacing that of its international competition. A study from Ember Energy revealed that China's solar panel export volume increased by 34% in 2023 and it now accounts for 80% of the world's solar panel manufacturing.

China's global lead is not an accident. In 2012, China's state energy policy called for a massive investment in renewable energy technology, such as solar panels, lithium-ion batteries and electric cars. The size of that investment is believed to have been hundreds of billions and a decade later, China's dominance of the solar panel industry proves the investment is paying off.

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Regardless of how you feel about Donald Trump or his tariffs, having a global rival control 80% of an industry that is key to the world's efforts to combat climate change leaves the United States in a difficult position. For example, if regional tensions over Taiwan should flare up, China could halt the delivery of solar panels to the U.S. and continue selling them to Europe, Africa and the Middle East.

This is where companies like First Solar come into the picture. This Tempe, Arizona-based company focuses on building advanced solar components for large-scale solar operations that public utility companies would build. First Solar has quietly expanded its operational capabilities and manufacturing footprint through the years. Its new facilities in Alabama and Ohio are designed to deliver 12 Gigawatts of power annually.

First Solar had a strong Q3 2024, generating $887 million in revenue (per public filings and Barchart), a year-on-year improvement of nearly 11%. The company's earnings per share (EPS) also jumped by 16% and currently sit at $2.91. The Q4 2024 numbers saw the company miss revenue expectations and lower its 2025 EPS forecast.

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That said, it's worth noting that First Solar is still predicting an EPS of $13-$13.50 in 2025. More importantly, First Solar may not have to wait for Trump's tariffs to increase profits. The United States Department of Commerce recently announced tariffs between 21% and 271% for Chinese solar panels sold through subsidiaries in Vietnam, Cambodia, Thailand and Malaysia.

These tariffs, classified as "antidumping duties," were instituted to keep Chinese-based manufacturers from dumping their massive stockpiles of unused solar panels on non-Chinese companies, who would presumably then sell them to the US. Piper Sandler analyst Kashy Harrison believes First Solar could benefit massively from this development.

According to Benzinga's latest estimates, First Solar stock is trading at $182, but analysts have a near-universal consensus that First Solar is primed for a strong 2025. Kashy Harrison has raised his price estimate to $250 (up from $210) and Benzinga's survey of 29 different analysts reveals an even higher consensus price target of $274.38. If First Solar hits those targets, this stock could light up your portfolio with strong profits.

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