What happened 

Shares of First Solar (FSLR -0.46%) jumped 15% last week, according to data from S&P Global Market Intelligence, after multiple analysts boosted their price targets for the energy producer's stock.

So what

On Monday, Bank of America analyst Julien Dumoulin-Smith lifted his share-price forecast for First Solar from $138 to $165. Dumoulin-Smith expects strong demand for renewable energy to allow the solar panel manufacturer to charge favorable prices for its products. In turn, he sees First Solar enjoying strong earnings growth in the coming years.

That same day, Guggenheim Partners analyst Joseph Osha offered an even more positive assessment. Osha thinks the stock could rocket 50% to $233. He highlighted First Solar's demonstrated ability to lock in attractive prices for new projects, which should provide investors with a greater level of visibility into the company's long-term revenue streams.

And on Tuesday, Piper Sandler analyst Kashy Harrison placed a $200 price target on First Solar's shares, up from a prior estimate of $170. Like Dumoulin-Smith and Osha, Harrison believes First Solar's recent business wins provide evidence of increased pricing power and a potential to generate higher profits in the years ahead.

Now what

The Inflation Reduction Act of 2022 is shaping up to be a game changer for the solar industry. The bill contains a staggering $369 billion in climate change and energy security investments geared toward helping the U.S. dramatically curtail carbon emissions.

As a leading American provider of renewable power technology, First Solar is likely to benefit from government incentives designed to spur domestic production of high-performance photovoltaic semiconductors. These financial incentives, combined with surging demand for clean energy, should help to fuel First Solar's growth in the coming decade.