Profiting From Subsidies While Proliferating Trump’s Protectionism

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Following the Olympic closing ceremony, a lot has happened in the world. Trump gave the longest and most incoherent State of the Union address in history. The US started waging war on Iran. In a more encouraging demonstration of higher intelligence, we saw Punch the monkey and his plush orangutan rise to global fame. Luckily, I was away on a vacation throughout much of this.

However, during the global chaos, there were a couple of related stories that largely flew under the radar but have significant implications to the renewable energy transition and global trade.

First Solar Profits From Subsidies

For 2025, First Solar posted a net profit of $1.53 billion on “Net Sales” of $5.2 billion. For most companies, that would be a high margin, but there is more to the story. In 2025, First Solar also recognized $1.6 billion in 45X transferable tax credits. Of note, First Solar counts its tax credit sales in its “Net Sales,” affecting its gross margin. They expect $2.1 to 2.19 billion in 45X tax credits to impact gross margin in their 2026 projection, as mentioned in the footnote in their earnings presentation. Wall Street wasn’t impressed, leading to a decrease in share price.

45X is a transferable tax credit that can be sold to other companies for cash. It goes out on a production basis at multiple steps of the manufacturing process. When you stack it up (components, wafer, cell, module, etc.), it comes to significantly more than the total cost per watt for solar panels in China. Some may try to say that this is a “tax cut,” but it is really just another subsidy mechanism. The subsidy that makes up First Solar’s profitability.

First Solar customers also benefit from subsidies like the 48E tax credit that continues for commercial installations, despite the demise of the 25C household credit. This starts at paying for 30% of the project cost, but “domestic content” adds on 10% and bonuses credits based on siting can take it to as much as 70% of the project cost. As First Solar is focused on the commercial and utility-scale solar market, they also benefit from this subsidy to their customers.

And First Solar isn’t new to subsidies, having relied on federal, state, and local government grants, loans, loan guarantees, tax credits, enterprise zones, etc. over the years. In addition, there are still expansive solar subsidies available at the federal, state and local level.

Protectionist Expansion Targeting India, Indonesia & Laos

At the same time that this is happening, First Solar and the Alliance for American Solar Manufacturing and Trade (AASMT) petitioned for expanded protectionism on solar panels under the excuse of “suspected subsidies.” This is in spite of First Solar having operations in some of the countries targeted. Trump’s Commerce Department issued initial Countervailing Duties (CVDs) on India at 125.87%, Indonesia at 104.38% and Laos at 80.67%. Recently, these countries have been the top exporters of solar panels to the US. India may be the most significant, as their solar sales to global markets also help to support their transition to potentially become the first electrostate. These tariffs follow prohibitive CVDs targeting Cambodia, Malaysia, Thailand and Vietnam. Those tariffs came after prohibitive tariffs and other protectionist measures that targeted the largest global producer of solar panels, China. Of course, these tariffs will effectively increase US solar prices and turn production capacity that was recently built to address global markets into “overcapacity.”

First Solar is singled out here as an example, but they are just a part of the larger issue. However, the business viability of less efficient thin film panels relies on them being less expensive than crystalline silicon panels. However, US crystalline silicon solar panels have been triple the price of solar panels made in China. And they are still multiple times the price of panels made in other Asian countries. Those imported panels are less expensive than US-made thin film panels. Through protectionism, people will pay more for less efficient panels.

Solar tariffs greatly impact the US energy transition. Inflating panel prices kills jobs, as most of the solar jobs come from installation and implementation. While US solar companies try to take credit for those indirect jobs and economic impact, the net impact would be increased by lower cost solar panels. Every dollar overpaid for panels means fewer people hired and more fossil fuels burned.

Profiteering On Hypocrisy

Fundamentally, there is nothing wrong with solar subsidies. The money spent to build solar capacity provides economic value through decades of energy production and decades of reduced fossil fuel dependency. Regardless of where the solar panels are made, the vast majority of jobs are created through their installation, and most of their economic value comes their use. That use of a durable product continues to provide decades of clean energy, regardless of trade disruptions. In contrast, fossil fuels are consumable and need a steady supply. No longer relying on fossil fuel consumption increases energy security.

However, propping up profits solely from subsidies in a closed market is not sustainable. The hypocrisy of placing prohibitive tariffs on imports under the excuse of “suspected subsidies” while massively subsidizing domestic industry is overall destructive. The claims of “unfair subsidies” never look in the mirror. Paying more in subsidies than the global price for solar panels destroys taxpayer value. Creating a closed market system that is heavily dependent on subsidies leaves the sector vulnerable to collapse if those subsidies end and the protectionism persists. Paying multiple times as much as the global price for solar panels after subsidies destroys customer value. Increasing energy prices impacts everyone who uses energy. Shifting more spending to less labor-intensive manufacturing destroys net jobs created. Distorting markets with the elevated prices makes solar less attractive overall, reduces scale and undermines the transition to renewable energy, both here and globally. Greedily trying to maintain the profits of globally uncompetitive domestic solar manufacturers is also effectively maintaining fossil fuel dependency and addiction. That addiction is leading to massive environmental and human destruction.

Protectionist and other discriminatory policies tend to rely on the composition fallacy that “they are all the same.” That becomes much harder to believe with the broadened scope of tariffs. The countries now being targeted with anti-solar tariffs have a combined population of over 3.4 billion people, over 41% of the global population. They also represent the vast majority of global solar manufacturing. There is a lot of competition between companies and no threat of a monopoly. We are blocking more diverse competition globally than we have at home.

The composition fallacy is backed by the xenophobic, narcissistic delusion that the “other” is out to destroy you. No smart business wants their customers to be destroyed. If that happens, then they make less money. However, if we try hard enough, we can make other countries our enemies. Trump certainly does seem to be trying. But the companies trying to sell us solar panels are not trying to hurt us.

They may be out to reduce global fossil fuel dependency. As the largest fossil fuel producer, that does hurt some US profits and reduce global reliance on the US. Fossil fuel interests support the elevated protectionism. However, we need to ask ourselves: Is the control, destruction, and greed more important than the transition to a cleaner, multilateral energy future?