First Solar Warns of Order Cliff by 2028 After 28 GW Backlog Decline and Revenue Miss
First Solar’s contracted backlog plunged from 78.3 GW at end-2023 to 50.1 GW by end-2025, while net bookings fell to negative 0.9 GW after 8.3 GW of cancellations against 7.4 GW of new orders in 2025. Management cut 2026 revenue guidance to $4.9–5.2 billion, missing estimates by roughly $1 billion.
1. Backlog Depletion Trends
First Solar’s contracted backlog fell by 28.2 GW over two years, sliding from 78.3 GW at the end of 2023 to 50.1 GW at the end of 2025, representing a drop in backlog value to approximately $15 billion. This rapid consumption of orders highlights weakening demand and higher cancellation rates on long-dated utility projects.
2. Net Bookings and Shipments
During 2025, the company shipped a record 17.5 GW of modules but recorded 8.3 GW of contract cancellations against only 7.4 GW of new gross bookings. The result was net negative bookings of 0.9 GW, indicating the backlog is depleting faster than it is replenished at current contract levels.
3. Tax Credit Dependency
Section 45X tax credits contribute $0.17 per watt—about 55% of First Solar’s $0.30 per watt selling price—propping up gross margins near 40%. Without those credits, margins would collapse to roughly 7–10%, and the credits begin phasing out in 2030, disappearing entirely by 2033.
4. 2026 Guidance and Valuation Risks
Management issued 2026 revenue guidance of $4.9–5.2 billion, roughly $1 billion below consensus and implying flat-to-negative growth. With subsidized EPS of $14.21 in 2025 versus normalized $2–3 without credits, the stock trades at 64–96 times normalized earnings, reflecting valuation risk as policy tailwinds expire.