First Solar, the largest U.S.-based manufacturer of photovoltaic panels, lowered its sales forecast for the coming year and cited rising product prices tied to newly imposed tariffs on foreign-made panels. The guidance revision sent the company's shares down about 14% in after-market trading.
Management said the anticipated price increases for its modules are a direct consequence of additional tariffs on imported panels. That change in the pricing environment arrives at a time when U.S. residential solar demand remains subdued - a weakness the company attributes to elevated interest rates and changes to metering rules in California that have cut the credits customers receive for sending excess electricity back to the grid.
First Solar reported net sales of $1.68 billion for the quarter ended Dec. 31, an increase of roughly 11.1% from the same period a year earlier. The firm said this top-line improvement was driven by higher volumes of modules sold during the quarter. On a profitability basis, the company posted fourth-quarter net income of $4.84 per share, up from $3.65 per share a year ago.
For 2026, First Solar now projects net sales in a range of $4.9 billion to $5.2 billion. This guidance sits below the consensus analyst estimate of $6.12 billion compiled by LSEG.
Industrywide, solar companies are already coping with softer demand and the effects of high interest rates on project economics and consumer financing. The sector is now also facing heightened uncertainty tied to U.S. trade and energy policy decisions under the current administration - developments the company and market participants say could further complicate forecasting and investment decisions.
Investors reacted swiftly to the revised outlook and tariff-driven price commentary, pushing the stock lower following the earnings release despite the quarter's year-over-year sales growth and improved earnings per share. The combination of weaker demand in the key residential segment, regulatory changes in California, and new tariff impacts on pricing were cited as the principal headwinds behind the updated guidance.
As the broader solar industry and equipment manufacturers digest the implications of higher module prices and persistent interest-rate pressure, market participants will likely watch upcoming policy moves and demand signals closely for signs of recovery or further downside to demand.