Sunshine is beaming down on solar stocks after policymakers saved the clean energy sector from a potentially dire threat, but there are still clouds looming over the sector.
Last week, the industry was relieved after a long-awaited budget bill left most industry credits intact. In the words of JPMorgan, the bill satisfied the “more bullish end” of expectations, sparing the sector-boosting credits from the chopping block.
The May 12 draft bill unleashed a comeback rally for top solar names, which outpaced a broader rally in the week.
First Solar surged nearly 23% between Monday and Friday, while Array Technologies, Nextracker, and Sunrun jumped 27%, 19%, and 26%, respectively. The Invesco Solar ETF jumped more than 10% in the week, about double the gain of the S&P 500.
By all accounts, the proposed legislation is an optimistic outcome amid White House administration opposition to clean energy buildout. It keeps alive tax benefits that have propelled solar’s record-breaking buildout in 2024.
But as enthusiastic as solar investors might get, the new bill faces challenges from Republicans looking for deeper spending cuts to fund tax breaks for households…
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