First Solar Inc. (NASDAQ:FSLR) jumped as much as 9% in Wednesday's premarket trading after Democrats won control of both chambers of Congress, raising hopes of renewed federal support for clean energy.
But the leading U.S. solar manufacturer already benefits from billions in manufacturing tax credits, while President Donald Trump's import restrictions could strengthen its competitive position.
The rally extended across the sector, with Sunrun Inc. (NASDAQ:RUN) and Enphase Energy Inc. (NASDAQ:ENPH) also posting substantial premarket gains.
The question is how much additional help Democrats can deliver.
What Democrats Could Change
First Solar already expects about $2.1 billion in federal tax credits this year for manufacturing solar panels in the U.S. Those subsidies are protected at their full value through 2029.
But the customers buying those panels face a different situation.
Trump's 2025 tax law eliminated key incentives for most new solar projects beginning operations after 2027, although projects that started construction by July 4, 2026, remain eligible.
Restoring those incentives could encourage developers to build more solar farms, boosting demand for First Solar's panels.
There is one major obstacle: Trump can veto any attempt to restore the credits. Democrats won't take control of Congress until January, and even then they lack the votes to override him.
Kalshi traders assign a 28% probability that Congress will override at least one Trump veto before Jan. 1, 2028. The market has approximately $108,000 in total trading volume.
The contract covers any presidential veto, not specifically clean-energy legislation, but illustrates the broader political hurdle facing Democrats.
Trump's Tariffs Could Help First Solar
While Democrats debate how to support solar energy, Trump's tariffs are already giving First Solar an advantage over foreign competitors.
Starting Dec. 4, covered imported solar panels will face a minimum price of 38 cents per watt, plus an additional 15% duty on many covered imports. That makes it harder for overseas manufacturers to undercut First Solar's American-made panels.
CEO Mark Widmar said on First Solar's Oct. 29 earnings call that it had raised prices in some customer negotiations following the tariff announcement.
But there's a catch.
Widmar said uncertainty over how the new import rules and other restrictions will be enforced has made it harder for customers to agree on prices, slowing new orders.
First Solar cut its annual sales forecast from $4.9 billion–$5.2 billion to $4.6 billion–$4.9 billion, citing weaker expected sales of panels manufactured in India and other overseas facilities, as well as U.S.-finished products.
That leaves First Solar in an unusual position: Trump's tariffs have already helped it raise its asking prices, but uncertainty over the new rules is making it harder to turn those negotiations into firm orders.
