What happened
Solar energy stocks had another big day on Tuesday, rising at the back of a bull market and some good news for the industry. The gains were widespread, but there are some companies that lead the industry today.
Sun power (NASDAQ: SPWR) rose to 18.2%, JinkoSolar Holding (NYSE: JKS) rose 9.9% and Enphase Energy (NASDAQ: ENPH) jumped 7%, while the developer Brookfield Renewable Partners (NYSE: BEP) rose 5% at its peak. Shares rose 17%, 9.5%, 5.2% and 4.8%, respectively, as of 3 pm EDT.
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And
The company’s first specific news was about SunPower, which had its target price raised from $ 22 to $ 35 per share by Piper Sandler analyst Kashy Harrison. The company’s rating remains overweight, and the analyst thinks President-elect Joe Biden’s energy plan could continue to fuel solar energy stocks in a long-term trend.
The nominee for Treasury Secretary Janet Yellen also attended Congress today, urging lawmakers to “act in style” in an economic aid package. Not only are these comments on the stimulus being applauded, but they seem to indicate that Yellen will push to keep interest rates extremely low in the near future, which would help to keep financing for solar projects low.
A general trend over the past six months has been to increase the prices of solar energy stocks, in the hope that subsidies and stimulus payments will increase under the Biden government and that regulatory policy will be more favorable. This is the same trend that we see today – except that, this time, the policies under discussion are a little more concrete.
What now
In days like today, the speculative tide of the market has taken over the solar industry and stocks are rising without much concrete news. There are no earnings reports or major contract signatures that drive revenue growth and profitability. But sometimes big gains occur on days when favorable winds carry upward stocks.
I would be more interested in the policies that a Biden government could implement to help the solar industry. Yellen will be one of those people who will help to formulate policies, but there are many more questions to be answered about how regulators will adjust policies to favor renewable energy – or whether they will push for more subsidies. At the moment, the market believes that the solar industry will be one of the biggest winners of Biden’s presidency. Given the push for spending at the highest levels of government, it is difficult to argue that this will not be the case.