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What changed in First Solar's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of First Solar's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+357 added−340 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-25)

Top changes in First Solar's 2025 10-K

357 paragraphs added · 340 removed · 266 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

100 edited+35 added−34 removed46 unchanged
Biggest changeThe following table shows interest expense, net for the years ended December 31, 2024, 2023, and 2022: Years Ended Change (Dollars in thousands) 2024 2023 2022 2024 over 2023 2023 over 2022 Interest expense, net $ (38,870) $ (12,965) $ (12,225) $ (25,905) 200 % $ (740) 6 % Interest expense, net during 2024 increased compared to 2023 primarily due to additional borrowing under various arrangements in India and higher capitalized interest balances in the prior year related to the construction of our manufacturing plant in India. 58 Table of Contents Other (expense) income, net Other (expense) income, net is primarily comprised of miscellaneous items and realized gains and losses on the sale of marketable securities and restricted marketable securities.
Biggest changeThe following table shows interest expense, net for the years ended December 31, 2025, 2024, and 2023: Years Ended Change (Dollars in thousands) 2025 2024 2023 2025 over 2024 2024 over 2023 Interest expense, net $ (44,131) $ (38,870) $ (12,965) $ (5,261) 14 % $ (25,905) 200 % Interest expense, net during 2025 increased compared to 2024 primarily due to factoring certain trade receivables with recourse, which were accounted for as secured borrowings.
In general, we expect the return rates for our Series 6 and Series 7 modules to be lower than our older series. Accordingly, we estimate that the return rate for such newer series of module technology will be less than 1%.
In general, we expect the return rates for our Series 6 and Series 7 modules to be lower than the rates of our older series. Accordingly, we estimate that the return rate for such newer series of module technology will be less than 1%.
If any future production lines do not achieve operating metrics similar to our existing production lines, our solar modules could perform below expectations and cause us to lose customers.” We have also committed and expect to continue to commit significant working capital to purchase various raw materials used in our module manufacturing process.
If any future production lines do not achieve operating metrics similar to our existing production lines, our solar modules could perform below expectations and cause us to lose customers.” We have committed and expect to continue to commit significant working capital to purchase various raw materials used in our module manufacturing process.
While our modules are generally competitive in cost, reliability, and performance attributes, there can be no guarantee such competitiveness will continue to exist in the future to the same extent or at all. Any declines in the competitiveness of our products could result in further declines in the average selling prices of our modules and additional margin compression.
While our modules are generally competitive in cost, reliability, and performance attributes, there can be no guarantee such competitiveness will continue to exist in the future to the same extent, or at all. Any declines in the competitiveness of our products could result in declines in the average selling prices of our modules and additional margin compression.
In Vietnam, we have been granted a long-term tax incentive, scheduled to expire at the end of 2036, pursuant to which income earned in Vietnam is subject to reduced annual tax rates, conditional upon our continued compliance with certain revenue and R&D spending thresholds.
In Vietnam, we have been granted a long-term tax incentive, scheduled to expire at the end of 2036, pursuant to which income earned in Vietnam is subject to reduced tax rates, conditional upon our continued compliance with certain revenue and R&D spending thresholds.
Any declines in the expected performance attributes of our modules could adversely impact our financial results due to declines in the average selling prices of our modules and additional margin compression. For example, the recently identified manufacturing issues affecting certain Series 7 modules may adversely impact the average selling prices of our modules or the carrying value of our inventories.
Any declines in the expected performance attributes of our modules could adversely impact our financial results due to declines in the average selling prices of our modules and additional margin compression. For example, the identified manufacturing issues affecting certain Series 7 modules may adversely impact the average selling prices of our modules or the carrying value of our inventories.
Cost of sales Our modules business cost of sales includes the cost of raw materials and components for manufacturing solar modules, such as glass, transparent conductive coatings, CdTe and other thin film semiconductors, laminate materials, connector assemblies, edge seal materials, and frames or back rails.
Cost of sales Our cost of sales includes the cost of raw materials and components for manufacturing solar modules, such as glass, transparent conductive coatings, CdTe and other thin film semiconductors, laminate materials, connector assemblies, edge seal materials, and frames or back rails.
Accordingly, changes in the expected realization of the grants could affect our results of operations. Additionally, the amount expected to be received from transfers to third parties may fluctuate based on market conditions or other factors that impact whether, and for how much, buyers are willing to purchase such credits. 65 Table of Contents
Accordingly, changes in the expected realization of the grants could affect our results of operations. Additionally, the amount expected to be received from transfers to third parties may fluctuate based on market conditions or other factors that impact whether, and for how much, buyers are willing to purchase such credits. 69 Table of Contents
To mitigate certain logistics costs, we employ commercial contract structures that provide additional consideration to us if the cost of logistics services, excluding demurrage and detention, exceeds defined thresholds. We may also adjust our shipping plans to include additional lead times for module deliveries and/or utilize our network of U.S. distribution centers to mitigate logistics costs.
To mitigate certain logistics costs, we employ commercial contract structures that provide additional consideration to us if the cost of logistics services, excluding demurrage and detention, exceeds defined thresholds. We may also adjust our shipping plans to include additional lead times for module deliveries and/or use our network of U.S. distribution centers to mitigate logistics costs.
“Risk Factors” and elsewhere in this Annual Report on Form 10-K for discussions of other risks that may affect us. Our business is evolving worldwide and is shaped by the varying ways in which our offerings can be compelling and economically viable solutions to energy needs in various markets.
“Risk Factors” and elsewhere in this Annual Report on Form 10-K for discussions of other risks that may affect us. Our business is evolving worldwide and is shaped by the varying ways in which our offerings can be compelling and economically viable solutions to energy needs in our key markets.
Recent developments to government incentive programs include the following: • United States. In August 2022, the previous U.S. President signed the IRA into law, which was intended to accelerate the country’s energy transition. Among other things, the financial incentives provided by the IRA have significantly increased demand for modules manufactured in the United States.
Recent developments to government incentive programs include the following: • United States. In August 2022, the previous U.S. President signed the IRA into law, which was intended to accelerate the country’s ongoing transition to clean energy. Among other things, the financial incentives provided by the IRA have significantly increased demand for modules manufactured in the United States.
As of December 31, 2024, we had no off-balance sheet debt or similar obligations, other than financial assurance related instruments, which are not classified as debt. We do not guarantee any third-party debt. See Note 14. “Commitments and Contingencies” to our consolidated financial statements for further information about our financial assurance related instruments.
As of December 31, 2025, we had no off-balance sheet debt or similar obligations, other than financial assurance related instruments, which are not classified as debt. We do not guarantee any third-party debt. See Note 14. “Commitments and Contingencies” to our consolidated financial statements for further information about our financial assurance related instruments.
Liquidity and Capital Resources As of December 31, 2024, we believe that our cash, cash equivalents, marketable securities, cash flows from operating activities, and contracts with customers for the future sale of solar modules will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months.
Liquidity and Capital Resources As of December 31, 2025, we believe that our cash, cash equivalents, marketable securities, cash flows from operating activities, and contracts with customers for the future sale of solar modules will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months.
“Risk Factors,” including those described under the headings “Our future success depends on our ability to effectively balance manufacturing 53 Table of Contents production with market demand, effectively manage our cost per watt, and, when necessary, continue to build new manufacturing plants over time in response to market demand, all of which are subject to risks and uncertainties” and “If any future production lines are not built in line with committed schedules, it may adversely affect our future growth plans.
“Risk Factors,” including those described under the headings “Our future success depends on our ability to effectively balance manufacturing production with market demand, effectively manage our cost per watt, and, when necessary, continue to build new manufacturing plants over time in response to market demand, all of which are subject to risks and uncertainties” and “If any future production lines are not built in line with committed schedules, it may adversely affect our future growth plans.
Such adjustments are presented within “Cost of Sales” on our consolidated statements of operations. During the year ended December 31, 2024, we completed our annual cost study of obligations under our module collection and recycling program and determined that no adjustment to the associated liability was necessary.
Such adjustments are presented within “Cost of Sales” on our consolidated statements of operations. During the year ended December 31, 2025, we completed our annual cost study of obligations under our module collection and recycling program and determined that no adjustment to the associated liability was necessary.
If these financial benefits vary significantly from our assumptions, our business, financial condition, and results of operations could be adversely affected.” See Note 9. “Government Grants” to our consolidated financial statements for further information about government grants.
If these financial benefits vary significantly from our assumptions, our business, financial condition, and results of operations could be adversely affected.” See Note 8. “Government Grants” to our consolidated financial statements for further information about government grants.
“Risk Factors – The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” • United States.
“Risk Factors – The modification, reduction, elimination, or expiration of government subsidies, economic incentives, eligibility limitations, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, have, and in the future could, negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results .” • United States.
“Risk Factors – The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” • India .
“Risk Factors – The modification, reduction, elimination, or expiration of government subsidies, economic incentives, eligibility limitations, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, have, and in the future could, negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” • India .
We maintain the intent and ability to permanently reinvest our accumulated earnings outside the United States, with the exception of certain subsidiaries for which applicable income taxes have been recorded as of December 31, 2024.
We maintain the intent and ability to permanently reinvest our accumulated earnings outside the United States, with the exception of certain subsidiaries for which applicable income taxes have been recorded as of December 31, 2025.
“Risk Factors – The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar 52 Table of Contents cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” Our ability to provide solar modules on economically attractive terms is also affected by the availability and cost of logistics services associated with the procurement of raw materials or equipment used in our manufacturing process and the shipping, handling, storage, and distribution of our modules.
“Risk Factors – The modification, reduction, elimination, or expiration of government subsidies, economic incentives, eligibility limitations, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, have, and in the future could, negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” 57 Table of Contents Our ability to provide solar modules on economically attractive terms is also affected by the availability and cost of logistics services associated with the procurement of raw materials or equipment used in our manufacturing process and the shipping, handling, storage, and distribution of our modules.
Our cost of sales also includes depreciation of manufacturing plant and equipment, facility-related expenses, environmental health and safety costs, and costs associated with shipping, warranties, and solar module collection and recycling (excluding accretion).
Our cost of sales also includes depreciation of manufacturing plant and equipment, facility-related expenses, environmental health and safety costs, and costs associated with logistics, warranties, and solar module collection and recycling (excluding accretion).
In the periods between the time of sale and the related settlement of the collection and recycling obligation, we accrete the carrying amount of the associated liability and classify the corresponding expense within “Selling, general and administrative” expense on our consolidated statements of operations. 63 Table of Contents We periodically review our estimates of expected future recycling costs and may adjust our liability accordingly.
In the periods between the time of sale and the related settlement of the collection and recycling obligation, we accrete the carrying amount of the associated liability and classify the corresponding expense within “Selling, general and administrative” expense on our consolidated statements of operations. We periodically review our estimates of expected future recycling costs and may adjust our liability accordingly.
In addressing electricity demands, we are focused on providing utility-scale module offerings in key geographic markets that we believe have a significant need for mass-scale PV solar electricity, including markets throughout the United States and India. We closely evaluate and monitor the appropriate level of resources required to support such markets and their associated sales opportunities.
In addressing electricity demands, we are focused on providing utility-scale module offerings in markets that we believe have a significant need for mass-scale PV solar electricity, including markets primarily in the United States and India. We closely evaluate and monitor the appropriate level of resources required to support such markets and their associated sales opportunities.
Based on the current form factor of our modules, we expect to qualify for a credit of approximately 17 cents per watt for each module produced in the United States and sold to a third party. Accordingly, we expect the advanced manufacturing production credit will provide us with a significant source of funding throughout its 10-year period.
Based on the current form factor of our modules, we believe we qualify for a credit of approximately 17 cents per watt for each module produced in the United States and sold to a third party. Accordingly, we expect the advanced manufacturing production credit will provide us with a significant source of funding throughout its remaining period.
The low end of the range of reasonably possible losses reflects performance data from select samples of Series 7 modules compared to warranted levels of performance, along with expectations of favorable Series 7 module energy performance attributes, such as a superior temperature coefficient and spectral response, that may partially offset underperformance from the identified issues.
The low end of the range of reasonably possible losses reflects this settlement experience and considers performance data from select samples of Series 7 modules compared to warranted levels of performance, along with expectations of favorable Series 7 module energy performance attributes, such as a superior temperature coefficient and spectral response, that may partially offset underperformance from the identified issues.
This volume and transaction price exclude contracts with customers in India for which payment has not been fully secured. This volume includes contracts for the sale of 37.1 GW of solar modules with anticipated price adjustments for future module technology improvements, including enhancements to certain energy related attributes.
This volume and transaction price exclude contracts with customers in India for which payment has not been fully secured. This volume includes contracts for the sale of 23.2 GW of solar modules with anticipated price adjustments for future module technology improvements, including enhancements to certain energy related attributes.
If any future production lines do not achieve operating metrics similar to our existing production lines, our solar modules could perform below expectations and cause us to lose customers.” Results of Operations The following table sets forth our consolidated statements of operations as a percentage of net sales for the years ended December 31, 2024, 2023, and 2022: Years Ended December 31, 2024 2023 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 55.8 % 60.8 % 97.3 % Gross profit 44.2 % 39.2 % 2.7 % Selling, general and administrative 4.5 % 6.0 % 6.3 % Research and development 4.5 % 4.6 % 4.3 % Production start-up 2.0 % 2.0 % 2.8 % Litigation loss — % 1.1 % — % Gain on sales of businesses, net — % 0.2 % 9.7 % Operating income (loss) 33.2 % 25.8 % (1.0) % Foreign currency loss, net (0.6) % (0.6) % (0.6) % Interest income 2.1 % 2.9 % 1.3 % Interest expense, net (0.9) % (0.4) % (0.5) % Other (expense) income, net (0.3) % (0.9) % 1.2 % Income tax expense (2.7) % (1.8) % (2.0) % Net income (loss) 30.7 % 25.0 % (1.7) % Segment Overview Our primary segment is our modules business, which involves the design, manufacture, and sale of CdTe solar modules, which convert sunlight into electricity.
If any future production lines do not achieve operating metrics similar to our existing production lines, our solar modules could perform below expectations and cause us to lose customers.” Results of Operations The following table sets forth our consolidated statements of operations as a percentage of net sales for the years ended December 31, 2025, 2024, and 2023: Years Ended December 31, 2025 2024 2023 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 59.4 % 55.8 % 60.8 % Gross profit 40.6 % 44.2 % 39.2 % Selling, general and administrative 3.9 % 4.5 % 6.0 % Research and development 4.5 % 4.5 % 4.6 % Production start-up 1.7 % 2.0 % 2.0 % Litigation loss — % — % 1.1 % Gain on sales of businesses, net — % — % 0.2 % Operating income 30.6 % 33.2 % 25.8 % Foreign currency loss, net (0.7) % (0.6) % (0.6) % Interest income 1.6 % 2.1 % 2.9 % Interest expense, net (0.8) % (0.9) % (0.4) % Other expense, net (0.3) % (0.3) % (0.9) % Income tax expense (1.0) % (2.7) % (1.8) % Net income 29.3 % 30.7 % 25.0 % Segment Overview First Solar operates as one business, which involves the design, manufacture, and sale of CdTe solar modules, which convert sunlight into electricity.
We have and intend to continue applying for export licenses where appropriate, as well as continuing to implement other strategic alternatives such as leveraging our alternative suppliers to mitigate potential adverse impacts from these export controls. For more information about this development, see Item 1A.
We have applied for and intend to continue applying for export licenses where appropriate, as well as continuing to implement other strategic alternatives, such as sourcing from other suppliers to mitigate potential adverse impacts from these export controls. For more information about this development, see Item 1A.
As of December 31, 2024, a 10% increase in the expected future recycling costs per module would increase the liability by $14.0 million. Product Warranties. We provide a limited PV solar module warranty covering defects in materials and workmanship under normal use and service conditions for up to 12.5 years.
As of December 31, 2025, a 10% increase in the expected future recycling costs per module would increase the liability by $20.3 million. Product Warranties. We provide a limited PV solar module warranty covering defects in materials and workmanship under normal use and service conditions for up to 12.5 years.
For example, we currently expect to qualify for the advanced manufacturing production credit under Section 45X of the IRC, which provides certain specified benefits for solar modules and solar module components manufactured in the United States and sold to third parties.
We expect to qualify for the advanced manufacturing production credit under Section 45X of the IRC, which provides certain specified benefits for solar 64 Table of Contents modules and solar module components manufactured in the United States and sold to third parties.
As of December 31, 2024, we had $1.8 billion in cash, cash equivalents, and marketable securities compared to $2.1 billion as of December 31, 2023.
As of December 31, 2025, we had $2.9 billion in cash, cash equivalents, and marketable securities compared to $1.8 billion as of December 31, 2024.
In early February 2025, China announced that it would tighten export controls for five key minerals, including products containing tellurium; tellurium is one of the main components of our CdTe module production process. Although tellurium and products containing tellurium are sourced globally, China is a major global producer of tellurium and products containing tellurium.
In February 2025, China announced that it would tighten export controls for five key minerals, including products containing tellurium, which is one of the main components of our CdTe modules. Although tellurium and products containing tellurium are sourced globally, China is a major global producer of tellurium and products containing tellurium.
Based on these potential improvements, the contracted module volume as of December 31, 2024, the expected timing of such improvements being incorporated into our manufacturing process, and the expected timing of module deliveries, such adjustments, if realized, could result in additional revenue of up to $0.7 billion, the majority of which would be recognized between 2026 and 2028.
Based on these potential improvements, the contracted module volume as of December 31, 2025, the expected timing of such improvements being incorporated into our manufacturing process, and the expected timing of module deliveries, such adjustments, if realized, could result in additional revenue of up to $0.6 billion, the majority of which would be recognized in 2027 and 2028.
We base these estimates on our experience collecting and recycling solar modules and on certain assumptions regarding costs at the time the solar modules will be collected and recycled.
We base these estimates on our 67 Table of Contents experience collecting and recycling solar modules and on certain assumptions regarding costs at the time the solar modules will be collected and recycled.
We monitor our working capital to ensure we have adequate liquidity, both domestically and internationally. We intend to maintain appropriate debt levels based upon cash flow expectations, our overall cost of capital, and expected cash requirements for operations, including near-term construction activities and purchases of manufacturing equipment for our newest manufacturing facilities in the United States.
We monitor our working capital to ensure we have adequate liquidity, both domestically and internationally. We intend to maintain appropriate debt levels based upon cash flow expectations, our overall cost of capital, and expected cash requirements for operations, including near-term expansion activities in the United States.
The capital expenditures necessary to expand our capacity may be financed, in part, by cash on hand, advance payments from customers for module sales in future periods, the advanced manufacturing production credit described above, and/or near-term bridge financing instruments.
The capital expenditures necessary to expand our capacity may be financed, in part, by cash on hand, advance payments from customers for module sales in future periods, and the advanced manufacturing production credit described above.
During the year ended December 31, 2024, we recognized $997.6 million of Section 45X credits as a reduction to “Cost of sales.” For further information about certain key aspects of the IRA, see Item 1A.
During the year ended December 31, 2025, we recognized $1.6 billion of Section 45X credits as a reduction to “Cost of sales.” For further information about certain key aspects of the IRA, see Item 1A.
As of December 31, 2024 and 2023, $0.7 billion and $1.2 billion of our cash, cash equivalents, and marketable securities, respectively, were held by our foreign subsidiaries and were primarily based in U.S. dollar and Indian Rupee denominated holdings.
As of December 31, 2025 and 2024, $0.5 billion and $0.7 billion of our cash, cash equivalents, and marketable securities, respectively, were held by our foreign subsidiaries and were primarily based in U.S. dollar, Indian Rupee, and Euro denominated holdings.
In April 2024, the American Alliance for Solar Manufacturing Trade Committee, which includes First Solar, filed a set of AD/CVD petitions with the USDOC and the USITC to impose duties on certain unfairly traded solar products from Cambodia, Malaysia, Thailand, and Vietnam. For more information about this development, see Item 1A.
In April 2024, the American Alliance for Solar Manufacturing Trade Committee, which includes First Solar, filed a set of AD/CVD petitions with the USDOC and the USITC to impose duties on certain unfairly traded solar products from Cambodia, Malaysia, Thailand, and Vietnam.
The following table shows income tax expense for the years ended December 31, 2024, 2023, and 2022: Years Ended Change (Dollars in thousands) 2024 2023 2022 2024 over 2023 2023 over 2022 Income tax expense $ (114,294) $ (60,513) $ (52,764) $ (53,781) 89 % $ (7,749) 15 % Effective tax rate 8.1 % 6.8 % 613.7 % Our tax rate is affected by the advanced manufacturing production credit under Section 45X and recurring items such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions.
The following table shows income tax expense for the years ended December 31, 2025, 2024, and 2023: Years Ended Change (Dollars in thousands) 2025 2024 2023 2025 over 2024 2024 over 2023 Income tax expense $ (52,684) $ (114,294) $ (60,513) $ 61,610 (54) % $ (53,781) 89 % Effective tax rate 3.3 % 8.1 % 6.8 % Our tax rate is affected by the advanced manufacturing production credit under Section 45X and recurring items such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions.
Interest expense, net Interest expense, net is primarily comprised of interest incurred on debt. We may capitalize interest expense to our property, plant and equipment when such costs qualify for interest capitalization, which reduces the amount of net interest expense reported in any given period.
We may capitalize interest expense to our property, plant and equipment when such costs qualify for interest capitalization, which reduces the amount of net interest expense reported in any given period.
In addition to these price adjustments, certain of our contracts with customers may include favorable price adjustments associated with sales freight in excess of defined thresholds and/or favorable or unfavorable price adjustments associated with changes to (i) certain commodity prices, (ii) the module wattage committed for delivery, and (iii) the volume of modules sold that meet certain U.S. domestic content requirements.
In addition to these price adjustments, certain of our contracts with customers may include favorable or unfavorable price adjustments associated with changes to (i) sales freight in excess of defined thresholds, (ii) changes to certain commodity prices, (iii) the module wattage committed for delivery, (iv) the volume of modules sold that meet certain U.S. domestic content requirements, and (v) changes to certain tariff structures within a defined threshold, among other things.
Changes in these policies and regulations could adversely impact the competitive landscape of solar markets, which could reduce demand for our solar modules. Recent revisions or proposed changes to trade policy and government regulations include the following: • China.
Changes in these policies and regulations could adversely impact the competitive landscape of solar markets, which could reduce demand for our solar modules. Recent revisions or proposed changes to trade policy and government regulations include the following: • United States . In April 2025, the U.S.
Our worldwide cash may also be affected by changes to foreign government banking regulations that restrict our ability to move funds among various jurisdictions under certain circumstances, which could negatively impact our access to capital, resulting in an adverse effect on our liquidity and capital resources.
In addition, changes to foreign government banking regulations may restrict our ability to move funds among various jurisdictions under certain circumstances, which could negatively impact our access to capital, resulting in an adverse effect on our liquidity and capital resources.
As of December 31, 2024, we had entered into contracts with customers for the future sale of 68.5 GW of solar modules for an aggregate transaction price of $20.5 billion, which we expect to recognize as revenue through 2030 as we transfer control of the modules to our customers.
As of December 31, 2025, we had entered into contracts with customers for the future sale of 50.1 GW of solar modules for an aggregate transaction price of $15.0 billion, which we expect to recognize as revenue through 2030 as we transfer control of the modules to our customers.
“Risk Factors – We have received and expect to continue to receive certain financial benefits as a result of tax incentives provided by the Inflation Reduction Act of 2022.
“Risk Factors – We have received and expect to continue to receive certain financial benefits as a result of tax incentives enacted by the Inflation Reduction Act of 2022 and amended by the One Big Beautiful Bill Act of 2025.
The following table shows research and development expense for the years ended December 31, 2024, 2023, and 2022: Years Ended Change (Dollars in thousands) 2024 2023 2022 2024 over 2023 2023 over 2022 Research and development $ 191,375 $ 152,307 $ 112,804 $ 39,068 26 % $ 39,503 35 % % of net sales 4.5 % 4.6 % 4.3 % 56 Table of Contents Research and development expense in 2024 increased compared to 2023 primarily due to higher depreciation and maintenance costs resulting from our significant investments in R&D facilities and equipment and higher employee compensation expense resulting from an increase in headcount.
The following table shows research and development expense for the years ended December 31, 2025, 2024, and 2023: Years Ended Change (Dollars in thousands) 2025 2024 2023 2025 over 2024 2024 over 2023 Research and development $ 233,421 $ 191,375 $ 152,307 $ 42,046 22 % $ 39,068 26 % % of net sales 4.5 % 4.5 % 4.6 % Research and development expense in 2025 increased compared to 2024 primarily due to (i) higher employee compensation expense resulting from an increase in headcount, (ii) higher depreciation and maintenance costs resulting from our significant investments in R&D facilities and equipment, and (iii) higher utility costs.
As of December 31, 2024, a 100 basis point increase in the return rates across all series of module technology would increase our product warranty liability by $183.5 million.
As of December 31, 2025, a 10 basis point increase in the return rates across all series of module technology would increase our product warranty liability by $24.3 million.
“Business – Business Strategy.” Additionally, we warrant that our solar modules will produce at least 98% of their labeled power output rating during the first year, with the warranty coverage reducing by a degradation factor that is generally between 0.3% and 0.5%, depending on the module series, every year thereafter throughout the limited power output warranty period of up to 30 years.
Item 1. “Business – Business Strategy.” Additionally, we generally warrant that our solar modules will produce at least 98% of their labeled power output rating during the first year, with the warranty coverage 54 Table of Contents reducing by a degradation factor every year thereafter throughout the limited power output warranty period of up to 30 years.
For more information about certain 60 Table of Contents risks associated with the benefits available to us under the IRA, see Item 1A. “Risk Factors – “We have received and expect to continue to receive certain financial benefits as a result of tax incentives provided by the Inflation Reduction Act of 2022.
For more information about certain risks associated with the benefits available to us under the IRA, see Item 1A. “Risk Factors – We have received and expect to continue to receive certain financial benefits as a result of tax incentives enacted by the Inflation Reduction Act of 2022 and amended by the One Big Beautiful Bill Act of 2025.
ASU 2024-03 is effective for public companies for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The disclosure requirements will be applied on a prospective basis, with the option to apply retrospectively. We are currently evaluating the impact ASU 2024-03 will have on our associated disclosures.
ASU 2024-03 is effective for public companies for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, but we do not expect to do so. The disclosure requirements will be applied on a prospective basis, with the option to apply retrospectively.
During 2024, no customer accounted for 10% or more of our modules business net sales, and the majority of our solar modules were sold to developers and operators of systems in the United States. Substantially all of our modules business net sales during 2024 were denominated in U.S. dollars.
During 2025, Silicon Ranch Corporation and NextEra Energy each accounted for 10% or more of our net sales, and the majority of our solar modules were sold to developers and operators of systems in the United States. Substantially all of our net sales during 2025 were denominated in U.S. dollars.
We have the right to terminate certain of these agreements upon payment of specified termination penalties (which, in aggregate, are up to $475.1 million as of December 31, 2024 and decline over the remaining supply periods).
We have the right to terminate certain of these agreements upon payment of specified termination payments (which, in aggregate, are up to approximately $300 million as of December 31, 2025 and decline over the remaining supply 65 Table of Contents periods).
To the extent we offer extended payment terms to customers, fail to collect trade receivables in a timely manner, or face other challenges in managing our working capital, we may be required to use our Revolving Capital Facility or other temporary sources of funding.
“Debt.” To the extent we offer extended payment terms to customers, fail to collect trade receivables in a timely manner, or face other challenges in managing our working capital, we may be required to use our Credit Facility or other temporary sources of funding. As necessary, we also believe we will have adequate access to the capital markets.
Financing Activities The decrease in net cash provided by financing activities during 2024 was primarily due to repayment of debt in the current year. 62 Table of Contents Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures , which requires greater disaggregation of an entity’s income tax disclosures.
Financing Activities The increase in net cash used in financing activities during 2025 was primarily due to repayment of debt, partially offset by new borrowings under various debt agreements. 66 Table of Contents Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures , which requires greater disaggregation of an entity’s income tax disclosures.
Cash Flows The following table summarizes key cash flow activity for the years ended December 31, 2024, 2023, and 2022 (in thousands): 2024 2023 2022 Net cash provided by operating activities $ 1,217,999 $ 602,260 $ 873,369 Net cash used in investing activities (1,563,307) (472,791) (1,192,574) Net cash provided by financing activities 24,849 336,853 309,392 Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents (6,387) 5,285 47,438 Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents $ (326,846) $ 471,607 $ 37,625 Operating Activities The increase in net cash provided by operating activities during 2024 was primarily driven by proceeds from the sale of Section 45X tax credits and receipts from factoring of receivables, partially offset by an increase in payments made to suppliers compared to the prior year, and lower cash receipts from module sales in the current year.
Cash Flows The following table summarizes key cash flow activity for the years ended December 31, 2025, 2024, and 2023 (in thousands): 2025 2024 2023 Net cash provided by operating activities $ 2,057,105 $ 1,217,999 $ 602,260 Net cash used in investing activities (765,168) (1,563,307) (472,791) Net cash (used in) provided by financing activities (119,228) 24,849 336,853 Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents 3,099 (6,387) 5,285 Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents $ 1,175,808 $ (326,846) $ 471,607 Operating Activities The increase in net cash provided by operating activities during 2025 was primarily driven by higher cash receipts from module sales, including advance payments for future sales, higher proceeds from the sale of Section 45X tax credits, and higher receipts from factoring certain trade receivables, partially offset by higher payments made to suppliers.
Foreign currency loss, net Foreign currency loss, net consists of the net effect of gains and losses resulting from holding assets and liabilities and conducting transactions denominated in currencies other than our subsidiaries’ functional currencies.
“Commitments and Contingencies” to our consolidated financial statements for further information about this matter. Foreign currency loss, net Foreign currency loss, net consists of the net effect of gains and losses resulting from holding assets and liabilities and conducting transactions denominated in currencies other than our subsidiaries’ functional currencies.
For example, in December 2024, the ALMM was amended to require nearly all solar development projects to use PV modules that contain domestically manufactured solar cells, which is expected to be effective for such projects completed on or after June 2026. For more information about the ALMM, see Item 1A.
For example, in December 2024, the ALMM was amended to require nearly all solar development projects to use PV modules that contain domestically manufactured solar cells, which is expected to be effective for such projects completed on or after June 2026; in August 2025, the relevant list of qualifying entities was released, which included First Solar as an approved manufacturer.
Accordingly, in arriving at the range of reasonably possible losses, we estimated that approximately two-thirds of Series 7 modules sold as of December 31, 2024 may have been impacted, based on the Series 7 production schedule and the dates of when the underlying manufacturing issues were addressed at each affected facility.
Accordingly, in arriving at the range of reasonably possible losses, we estimated that approximately two-thirds of Series 7 modules sold prior to December 31, 2024 may have been impacted, based on the Series 7 production schedule and the dates of when the underlying manufacturing issues were addressed at each affected facility. 68 Table of Contents During the year ended December 31, 2025, we settled certain of our obligations related to these issues and continued to engage in settlement discussions with various additional customers.
Demand for our PV solar module offerings depends, in part, on market factors outside our control. For example, many governments have proposed or enacted policies or incentive programs intended to encourage renewable energy investments to achieve decarbonization objectives and/or establish greater energy independence.
For example, many governments have proposed or enacted policies or incentive programs intended to encourage renewable energy investments to achieve decarbonization objectives and/or establish greater energy independence.
In December 2023, we entered into two agreements with Fiserv for the sale of $687.2 million of Section 45X tax credits we generated during 2023, for aggregate cash proceeds of $659.7 million. We received the full cash proceeds during 2024.
In October 2025, we entered into two agreements for the sale of $699.7 million of Section 45X tax credits we generated during 2025 for aggregate cash proceeds of $668.2 million.
Investing Activities The increase in net cash used in investing activities during 2024 was primarily due to lower proceeds from the sales and maturities of marketable securities in the current year and higher purchases of property, plant and equipment compared to the prior year for our U.S. and Indian facilities, partially offset by lower purchases of marketable securities in the current year.
Investing Activities The decrease in net cash used in investing activities during 2025 was primarily due to lower purchases of property, plant and equipment for our manufacturing facilities in the United States and India and higher net proceeds from sales and maturities of marketable securities.
The following table shows interest income for the years ended December 31, 2024, 2023, and 2022: Years Ended Change (Dollars in thousands) 2024 2023 2022 2024 over 2023 2023 over 2022 Interest income $ 89,090 $ 97,667 $ 33,284 $ (8,577) (9) % $ 64,383 193 % Interest income during 2024 decreased compared to 2023 primarily due to lower interest rates on cash and cash equivalents and lower average balances of time deposits, partially offset by increased interest earned on trade receivables.
The following table shows interest income for the years ended December 31, 2025, 2024, and 2023: Years Ended Change (Dollars in thousands) 2025 2024 2023 2025 over 2024 2024 over 2023 Interest income $ 81,762 $ 89,090 $ 97,667 $ (7,328) (8) % $ (8,577) (9) % Interest income during 2025 decreased compared to 2024 primarily due to lower average balances of time deposits and marketable securities.
For example, we currently expect to qualify for the advanced manufacturing production credit under Section 45X of the IRC, which provides certain specified benefits for solar modules and solar module components manufactured in the United States and sold to third parties. See Note 9. “Government Grants” and Note 18.
We expect to qualify for the advanced manufacturing production credit under Section 45X of the IRC, which provides certain specified benefits for solar modules and solar module components manufactured in the United States and sold to third parties. However, the current U.S. presidential administration and control of the U.S. Congress present uncertainty as to the continued availability of certain benefits.
The following table shows production start-up expense for the years ended December 31, 2024, 2023, and 2022: Years Ended Change (Dollars in thousands) 2024 2023 2022 2024 over 2023 2023 over 2022 Production start-up $ 84,492 $ 64,777 $ 73,077 $ 19,715 30 % $ (8,300) (11) % % of net sales 2.0 % 2.0 % 2.8 % During 2024, we incurred production start-up expense primarily for our fourth and fifth manufacturing facilities in the U.S. and also for a limited commercial production run of modules employing our CuRe technology.
The following table shows production start-up expense for the years ended December 31, 2025, 2024, and 2023: Years Ended Change (Dollars in thousands) 2025 2024 2023 2025 over 2024 2024 over 2023 Production start-up $ 86,295 $ 84,492 $ 64,777 $ 1,803 2 % $ 19,715 30 % % of net sales 1.7 % 2.0 % 2.0 % 61 Table of Contents During 2025 and 2024, we incurred production start-up expense primarily for our fifth and fourth manufacturing facilities in the United States, respectively.
As of December 31, 2024, such funds were comprised of restricted marketable securities of 61 Table of Contents $199.1 million and associated restricted cash and cash equivalents balances of $5.0 million. As of December 31, 2024, our module collection and recycling liability was $134.4 million.
As of December 31, 2025, such funds were comprised of restricted marketable securities of $217.2 million and associated restricted cash and cash equivalents of $6.9 million. As of December 31, 2025, our module collection and recycling liability was $146.0 million.
Any future manufacturing issues, including any additional commitment made by us to remediate the affected modules beyond our limited warranty, could also adversely impact our reputation, financial position, operating results, and cash flows. We may also be subject to certain other risks and uncertainties surrounding module performance as described in Item 1A.
These manufacturing issues may also increase product warranty claims by our customers to resolve the premature power loss in affected modules. Any future manufacturing issues, including any additional commitment made by us to remediate the affected modules beyond our limited warranty, could also adversely impact our reputation, financial position, operating results, and cash flows.
We utilize a variety of tax planning and financing strategies in an effort to ensure that our worldwide cash is available in the locations in which it is needed. If certain international funds were needed for our operations in the United States, we may be required to accrue and pay certain U.S. and foreign taxes to repatriate such funds.
If certain international funds were needed for our operations in the United States, we may be required to accrue and pay certain U.S. and foreign taxes to repatriate such funds.
The high end of the range of reasonably possible losses excludes any such favorable energy performance expectations from our advanced module technology and includes an estimate of incremental module underperformance beyond that exhibited in our samples of module performance data. 64 Table of Contents Given the inherent limitations of sampling combined with the variability of module performance at different field installation sites, no individual amount within the range represented a better estimate than any other amount.
The high end of the range of reasonably possible losses excludes any such favorable energy performance expectations from our advanced module technology and includes an estimate of incremental module underperformance beyond that exhibited in our samples of module performance data.
At this time, it is uncertain to what extent we may qualify for such incentives. 51 Table of Contents Demand for our solar energy solutions also depends on domestic or international trade policies and government regulations, which may be proposed, revised, and/or enacted across short- and long-term time horizons with varying degrees of impact to our net sales, profit, and manufacturing operations.
If these financial benefits vary significantly from our assumptions, our business, financial condition, and results of operations could be adversely affected.” 55 Table of Contents Demand for our PV solar modules also depends on domestic or international trade policies and government regulations, which may be proposed, revised, and/or enacted across short- and long-term time horizons with varying degrees of impact to our net sales, profit, and manufacturing operations.
Treasury Department, (ii) subsequent amendments to or interpretations of the law, and/or (iii) future laws or regulations rendering certain provisions of the IRA less effective or ineffective, in whole or in part, could result in material adverse changes to the benefits we have recognized and expect to recognize.
If these financial benefits vary significantly from our assumptions, our business, financial condition, and results of operations could be adversely affected.” Any modifications to the law or its effects arising, for example, through (i) subsequent amendments to or interpretations of the law, and/or (ii) future laws or regulations rendering certain provisions of the IRA less effective or ineffective, in whole or in part, could result in material adverse changes to the benefits we have recognized and expect to recognize.
This decrease was primarily driven by purchases of property, plant and equipment for our U.S. and Indian facilities and various operating expenditures, partially offset by proceeds from the sale of Section 45X tax credits, net cash receipts from module sales, and receipts from factoring of receivables.
This increase was primarily driven by (i) proceeds from the sale of Section 45X tax credits and (ii) higher cash receipts from module sales, including advance payments for future sales, partially offset by (iii) increases in payments made to suppliers, (iv) purchases of property, plant and equipment for our U.S. facilities, (v) various operating expenditures, (vi) certain advance payments for raw materials, and (vii) repayment of debt.
This additional capacity, and any other potential investments to add to or otherwise modify our existing manufacturing capacity in response to market demand and competition, may require significant internal and possibly external sources of capital, and may be subject to certain risks and uncertainties described in Item 1A.
“Risk Factors – Problems with product quality or performance may cause us to incur significant and/or unexpected contractual damages and/or warranty and related expenses, damage our market reputation, and prevent us from maintaining or increasing our market share.” 58 Table of Contents We are in the process of expanding our domestic manufacturing capacity; this additional capacity, and any other potential investments to add to or otherwise modify our existing manufacturing capacity in response to market demand and competition, may require significant internal and possibly external sources of capital, and may be subject to certain risks and uncertainties described in Item 1A.
President issued the executive order entitled, “Unleashing American Energy,” which, among other things, indicated a lack of support for federal funding of certain solar and solar-related projects. For more information about certain risks associated with the benefits available to us under the IRA, see Item 1A.
For example, on January 20, 2025, the U.S. President issued the executive order entitled, “Unleashing American Energy,” which, among other things, indicated a lack of support for federal funding of certain solar and solar-related projects. Further, on July 4, 2025, the U.S.
The following table shows other (expense) income, net for the years ended December 31, 2024, 2023, and 2022: Years Ended Change (Dollars in thousands) 2024 2023 2022 2024 over 2023 2023 over 2022 Other (expense) income, net $ (13,326) $ (29,145) $ 31,189 $ 15,819 (54) % $ (60,334) N/A Other expense, net decreased in 2024 compared to 2023 primarily due to the impairment of a strategic investment in 2023.
The following table shows other expense, net for the years ended December 31, 2025, 2024, and 2023: Years Ended Change (Dollars in thousands) 2025 2024 2023 2025 over 2024 2024 over 2023 Other expense, net $ (15,013) $ (13,326) $ (29,145) $ (1,687) 13 % $ 15,819 (54) % Other expense, net for the year ended December 31, 2025 was consistent with the prior year.
Although we compete in markets that do not require solar-specific government subsidies or incentive programs, such incentives continue to influence the demand for PV solar energy around the world. For example, the financial incentives provided by the IRA are expected to increase both the demand for, and the domestic manufacturing of, solar modules in the United States.
Although we compete in markets that do not require solar-specific government subsidies or incentive programs, such incentives continue to significantly influence the demand for PV solar energy around the world. Further, our net sales and profits remain subject to variability based on the availability and size of government subsidies and economic incentives.
Income tax expense increased by $53.8 million during 2024 compared to 2023 primarily due to higher pretax income in the current year and the impact of taxes due on U.S. inclusions in taxable income related to global intangible low-taxed income (“GILTI”), partially offset by the beneficial effects of tax law associated with the IRA and the long-term tax holiday in Malaysia.
Income tax expense decreased by $61.6 million during 2025 compared to 2024 primarily due to the beneficial 63 Table of Contents effects of tax law associated with the IRA, partially offset by a lower relative benefit from the long-term tax holiday in Malaysia and higher pretax income in the current year.
The following table shows cost of sales by reportable segment for the years ended December 31, 2024, 2023, and 2022: Years Ended Change (Dollars in thousands) 2024 2023 2022 2024 over 2023 2023 over 2022 Modules $ 2,342,045 $ 2,019,388 $ 2,312,881 $ 322,657 16 % $ (293,493) (13) % Other 6,380 (1,465) 236,580 7,845 N/A (238,045) N/A Cost of sales $ 2,348,425 $ 2,017,923 $ 2,549,461 $ 330,502 16 % $ (531,538) (21) % % of net sales 55.8 % 60.8 % 97.3 % Cost of sales increased $330.5 million, or 16%, and decreased 5.0 percentage points as a percent of net sales when comparing 2024 with 2023.
The following table shows cost of sales for the years ended December 31, 2025, 2024, and 2023: Years Ended Change (Dollars in thousands) 2025 2024 2023 2025 over 2024 2024 over 2023 Cost of sales $ 3,099,037 $ 2,348,425 $ 2,017,923 $ 750,612 32 % $ 330,502 16 % % of net sales 59.4 % 55.8 % 60.8 % Cost of sales increased $750.6 million, or 32%, and increased 3.6 percentage points as a percent of net sales when comparing 2025 with 2024.
Pursuant to such policy, we place our investments with a diversified group of high-quality financial institutions and limit the concentration of such investments with any one counterparty. We place significant emphasis on the creditworthiness of financial institutions and assess the credit ratings and financial health of our counterparty financial institutions when making investment decisions.
Our investment policy seeks to preserve our investment principal and maintain adequate liquidity to meet our cash flow requirements, while at the same time optimizing the return on our investments. Pursuant to such policy, we place our investments with a diversified group of high-quality financial institutions and limit the concentration of such investments with any one counterparty.
The following table shows selling, general and administrative expense for the years ended December 31, 2024, 2023, and 2022: Years Ended Change (Dollars in thousands) 2024 2023 2022 2024 over 2023 2023 over 2022 Selling, general and administrative $ 188,262 $ 197,622 $ 164,724 $ (9,360) (5) % $ 32,898 20 % % of net sales 4.5 % 6.0 % 6.3 % Selling, general and administrative expense in 2024 decreased compared to 2023 primarily due to (i) lower employee bonus expense and lower share-based compensation expense, and (ii) lower costs associated with the implementation of a new global enterprise resource planning system as compared to the prior year, partially offset by (iii) higher employee compensation expense due to an increase in headcount, (iv) higher costs for certain legal matters, and (v) higher consulting fees.
The following table shows selling, general and administrative expense for the years ended December 31, 2025, 2024, and 2023: Years Ended Change (Dollars in thousands) 2025 2024 2023 2025 over 2024 2024 over 2023 Selling, general and administrative $ 203,759 $ 188,262 $ 197,622 $ 15,497 8 % $ (9,360) (5) % % of net sales 3.9 % 4.5 % 6.0 % Selling, general and administrative expense in 2025 increased compared to 2024 primarily due to (i) higher expected credit losses from an increase in the aging of certain accounts receivable and (ii) higher costs for certain legal matters.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our competitors reduce module pricing to levels near or below their manufacturing costs, or are able to operate at minimal or negative operating margins for sustained periods of time, or if global demand for PV modules decreases relative to installed production capacity, our business, financial condition, and results of operations could be adversely affected. • The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or other public policies could negatively impact demand and/or price levels for our solar modules.
Biggest changeIf our competitors maintain module pricing at levels near or below their manufacturing costs, or are able to operate at minimal or negative operating margins for sustained periods of time, or if global demand for PV modules decreases relative to installed production capacity, our business, financial condition, and results of operations could be adversely affected. • The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, have, and in the future could, negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results. • The loss of any of our large customers, or the inability of our customers and counterparties to perform under their contracts with us, including through terminations by customers of any contract in part or in full, has reduced and, in the future, could significantly reduce our net sales and negatively impact our results of operations.
Refer also to the Risk Factors entitled, “Our substantial international operations subject us to a number of risks, including unfavorable political, regulatory, labor, and tax conditions in the United States and/or foreign countries,” “The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results,” and “We may be unable to generate sufficient cash flows or have access to the sources of external financing necessary to fund planned capital investments in manufacturing capacity and product development.” Risks Related to Our Operations, Manufacturing, and Technology We face intense competition from manufacturers of crystalline silicon solar modules; if global supply exceeds global demand, it could lead to a further reduction in the average selling price for PV solar modules , which could reduce our net sales and adversely affect our results of operations.
Refer also to the Risk Factors entitled, “Our substantial international operations subject us to a number of risks, including unfavorable political, regulatory, labor, and tax conditions in the United States and/or foreign countries,” “The modification, reduction, elimination, or expiration of government subsidies, economic incentives, eligibility limitations, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, have, and in the future could, negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results,” and “We may be unable to generate sufficient cash flows or have access to the sources of external financing necessary to fund planned capital investments in manufacturing capacity and product development.” Risks Related to Our Operations, Manufacturing, and Technology We face intense competition from manufacturers of crystalline silicon solar modules; if global supply exceeds global demand, it could lead to a further reduction in the average selling price for PV solar modules , which could reduce our net sales and adversely affect our results of operations.
However, in February 2025, the Indian government began imposing import duty tariffs of 20% each on solar modules and cells and levied additional tax on certain commercial agricultural production, which tax included of 20% on solar modules and 7.5% on solar cells. Therefore, the aggregate impact on the import of solar modules and cells is 40% and 27.5%, respectively.
However, in February 2025, the Indian government began imposing import duty tariffs of 20% each on solar modules and cells and levied additional tax on certain commercial agricultural production, which included a tax of 20% on solar modules and 7.5% on solar cells. Therefore, the aggregate impact on the import of solar modules and cells is 40% and 27.5%, respectively.
We face numerous difficulties in executing on our long-term strategic plans, particularly in new foreign jurisdictions, including the following: • difficulty in competing against companies who may have greater financial resources and/or a more effective or established localized business presence and/or an ability to operate with minimal or negative operating margins for sustained periods of time; • difficulty in competing successfully with other technologies, such as crystalline silicon, hybrid perovskites, tandem solar cells, or other thin films; • difficulty in accurately prioritizing geographic markets that we can most effectively and profitably serve with our solar module offerings, including miscalculations in overestimating or underestimating addressable market demand; • adverse public policies in countries we operate in and/or are pursuing, including local content requirements, the imposition of trade remedies, the removal of trade barriers, the imposition of tariffs, or capital investment requirements; • business climates, such as that in China, that may have the effect of putting foreign companies at a disadvantage relative to domestic companies; • unstable or adverse economic, social, and/or operating environments, including social unrest, currency, inflation, and interest rate uncertainties; • the possibility of applying an ineffective commercial approach to targeted markets, including product offerings that may not meet market needs; 22 Table of Co n tents • difficulty in generating sufficient sales volumes at economically sustainable profitability levels; • difficulty in timely identifying, attracting, training, and retaining qualified sales, technical, and other talent; • difficulty in realizing the potential benefits of strategic acquisitions and investments; • difficulty in maintaining proper controls and procedures as we expand our business operations in terms of geographical reach, including transitioning certain business functions to low-cost geographies, with any material control failure potentially leading to reputational damage and loss of confidence in our financial reporting; • difficulty in competing successfully for market share in overall solar markets as a result of the success of companies participating in other solar segments in which we do not have significant historical experience, such as residential; • difficulty in establishing and implementing a commercial and operational approach adequate to address the specific needs of the markets we are pursuing; • difficulty in identifying effective local partners and developing any necessary partnerships with local businesses on commercially acceptable terms; and • difficulty in balancing market demand and manufacturing production in an efficient and timely manner, potentially causing our manufacturing capacity to be constrained in some future periods or over-supplied in others.
We face numerous difficulties in executing on our long-term strategic plans, particularly in new foreign jurisdictions, including the following: • difficulty in competing against companies who may have greater financial resources and/or a more effective or established localized business presence and/or an ability to operate with minimal or negative operating margins for sustained periods of time; • difficulty in competing successfully with other technologies, such as crystalline silicon, hybrid perovskites, tandem solar cells, or other thin films; • difficulty in accurately prioritizing geographic markets that we can most effectively and profitably serve with our solar module offerings, including miscalculations in overestimating or underestimating addressable market demand; • adverse public policies in countries we operate in and/or are pursuing, including local content requirements, the imposition of trade remedies, the removal of trade barriers, the imposition of tariffs, or capital investment requirements; • business climates, such as that in China, that may have the effect of putting foreign companies at a disadvantage relative to domestic companies; • unstable or adverse economic, social, and/or operating environments, including social unrest, currency, inflation, and interest rate uncertainties; • the possibility of applying an ineffective commercial approach to targeted markets, including product offerings that may not meet market needs; 24 Table of Contents • difficulty in generating sufficient sales volumes at economically sustainable profitability levels; • difficulty in timely identifying, attracting, training, and retaining qualified sales, technical, and other talent; • difficulty in realizing the potential benefits of strategic acquisitions and investments; • difficulty in maintaining proper controls and procedures as we expand our business operations in terms of geographical reach, including transitioning certain business functions to low-cost geographies, with any material control failure potentially leading to reputational damage and loss of confidence in our financial reporting; • difficulty in competing successfully for market share in overall solar markets as a result of the success of companies participating in other solar segments in which we do not have significant historical experience, such as residential; • difficulty in establishing and implementing a commercial and operational approach adequate to address the specific needs of the markets we are pursuing; • difficulty in identifying effective local partners and developing any necessary partnerships with local businesses on commercially acceptable terms; and • difficulty in balancing market demand and manufacturing production in an efficient and timely manner, potentially causing our manufacturing capacity to be constrained in some future periods or over-supplied in others.
If any of the other assumptions used in estimating our module warranties prove incorrect, we may also be required to accrue additional expenses, which could adversely impact our financial position, operating results, and cash flows.
If any of the assumptions used in estimating our module warranties prove incorrect, we may also be required to accrue additional expenses, which could adversely impact our financial position, operating results, and cash flows.
Risks inherent to international operations include, but are not limited to, the following: • difficulty in enforcing agreements in foreign legal systems; • varying degrees of protection afforded to foreign investments in the countries in which we operate and irregular interpretations and enforcement of laws and regulations in such jurisdictions; • foreign countries may impose additional income and withholding taxes or otherwise tax our foreign operations, impose tariffs, or adopt other controls or restrictions on foreign trade and investment, including currency exchange controls; • fluctuations in exchange rates may affect demand for our products and services and may adversely affect our profitability and cash flows in U.S. dollars to the extent that our net sales or our costs are denominated in a foreign currency and the cost associated with hedging the U.S. dollar equivalent of such exposures is prohibitive; the longer the duration of such foreign currency exposure, the greater the risk; • anti-corruption compliance issues, including the costs related to the mitigation of such risk; • risk of nationalization or other expropriation of private enterprises; • changes in general economic and political conditions in the countries in which we operate, including changes in government incentive provisions and government program funding; • unexpected adverse changes in U.S. or foreign laws or regulatory requirements, including those with respect to environmental protection, import or export duties, tariffs, and quotas; • opaque approval processes in which the lack of transparency may cause delays and increase the uncertainty of project approvals; • difficulty in staffing and managing widespread operations; • difficulty in repatriating earnings; • difficulty in negotiating a successful collective bargaining agreement in applicable foreign jurisdictions; 31 Table of Co n tents • trade barriers such as export requirements, tariffs, taxes, local content requirements, anti-dumping regulations and requirements, and other restrictions and expenses, which could increase the effective price of our solar modules and make us less competitive in some countries or increase the costs to perform under our existing contracts; and • difficulty of, and costs relating to, compliance with the different commercial and legal requirements of the overseas countries in which we offer and sell our solar modules.
Risks inherent to international operations include, but are not limited to, the following: • difficulty in enforcing agreements in foreign legal systems; • varying degrees of protection afforded to foreign investments in the countries in which we operate and irregular interpretations and enforcement of laws and regulations in such jurisdictions; • foreign countries may impose additional income and withholding taxes or otherwise tax our foreign operations, impose tariffs, or adopt other controls or restrictions on foreign trade and investment, including currency exchange controls; 33 Table of Contents • fluctuations in exchange rates may affect demand for our products and services and may adversely affect our profitability and cash flows in U.S. dollars to the extent that our net sales or our costs are denominated in a foreign currency and the cost associated with hedging the U.S. dollar equivalent of such exposures is prohibitive; the longer the duration of such foreign currency exposure, the greater the risk; • anti-corruption compliance issues, including the costs related to the mitigation of such risk; • risk of nationalization or other expropriation of private enterprises; • changes in general economic and political conditions in the countries in which we operate, including changes in government incentive provisions and government program funding; • unexpected adverse changes in U.S. or foreign laws or regulatory requirements, including those with respect to environmental protection, import or export duties, tariffs, and quotas; • opaque approval processes in which the lack of transparency may cause delays and increase the uncertainty of project approvals; • difficulty in staffing and managing widespread operations; • difficulty in repatriating earnings; • difficulty in negotiating a successful collective bargaining agreement in applicable foreign jurisdictions; • trade barriers such as export requirements, tariffs, taxes, local content requirements, anti-dumping regulations and requirements, and other restrictions and expenses, which could increase the effective price of our solar modules and make us less competitive in some countries or increase the costs to perform under our existing contracts; and • difficulty of, and costs relating to, compliance with the different commercial and legal requirements of the overseas countries in which we offer and sell our solar modules.
Our ability to effectively manage our cost per watt or successfully expand production capacity is subject to significant risks and uncertainties, including the following: • failure to reduce manufacturing material, labor, or overhead costs; • an inability to increase production throughput or the average power output per module, or minimize manufacturing yield losses; • failure to effectively manage the availability and cost of logistics services associated with the procurement of raw materials or equipment used in our manufacturing process and the shipping, handling, storage, and distribution of our modules; • delays and cost overruns as a result of a number of factors, many of which may be beyond our control, such as our inability to secure economical contracts with equipment vendors; • our custom-built equipment taking longer and costing more to manufacture than expected and not operating as designed; • delays or denial of required approvals by relevant government authorities; 28 Table of Co n tents • an inability to hire qualified staff; • capital expenditures exceeding our initial estimates with respect to expanding and building our manufacturing and R&D facilities; • difficulty in balancing market demand and manufacturing production in an efficient and timely manner, potentially causing our manufacturing capacity to be constrained in some future periods or over-supplied in others; and • incurring manufacturing asset write-downs, write-offs, and other charges and costs, which may be significant, during those periods in which we idle, slow down, shut down, or otherwise adjust our manufacturing capacity.
Our ability to effectively manage our cost per watt or successfully expand production capacity is subject to significant risks and uncertainties, including the following: • failure to reduce manufacturing material, labor, or overhead costs; • an inability to increase production throughput or the average power output per module, or minimize manufacturing yield losses; • failure to effectively manage the availability and cost of logistics services associated with the procurement of raw materials or equipment used in our manufacturing process and the shipping, handling, storage, and distribution of our modules; • delays and cost overruns as a result of a number of factors, many of which may be beyond our control, such as our inability to secure economical contracts with equipment vendors; • our custom-built equipment taking longer and costing more to manufacture than expected and not operating as designed; 30 Table of Contents • delays or denial of required approvals by relevant government authorities; • an inability to hire qualified staff; • capital expenditures exceeding our initial estimates with respect to expanding and building our manufacturing and R&D facilities; • difficulty in balancing market demand and manufacturing production in an efficient and timely manner, potentially causing our manufacturing capacity to be constrained in some future periods or over-supplied in others; and • incurring manufacturing asset write-downs, write-offs, and other charges and costs, which may be significant, during those periods in which we idle, slow down, shut down, or otherwise adjust our manufacturing capacity.
If our competitors reduce module pricing to levels near or below their manufacturing costs, or are able to operate at minimal or negative operating margins for sustained periods of time, or if global demand for PV modules decreases relative to installed production capacity, our business, financial condition, and results of operations could be adversely affected.
If our competitors maintain module pricing at levels near or below their manufacturing costs, or are able to operate at minimal or negative operating margins for sustained periods of time, or if global demand for PV modules decreases relative to installed production capacity, our business, financial condition, and results of operations could be adversely affected.
For additional information, see the Risk Factor entitled, “The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” In addition, we believe that a significant percentage of our customers install systems as an investment, funding the initial capital expenditure through a combination of equity and debt.
For additional information, see the Risk Factor entitled, “The modification, reduction, elimination, or expiration of government subsidies, economic incentives, eligibility limitations, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, have, and in the future could, negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” In addition, we believe that a significant percentage of our customers install systems as an investment, funding the initial capital expenditure through a combination of equity and debt.
For additional information about global tariffs and trade developments, see the Risk Factor entitled, “The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” Additionally, an increase in price levels generally, such as inflation related to the cost of raw materials, key manufacturing equipment, labor, and logistics services, could adversely impact our profitability.
For additional information about global tariffs and trade developments, see the Risk Factor entitled, “The modification, reduction, elimination, or expiration of government subsidies, economic incentives, eligibility limitations, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, have, and in the future could, negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.” Additionally, an increase in price levels generally, such as inflation related to the cost of raw materials, key manufacturing equipment, labor, and logistics services, could adversely impact our profitability.
We regularly file patent applications to protect certain inventions arising from our R&D and are currently pursuing such patent applications in various countries in accordance with our strategy for intellectual property in that jurisdiction. Our existing patents and future patents could be challenged, invalidated, circumvented, or rendered unenforceable.
We regularly file patent applications to protect certain inventions arising from our R&D and are currently pursuing such patent applications in various countries in accordance with our strategy for intellectual property. Our existing patents and future patents could be challenged, invalidated, circumvented, or rendered unenforceable.
Exporters of tellurium and related products may be required to obtain a license from the Chinese Ministry of Commerce, which may be difficult, costly, and time-consuming, and our suppliers may not be successful in obtaining necessary export licenses in a timely manner or at all.
Exporters of tellurium and related products are generally required to obtain a license from the Chinese Ministry of Commerce, which may be difficult, costly, and time-consuming, and our suppliers may not be successful in obtaining necessary export licenses in a timely manner or at all.
Treasury Department, or the courts, (iii) future laws or regulations rendering certain provisions of the IRA less effective or ineffective, in whole or in part, and/or (iv) changes to U.S. government priorities, policies, and/or initiatives as a result of the new presidential administration and control of the U.S.
Treasury Department, or the courts, (iii) future laws or regulations rendering certain provisions of the IRA less effective or ineffective, in whole or in part, and/or (iv) changes to U.S. government priorities, policies, and/or initiatives as a result of the current U.S. presidential administration and control of the U.S.
Finally, many of our competitors are promoting modules with larger overall area based on the use of larger silicon wafers. While the transition to such larger wafers would increase nameplate wattage, we believe the associated production cost would not improve significantly.
Finally, many of our competitors are promoting modules with larger overall area based on the use of larger silicon wafers. While the transition to such larger wafers would increase nameplate power, we believe the associated production cost would not improve significantly.
For example, we currently expect to qualify for the advanced manufacturing production credit under Section 45X of the IRC, which provides certain specified benefits for solar modules and certain solar module components manufactured in the United States and sold to third parties.
We expect to qualify for the advanced manufacturing production credit under Section 45X of the IRC, which provides certain specified benefits for solar modules and solar module components manufactured in the United States and sold to third parties.
The modification, reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, could negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.
The modification, reduction, elimination, or expiration of government subsidies, economic incentives, eligibility limitations, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or the impact of other public policies, such as tariffs or other trade remedies imposed on solar cells and modules or related raw materials or equipment, have, and in the future could, negatively impact demand and/or price levels for our solar modules and limit our growth or lead to a reduction in our net sales or increase our costs, thereby adversely impacting our operating results.
If a court were to find the exclusive forum provisions in our Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could adversely affect our results of operations. Item 1B. Unresolved Staff Comments None.
If a court were to find the exclusive forum provisions in our Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could adversely affect our results of operations. 44 Table of Contents Item 1B. Unresolved Staff Comments None.
While the expected potential of the markets we are targeting is significant, policy promulgation and market development are especially vulnerable to governmental inertia, political instability, the imposition or lowering of trade remedies and other trade barriers, geopolitical risk, fossil fuel subsidization, potentially stringent localization requirements, and limited available infrastructure.
While the expected potential of the markets we are targeting is significant, policy promulgation and market development are especially vulnerable to governmental inertia, political instability, changing government policy and priorities, the imposition or lowering of trade remedies and other trade barriers, geopolitical risk, fossil fuel subsidization, potentially stringent localization requirements, and limited available infrastructure.
While we have instituted security measures and procured insurance to mitigate the likelihood and impact of a cybersecurity incident and other events, including information and security breaches, there is no assurance that these measures, or those of the third parties with which we do business, will be adequate in the future.
While we have instituted security measures and procured insurance to mitigate the likelihood and impact of a cybersecurity incident and other events, including information and security breaches, there is no assurance that these measures, or those of the third parties with which we do 38 Table of Contents business, will be adequate in the future.
Although we carry business interruption insurance coverage and typically have provisions in our contracts that protect us in certain events, our coverage may not be adequate to compensate us for all losses that may occur as a direct or indirect result of weather events or natural disasters.
Although we carry business interruption insurance coverage and typically have provisions in our contracts that protect us in 39 Table of Contents certain events, our coverage may not be adequate to compensate us for all losses that may occur as a direct or indirect result of weather events or natural disasters.
Additionally, although we require some form of payment security from our customers, such as cash deposits, parent guarantees, bank guarantees, surety bonds, or commercial letters of credit, in the event the providers of such payment security fail to perform their obligations, our operating results could be adversely impacted. 21 Table of Co n tents An increase in interest rates or tightening of the supply of capital in the global financial markets (including a reduction in total tax equity availability) could make it difficult for customers to finance the cost of a PV solar power system and could reduce the demand for our modules and/or lead to a reduction in the average selling price for our modules.
Additionally, although we require some form of payment security from our customers, such as cash deposits, parent guarantees, bank guarantees, surety bonds, or commercial letters of credit, in the event the providers of such payment security fail to perform their obligations, our operating results could be adversely impacted. 23 Table of Contents An increase in interest rates or tightening of the supply of capital in the global financial markets (including a reduction in total tax equity availability) could make it difficult for customers to finance the cost of a PV solar power system and could reduce the demand for our modules and/or lead to a reduction in the average selling price for our modules.
As a result, the equipment is not readily available from multiple vendors and would be difficult to repair or replace if it were to become delayed, damaged, or stop working. If any piece of equipment fails, production along the entire production line could be interrupted.
As a result, the equipment is not readily available from multiple vendors and would be difficult to repair or replace if it were to become delayed, damaged, or stop working. If any piece of equipment fails, production along 28 Table of Contents the entire production line could be interrupted.
Although we have implemented policies, procedures, and, in certain cases, contractual arrangements designed to facilitate compliance with applicable privacy and data security laws and standards, any inability or perceived inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable privacy and data security laws, regulations, and policies, could result in additional fines, costs, and liabilities to us, damage our reputation, inhibit sales, and adversely affect our business.
Although we have implemented policies, procedures, and, in certain cases, contractual arrangements designed to facilitate compliance with applicable privacy and data security laws and standards, any inability or perceived inability to 43 Table of Contents adequately address privacy and security concerns, even if unfounded, or comply with applicable privacy and data security laws, regulations, and policies, could result in additional fines, costs, and liabilities to us, damage our reputation, inhibit sales, and adversely affect our business.
While our vision is to lead the world’s sustainable energy future through solar technology that is eco-efficient and socially responsible, if our ESG practices do not meet investor or other industry stakeholder expectations, which continue to evolve, we may incur additional costs and our brand, business, and ability to attract and retain qualified employees may be harmed.
While our vision is to lead the world’s sustainable energy future 37 Table of Contents through solar technology that is eco-efficient and socially responsible, if our ESG practices do not meet investor or other industry stakeholder expectations, which continue to evolve, we may incur additional costs and our brand, business, and ability to attract and retain qualified employees may be harmed.
Legal proceedings could also result in our customers or potential customers deferring or limiting their purchase or use of our solar modules or other technology or know-how until the resolution of such legal proceedings. Currency translation and transaction risk may negatively affect our results of operations.
Legal proceedings could also result in our customers or potential customers deferring or limiting their purchase or use of our solar modules or other technology or know-how until the resolution of such legal proceedings. 41 Table of Contents Currency translation and transaction risk may negatively affect our results of operations.
For example, while conventional solar modules are monofacial, meaning their ability to produce energy is a function of direct and diffuse irradiance on their front side, most module manufacturers offer bifacial modules that also capture diffuse irradiance on the back side of a module.
For example, while conventional solar modules are monofacial, meaning their ability to produce energy is a function of direct and diffuse irradiance on their front side, most module 25 Table of Contents manufacturers offer bifacial modules that also capture diffuse irradiance on the back side of a module.
Therefore, the amounts ultimately paid upon resolution of such examinations could be materially different from the amounts previously included in our income tax provision, which could have a material adverse impact on our business, financial condition, and results of operations.
Therefore, the amounts ultimately paid upon resolution of such 42 Table of Contents examinations could be materially different from the amounts previously included in our income tax provision, which could have a material adverse impact on our business, financial condition, and results of operations.
President signed into law the IRA, which revised U.S. tax law by, among other things, including a new corporate alternative minimum tax (the “CAMT”) of 15% on certain large corporations, imposing a 1% excise tax on stock buybacks, and providing various incentives to address climate change, including the introduction of the advanced manufacturing production credit under Section 45X of the IRC.
President signed into law the IRA, which revised U.S. tax law by, among other things, including a new corporate alternative minimum tax (the “CAMT”) of 15% on certain large corporations, imposing a 1% excise tax on stock buybacks, and providing various incentives, including the introduction of the advanced manufacturing production credit under Section 45X of the IRC.
The United States currently imposes tariffs on various articles imported from China, including tariffs of 50% on crystalline silicon solar cells and tariffs of 25% on modules, based on an investigation under Section 301 of the Trade Act of 1974. In February 2025, the U.S.
The United States currently imposes tariffs on various articles imported from China, including tariffs of 50% on crystalline silicon solar cells and tariffs of 25% on modules, based on an investigation under Section 301 of the Trade Act of 1974. The U.S.
Additionally, certain module manufacturers have introduced n-type mono-crystalline modules, such as tunnel oxide passivated contact (“TOPCon”) modules, which are expected to provide certain improvements to module efficiency, temperature coefficient, and bifacial performance, and claim to provide certain degradation advantages compared to other mono-crystalline modules.
Additionally, certain module manufacturers have introduced n-type mono-crystalline modules, such as tunnel oxide passivated contact (“TOPCon”) modules, which may provide certain improvements to module efficiency, temperature coefficient, and bifacial performance, and claim to provide certain degradation advantages compared to other mono-crystalline modules.
The loss of any of our large customers, their inability to perform under their contracts, or their default in payment could significantly reduce our net sales and/or adversely impact our operating results.
The loss of any of our large customers, their inability to perform under their contracts, or their default in payment has reduced and, in the future, could significantly reduce our net sales and/or adversely impact our operating results.
These environmental laws and regulations include those governing the discharge of pollutants into the air and water, the use, management, and disposal of hazardous materials and wastes, the cleanup of contaminated sites, and occupational health and safety.
These environmental laws and regulations include those governing the discharge of pollutants 36 Table of Contents into the air and water, the use, management, and disposal of hazardous materials and wastes, the cleanup of contaminated sites, and occupational health and safety.
In the aggregate, we believe manufacturers of solar cells and modules have significant installed production capacity, relative to global demand, and the ability for additional capacity expansion. For example, we estimate that in 2024 approximately 270 GW of capacity was added by solar module manufacturers, primarily in China.
In the aggregate, we believe manufacturers of solar cells and modules have significant installed production capacity, relative to global demand, and the ability for additional capacity expansion. For example, we estimate that in 2025 approximately 105 GW of capacity was added by solar module manufacturers, primarily in China.
Nothing in our Bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in any court, subject to applicable law. 42 Table of Co n tents Any person or entity holding, owning or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to these provisions.
Nothing in our Bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in any court, subject to applicable law. Any person or entity holding, owning or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to these provisions.
Risks Related to Our Operations, Manufacturing, and Technology • We face intense competition from manufacturers of crystalline silicon solar modules; if global supply exceeds global demand, it could lead to a further reduction in the average selling price for PV solar modules, which could reduce our net sales and adversely affect our results of operations. • Problems with product quality or performance may cause us to incur significant and/or unexpected contractual damages and/or warranty and related expenses, damage our market reputation, and prevent us from maintaining or increasing our market share. • Our failure to further refine our technology and develop and introduce improved PV products, including as a result of delays in implementing planned advancements, could render our solar modules uncompetitive and reduce our net sales, profitability, and/or market share. • Several of our key raw materials and components, in particular CdTe, tellurium, products containing tellurium, and substrate glass, and manufacturing equipment are either single-sourced or sourced from a limited number of suppliers, and their failure to perform could cause manufacturing delays, especially as we expand or seek to expand our business, and/or impair our ability to deliver solar modules to customers in the required quality and quantities and at a price that is profitable to us. 17 Table of Co n tents • Our failure to effectively manage module manufacturing production and selling costs, including costs related to raw materials and logistics services, could render our solar modules uncompetitive and reduce our net sales, profitability, and/or market share. • Our future success depends on our ability to effectively balance manufacturing production with market demand, effectively manage our cost per watt, and, when necessary, continue to build new manufacturing plants over time in response to market demand, all of which are subject to risks and uncertainties. • We may be unable to generate sufficient cash flows or have access to the sources of external financing necessary to fund planned capital investments in manufacturing capacity and product development.
Risks Related to Our Operations, Manufacturing, and Technology • We face intense competition from manufacturers of crystalline silicon solar modules; if global supply exceeds global demand, it could lead to a further reduction in the average selling price for PV solar modules, which could reduce our net sales and adversely affect our results of operations. • Problems with product quality or performance may cause us to incur significant and/or unexpected contractual damages and/or warranty and related expenses, damage our market reputation, and prevent us from maintaining or increasing our market share. • Our failure to further refine our technology and develop and introduce improved PV products, including as a result of delays in implementing planned advancements, could render our solar modules uncompetitive and reduce our net sales, profitability, and/or market share. 17 Table of Contents • Several of our key raw materials and components, in particular CdTe, tellurium, products containing tellurium, and substrate glass, and manufacturing equipment are either single-sourced or sourced from a limited number of suppliers, and their failure to perform could cause manufacturing delays, especially as we expand or seek to expand our business, and/or impair our ability to deliver solar modules to customers in the required quality and quantities and at a price that is profitable to us. • Our failure to effectively manage module manufacturing and related costs, including costs related to raw materials and logistics services, could render our solar modules uncompetitive and reduce our net sales, profitability, and/or market share. • Our future success depends on our ability to effectively balance manufacturing production with market demand, effectively manage our cost per watt, and, when necessary, continue to build new manufacturing plants over time in response to market demand, all of which are subject to risks and uncertainties. • We may be unable to generate sufficient cash flows or have access to the sources of external financing necessary to fund planned capital investments in manufacturing capacity and product development. • Our failure to protect or successfully commercialize our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property rights or defend against third-party allegations of infringement may be costly.
“Business – Incentive Programs.” To the extent these incentive programs are reduced earlier than previously expected, are changed retroactively, or are not renewed, such changes could negatively impact demand and/or price levels for our solar modules, lead to a reduction in our net sales, and adversely impact our operating results.
To the extent government incentive programs are reduced earlier than previously expected, are changed retroactively, or are not renewed, such changes have and could negatively impact demand and/or price levels for our solar modules, lead to a reduction in our net sales, and adversely impact our operating results.
In addition, the failure of our equipment manufacturers to supply 26 Table of Co n tents equipment in a timely manner or on commercially reasonable terms could delay our expansion or conversion plans, otherwise disrupt our production schedule, and/or increase our manufacturing costs, all of which would adversely impact our operating results.
In addition, the failure of our equipment manufacturers to supply equipment in a timely manner or on commercially reasonable terms could delay our expansion or conversion plans, otherwise disrupt our production schedule, and/or increase our manufacturing costs, all of which would adversely impact our operating results.
Our operating results could be adversely impacted if the USDOC and other U.S. government agencies do not enforce the affirmative circumvention rulings as expected or if pending litigation challenges result in a modification of the rulings. Conversely, effective enforcement could positively impact our operating results. • United States — Antidumping and Countervailing Duties on Certain Imported Aluminum Extrusions.
Our operating results could be adversely impacted if the USDOC and other U.S. government agencies do not enforce the affirmative circumvention rulings as expected or if pending litigation challenges result in a modification of the rulings. Conversely, effective enforcement could positively impact our operating results. • United States — Antidumping and Countervailing Duties on Certain Traded Solar Products.
Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments.
Investor advocacy groups, certain institutional investors, investment funds and other influential investors may also be focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments.
Several of our key raw materials and components, in particular CdTe and substrate glass, are either single-sourced or sourced from a limited number of suppliers. As a result, the failure of any of our suppliers to perform could disrupt our supply chain and adversely impact our operations.
Several of our key raw materials and components, in particular CdTe, tellurium, products containing tellurium, substrate glass, and manufacturing equipment are either single-sourced or sourced from a limited number of suppliers. As a result, the failure of any of our suppliers to perform could disrupt our supply chain and adversely impact our operations.
Our suppliers may also incur additional costs to repair or replace their own operations, which may cause them to require higher prices 37 Table of Co n tents as part of current and future contracts and/or otherwise be unable to perform under their existing contract commitments.
Our suppliers may also incur additional costs to repair or replace their own operations, which may cause them to require higher prices as part of current and future contracts and/or otherwise be unable to perform under their existing contract commitments.
Our Bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause of action under the 41 Table of Co n tents Securities Act.
Our Bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause of action under the Securities Act.
Our competitors could decide to reduce their sales prices in response to competition, even below their manufacturing costs, in order to generate sales, and may do so for a sustained period.
Our competitors have decided, and in the future could decide, to reduce their sales prices in response to competition, even below their manufacturing costs, in order to generate sales, and may do so for a sustained period.
Any underperformance or failures in BoS equipment beyond our expectations may also adversely impact our reputation, financial position, operating results, and cash flows. 25 Table of Co n tents In addition, our contracts with customers may include provisions with particular product specifications, minimum wattage requirements, and specified delivery schedules.
Any underperformance or failures in BoS equipment beyond our expectations may also adversely impact our reputation, financial position, operating results, and cash flows. 27 Table of Contents In addition, our contracts with customers may include provisions with particular product specifications, minimum wattage requirements, and specified delivery schedules.
While we believe that these factors and procedures are sufficient to protect our associates, end users, and the general public from adverse health effects that may arise from cadmium exposure, we cannot ensure that human or environmental exposure to cadmium or cadmium compounds used in our 34 Table of Co n tents products will not occur.
While we believe that these factors and procedures are sufficient to protect our associates, end users, and the general public from adverse health effects that may arise from cadmium exposure, we cannot ensure that human or environmental exposure to cadmium or cadmium compounds used in our products will not occur.
FTC”) issued a final rule that, if enforceable, would ban any non-competition provisions, including provisions in existing employment agreements, which could make it more difficult for us to retain qualified associates. On August 20, 2024, a U.S. district court issued an order stopping the U.S.
In addition, on April 23, 2024, the U.S. Federal Trade Commission (“U.S. FTC”) issued a final rule that, if enforceable, would ban any non-competition provisions, including provisions in existing employment agreements, which could make it more difficult for us to retain qualified associates. On August 20, 2024, a U.S. district court issued an order stopping the U.S.
We cannot ensure that the outcome of such potential litigation will be in our favor, and such litigation may be costly and may divert management attention and other resources away from our business. An adverse determination in any such litigation may impair our intellectual property rights and may harm our business, prospects, and reputation.
We cannot ensure that the outcome of such litigation will be in our favor, and such litigation may be costly and may divert management attention and other resources away from our business. An adverse determination in any such litigation or the related ex parte reexaminations may impair our intellectual property rights and may harm our business, prospects, and reputation.
Moreover, 40 Table of Co n tents complaints filed against us may not specify the amount of damages that plaintiffs seek, and we therefore may be unable to estimate the possible range of damages that might be incurred should these lawsuits be resolved against us.
Moreover, complaints filed against us may not specify the amount of damages that plaintiffs seek, and we therefore may be unable to estimate the possible range of damages that might be incurred should these lawsuits be resolved against us.
For further information, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” However, there is no assurance that future sales of tax credits will be available to us on similar or alternative terms or at all.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” However, there is no assurance that future sales of tax credits will be available to us on similar or alternative terms or at all.
The final regulations mostly adopted and confirmed the proposed regulations previously issued in June 2023. 32 Table of Co n tents • In April 2024, the U.S. Treasury Department and the IRS issued final regulations on the elective transfer provisions under Section 6418 of the IRC.
The final regulations mostly adopted and confirmed the proposed regulations previously issued in June 2023. • In April 2024, the U.S. Treasury Department and the IRS issued final regulations on the elective transfer provisions under Section 6418 of the IRC.
Such 23 Table of Co n tents technology can improve the overall energy production of a module relative to nameplate efficiency when applied in certain applications, which could potentially lower the overall LCOE of a system when compared to systems using conventional solar modules, including the modules we currently produce.
Such technology can improve the overall energy production of a module relative to nameplate power when applied in certain applications, which could potentially lower the overall LCOE of a system when compared to systems using conventional solar modules, including the modules we currently produce.
Currently, PV solar modules are explicitly excluded from the scope of RoHS (Article 2), as adopted in June 2011. Other jurisdictions have adopted similar legislation or are considering doing so. The next revision of the RoHS Directive is expected in 2025.
Currently, PV solar modules are explicitly excluded from the scope of RoHS (Article 2), as adopted in June 2011. Other jurisdictions have adopted similar legislation or are considering doing so.
For additional information regarding the risks related to our customers, see the Risk Factor entitled, “The loss of any of our large customers, or the inability of our customers and counterparties to perform under their contracts with us, could significantly reduce our net sales and negatively impact our results of operations.” The severity and duration of public health threats could materially impact our business, financial condition, and results of operations.
For additional information regarding the risks related to our customers, see the Risk Factor entitled, “The loss of any of our large customers, or the inability of our customers and counterparties to perform under their contracts with us, including through terminations by customers of any contract in part or in full, has reduced and, in the future, could significantly reduce our net sales and negatively impact our results of operations.” The severity and duration of public health threats could materially impact our business, financial condition, and results of operations.
Protection of our proprietary processes, methods, and other technology is critical to our business. Failure to protect and monitor the use of our existing intellectual property rights or to successfully commercialize future intellectual property rights could result in the loss of valuable technologies. We rely primarily on patents, trademarks, trade secrets, copyrights, and contractual restrictions to protect our intellectual property.
Failure to protect and monitor the use of our existing intellectual property rights or to successfully commercialize future intellectual property rights could result in the loss of valuable technologies. We rely primarily on patents, trademarks, trade secrets, copyrights, and contractual restrictions to protect our intellectual property.
For further information, see the Risk Factor entitled, “We have received and expect to continue to receive certain financial benefits as a result of tax incentives provided by the Inflation Reduction Act of 2022.
For further information, see the Risk Factor entitled, “We have received and expect to continue to receive certain financial benefits as a result of tax incentives enacted by the Inflation Reduction Act of 2022 and amended by the One Big Beautiful Bill Act of 2025.
In August 2023, the USDOC issued final affirmative circumvention rulings, finding that solar modules completed in Cambodia, Malaysia, Thailand, and Vietnam using parts and components produced in China circumvent the pre-existing AD/CVD orders on China.
AD/CVD laws could have an adverse impact on our operating results. In August 2023, the USDOC issued final affirmative circumvention rulings, finding that solar modules completed in Cambodia, Malaysia, Thailand, and Vietnam using parts and components produced in China circumvent the pre-existing AD/CVD orders on China.
Risks Related to Regulations • We have received and expect to continue to receive certain financial benefits as a result of tax incentives provided by the Inflation Reduction Act of 2022.
Risks Related to Regulations • We have received and expect to continue to receive certain financial benefits as a result of tax incentives enacted by the Inflation Reduction Act of 2022 and amended by the One Big Beautiful Bill Act of 2025.
The new California laws, the Climate Corporate Data Accountability Act, and the Climate-Related Financial Risk Act each impose additional climate-related reporting requirements on large companies conducting business in the state of California. We expect we will be subject to these new laws, which impose extensive reporting obligations about greenhouse gas emissions and climate-related financial risks.
For example, in California, the Climate Corporate Data Accountability Act, and the Climate-Related Financial Risk Act each impose climate-related reporting requirements on large companies conducting business in the state of California, and we expect we will be subject to these new laws.
Any new government regulations or utility policies pertaining to our modules may result in significant additional expenses to us or our customers and, as a result, could cause a significant reduction in demand for our products.
Any new government regulations or utility policies pertaining to our modules may result in significant additional expenses to us or our customers and, as a result, could cause a significant reduction in demand for our products. In addition, any regulatory compliance failure could result in significant management distraction, unplanned costs, and/or reputational damage.
We believe the solar industry may from time to time experience periods of structural imbalance between supply and demand, and that excess capacity will continue to put pressure on pricing.
We believe the solar industry may from time to time experience periods of structural imbalance between supply and demand, and that excess capacity will continue to put pressure on pricing. Module average selling prices in many global markets have declined.
Bribery Act) extend their application to activities outside their country of origin. Our policies mandate compliance with all applicable anti-bribery laws. We currently operate in, and may further expand into, key parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.
We currently operate in, and may further expand into, key parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.
In December 2024, the ALMM was amended to require nearly all solar development projects to use PV modules that contain domestically manufactured solar cells, which is expected to be effective for such projects completed on or after June 2026.
In December 2024, the ALMM was amended to require nearly all solar development projects to use PV modules that contain domestically manufactured solar cells, which is expected to be effective for such projects completed on or after June 2026; in August 2025, the relevant list of qualifying entities was released, which included First Solar as an approved manufacturer.
The loss of any of our large customers, or the inability of our customers and counterparties to perform under their contracts with us, could significantly reduce our net sales and negatively impact our results of operations.
The loss of any of our large customers, or the inability of our customers and counterparties to perform under their contracts with us, including through terminations by customers of any contract in part or in full, has reduced and, in the future, could significantly reduce our net sales and negatively impact our results of operations.
While we and the third parties with which we do business have experienced and may continue to experience cybersecurity incidents and other events, including information and security breaches, we have not experienced any material adverse effect on our business, financial condition, or results of operations, or any other material consequences, relating to or as a result of a cybersecurity incident or other such event, whether directed at us or our third parties. 36 Table of Co n tents Uncertainty in the development, deployment and use of AI in our products and services, as well as our business more broadly, could adversely affect our business and reputation.
While we and the third parties with which we do business have experienced and may continue to experience cybersecurity incidents and other events, including information and security breaches, we have not experienced any material adverse effect on our business, financial condition, or results of operations, or any other material consequences, relating to or as a result of a cybersecurity incident or other such event, whether directed at us or our third parties.
As a result of any public health threat and any related containment measures, we, our suppliers, or customers may be subject to significant risks, including to supply chain and business operations, which have the potential to materially and adversely impact our business, financial condition, and results of operations.
As a result of any public health threat and any related containment measures, we, our suppliers, or customers may be subject to significant risks, including to supply chain and business operations, which have the potential to materially and adversely impact our business, financial condition, and results of operations. 40 Table of Contents If we are unable to attract, train, retain, and successfully integrate key talent into our team, our business may be materially and adversely affected.
In April 2024, the American Alliance for Solar Manufacturing Trade Committee, which includes First Solar, filed a set of AD/CVD petitions with the USDOC and the USITC to impose duties on certain unfairly traded solar products from Cambodia, Malaysia, Thailand, and Vietnam. The investigations could potentially lead to the imposition of AD/CVD orders on such solar products.
In April 2024, the American Alliance for Solar Manufacturing Trade Committee, which includes First Solar, filed a set of AD/CVD petitions with the USDOC and the U.S. International Trade Commission (“USITC”) to impose duties on certain unfairly traded solar products from Cambodia, Malaysia, Thailand, and Vietnam. On April 21, 2025, the USDOC announced final determinations in the AD/CVD investigations.
Our operating results could be adversely impacted if the ALMM requirements are significantly relaxed to allow modules, solar cells, or certain other key module components to be imported from other countries. • India — Import Duty Tariffs. In April 2022, the Indian government began imposing import duty tariffs of 40% on solar modules and 25% on solar cells.
Our operating results could also be adversely impacted if the ALMM requirements are significantly relaxed to allow modules, solar cells, or certain other key module components to be imported from other countries. 22 Table of Contents • India — Import Duty Tariffs.
Congress, could result in changes to the expected and/or actual benefits in the future, which could have a material adverse effect on demand and/or price levels for our solar modules, our net sales, and future expansion plans within the United States, and/or otherwise adversely impact our business, financial condition, and results of operations.
Congress, could result in changes to the expected and/or actual benefits in the future, which could have a material adverse effect on demand and/or price levels for our solar modules, our net sales, and future expansion plans within the United States, and/or otherwise adversely impact our business, financial condition, and results of operations. 35 Table of Contents Existing regulations and policies, changes thereto, and new regulations and policies may present technical, regulatory, and economic barriers to the purchase and use of PV solar products, which may significantly reduce demand for our modules.
The ALMM is approved by the MNRE, and any modifications to the ALMM and its application may affect future investments in solar module manufacturing in India. In April 2024, the government of India reimposed the ALMM, thereby requiring solar project developers to procure qualifying modules from companies on the list, which includes our Indian manufacturing facility.
In April 2024, the government of India reimposed the ALMM, thereby requiring solar project developers to procure qualifying modules from companies on the list, which includes our Indian manufacturing facility.
Congress, may subject us to significant risks, including the following: • a reduction or removal of clean energy programs and initiatives and the incentives they provide may diminish the market for future solar energy off-take agreements, slow the retirement of aging fossil fuel plants, including the retirements of coal generation plants, and reduce the ability for solar project developers to compete for off-take agreements, which may reduce PV solar module sales; • any limitations on the value or availability to manufacturers or potential investors of tax incentives that benefit solar energy production, sales, or projects, such as the Section 45X advanced manufacturing production credit, ITC, and PTC, could result in reducing such manufacturers’ or investors’ economic returns and could cause a reduction in the availability of financing, thereby reducing demand for PV solar modules; • any incentives contingent upon domestic production of modules, such as tax incentives set forth under the IRA, could limit our ability to sell modules manufactured in certain foreign jurisdictions, which may adversely impact our module average selling prices and could require us to record significant charges to earnings should we determine that the manufacturing equipment in such foreign jurisdictions is impaired; and • any effort to overturn federal and state laws, regulations, or policies that are supportive of solar energy generation or that remove costs or other limitations on other types of electricity generation that compete with solar energy projects could negatively impact our ability to compete with traditional forms of electricity generation and materially and adversely affect our business.
President signed into law on July 4, 2025, could result in reducing such manufacturers’ or investors’ economic returns and could cause a reduction in the availability of financing, thereby reducing demand for PV solar modules; • any incentives contingent upon domestic production of modules, such as tax incentives set forth under the IRA, could limit our ability to sell modules manufactured in certain foreign jurisdictions, which may adversely impact our module average selling prices and could require us to record significant charges to earnings should we determine that the manufacturing facilities and equipment in such foreign jurisdictions are impaired; and • any effort to overturn federal and state laws, regulations, or policies that are supportive of solar energy generation or that remove costs or other limitations on other types of electricity generation that compete with solar energy projects could negatively impact our ability to compete with traditional forms of electricity generation and materially and adversely affect our business.
The development, adoption, integration, and use of generative AI technology remains in early stages, and ineffective or inadequate AI governance, development, use, or deployment practices by us or third parties could result in unintended consequences.
As with many new and emerging technologies, AI presents numerous risks and challenges that could adversely affect our business. The development, adoption, integration, and use of generative AI technology remains in early stages, and ineffective or inadequate AI governance, development, use, or deployment practices by us or third parties could result in unintended consequences.
For example, we commenced a limited commercial production run of modules employing our copper replacement (“CuRe”) technology in late 2024 and intend to begin a phased replication of the technology across our fleet in the first quarter of 2026.
For example, we commenced a limited commercial production run of modules employing our CuRe technology in late 2024, and beginning in the first quarter of 2026, we intend to permanently convert one of our Ohio facilities to CuRe, followed by a phased replication of the technology across certain manufacturing facilities within our fleet.
We are subject to income taxes in the various jurisdictions in which we operate. Accordingly, we are subject to a variety of tax laws and interpretations of such laws by local tax authorities.
Unanticipated changes in our tax position, the enactment of new tax legislation, or exposure to additional income tax liabilities could affect our profitability. We are subject to income taxes in the various jurisdictions in which we operate. Accordingly, we are subject to a variety of tax laws and interpretations of such laws by local tax authorities.
FTC from 38 Table of Co n tents enforcing the rule effective September 4, 2024 onward, and the U.S. FTC has appealed this order. However, this order does not prevent the U.S. FTC from addressing non-competition provisions on a case-by-case basis.
FTC from enforcing the rule effective September 4, 2024 onward, and the U.S. FTC has appealed this order. However, this order does not prevent the U.S. FTC from addressing non-competition provisions on a case-by-case basis. It is uncertain if the rule will be enforceable or whether the language of the final rule could be further modified.
Although several of our current key associates, including our executive officers, are subject to employment conditions or arrangements that contain post-employment non-competition provisions, these arrangements permit the associates to terminate their employment with us upon little or no notice. In addition, on April 23, 2024, the U.S. Federal Trade Commission (“U.S.
However, we may not be able to retain or replace these key associates in a timely manner. Although several of our current key associates, including our executive officers, are subject to employment conditions or arrangements that contain post-employment non-competition provisions, these arrangements permit the associates to terminate their employment with us upon little or no notice.
Because the price of our common stock has been, and may continue to be, volatile, we can provide no assurance that additional securities or other litigation will not be filed against us in the future. See Note 14. “Commitments and Contingencies – Legal Proceedings” to our consolidated financial statements for more information on our legal proceedings.
These costs may exceed the dollar limits of our insurance policies or may not be covered at all by our insurance policies. Because the price of our common stock has been, and may continue to be, volatile, we can provide no assurance that additional securities or other litigation will not be filed against us in the future. See Note 14.
The United States currently imposes antidumping and countervailing duties (“AD/CVDs”) on certain imported crystalline silicon PV cells and modules from China and Taiwan. Such AD/CVDs can 19 Table of Co n tents change over time pursuant to annual administrative reviews conducted by the U.S.
The United States currently imposes AD/CVDs on certain imported crystalline silicon PV cells and modules from China and Taiwan. Such AD/CVDs can change over time pursuant to annual administrative reviews conducted by the U.S. Department of Commerce (“USDOC”), and a decline in duty rates or USDOC failure to fully enforce U.S.
If we cannot fund the required investments from our operating cash flows or raise additional funds when we need them, we may be unable to fully execute our business plan and our financial condition, results of operations, and business prospects could be materially and adversely affected.
If we cannot fund the required investments from our operating cash flows or raise additional funds when we need them, we may be unable to fully execute our business plan and our financial condition, results of operations, and business prospects could be materially and adversely affected. 31 Table of Contents If our estimates regarding the future costs of collecting and recycling CdTe solar modules covered by our solar module collection and recycling program are incorrect, we could be required to accrue additional expenses and face a significant unplanned cash burden.
Federal, state, and local governmental bodies in many countries have provided subsidies in the form of 18 Table of Co n tents feed-in-tariff structures, rebates, tax incentives, and other incentives to end users, distributors, system integrators, and manufacturers of PV solar products.
Federal, state, and local governmental bodies in many countries have provided subsidies in the form of feed-in-tariff structures, rebates, tax incentives, and other incentives to end users, distributors, system integrators, and manufacturers of PV solar products. Many of these incentive programs expire, phase down over time, require renewal by the applicable authority, or may be amended.
The loss of one or more of these key associates could have a material adverse effect on our business. We have a comprehensive succession planning process in place, which contemplates talent at all levels of the organization. However, we may not be able to retain or replace these key associates in a timely manner.
We are also dependent on the services of our executive officers and other members of our senior management team. The loss of one or more of these key associates could have a material adverse effect on our business. We have a comprehensive succession planning process in place, which contemplates talent at all levels of the organization.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur incident response plan includes specific criteria for determining the potential impact of an identified cybersecurity incident and defined escalation protocols to determine which internal and external stakeholders should be involved and the appropriate communication channels, including considerations of any reporting based on regulatory requirements.
Biggest changeIntrusion prevention, detection, and response systems, access management systems, and incident and vulnerability management systems are all examples of technical tools employed by First Solar’s cybersecurity team to protect our information and operational technology environment. 45 Table of Contents Our incident response plan includes specific criteria for determining the potential impact of an identified cybersecurity incident and defined escalation protocols to determine which internal and external stakeholders should be involved and the appropriate communication channels, including considerations of any reporting based on regulatory requirements.
The Head of Information Security and our Information Security team members collectively hold certifications in cyber-risk oversight from the National Association of Corporate Directors, Certified Systems Security Officer and Certified Information Systems Manager credentials, and Certified Information Systems Security Professional and Systems Security Certified Practitioner credentials.
The Head of Cyber Security and our cybersecurity team members collectively hold certifications in cyber-risk oversight from the National Association of Corporate Directors, Certified Systems Security Officer and Certified Information Systems Manager credentials, and Certified Information Systems Security Professional and Systems Security Certified Practitioner credentials.
Further, at least annually, certain key members from our Information Security team engage in cybersecurity tabletop exercises alongside certain members of both our executive team and board of directors, which are designed to simulate a cybersecurity threat or incident to test First Solar’s incident response plan.
Further, at least annually, certain key members from our cybersecurity team engage in cybersecurity tabletop exercises alongside certain members of both our executive team and board of directors, which are designed to simulate a cybersecurity threat or incident to test First Solar’s incident response plan.
For further information regarding the risks to us associated with cybersecurity incidents and other events, including information and security breaches, and how such risks may affect the Company, see the Risk Factor entitled, “Cybersecurity incidents or information or security breaches, or those of third parties with which we do business, could have a material adverse effect on our business, financial condition, and results of operations.” 44 Table of Contents
For further information regarding the risks to us associated with cybersecurity incidents and other events, including information and security breaches, and how such risks may affect the Company, see the Risk Factor entitled, “Cybersecurity incidents or information or security breaches, or those of third parties with which we do business, could have a material adverse effect on our business, financial condition, and results of operations.”
These processes enable us to oversee and identify potentially material risks from cybersecurity threats associated with our use of third-party service providers. 43 Table of Contents The Head of Information Security oversees the Information Security team, which assesses and manages cybersecurity risks at First Solar as part of our information security program.
These processes enable us to oversee and identify potentially material risks from cybersecurity threats associated with our use of third-party service providers. The Head of Cyber Security oversees the cybersecurity team, which assesses and manages cybersecurity risks at First Solar as part of our information security program.
An Information Security Steering Committee, which is comprised of senior management from various departments, serves in an advisory capacity regarding the implementation, support, and management of the information security program and compliance with applicable state and federal laws and regulations. This committee aligns business initiatives, material digital risks, risk tolerance levels, and security requirements with the information security roadmap.
An Information Security Steering Committee, which is comprised of executive leadership, serves in an advisory capacity regarding the implementation, support, and management of the information security program and compliance with applicable state and federal laws and regulations. This committee aligns business initiatives, material digital risks, risk tolerance levels, and security requirements with the information security roadmap.
The Head of Information Security, who has over 20 years of information technology experience, including over 10 years in leadership roles at First Solar, reports to the Chief Information Officer and regularly briefs the Chief Financial Officer and, at least quarterly, briefs the audit committee of the board of directors on cybersecurity matters.
The Head of Cyber Security, who has over 20 years of information security experience, reports to the Chief Information Officer. Our Chief Information Officer has 26 years of information technology experience, including 19 years in leadership roles at First Solar.
The cybersecurity risks identified as part of our information security program are integrated into our enterprise risk management program.
They regularly brief the executive leadership team and, at least quarterly, brief the audit committee of the board of directors on cybersecurity matters. The cybersecurity risks identified as part of our information security program are integrated into our enterprise risk management program.
The Information Security team actively manages cybersecurity threats and incidents through comprehensive technical tooling, reporting, partnerships, and processes. Intrusion prevention, detection, and response systems, access management systems, and incident and vulnerability management systems are all examples of technical tools employed by First Solar’s Information Security team to protect our information technology environment.
The cybersecurity team actively manages cybersecurity threats and incidents through comprehensive technical tooling, reporting, partnerships, and processes.
Removed
Effective March 16, 2025, our Head of Information Security will be departing the Company and, as a result, our Chief Information Officer will act as our interim Head of Information Security while we conduct a search for a permanent replacement. Our Chief Information Officer has 25 years of information technology experience, including 18 years in leadership roles at First Solar.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties As of December 31, 2024, our principal properties, which pertain to our modules business, consisted of the following: Nature Location Held Corporate headquarters Tempe, Arizona, United States Lease R&D facility Santa Clara, California, United States Lease Manufacturing plants, R&D facilities, and administrative offices Perrysburg and Lake Township, Ohio, United States Own Manufacturing plants Kulim, Kedah, Malaysia Lease land, own buildings Manufacturing plants Ho Chi Minh City, Vietnam Lease land, own buildings Manufacturing plant Tamil Nadu, India Lease land, own buildings Manufacturing plant Trinity, Alabama, United States Own Manufacturing plant (1) Iberia Parish, Louisiana, United States Lease land, own buildings —————————— (1) Manufacturing plant currently under construction; operations are expected to commence in the second half of 2025.
Biggest changeProperties As of December 31, 2025, our principal properties consisted of the following: Nature Location Held Corporate headquarters Phoenix, Arizona, United States Lease R&D facility Santa Clara, California, United States Lease Manufacturing plants, R&D facilities, and administrative offices Perrysburg and Lake Township, Ohio, United States Own Manufacturing plants Kulim, Kedah, Malaysia Lease land, own buildings Manufacturing plants Ho Chi Minh City, Vietnam Lease land, own buildings Manufacturing plant Tamil Nadu, India Lease land, own buildings Manufacturing plant Trinity, Alabama, United States Own Manufacturing plant Iberia Parish, Louisiana, United States Lease land, own buildings Manufacturing plant (1) Gaffney, South Carolina, United States Lease —————————— (1) Manufacturing plant currently under construction; operations are expected to commence in the second half of 2026. 46 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is listed on The Nasdaq Stock Market LLC under the symbol FSLR. Holders As of February 21, 2025, there were 41 record holders of our common stock, which does not reflect beneficial owners of our shares.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is listed on The Nasdaq Stock Market LLC under the symbol FSLR. Holders As of February 20, 2026, there were 39 record holders of our common stock, which does not reflect beneficial owners of our shares.
The stock price performance shown in the graph represents past performance and is not necessarily indicative of future stock price performance. 46 Table of Contents Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliate Purchases None. Item 6. Reserved None.
The stock price performance shown in the graph represents past performance and is not necessarily indicative of future stock price performance. 50 Table of Contents Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliate Purchases None. Item 6. Reserved None.
For purposes of the graph, an investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, the S&P 500 Index, and the Invesco Solar ETF on December 31, 2019, and its relative performance is tracked through December 31, 2024.
For purposes of the graph, an investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, the S&P 500 Index, and the Invesco Solar ETF on December 31, 2020, and its relative performance is tracked through December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

31 edited+12 added−14 removed6 unchanged
Biggest changeThe increase was primarily driven by a higher sales mix of modules qualifying for the advanced manufacturing production credit under Section 45X of the IRC, termination payments associated with certain customer contract terminations in the U.S., India, and Europe, and an increase in the volume of modules sold to third parties, partially offset by higher module storage costs and a reduction in revenue related to manufacturing issues affecting certain Series 7 modules manufactured in 2023 and 2024. • During 2024, we commenced production of Series 7 modules at our first manufacturing facility in Alabama, bringing our total installed nameplate production capacity across all our facilities to approximately 21 GW.
Biggest changeThe decrease was primarily driven by higher costs related to a sales mix that included more U.S.-produced modules, higher warehousing costs, additional duties and tariff costs, and higher logistics charges, partially offset by the recognition of higher advanced manufacturing production credits under Section 45X of the IRC. • During 2025, we commenced production of Series 7 modules at our new manufacturing facility in Louisiana.
Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors, including those discussed under Item 1A. “Risk Factors,” and elsewhere in this Annual Report on Form 10-K. This discussion and analysis does not address certain items in respect of the year ended December 31, 2022. See Item 7.
Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors, including those discussed under Item 1A. “Risk Factors,” and elsewhere in this Annual Report on Form 10-K. This discussion and analysis does not address certain items in respect of the year ended December 31, 2023. See Item 7.
Notwithstanding these considerations, utility and corporate demand for clean energy, and overall electric load growth, especially as a result of AI-driven data center demand, continue to increase.
Notwithstanding these considerations, utility and corporate demand for energy and overall electric load growth, especially as a result of AI-driven data center demand, continue to increase.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 for comparative discussions of our results of operations and liquidity and capital resources for the years ended December 31, 2023 and 2022. Executive Overview We are America’s leading PV solar technology and manufacturing company.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for comparative discussions of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2023. Executive Overview We are America’s leading PV solar technology and manufacturing company.
Market Overview Solar energy is one of the fastest growing forms of renewable energy with numerous benefits, including economic and speed of deployment, that make it an attractive complement to or substitute for traditional forms of energy generation.
Market Overview Solar energy is one of the fastest growing forms of renewable energy with numerous benefits, including economic benefits and speed of deployment, which make it an attractive complement to or substitute for traditional forms of energy generation.
The cost of polysilicon is a significant driver of the manufacturing cost of crystalline silicon solar modules, and the timing and rate of change in the cost of silicon feedstock and polysilicon could lead to changes in solar module pricing levels. Energy Performance.
The cost of polysilicon is a significant driver of the manufacturing cost of crystalline silicon solar modules, and the timing and rate of change in the cost of silicon feedstock and polysilicon could lead to changes in solar module pricing levels.
In many climates our solar modules provide certain energy production advantages relative to competing crystalline silicon solar modules. As a result, our solar modules can produce more annual energy in real-world operating conditions than conventional crystalline silicon modules with the same nameplate capacity. For more information about these advantages, see
Energy Performance In many climates, our solar modules provide certain energy production advantages relative to competing crystalline silicon solar modules. As a result, our solar modules can produce more energy in real-world operating conditions than conventional crystalline silicon modules with the same nameplate power. For more information about these advantages, see
In light of such market realities, we continue to advocate for industrial and trade policies that provide a level playing field for domestic manufacturers of solar cells and modules.
In light of these market realities, we continue to advocate for industrial and trade policies that provide a level playing field for manufacturers of solar cells and modules.
Bifaciality compromises nameplate efficiency, but by converting both front and rear side irradiance, such technology may improve the overall energy production of a module relative to nameplate efficiency when applied in certain applications, which could lower the overall LCOE of a system when compared to systems using monofacial solar modules.
Bifaciality compromises nameplate power, but by converting both front and back side irradiance, such technology may improve the overall energy production of a module relative to nameplate power when applied in certain applications, which could lower the overall LCOE of a system when compared to systems using monofacial solar modules. • CuRe .
As a result of these performance improvements, our PV solar modules are expected to produce more energy in real- 49 Table of Contents world operating conditions over their estimated useful lives than crystalline silicon modules with the same nameplate capacity.
As a result of these performance improvements, our PV solar modules are expected to produce more energy in real-world operating conditions over their estimated useful lives than crystalline silicon modules with the same nameplate power.
Certain of our financial results and other key operational developments for the year ended December 31, 2024 include the following: • Net sales for 2024 increased by 27% to $4.2 billion compared to $3.3 billion in 2023.
Certain of our financial results and other key operational developments for the year ended December 31, 2025 include the following: • Net sales for 2025 increased by 24% to $5.2 billion compared to $4.2 billion in 2024.
For certain of our competitors, including many in China, these practices may be enabled by their direct or indirect access to sovereign capital or other forms of state support.
For certain of our competitors, including many in China, these practices may be enabled by their direct or indirect access to sovereign capital or other forms of state support. Module average selling prices in many global markets have declined.
This competition may result in an environment in which pricing falls rapidly, which could potentially increase demand for solar energy solutions but constrain the ability for module manufacturers and project developers to sustain meaningful and consistent profitability.
Pricing Competition The solar industry continues to be characterized by intense pricing competition, both at the module and system levels. This competition may result in an environment in which pricing falls rapidly, which could potentially increase demand for solar energy solutions but constrain the ability for module manufacturers and project developers to sustain meaningful and consistent profitability.
This design lowers the operational temperature of the module, resulting in a higher energy yield. • CuRe . Our CuRe program is intended to improve our current semiconductor structure by replacing copper with certain other elements that are expected to enhance module performance by improving its bifaciality characteristics, improving its temperature coefficient, and improving its warranted degradation.
Our CuRe program is intended to improve our current semiconductor structure by replacing copper with certain other elements that are expected to enhance module performance by improving its bifaciality characteristics, improving its temperature coefficient, and improving its warranted degradation.
Government incentive programs, such as the IRA discussed previously, have contributed to this momentum by providing solar module manufacturers, project developers, and project owners with various incentives to accelerate the deployment of solar power generation. For more information about these incentive programs, see Item 1. “Business – Incentive Programs.” Supply and Demand.
As a result of these and other factors, worldwide solar markets continue to develop and expand. Government incentive programs have contributed to this momentum by providing solar module manufacturers, project developers, and project owners with various incentives to accelerate the deployment of solar power generation. For more information about these incentive programs, see Item 1.
Accordingly, we believe the solar industry may experience periods of structural imbalance between supply and demand, which could lead to periods of pricing volatility. Further, demand for solar energy in key markets, such as the United States and India, may be affected by the nature and extent of commitments to the renewable energy transition at the local and global levels.
Further, demand for solar energy in key markets, such as the United States and India, may be affected by the nature and extent of commitments to the renewable energy transition at the local and global levels.
The efficiencies gained from the vertical integration of our manufacturing model and our cost management initiatives allow us to compete favorably in markets where pricing for modules and systems is highly competitive.
Our investment in this technology also includes the construction of a dedicated perovskite development line at our Ohio facility. Product Efficiencies The efficiencies gained from the vertical integration of our manufacturing model and our cost management initiatives allow us to compete favorably in markets where pricing for modules and systems is highly competitive.
Solar module manufacturers compete with one another on sales price per watt, which may be influenced by several module value attributes, including energy yield, wattage (through a larger form factor or an improved conversion efficiency), degradation, sustainability, and reliability. Sales price per watt may also be influenced by warranty terms, customer payment terms, and/or module content attributes.
Diverse Offerings We face intense competition from manufacturers of crystalline silicon solar modules and other emerging technologies. Solar module manufacturers compete with one another on sales price per watt, which may be influenced by several module value attributes, including energy yield, wattage (through a larger form factor or an improved conversion efficiency), degradation, sustainability, and reliability.
We also continue to focus on our strategies and points of differentiation, which include our advanced module technology, our manufacturing process and distributed manufacturing presence, our R&D capabilities, our commitment to responsible solar, and our financial stability. Pricing Competition. The solar industry has been characterized by intense pricing competition, both at the module and system levels.
We also continue to focus on our strategies and points of differentiation, which include our proprietary advanced module technology, our manufacturing process and distributed manufacturing presence, our localized supply chain, our R&D capabilities, our commitment to responsible solar, and our financial stability.
We commenced a limited commercial production run of modules employing our CuRe technology in late 2024 and intend to begin a phased replication of the technology across our fleet in the first quarter of 2026. • Multi-junction .
In late 2024, we commenced a limited commercial production run of modules employing our CuRe technology, and during the first half of 2025, we sold our first CuRe modules to customers.
The only U.S.-headquartered company among the world’s largest solar manufacturers, First Solar is focused on competitively and reliably enabling power generation needs with our advanced, thin film PV technology.
The only U.S.-headquartered company among the world’s largest solar manufacturers, First Solar is focused on competitively and reliably enabling power generation needs with our advanced, uniquely American thin film PV technology. Developed at R&D labs in California and Ohio, our technology provides a competitive, high-performance, and responsibly produced alternative to conventional crystalline silicon PV solar modules.
We believe that utility-scale solar will continue to be a compelling offering and will continue to represent an increasing portion of the overall electricity generation mix. However, this focus on utility-scale module offerings exists within a current market environment that includes rooftop and distributed generation solar, which may influence our future offerings.
However, this focus on utility-scale module offerings exists within a current market environment that includes rooftop and distributed generation solar, which may influence our future offerings. 53 Table of Contents We continue to devote significant resources to support the implementation of our technology roadmap and improve the energy output of our modules.
We continue to evaluate opportunities for future expansion worldwide. We believe manufacturers of solar cells and modules, particularly those in China, have significant installed production capacity, relative to global demand, and the ability for additional capacity expansion.
We believe 52 Table of Contents manufacturers of solar cells and modules, particularly those in China, have significant installed production capacity, relative to global demand, and the ability for additional capacity expansion. Accordingly, we believe the solar industry may experience periods of structural imbalance between supply and demand, which could lead to periods of pricing volatility.
Internationally, given the 48 Table of Contents combination of (i) a European Union market captured by Chinese solar modules, which pricing is at levels near or below manufacturing costs, (ii) an India market effectively closed to Southeast Asian finished goods, (iii) the uncertain U.S. policy environment following the 2024 U.S. elections, and (iv) a supply and demand imbalance for Southeast Asian product, we have decided to reduce production output of our Series 6 modules at our manufacturing facilities in Malaysia and Vietnam by a combined total of 1 GW in 2025.
Given the combination of (i) a European market captured by Chinese solar modules, where pricing is at levels near or below manufacturing costs, (ii) an Indian market effectively closed to Southeast Asian products, (iii) a general supply and demand imbalance for Southeast Asian products, and (iv) certain tariffs on modules imported into the United States, we have reduced production of Series 6 modules at our international manufacturing facilities.
We continue to devote significant resources to support the implementation of our technology roadmap and improve the energy output of our modules. In the course of our R&D activities, we explore various technologies in our efforts to sustain competitive differentiation of our modules.
In the course of our R&D activities, we explore various technologies in our efforts to sustain competitive differentiation of our modules. Such technologies include the development of bifacial modules, the implementation of our CuRe program, and the ongoing R&D of a viable and commercially scalable perovskite product. • Bifacial.
As a result of the market opportunities described above, we recently commenced production of Series 7 modules at our first manufacturing facility in Alabama and are in the process of expanding our manufacturing capacity, including the construction of our fifth U.S. manufacturing facility, which is expected to commence operations in the second half of 2025.
We are in the process of further expanding our domestic manufacturing capacity, including the construction of our sixth U.S. manufacturing facility to onshore final production processes for modules initiated by our international fleet, which is expected to commence operations in the second half of 2026.
We recently commenced operations at our fourth manufacturing facility in the United States and are in the process of expanding our manufacturing capacity, including the construction of our fifth manufacturing facility in the United States, which is expected to commence operations in the second half of 2025.
We are in the process of further expanding our domestic manufacturing capacity, including the construction of our sixth U.S. manufacturing facility to onshore final production processes for modules initiated by our international fleet, which is expected to commence operations in the second half of 2026. Our global manufacturing footprint spans the United States, India, Malaysia, and Vietnam.
Other technological developments in the renewable energy industry, such as the advancement of energy storage capabilities, have further enhanced the prospects of solar energy as an alternative to traditional forms of energy generation. As a result of these and other factors, worldwide solar markets continue to develop and expand.
In recent years, the cost of electricity from PV solar power systems has generally been competitive with or below other forms of generation. Other technological developments in the renewable energy industry, such as the advancement of energy storage capabilities, have further enhanced the prospects of solar energy as an attractive complement to traditional forms of energy generation.
Developed at R&D labs in California and Ohio, the Company’s technology represents the next generation of solar power generation, providing a competitive, high-performance, and responsibly produced alternative to conventional crystalline silicon PV solar modules. Our PV solar modules are produced using a fully integrated, continuous process that does not rely on Chinese crystalline silicon supply chains.
Our PV solar modules are produced using a fully integrated, continuous process that does not rely on Chinese crystalline silicon supply chains. We are the world’s largest thin film PV solar module manufacturer and the largest PV solar module manufacturer in the Western Hemisphere.
(“Visa”) for the sale of $857.2 million of Section 45X tax credits we generated during 2024 for aggregate cash proceeds of $818.6 million and received initial cash proceeds of $616.0 million. We expect to receive the remaining cash proceeds during the first quarter of 2025.
We received the full cash proceeds during the year ended December 31, 2025. • In October 2025, we entered into two separate agreements for the sale of $699.7 million of Section 45X tax credits we generated during 2025 for aggregate cash proceeds of $668.2 million.
Although module average selling prices in many global markets continue to decline, recent module pricing in the United States, our primary market, has been relatively stable due, in part, to the demand for domestically manufactured modules as a result of the IRA. Diverse Offerings. We face intense competition from manufacturers of crystalline silicon solar modules and other emerging technologies.
However, recent module pricing in the United States, our primary market, has remained stable due, in part, to the rising demand for domestically manufactured modules as a result of the IRA, energy tax credit eligibility restrictions (including foreign-entity-related limitations) as amended by the OBBBA, and tariffs on modules imported into the United States.
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We are the world’s largest thin film PV solar module manufacturer and the largest PV solar module manufacturer in the Western Hemisphere.
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We recently commenced operations at our fourth and fifth manufacturing facilities in the United States and completed the expansion of our manufacturing footprint at our existing facilities in Ohio.
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With a global footprint that spans the United States, India, Malaysia, and Vietnam, we expect to have an annual manufacturing capacity of over 25 GW by 2026.
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The increase in net sales was primarily driven by an increase in the volume of modules sold to third parties. 51 Table of Contents • Gross profit as a percentage of net sales decreased 3.6 percentage points to 40.6% in 2025 from 44.2% in 2024.
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The increase in net sales was primarily driven by an increase in the volume of modules sold to third parties and an increase in termination payments associated with certain customer contract terminations in the U.S., India, and Europe, partially offset by a reduction in revenue related to manufacturing issues affecting certain Series 7 modules manufactured in 2023 and 2024.
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During 2025, we produced 16.1 GW and sold 17.5 GW of solar modules. • In June 2025 and July 2025, we entered into two separate agreements for the sale of $701.9 million of Section 45X tax credits we generated during 2025 for aggregate cash proceeds of $668.1 million.
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We currently believe the primary causes of the issues have been identified and we have taken actions to address such issues. 47 Table of Contents • Gross profit as a percentage of net sales increased 5.0 percentage points to 44.2% in 2024 from 39.2% in 2023.
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We received initial cash proceeds of $573.0 million during the year ended December 31, 2025, and expect to receive the remaining cash proceeds of $95.2 million during the first quarter of 2026. • During 2025, we terminated various master supply agreements with BP Solar Holding LLC and its affiliate Lightsource Renewable Energy Trading, LLC due to the customers’ failure to cure several breaches of their contractual obligations.
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During 2024, we produced 15.5 GW and sold 14.1 GW of solar modules. During 2025, we expect to produce between 18 GW and 19 GW and sell between 18 GW and 20 GW. • In May 2024, we achieved a new world record CdTe research cell conversion efficiency of 23.1%, which was certified by the U.S.
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These terminations triggered certain contractual termination payment provisions amounting to $384.6 million, of which we recognized $61.0 million as revenue for advance payments previously received from the customer.
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Department of Energy’s National Renewable Energy Laboratory. • In July 2024, our dedicated R&D innovation center in Ohio was formally commissioned.
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In September 2025, we filed a complaint with the Supreme Court of the State of New York seeking relief and demanding payment from these customers for the remaining termination payments along with certain other receivables for solar modules previously delivered.
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This R&D facility features a high-volume manufacturing scale production pilot line, which is expected to enable the production of full-sized prototypes of thin film and tandem PV modules, supporting the implementation of our technology roadmap. • In December 2024, we entered into two agreements with Visa Inc.
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“Business – Incentive Programs.” Although we compete in markets that do not require solar-specific government incentive programs, our net sales and profits remain subject to variability based on the availability and size of these programs, including tax and production incentives, renewable portfolio standards, and other incentive programs intended to stimulate economies, achieve decarbonization initiatives, and/or establish greater energy independence.
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In recent years, the cost of producing electricity from PV solar power systems has decreased to levels that are competitive with or below the wholesale price of electricity in many markets.
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Such programs continue to influence the demand for PV solar energy around the world. Supply and Demand As a result of the market opportunities described above, we recently commenced operations at our fourth and fifth manufacturing facilities in the United States and completed the expansion of our manufacturing footprint at our existing facilities in Ohio.
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For example, certain large oil and gas and energy companies have experienced investor pressure to pursue returns commensurate with those currently associated with fossil fuel projects, where returns have become easier as fossil fuel prices have rebounded since the COVID-19 pandemic.
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Further, even on an unsubsidized basis, utility-scale PV solar is cost competitive with conventional forms of energy generation, including natural gas and nuclear, and is significantly faster to deploy than a five-year natural gas project development timeline or a much longer nuclear project timeline.
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Such technologies include the development of bifacial modules, the implementation of our CuRe program, and ongoing research and development of multi-junction solar modules. • Bifacial.
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Sales price per watt may also be influenced by warranty terms, customer payment terms, and/or module attributes. We believe that utility-scale solar will continue to be a compelling offering and will continue to represent an increasing portion of the overall electricity generation mix.
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We recently began commercial production of bifacial solar modules at certain of our manufacturing facilities and delivered our first bifacial modules to customers. Our bifacial module features an innovative transparent back contact which, in addition to converting both front and rear side irradiance, allows infrared light to pass through rather than be absorbed as heat.
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Beginning in the first quarter of 2026, we intend to permanently convert one of our Ohio facilities to CuRe, followed by a phased replication of the technology across certain manufacturing facilities within our fleet. • Perovskite . We continue to research and develop our thin-film semiconductor technology, with a focus on the use of perovskite thin films.
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In May 2024, we achieved a new world record CdTe research cell conversion efficiency of 23.1%, which was based on our CuRe program and certified by the U.S. Department of Energy’s National Renewable Energy Laboratory.
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Perovskites have the potential to significantly increase the efficiency and reduce the cost of PV solar modules either through single-junction or potentially multi-junction devices. Supported by the associates at our California and European Technology Centers, we continue to advance our work on improving both the efficiency and stability of this technology in developing a commercially scalable perovskite product.
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We continue to evaluate opportunities to develop and leverage other solar cell technologies in multi-junction applications that combine our thin film PV technology with another high efficiency PV semiconductor, with each layer optimized for a different range of the solar spectrum.
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We believe such applications, which are expected to utilize at least one thin-film semiconductor, have the potential to significantly increase the efficiency of PV modules beyond the limits of traditional single-junction devices. Our acquisition of Evolar is expected to accelerate the development of high efficiency multi-junction devices by integrating Evolar’s expertise with First Solar’s existing R&D capabilities. Product Efficiencies.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor the year ended December 31, 2024, our restricted marketable securities incurred a loss of less than 1%, including the impact of fluctuations in the price of the underlying securities, and had a weighted-average maturity of approximately 10 years as of the end of the period.
Biggest changeFor the year ended December 31, 2025, our restricted marketable securities earned a return of 10%, including the impact of fluctuations in the price of the underlying securities, and had a weighted-average maturity of approximately 9 years as of the end of the period.
Accordingly, from time to time we may enter into foreign exchange forward contracts to hedge a portion of these forecasted cash flows. These foreign exchange forward contracts qualify for accounting as cash flow hedges in accordance with Accounting Standards Codification (“ASC”) 815 and we designate them as such.
Accordingly, from time to time we may enter into foreign exchange forward contracts to hedge a portion of these forecasted cash flows. These foreign exchange forward contracts may qualify for accounting as cash flow hedges in accordance with Accounting Standards Codification (“ASC”) 815 and we may designate them as such.
The gains and losses on such foreign exchange forward contracts will economically offset all or part of the transaction gains and losses that we recognize in earnings on the related foreign currency denominated assets and liabilities. For additional details on our economic hedging instruments and activities, see Note 10. “Derivative Financial Instruments” to our consolidated financial statements.
The gains and losses on such foreign exchange forward contracts will economically offset all or part of the transaction gains and losses that we recognize in earnings on the related foreign currency denominated assets and liabilities. For additional details on our economic hedging instruments and activities, see Note 9. “Derivative Financial Instruments” to our consolidated financial statements.
An increase in relevant interest rates would increase the cost of borrowing under certain of our debt arrangements. For the year ended December 31, 2024, a 100 basis point change in such variable interest rates would not have had a significant impact to our interest expense. Customer Financing Exposure.
An increase in relevant interest rates would increase the cost of borrowing under certain of our debt arrangements. For the year ended December 31, 2025, a 100 basis point change in such variable interest rates would not have had a significant impact to our interest expense. Customer Financing Exposure.
We are exposed to interest rate risk as certain of our debt arrangements have variable interest rates, exposing us to variability in interest expense and cash flows. See Note 13. “Debt” to our consolidated financial statements for additional information on our debt borrowing rates.
We are exposed to interest rate risk as certain of our debt arrangements have variable interest rates, exposing us to variability in interest expense and cash flows. See Note 12. “Debt” to our consolidated financial statements for additional information on our debt borrowing rates.
For the year ended December 31, 2024, our marketable securities earned a return of 5%, including the impact of fluctuations in the price of the underlying securities, and had a weighted-average maturity of 1 month as of the end of the period.
For the year ended December 31, 2025, our marketable securities earned a return of 5%, including the impact of fluctuations in the price of the underlying securities, and had a weighted-average maturity of 1 month as of the end of the period.
Based on our investment positions as of December 31, 2024, a hypothetical 100 basis point change in interest rates would not have had a significant impact on the market value of our marketable securities investment portfolio.
Based on our investment positions as of December 31, 2025, a hypothetical 100 basis point change in interest rates would not have had a significant impact on the market value of our marketable securities investment portfolio.
We report unrealized gains or losses on such contracts in “Accumulated other comprehensive loss” and subsequently reclassify applicable amounts into earnings when the hedged transaction occurs and impacts earnings. For additional details on our derivative hedging instruments and activities, see Note 10. “Derivative Financial Instruments” to our consolidated financial statements.
We report unrealized gains or losses on such designated contracts in “Accumulated other comprehensive loss” and subsequently reclassify applicable amounts into earnings when the hedged transaction occurs and impacts earnings. For additional details on our derivative hedging instruments and activities, see Note 9. “Derivative Financial Instruments” to our consolidated financial statements.
We typically require some form of payment security from our customers, including, but not limited to, advance payments, parent guarantees, letters of credit, bank guarantees, or surety bonds. 67 Table of Contents
We typically require some form of payment security from our customers, including, but not limited to, advance payments, parent guarantees, letters of credit, bank guarantees, or surety bonds. 71 Table of Contents
Such factors could reduce demand or lower the price we can charge for our modules, thereby reducing our net sales and gross profit. 66 Table of Contents Marketable Securities and Restricted Marketable Securities Exposure. We invest in various debt securities, which exposes us to interest rate risk.
Such factors could reduce demand or lower the price we can charge for our modules, thereby reducing our net sales and gross profit. 70 Table of Contents Marketable Securities and Restricted Marketable Securities Exposure. We invest in various debt securities, which expose us to interest rate risk.
Based on our restricted marketable securities positions as of December 31, 2024, a hypothetical 100 basis point change in interest rates would have resulted in a $15.4 million change in the market value of our restricted marketable securities portfolio.
Based on our restricted marketable securities positions as of December 31, 2025, a hypothetical 100 basis point change in interest rates would have resulted in a $15.9 million change in the market value of our restricted marketable securities portfolio.
As of December 31, 2024, a 10% change in the U.S. dollar relative to our primary foreign currency exposures would have resulted in an $8.8 million change to our net foreign currency income or loss, including the effect of our hedging activities. Interest Rate Risk Variable Rate Debt Exposure.
As of December 31, 2025, a 10% change in the U.S. dollar relative to our primary foreign currency exposures would have resulted in a $3.5 million change to our net foreign currency income or loss, including the effect of our hedging activities. Interest Rate Risk Variable Rate Debt Exposure.

Other FSLR 10-K year-over-year comparisons