Why First Solar Stands Out Among Its Peers: Does It Belong in Your Portfolio?

First Solar (NASDAQ: FSLR), Enphase Energy (NASDAQ: ENPH), and SolarEdge Technologies (NASDAQ: SEDG) are the three names most investors reach for when they want solar exposure. For a retirement-focused investor right now, only one of them belongs in a long-term portfolio.

While the industry faces a complex regulatory landscape in the United States due to the sunsetting of key residential tax credits and new trade tariffs, global growth remains aggressive. In 2026, global installed capacity is expected to surpass 1,000 GW, making solar PV generation larger than both wind and nuclear power for the first time.

1. Financial Strength and Balance Sheet

First Solar wins this category without contest. The company closed FY2025 with $9.54 billion in shareholder equity, $2.80 billion in cash, and total liabilities that fell 8.77% year over year. Operating cash flow reached $2.06 billion, up 68.89% year over year. The balance sheet is stable and actively strengthening.

Enphase tells a different story. FY2025 operating cash flow collapsed 73.42% year over year to $136.54 million, and free cash flow dropped 80.02% to $95.90 million. Tariffs hit Q4 gross margin by 5.1 percentage points, and Q1 2026 guidance already bakes in about another 5 percentage points of tariff drag. SolarEdge carries $1.75 billion in total liabilities against only $427 million in equity, and shareholder equity dropped 35.07% year over year. Its operating cash flow only just turned positive in FY2025 at $104.26 million, versus negative $313.32 million in FY2024.

Winner: First Solar.

2. Profitability and Earnings Quality

First Solar generated $1.53 billion in net income in FY2025, up 18.28% year over year, on revenue of $5.22 billion, up 24.09%. FY2025 EPS came in at $14.21. Q4 net income alone rose 32.5% year over year to $520.88 million. The company carries a contracted backlog of 53.7 GW valued at $16.4 billion as of Q3 2025, providing visibility that neither rival can match.

Enphase returned to modest profitability in FY2025 with net income of $172.13 million, up 67.68% year over year, but Q4 operating income fell 59.06% year over year to $22.44 million and Q4 net income dropped 37.72%. SolarEdge posted a full-year net loss of $405.45 million in FY2025, with a non-GAAP gross margin of just 23.3% in Q4 and GAAP operating losses continuing. A company losing money at this scale disqualifies itself from retirement portfolios.

Winner: First Solar.

3. Long-Term Track Record and Volatility

Over the past year, First Solar is up 51.2%. Over five years, shares have gained 141.4%. Enphase has shed 38.2% over the past year and has lost 78.4% over five years. It cratered 27.3% in the past month alone. SolarEdge is up 202.6% over one year. That’s impressive on the surface, but it has shed 85.2% over five years and fell 8.4% in just the past week. That one-year gain reflects a bounce off deeply distressed lows rather than durable compounding.

First Solar’s domestic U.S. manufacturing footprint (five facilities including a new Louisiana plant, with South Carolina announced) insulates it from the Chinese supply chain exposure that pressures both rivals. Its Section 45X manufacturing tax credit benefits remain intact through the end of the decade.

Winner: First Solar.

Verdict

SolarEdge is a speculative turnaround trade for investors who can tolerate ongoing losses, a leveraged balance sheet, and violent price swings. Enphase is a fallen-angel story with unresolved tariff risk and shrinking cash flows remaining key concerns for retirement-focused investors.

First Solar is the only solar stock in this group with consistent profitability, a fortress balance sheet, positive and growing cash flow, and a manufacturing moat that competitors cannot replicate quickly. For retirement-focused investors prioritizing durability, First Solar presents the strongest fundamentals among the three.