(Bloomberg) — An American company has become the world’s most valuable solar manufacturer for the first time since 2018, as Chinese rivals suffer from a profit-sapping price war and a flurry of trade barriers erected by Washington.
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First Solar Inc. gained 1.5% on Friday to end trading with a market cap of $21.15 billion. The increase allowed Arizona-based company Sungrow Power Supply Co. catch up, which saw its shares fall 4.2% in Shenzhen on Friday, valuing it at about $20.85 billion.
It is the first time since 2018 that a Chinese company is not the most valuable solar equipment manufacturer. The country dominates global panel production, controlling more than 80% at every step of the supply chain.
But China’s factory build-up has come at a cost as capacity has outpaced global demand, leading to falling prices and shrinking profit margins. Longi Green Energy Technology Co., another leading Chinese manufacturer, posted a net loss of 2.35 billion yuan ($325 million) in the first quarter, after posting a profit of 3.64 billion yuan in the same period of 2023.
China’s solar giants are also increasingly finding themselves in geopolitical conflict, with leaders from the US and Germany criticizing their excess capacity for hampering the development of supply chains in other parts of the world. President Joe Biden this week announced higher tariffs on Chinese solar panels and other measures aimed at supporting American manufacturers.
First Solar, the largest U.S. panel manufacturer, is one of the main beneficiaries of these actions. It sells its panels in the US, where prices are almost three times the global average due to tariffs on Chinese products. And the expansion plans will be subsidized by the Biden administration’s Inflation Reduction Act.
Of course, market capitalization is just one way to measure companies. By most other measures, including the vital metric of being able to produce enough clean energy to combat climate change, First Solar still has a ways to go to catch up to its Chinese counterparts. It produced 12 gigawatts of panels in 2023, compared with 79 gigawatts for Shanghai-based Jinko Solar Co.
First Solar did not immediately respond to a request for comment.
–With help from Will Wade.
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