First Solar, Inc. (FSLR shares experienced a precipitous -17.89% decline on June 17, 2025, shedding $31.35 per share to close at $143.90. This sharp downturn, which wiped out over $3 billion from its market capitalization, was directly triggered by the U.S. Senate's introduction of a bill proposing the phase-out of critical solar and wind energy tax credits by 2028, sending immediate tremors throughout the renewable energy sector.
This legislative development has fundamentally altered the near-term investment calculus for solar companies, including FSLR, shifting focus from robust growth projections to strategic adaptation. The market's swift reaction underscores the profound reliance of the renewable energy sector on supportive policy frameworks, particularly the Investment Tax Credit (ITC) and Production Tax Credit (PTC), which have been instrumental in driving project economics and accelerating deployment across the United States. While the long-term trajectory for solar remains positive, this policy uncertainty introduces a new layer of complexity for investors and industry participants alike.
Navigating the Policy Headwinds: First Solar's Latest Challenges#
The Immediate Market Reaction to Legislative Proposals#
On June 17, 2025, First Solar's stock witnessed a significant sell-off, with its price plummeting from a previous close of $175.246 to $143.90, representing a -17.89% drop. This sharp decrease, as reported by outlets such as Fool.com, was largely driven by the U.S. Senate's proposal to phase out solar and wind energy tax credits by 2028. The news created heightened market volatility across the entire renewable sector, impacting not just FSLR but also many of its peers. Investors immediately reacted to the perceived threat of reduced incentives, anticipating a potential slowdown in project pipelines and a squeeze on profitability in the coming years. This sector-wide decline reflects a fundamental re-evaluation of long-term growth prospects for companies heavily reliant on these federal subsidies.
Historically, the solar industry has been sensitive to policy shifts, with previous changes in tariffs or state-level incentives often leading to temporary market corrections. However, the proposed