WASHINGTON (AP) — While campaigning for president, Joe Biden promised to spend billions of dollars to “save the world” from climate change. One of the biggest players in the solar industry was ready.
Executives, officials and major investors in First Solar, the largest domestic manufacturer of solar panels, donated at least $2 million to Democrats in 2020, including $1.5 million to Biden’s successful bid for the White House. After he won, the company spent another $2.8 million lobbying his administration and Congress, records show — an effort that included high-level meetings with top administration officials.
The strategy was a dramatic departure from the Arizona-based company’s stance under then-President Donald Trump, who was publicly labeled by company officials as hostile to renewable energy. It has also reaped enormous benefits, as First Solar became perhaps the biggest beneficiary of an estimated $1 trillion in environmental spending enacted under the Inflation Reduction Act, a major piece of legislation that Biden signed into law in 2022 after passing the Congress had approved solely with Democratic votes.
Since then, First Solar’s stock price has doubled and profits have soared thanks to new federal subsidies that could be worth as much as $10 billion in ten years. The success has also provided a huge windfall for a small group of Democratic donors who have invested heavily in the company.
Big returns
Ahead of what will be a tight race for the White House this year, Biden and his fellow Democrats are pointing to the sprawling legislation as an example of investing in alternative energy in ways that will help the environment and boost the economy. But First Solar offers an example of how the same piece of legislation, shaped by a team of lobbyists and potentially influenced by a flood of campaign cash, can deliver huge returns for the well-connected.
Samantha Sloan, First Solar’s top lobbyist, provided a revealing look at the company’s reach after the bill was signed.
“Those of us who worked on this know that none of this would have been possible without the dedication and cooperation of a group of Congressional staff who worked long hours” to ensure that the law “would be implemented as intended.” , she posted on LinkedIn alongside a photo of herself beaming on the South Lawn of the White House.
Angelo Fernández Hernández, a White House spokesman, did not directly address First Solar’s efforts to curry favor with the Biden administration.
“President Biden has led and implemented the most ambitious climate agenda in history, restoring America’s climate leadership at home and abroad,” Fernández Hernández said in a statement. “The White House consults regularly with industry leaders across all sectors, including clean energy producers. and gas and oil producers.”
In a statement, First Solar CEO Mark Widmar said the new subsidies helped expand the company’s domestic footprint. He also lashed out at some of First Solar’s rivals with ties to China, which dominates the sector.
“Unlike others who routinely do significantly more lobbying on behalf of Chinese companies that circumvent U.S. laws and increase strategic vulnerabilities, our interests lie in a diverse, competitive domestic solar manufacturing base that supports American jobs, economic value and energy security,” said Widmar.
Founded in 1999 by a private equity group that included a Walmart heir, First Solar went public in 2006, the same year that former Vice President Al Gore’s film “An Inconvenient Truth” helped raise awareness about the threat of increase climate change. Company officials cultivated a constituency with Democrats during Barack Obama’s administration, who in turn subsidized their industry — and First Solar — with billions of dollars in government-backed loans.
As the Biden administration began writing rules to implement the Democrats’ new law, First Solar executives and lobbyists met at least four times in late 2022 and 2023 with administration officials, including John Podesta, who oversaw the measure’s environmental provisions. One of the more intimate meetings was attended by Podesta, Widmar and Sloan, as well as First Solar’s contract lobbyist Claudia James, a longtime friend of Podesta’s who worked for decades at a lobbying firm run by Podesta’s brother Tony, the records show.
Widmar and Sloan also attended a celebration at the White House in September 2022, according to records and social media posts, with Sloan praising the new law as “one of the most consequential pieces of legislation of our lifetimes.”
A consequential law
The law has had consequences for First Solar.
The company stands to benefit from billions of dollars in lucrative tax credits for domestic clean energy producers — a policy aimed at making the U.S. more competitive with green energy giant China. While intended to reward clean energy companies, the credits can also be sold on the open market to companies with little to do with fighting climate change.
Last December, First Solar agreed to sell about $650 million of these credits to a tech company, bringing in a huge influx of cash courtesy of the U.S. government.
Investors in the company, including a handful of major Democratic donors, have also benefited from First Solar’s rising stock price.
Farhad “Fred” Ebrahimi, co-founder of software company Quark, was added to Forbes’ billionaires list in 2023 thanks to the skyrocketing value of his roughly 5% stake in First Solar, financial disclosures show. Ebrahimi, along with his wife and family, contributed at least $1 million to Biden’s 2020 election efforts, campaign finance disclosures show.
Lukas T. Walton, heir to the Walmart fortune, had a 4.9% stake in the company, according to 2020 financial disclosures. Walton donated $360,000 to Biden’s 2020 campaign, as well as $100,000 to his 2021 inauguration, campaign financial records show.
A breakthrough
For a time, there were real doubts about whether Democrats could reach a consensus and pass the bill, which had stalled in the Senate in late 2021. A breakthrough came the following July, when Senate Majority Leader Chuck Schumer of New York and Sen. Joe Manchin of West Virginia entered secret negotiations in hopes of reviving it.
A day after the two lawmakers met, Democratic megadonor Jim Simons, an enthusiastic supporter of the party’s green energy efforts, donated $2.5 million to Schumer’s super PAC, which spends tens of millions of dollars each election season supporting Senate Democrats.
Renaissance Technologies, a hedge fund founded by Simons, also began buying First Solar stock. The hedge fund bought 60,000 shares between July, when Schumer privately negotiated with Manchin, and September, when Biden held a party after signing the bill, financial filings show. The fund eventually increased its position to 1.5 million shares, which it sold in 2023 after the company’s share price skyrocketed.
Simons, who died in May, was no ordinary donor. Documents show that his family donated $25 million to Democrats in 2022. And in the past, he had said he helped Schumer draft legislation, calling the New York Democrat “a pretty good friend of mine,” according to a 2020 oral history interview with the American Institute of Physics.
A spokesman for Schumer said the Senate leader did not speak to Simons about the negotiations.
“At Senator Manchin’s request, no one outside of Senator Schumer’s staff or Senator Manchin’s staff was informed of the negotiations,” the spokesperson said. A spokesperson for Manchin did not respond to a request for comment.
A representative for Renaissance Strategies said the hedge fund uses computer-based trading strategies that “do not involve human stock picking.”
Investments in alternative energy
Democrats’ investments in alternative energy companies have not always paid off. The 2011 bankruptcy of Solyndra, which had received a $500 million government-backed loan, became a rallying cry for Republicans.
It also drew attention to First Solar, whose chairman was called to testify before the Republican Party-controlled House Oversight Committee in 2012 when he was questioned about strong-arm tactics used to secure more than $2 billion in government loans -Secure Obama for projects. Solar was involved.
In an email to House Republicans, a First Solar executive pressured the Department of Energy for the funding, suggesting that otherwise a plant in Mesa, Arizona, that Obama administration officials would like to wanted to promote might not be built.
“Failure to approve could jeopardize construction and, frankly, undermine the rationale for a new manufacturing center in Arizona,” the former executive wrote in 2011.
The loans were granted. However, the factory was never completed.
First Solar spokesman Reuven Proenca said the decision was prompted by a recession in the solar energy sector and that the company was also closing a factory in Germany.
More recently, the company paid $350 million to settle a securities fraud lawsuit – an agreement that was announced shortly before the case was set to go to trial. The company denied wrongdoing and the 2020 settlement did not include an admission of liability.
Details in the file provide a damning portrait. Investors accused company officials of lying about the extent of a defect that caused panels to fail prematurely, court records say. It was a decision, investors argued, driven by company executives’ desire to preserve First Solar’s stock price.
But while First Solar officials downplayed the extent of the problem, some of them dumped their own stock, court records show. Mark Ahearn, the company’s founder and chairman, sold more than $427 million worth of stock alone before the extent of the defect was made public and the shares plummeted. The ordeal ultimately cost the company $260 million to resolve, court records say.
Proenca, the First Solar spokesman, said the company handled the case to “focus on moving the company forward.”
Because First Solar is the largest U.S.-based solar manufacturer, green energy advocates say Biden has no choice but to subsidize the company if he wants to meet his ambitious climate goals while becoming more competitive with China.
“Hopefully they are reformed,” said Pat Parenteau, professor emeritus at Vermont Law School and senior fellow at the Environmental Law Center. “They may be an imperfect vehicle. But the reality is that we really need them.”
