What happened
The day started off hot for renewable energy stocks, with several stocks rising more than 10%. A major catalyst was President Trump actually signing the recently approved stimulus bill over the weekend, after threatening to veto it. But the excitement about the subscription soon passed.
Most notable today were the actions of Blink Charging (NASDAQ: BLNK), which rose to 13.4%; Plug Power (NASDAQ: PLUG), up to 5.4%; ReneSola (NYSE: SOL), gaining 29.3%; and Eos Energy Enterprises (NASDAQ: EOSE), an increase of 20.4%.
Blink and Plug Power ended up returning all gains and closed the day with a decrease of 5.3% and 5.6%, respectively, while ReneSola (28.9%) and Eos (16.9%) closed higher.
Image source: Getty Images.
And
From a policy perspective, solar developers are getting a two-year extension of the investment tax credit by 26%. This will extend to energy storage projects that are connected to solar projects as well, which could help Eos Energy Enterprises.
Energy storage also received $ 1.08 billion for research and development, and there are funds to modernize the grid that can also be used in storage projects. In all, now that the stimulus has been officially signed, it is probably good news for a solar developer like ReneSola and a battery company like Eos Energy Enterprises.
The impact on hydrogen and electric vehicles is minimal, which is probably why the pops of Blink Charging and Plug Power did not last today. There may be a small benefit from more renewable energy facilities or R&D funding going to alternative energy more broadly, but direct subsidies have not been added or extended to your business.
What now
Renewable energy stocks have had a strong run for the past six months, with investors celebrating the combination of a Biden presidency, low interest rates and increased attention to all forms of alternative energy, such as solar and electric vehicles. But with the end of 2020, the hype will need to turn to fundamental improvements to these energy stocks.
What I will be looking at next year is how these companies translate the higher prices of their shares into growth. Blink Charging needs to quickly expand its network of chargers and Plug Power needs to increase hardware sales and hydrogen fuel to keep investors happy.
For ReneSola and Eos Energy, the project cycle is long, but we should expect the accumulation of projects they are working on to grow rapidly over the year. Otherwise, these rising stocks can be disappointing for investors. For today, there was another last upward movement as the year approaches.