SunPower equipment technicians install P-Series solar panel manufacturing technology at its manufacturing facility in Hillsboro, Oregon on November 7, 2018.
Steve Dipaola | Reuters
Solar energy stocks soared on Monday after a report that the Biden administration will suspend tariffs on solar panel components from four countries.
President Joe Biden declared a 24-month tariff exemption for solar panel products from several Southeast Asian countries and announced the use of the Defense Production Act to promote domestic production. The news was first reported by Reuters. The move comes as a Commerce Department investigation into Cambodia, Malaysia, Thailand and Vietnam added more barriers to importing equipment.
Shares of Sunrun jumped more than 11%, while SunPower and Enphase Energy each jumped more than 7%. SolarEdge technology gained more than 4%. Array Technologies jumped around 18%.
“We believe the announcement will be clearly positive for our coverage, particularly in the utility-scale solar market, which has faced uncertainty since the launch of the U.S. Commerce Department’s AD/CVD survey. end of March,” said JPMorgan analyst Mark Strouse. in a note to customers.
The tariffs have come under increasing criticism in recent months as war in Europe has driven up energy prices around the world. The tariffs were originally put in place by the Trump administration, with Biden announcing a four-year extension in February.
The Commerce Department said in a statement that tariffs on Chinese and Taiwanese solar products would remain in place.
“I remain committed to upholding our trade laws and ensuring that American workers have a chance to compete on a level playing field. The President’s emergency declaration ensures that American families have access to reliable and clean while ensuring that we have the ability to hold our business partners accountable for their commitments,” Commerce Department Secretary Gina Raimondo said in a statement.
Solar stocks have slumped since last November when market sentiment towards unprofitable growth companies soured. However, the sector has staged a nice rally in recent weeks. The Invesco Solar ETF (TAN) has gained more than 27% from its lows in May.
The rise in solar inventory in 2020 and 2021 was due in part to optimism that a Democratic administration would bolster federal support for the industry. However, the Build Back Better bill, which would include additional clean energy spending, stalled in Congress last year.