<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                   FORM 10-Q

(Mark one)
  X   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
-----
EXCHANGE ACT OF 1934
                   for the three months ended March 31, 2000

                                      OR

____  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

       For the transition period from _______________ to ______________

                            Commission File Number
                                   000-23657
                               AstroPower, Inc.
            (Exact name of registrant as specified in its charter)

Delaware                                                    51-0315869
(State or other jurisdiction                                (IRS Employer
of incorporation or organization)                           Identification
                                                            Number)

Solar Park
Newark, Delaware                                            19716-2000
(Address of principal executive offices)                    (Zip Code)

                                 302-366-0400
             (Registrant's telephone number, including area code)



Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the Registrant was required
to file such report(s), and (2) has been subject to such filing requirements for
the past 90 days.

                    YES     X     NO _____
                         -------
    (Registrant became subject to filing requirements on February 12, 1998)

The number of shares outstanding of the Registrant's common stock, $0.01 par
value, as of May 13, 2000, was 11,428,545.
<PAGE>

                               AstroPower, Inc.
              FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2000

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 Page No.
                                                                                 --------

                        PART I:  FINANCIAL INFORMATION
                        ------------------------------

<S>                                                                              <C>
ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS

          .    Consolidated Balance Sheets
               -  March 31, 2000 (unaudited) and December 31, 1999................   1, 2

          .    Consolidated Statements of Income (unaudited) -
               Three months ended March 31, 2000 and 1999.........................      3

          .    Consolidated Statements of Cash Flows (unaudited) -
               Three months ended March 31, 2000 and 1999.........................      4

          .    Notes to Consolidated Financial Statements (unaudited).............      5

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS.....................................   6-8

                          PART II:  OTHER INFORMATION
                          ---------------------------


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K........................................     9


          SIGNATURES..............................................................     10
</TABLE>


Cautionary Note Regarding Forward-Looking Statements
----------------------------------------------------

This quarterly report on Form 10-Q contains forward-looking statements that are
made pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements involve risks, uncertainties and
assumptions as described from time to time in registration statements, annual
reports, and other periodic reports and filings which we file with the
Securities and Exchange Commission. All statements, other than statements of
historical facts, which address our expectations of sources of capital or which
express our expectation for the future with respect to financial performance or
operating strategies, including statements with respect to year 2000 compliance,
can be identified as forward-looking statements. As a result, there can be no
assurance that our future results will not be materially different from those
described herein as "believed", "anticipated", "estimated" or "expected", which
reflect our current views with respect to future events. We caution readers that
these forward-looking statements speak only as of the date hereof. We hereby
expressly disclaim any obligation or undertaking to release publicly any updates
or revisions to any such statements to reflect any changes in our expectations
or any change in events, conditions or circumstances on which such statement is
based.
<PAGE>

                                  ASTROPOWER, INC.

                          CONSOLIDATED BALANCE SHEETS

                                                        Mar. 31      Dec. 31
              ASSETS                                      2000         1999
---------------------------------------------------  ------------   ----------
                                                      (unaudited)
CURRENT ASSETS:
Cash and cash equivalents..........................  $ 23,444,250   25,338,239
 Accounts receivable:
    Trade, net.....................................    17,204,095   14,106,031
    Other..........................................       236,124      418,174
   Inventories.....................................     8,388,618    7,823,382
   Prepaid expenses................................     1,119,487      747,828
   Deferred tax asset..............................     2,041,848    2,280,373
                                                     ------------   ----------
      Total current assets.........................    52,434,422   50,714,027

INVESTMENT IN JOINT VENTURES.......................       651,746      662,838

PROPERTY AND EQUIPMENT:............................    18,058,043   16,760,070
   Less accumulated depreciation and amortization..    (4,929,313)  (4,629,442)
                                                     ------------   ----------
                                                       13,128,730   12,130,628
                                                     ------------   ----------
      Total assets.................................  $ 66,214,898   63,507,493
                                                     ============   ==========

          See accompanying notes to consolidated financial statements.

                                       1
<PAGE>

                               ASTROPOWER, INC.

                         CONSOLIDATED BALANCE SHEETS

                                                         Mar. 31      Dec. 31
                                                           2000         1999
                                                       -----------  ----------
       LIABILITIES AND STOCKHOLDERS' EQUITY            (unaudited)
----------------------------------------------------

CURRENT LIABILITIES:
Accounts payable....................................     4,166,622   3,349,921
Accrued payroll and payroll taxes...................       711,404   1,050,525
Accrued expenses....................................       177,318     182,571
                                                       -----------  ----------
     Total current liabilities......................     5,055,344   4,583,017

OTHER LIABILITIES:
Deferred tax liability and other....................     1,433,469   1,431,398
                                                       -----------  ----------
     Total liabilities..............................     6,488,813   6,014,415
                                                       -----------  ----------

       COMMITMENTS AND CONTINGENCIES
----------------------------------------------------

STOCKHOLDERS' EQUITY:
Common stock........................................       114,054     112,271
Additional paid-in capital..........................    58,889,446  57,795,387
Unearned compensation...............................      (123,187)   (147,693)
Retained earnings (deficit).........................       845,772    (266,887)
                                                       -----------  ----------
     Total stockholders' equity.....................    59,726,085  57,493,078

                                                       -----------  ----------
       Total liabilities and stockholders' equity...    66,214,898  63,507,493
                                                       ===========  ==========

          See accompanying notes to consolidated financial statements.

                                       2
<PAGE>

                               ASTROPOWER, INC.

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                             Three Months Ended March 31
                                          -----------------------------------
                                                      (unaudited)
REVENUES:                                     2000                   1999
                                          ------------          -------------
<S>                                       <C>                   <C>
  Product sales.........................  $  9,670,482          $   6,300,557
  Research contracts....................       732,106                838,428
                                          ------------          -------------

    Total revenues......................    10,402,588              7,138,985

COST OF REVENUES:
  Product sales.........................     6,642,317              4,687,045
  Research contracts....................       470,126                614,726
                                          ------------          -------------

    Total cost of revenues..............     7,112,443              5,301,771
                                          ------------          -------------
    Gross profit........................     3,290,145              1,837,214

OPERATING EXPENSES:
  Product development expenses..........       622,937                556,410
  General and administrative expenses...       857,328                654,129
  Selling expenses......................       538,849                259,849
                                          ------------          -------------
    Income from operations..............     1,271,031                366,826

OTHER INCOME (EXPENSE):
  Interest expense......................        (1,792)                  (393)
  Equity in earnings (loss) of
    joint ventures......................       (20,315)                     -
  Interest income.......................       340,785                 41,711
                                          ------------          -------------
    Total other income .................       318,678                 41,318
                                          ------------          -------------
INCOME BEFORE INCOME TAXES..............     1,589,709                408,144
INCOME TAXES............................       477,050                122,443
                                          ------------          -------------
NET INCOME..............................  $  1,112,659          $     285,701
                                          ============          =============
NET INCOME DATA:
  Net income per share - basic..........  $       0.10                   0.03
                                          ============          =============
  Net income per share - diluted........  $       0.09                   0.03
                                          ============          =============

  Weighted average shares
   outstanding - basic..................    11,315,278              8,695,884
                                          ============          =============
  Weighted average shares
   outstanding - diluted................    12,849,296              9,486,880
                                          ============          =============
</TABLE>

           See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

                               ASTROPOWER, INC.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                 Three Months Ended March 31
                                                 ----------------------------
                                                          (unaudited)
                                                    2000               1999
                                                 ----------       -----------
<S>                                              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.....................................   1,112,659       $   285,701
Adjustments to reconcile net income to net
  cash used in operating activities:
    Deferred income taxes......................     238,525           122,443
    Depreciation and amortization..............     299,871           255,210
    Amortization of unearned compensation......      24,507            24,507
    Changes in working capital items:
      Accounts receivable......................  (2,916,014)       (1,845,495)
      Inventories..............................    (565,236)       (1,650,643)
      Prepaid expenses.........................    (371,659)         (986,272)
      Accounts payable and accrued expenses....     811,448         1,191,448
      Accrued payroll and payroll taxes........    (339,121)         (183,218)
      Other....................................      13,162           (19,421)
                                                 ----------       -----------
    Net cash used in operating activities......  (1,691,858)       (2,805,740)



CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures.......................  (1,297,973)         (766,522)
                                                 ----------       -----------
    Net cash used in investing activities......  (1,297,973)         (766,522)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of common stock.....   1,095,842           161,740
                                                 ----------       -----------
    Net cash provided by financing activities..   1,095,842           161,740
                                                 ----------       -----------

NET DECREASE IN CASH AND
  CASH EQUIVALENTS.............................  (1,893,989)       (3,410,522)
CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD..........................  25,338,239         6,545,095

CASH AND CASH EQUIVALENTS AT END OF
                                                 ----------       -----------
  PERIOD.......................................  23,444,250       $ 3,134,573
                                                 ==========       ===========
</TABLE>

         See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                               AstroPower, Inc.

                  Notes to Consolidated Financial Statements
                                March 31, 2000
                                  (unaudited)



(1)   General
      -------

The accompanying consolidated financial statements for the three month periods
ended March 31, 2000 and 1999 have been prepared by AstroPower, Inc. (Company)
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The information furnished herein reflects all adjustments
(consisting only of normal recurring accruals) which are, in the opinion of
management, necessary to present fairly the financial position and operating
results of the Company as of and for the respective periods. Certain information
and footnote disclosures normally included in annual financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. However, management of the
Company believes that the disclosures herein are adequate to make the
information presented not misleading. The accompanying financial statements
should be read in conjunction with the financial statements contained in the
Company's Annual Report Form 10-K for the year ended December 31, 1999. The
results of operations for interim periods may not be indicative of the results
that may be expected for the entire year.



                                       5
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

Overview

We develop, manufacture, market and sell a range of solar electric power
products, including solar cells, modules and panels, for the global marketplace.
Solar cells are semiconductor devices which convert sunlight into electricity
and form the building block for all solar electric power products. Historically,
our products have primarily been used to generate electricity for users not
connected to the utility grid. Such applications include electrification of
rural homes and villages, and power supply for equipment in the communications
and transportation industries. More recently our products are also being used by
customers already connected to the utility grid as a clean, renewable source of
alternative or supplemental electricity. Additionally, through our joint venture
agreement with GPU International, we generate and sell wholesale solar electric
power.

We currently generate product revenues from the sale of solar cells, modules,
and panels. Although we are continuing a significant expansion of our Silicon-
Film manufacturing capacity, the predominant source of our product revenues to
date has been recycled wafer products. We recognize product sales revenue upon
shipment. Solar cell prices and manufacturing costs vary depending upon supply
and demand in the market for solar cells and modules, order size, yields, the
costs of raw materials, particularly reclaimed silicon wafers recycled from the
semiconductor industry, and other factors. Product sales represented 93.0% of
total revenues for the three months ended March 31, 2000. In addition, we also
generate revenue from contracts with various federal government agencies to
conduct research on advanced Silicon-Film products and optoelectronic devices.
Generally, these contracts last from six months to three years. We recognize
research contract revenue at the time costs benefiting the contracts are
incurred, which approximates the percentage of completion method.

For the three months ended March 31, 2000, 83% of our product revenues were
generated by sales to customers located outside of the United States.  We
believe that international sales will continue to account for a significant
portion of our product sales for the foreseeable future. Current sales are
denominated in U.S. dollars and foreign exchange rate fluctuations have not had
an impact on our results of operations.

Solar cells that we manufacture are sold to original equipment manufacturers
that assemble the solar cells into modules. We sell modules to distributors and
value-added resellers.  The sale of a module results in substantially more
revenue to us than the sale of solar cells due to the value of the additional
materials, labor and overhead added during the module assembly process.
Accordingly, our product sales are affected not just by changes in total solar
cells produced, but by changes in the mix between solar cells and modules sold.
The gross margin percentages for modules are generally less than those of solar
cells and as a result, changes in the mix of solar cells and modules sold may
affect total product gross margin.

Substantially all of our revenues from government contracts are subject to audit
under various federal statutes.  Although we have received final written
acceptance of our overhead rates through 1993, the Defense Contract Audit Agency
is now disputing certain elements of those submissions as well as the overhead
rates for 1994 and 1995. The dispute is centered on the effect of our
manufacturing operations on our government contract overhead rates during the
years of transition from a contract research and development organization to
commercial manufacturing. The overhead rates for 1996 have been submitted, but
have not yet been audited. This dispute does not affect our overhead rates for
1997, 1998 and 1999, inasmuch as we revised our methodology for determining
overhead rates. We believe that adjustments to revenue, if any, will not have a
material adverse effect on our business and financial condition, but may impact
results of operations.

                                       6
<PAGE>

Results of Operations

Three Months Ended March 31, 2000 and 1999


Revenues  -  Our total revenues were $10.4 million for the three months ended
March 31, 2000, an increase of $3.3 million or 45.7% from 1999.  Product sales
were $9.7 million for the three months ended March 31, 2000, an increase of $3.4
million or 53.5% from 1999.  Our increase in product sales was due to ongoing
strong demand for our products and expansion of  manufacturing capacity at both
our manufacturing plants to meet demands.  Contract revenues were $732,000 for
the three months ended March 31, 2000, a decrease of $106,000 or 12.7% from
1999.

Gross profit  -  Our gross profit was $3.3 million for the three months ended
March 31, 2000, an increase of $1.5 million or  79.1% from 1999.  Product gross
profit for 2000 was $3.0 million, an increase of $1.4 million or 87.6% from
1999.  Our product gross margin was 31.3% for the three months ended March 31,
2000.  In the similar 1999 period, the product gross margin was 25.6%.  Our 2000
first quarter increase in product gross margins was due to improvements in
manufacturing productivity and the effects of increased manufacturing volumes on
unit costs.  Our gross profit on research contracts for the three months ended
March 31, 2000 was $262,000, an increase of $39,000 or 17.5% from the 1999
period.

Product development costs  -  Our product development costs for the three months
ended March 31, 2000 were $623,000, up $67,000 or 12.1% from 1999, as a result
of increased levels of development efforts related to new products.

General and administrative expenses  -  Our general and administrative expenses
for the three months ended March 31, 2000 were $857,000, an increase of $203,000
or 31.0% from the similar 1999 period.  The increase is primarily a result of
higher levels of salaries, professional fees and insurance expenses.

Selling expenses  -  Our selling expenses for the three months ended March 31,
2000 were $539,000, an increase of $279,000 or 107.3% from 1999.  The increase
is due to higher salary costs as a result of additions to the sales and
marketing staff, and higher advertising expenditures.

Interest income  -  Our interest income for the three months ended March 31,
2000 was $341,000, as compared with $42,000 in the 1999 period.  The increase is
due to higher cash balances as a result of our follow-on public offering in
October, 1999.

Income taxes - Income taxes for the three months ended March 31, 2000 were
$477,000, as compared with $122,000 in 1999, representing an effective rate of
30%.  Our effective tax rate is lower than the statutory rates, principally as a
result of research and experimentation tax credits and the benefit of a Foreign
Sales Corporation.


Liquidity and Capital Resources

At March 31, 2000, we had cash of $23.4 million, as compared with $25.3 million
at December 31, 1999.  The decrease in the cash balance during the 2000 first
quarter was due to increases in accounts receivable and inventory balances and
to increases in capital expenditures, offset by increases in accounts payable
and proceeds from the exercise of stock options.

As a result of anticipated changes in payment terms of certain of our customers,
we expect that the balance of accounts receivable will increase at a more
moderate rate over the balance of 2000.

                                       7
<PAGE>

Our sources of liquidity as of March 31, 2000 consist principally of cash of
$23.4 million, and available bank credit lines of $4 million.  Any borrowings
under our bank facilities will be secured by accounts receivable, inventory and
machinery and equipment. There were no borrowings outstanding under the bank
credit lines as of March 31, 2000.

We expect that the available cash balance, together with projected cash
generated from operations and available bank credit lines, will be sufficient to
fund our activities for the next 24 months.

                                       8
<PAGE>

                               AstroPower, Inc.
              FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2000



                          PART II:  OTHER INFORMATION



ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          Exhibits

          Exhibit No.         Description
          -----------         -----------

          27                  Financial Data Schedule

        There were no reports on Form 8-K filed during the quarter ended March
31, 2000.

                                       9
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                   AstroPower, Inc.


Date:  May 12, 2000                By:  /s/  Allen M. Barnett
                                       -----------------------------------------
                                             Allen M. Barnett
                                        President and Chief Executive Officer



Date:  May 12, 2000                By:  /s/  Thomas J. Stiner
                                       -----------------------------------------
                                             Thomas J. Stiner
                                       Senior Vice President and Chief Financial
                                                   Officer
                                            (Principal Financial Officer)

                                       10