First Solar vs. Enphase Energy: Which Solar Stock Shines Now?

As renewable energy continues to grow, investors are paying more attention to companies that play important roles in the solar sector. Two widely followed names in this space are First Solar, Inc. FSLR and Enphase Energy, Inc. ENPH. While both are supported by the long-term shift toward clean energy, they operate in different parts of the solar market and each has its own strengths.

As industries around the world continue moving toward cleaner and more reliable energy options, solar power has become one of the most widely adopted renewable sources. Its growth can be seen in the steady rise of solar panel installations across homes, businesses and large utility projects in many countries. Supportive government policies, corporate efforts to cut carbon emissions and growing consumer interest in lowering energy costs are all contributing to higher solar adoption. Together, these factors are helping drive consistent growth in solar capacity across both developed and emerging markets.

The Case for FSLR Stock

First Solar is aggressively expanding its manufacturing capacity to capture growing global solar demand. During 2025, the company commenced production of Series 7 modules at its new manufacturing facility in Louisiana. It produced 16.1 gigawatts (GW) and sold 17.5 GW of solar modules. These are expected to strengthen its global presence and support future revenue growth.

First Solar continues to strengthen its manufacturing base through steady domestic and international expansion. The company recently began operations at its fourth and fifth U.S. manufacturing facilities and expanded its existing Ohio footprint, while also advancing construction of a sixth U.S. plant expected to come online in the second half of 2026. Its vertically integrated, continuous-flow production process supports efficient, large-scale module manufacturing across facilities in the United States, India, Malaysia and Vietnam. To support this expansion and ongoing technology improvements, the company expects capital expenditures between $0.8 billion and $1 billion in 2026, including investments in new facilities, equipment upgrades and research and development initiatives.

The Case for ENPH Stock

Enphase Energy holds a strong position in the battery storage segment through its fully integrated solar-plus-storage systems. In the fourth quarter of 2025, the company shipped 150.1 megawatt-hours of IQ Batteries, highlighting steady demand for its storage solutions across key solar markets. Enphase Energy is currently delivering its third-generation IQ Battery 5P to customers in Australia, New Zealand, the United States, Puerto Rico, Mexico, Canada, the United Kingdom, Italy, France, the Netherlands, Luxembourg, Belgium, Romania and India.

Enphase Energy also maintains a leadership role in the U.S. microinverter market. The company transformed the solar industry with its semiconductor-based microinverter technology, which converts electricity at the individual module level rather than through a centralized system. In the fourth quarter of 2025, microinverter shipments totaled approximately 1.55 million units, marking solid year-over-year growth. As part of its global expansion strategy, Enphase Energy continues to introduce new products in additional markets, including the launch of its IQ9 microinverters in the United States in January 2026.

Let's compare the stocks' fundamentals to determine which one is a better investment option at present.

How Does the Zacks Consensus Estimate Compare for FSLR & ENPH?

The Zacks Consensus Estimate for First Solar’s 2025 earnings per share (EPS) indicates a decrease of 0.13% in the past 60 days.

The consensus estimate for Enphase Energy’s 2026 EPS indicates an increase of 4.76% in the past 60 days.

Return on Equity of FSLR & ENPH

Currently, ROE for First Solar is 17.32% compared with Enphase Energy’s 41.33%.

FSLR & ENPH’s Price Performance

In the past six months, shares of FSLR and ENPH have risen 9.9% and 29.1%, respectively.

Valuation for FSLR & ENPH

FSLR shares trade at a forward 12-month Price/Sales (P/S F12M) multiple of 3.56 compared with ENPH’s P/S F12M of 5.03.

FSLR & ENPH: Which Is a Better Choice Now?

Both companies operate in the expanding solar industry. First Solar focuses on utility-scale projects and large-scale module manufacturing, with an emphasis on domestic production and capacity growth. Enphase Energy, on the other hand, centers on residential and commercial markets through microinverters and battery storage solutions. While First Solar relies on manufacturing scale and project demand, Enphase Energy differentiates itself through power electronics and integrated energy systems.

However, our choice at the moment is Enphase Energy, given its better price performance, earnings growth and ROE than First Solar.

Enphase Energy and First Solar both carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research