A law signed by Biden aimed to boost renewable energy. It also helped a solar energy company reap billions

WASHINGTON – While campaigning for the presidency, 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, employees and major investors at First Solar, the nation’s largest solar panel manufacturer, donated at least $2 million to Democrats in 2020, including $1.5 million toward 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 senior administration officials.

The strategy was a dramatic departure from the Arizona-based company’s stance under then-president donald trump, which corporate officials have publicly called hostile to renewable energy. It also paid huge dividends, as First Solar became perhaps the largest beneficiary of nearly $1 billion in enacted environmental spending. under the Inflation Reduction Actan important piece of legislation that Biden signed into law in 2022 after cleared Congress with only Democratic votes.

Since then, First Solar’s stock price has doubled and its profits have soared thanks to new federal subsidies that could be worth up to $10 billion over a decade. The success also provided a huge windfall for a small group of Democratic donors who invested heavily in the company.

Ahead of what’s shaping up to be a tight race for the White House This year, Biden and his fellow Democrats point to the expanding 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 generate outsized returns for the well-connected.

First Solar’s top lobbyist, Samantha Sloan, offered a revealing glimpse into the company’s reach after a bill signing celebration.

“Those of us who worked on this know that none of this would have been possible without the dedication and collaboration of a group of congressional staffers who worked long hours” to ensure the law “would go as planned,” she posted on LinkedIn alongside a photo of her smiling 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 delivered on 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 regularly engages with industry leaders across sectors, including clean energy manufacturers. and gas and oil producers.”

In a statement, First Solar CEO Mark Widmar said the new subsidies helped build the company’s domestic presence. He also attacked some of First Solar’s rivals with ties to China, which dominates the sector.

“Unlike others who routinely spend substantially more lobbying on behalf of Chinese companies that skirt U.S. laws and deepen strategic vulnerabilities, our interests lie in a diverse and competitive domestic solar production base that supports jobs, economic value and American energy security,” said Widmar.

Founded in 1999 by a private equity group that included an heir to the Walmart fortune, 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 climate change. Company officials cultivated a constituency with Democrats during the administration of Barack Obama, who in turn subsidized their industry — and First Solar — through 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 environmental provisions. of the measurement. One of the more intimate meetings was attended by Podesta, Widmar and Sloan, as well as First Solar contract lobbyist Claudia James, an old friend of Podesta who worked for decades at a lobbying firm run by Podesta’s brother, Tony, records show.

Widmar and Sloan also attended a September 2022 celebration at the White House, according to records and social media posts, with Sloan praising the new law as “one of the most important pieces of legislation of our lifetimes.”

The law had consequences for First Solar.

The company will benefit from billions of dollars in lucrative tax credits for domestic clean energy manufacturers – a policy aimed at putting the US in a more competitive position with green energy giant China. Although intended for reward clean energy companiesCredits can also be sold on the open market to companies that have little to do with combating climate change.

Last December, First Solar agreed to sell about $650 million of these credits to a technology company – providing a massive influx of cash, courtesy of the US government.

Investors in the company, including some major Democratic donors, also benefited from First Solar’s rising share price.

Farhad “Fred” Ebrahimi, co-founder of software company Quark, has been added to Forbes’ 2023 billionaires list thanks to the exorbitant 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 effort, according to campaign finance disclosures.

Lukas T. Walton, heir to the Walmart fortune, held 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 inauguration in 2021, campaign finance records show.

For a period, there were real doubts on whether Democrats could reach consensus and pass the bill, which had stalled in the Senate at the end of 2021. A breakthrough came the following July, when Senate Majority Leader Chuck Schumer of New York and the Resistant Senator Joe Manchin of West Virginia began secret negotiations in hopes of reviving it.

A day after the two lawmakers began meeting, Democratic mega-donor 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 every election season to support Senate Democrats.

Renaissance Technologies, a hedge fund founded by Simons, also began buying First Solar shares. The hedge fund bought 60,000 shares between July, when Schumer was negotiating privately with Manchin, and September, when Biden held a celebration after signing the bill, financial records show. The fund eventually increased its position to 1.5 million shares, which it sold in 2023 after the company’s share price soared.

Simões, who died in May, was no ordinary donor. His family contributed $25 million to Democrats in 2022, records show. And in the past, he has said he helped Schumer draft legislation and called the New York Democrat “a very good friend of mine,” according to a 2020 oral history interview with the American Institute of Physics.

A spokesperson for Schumer said the Senate leader has not spoken with Simons about the negotiations.

“At Senator Manchin’s request, no one outside Senator Schumer’s team or Senator Manchin’s team was briefed on the negotiations,” the spokesperson said. A spokesperson for Manchin did not respond to a request for comment.

A Renaissance Strategies representative said the hedge fund uses computer-based trading strategies that “do not involve human stock picking.”

Democrats’ investments in alternative energy companies have not always panned out. The 2011 Solyndra bankruptcywhich received a $500 million government-backed loan, became a rallying cry for Republicans.

It also drew attention to First Solar, whose president was called to testify before the GOP-controlled House Oversight Committee in 2012 when he was questioned about violent tactics used to secure more than $2 billion in government loans. Obama for projects. Solar was involved.

In an email delivered to House Republicans, a First Solar executive lobbied the Energy Department for funding, suggesting that otherwise a factory in Mesa, Arizona, that Obama administration officials were eager to tout might not be able to be built.

“Failure to receive approval could “jeopardize construction” and “frankly, undermine the justification for a new manufacturing center in Arizona.” the former executive wrote in 2011.

Loans were granted. The factory, however, was never completed.

First Solar spokesman Reuven Proença said the decision was prompted by a crisis in the solar industry and that the company also closed a factory in Germany.

More recently, the company paid US$350 million to settle a securities fraud case – a settlement announced shortly before the case went to trial. The company has denied any wrongdoing and the 2020 settlement did not include any admission of liability.

The details included in the case file offer a damning portrait. Investors accused company officials of lying about the extent of a defect that caused the panels to fail prematurely, court records state. It was a decision, investors argued, motivated by company executives’ desire to preserve First Solar’s share price.

But while First Solar officials downplayed the extent of the problem, some of them dumped personally held shares, according to court records. Mark Ahearn, the company’s founder and chairman, alone sold more than $427 million worth of shares before the extent of the defect became public and the stock plummeted. The ordeal cost the company $260 million to fix, court records state.

Proença, a First Solar spokesperson, said the company settled the case to “focus on driving the business.”

Because First Solar is the largest U.S.-based solar power 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 the China.

“I hope they have reformed,” said Pat Parenteau, professor emeritus at Vermont Law School and senior fellow at the Environmental Law Center. “They can be an imperfect vehicle.