First Solar (NASDAQ:FSLR) stock has more than doubled in the past year on stronger-than-expected solar demand for the industry overall. And it hasn't hurt that the fear of solar tariffs has given developers an incentive to lock up First Solar's tariff-free panels in long-term contracts. 

There's also reason to think First Solar's stock has room to run higher, because conditions in the solar industry more broadly look favorable and are especially likely to help First Solar in particular. Here's how shares could get a further boost. 

Utility-scale solar installation in the desert.

Image source: First Solar.

U.S. tariffs would be a loss for solar but a win for First Solar

First Solar has already booked at least 6.7 gigawatts (GW) of solar panel sales in 2017 and 4.5 GW in the third quarter alone. That compares to 2.6 GW to 2.7 GW of solar panels expected to ship in 2017. There's no question that First Solar has capitalized on the threat of tariffs by booking out years of production. But that could just be the start of the benefit. 

If the Trump administration decides to put punitive tariffs on silicon-based solar imports, it could make it attractive for First Solar to boost its own production beyond a run rate of about 4 GW currently planned for the end of 2019. The company has room in Malaysia to expand and could add capacity in the U.S. or Vietnam as well

The challenge is that it would take about 18 months from the time First Solar decides to expand production until panels start coming off the line. The tariff decision isn't expected until January 2018, so realistically it wouldn't be until mid- to late 2019 that First Solar could expand beyond the 4 GW level annually. But expansion, particularly to serve the U.S. market under punitive tariffs, is an option no other company has. 

A balance sheet ready for anything

At the end of the third quarter, First Solar had $2.7 billion of cash and marketable securities and just $344 million of long-term debt. That's a balance sheet built for weathering tough times -- or for taking advantage of unique opportunities when they arise. 

The major area where I think First Solar could expand or make acquisitions that would augment the business is in energy storage. Utilities are beginning to install energy storage to reduce peak energy demand and provide other services. First Solar could use it at power plants to smooth out the flow of power to the grid, providing more value in the process. Until now, First Solar has been hesitant to make energy storage a big part of its business, leaving the opportunity to competitors, but that could change. 

If First Solar doesn't need more money to expand production or make acquisitions, we could also see it buy back shares in the next few years. After all, having billions on the balance sheet with nothing to do with it isn't good for any business. 

Is First Solar going to pop again?

Short-term, there won't be a lot of surprises in First Solar's financial results. The company doesn't have room to expand production for at least 18 months beyond what's already being planned, and doesn't have major solar projects to sell, which has led to a windfall the last few quarters. But in 2020 and beyond, it could have room to grow more than expected, and that's what could drive shares higher in 2018 -- but probably only if tariffs come down as the company currently hopes.

Travis Hoium owns shares of First Solar. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.