RUN, SPWR, FSLR actions: solar actions slide on the reconstruction of better woes

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Solar stocks are in the red today after a surprising Capitol Hill setback triggered an industry-wide downtrend. Sunrun (NASDAQ:CLASSES), SunPower (NASDAQ:SPWR) and First solar (NASDAQ:FSLR) are down about 8%.

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What do these sunny stocks look like cloudy today?

The Build Back Better Act encountered a major hurdle after Senator Joe Manchin said he did not support the social spending proposal. His decision effectively ended negotiations on the bill, at least until the New Year.

Manchin’s office released a statement about its decision. He said:

“My fellow Democrats in Washington are determined to radically reshape our society in a way that makes our country even more vulnerable to the threats we face. I cannot take this risk with massive debt over $ 29 trillion and inflation taxes that are real and damaging to all Americans who work hard at gas pumps, grocery stores and utility bills. audiences with no end in sight. “

But what impact does this have on solar stocks? Importantly, the Social Expenditure Bill would have supercharged solar systems by 31% until 2026.

The legislation provided for a record $ 555 billion in climate change investments, including nearly $ 300 billion in green energy tax incentives. Manchin’s decision is therefore a blow to many renewable energy companies.

How serious is the BBB’s rejection for solar stocks?

Manchin’s move caused solar stocks to sell off, adding to an already tumultuous year. After a huge spike in January, Sunrun and SunPower both saw steep declines. The SPWR hit a 52-week high of $ 57.52 on Jan.29, but fell back to $ 19.80 today – and down. RUN has a similar story: Shares hit a record high of $ 100.93 on January 12. Today they are trading for $ 31.62.

Despite the gloom surrounding the industry today, there is still a long way to go for solar bulls. On Friday, the Solar Energy Industries Association revealed Solar installations in the third quarter saw a drop of 33% year-over-year increase, the largest third quarter on record. Additionally, residential solar installations in the United States exceeded 1 gigawatt (GWdc) of solar capacity and more than 130,000 systems in a quarter for the first time. Utility-scale solar power had an equally record quarter.

Solar growth is a practical certainty, especially given President Joe Biden’s goal of 100% carbon-free energy by 2030. This adds to the rapid demand for solar panels in places like California and Texas.

Whatever the near term outlook, in the case of solar stocks, it is always worth keeping an eye on the sky.

As of the publication date, Shrey Dua does not have (directly or indirectly) any position in any of the stocks mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.

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