This week, the stocks of solar power companies enjoyed a sharp jump following the presidential debate between Donald Trump and Kamala Harris. Some companies saw a double-digit rise the day after the debate—because analysts ruled that the faceoff would tip the scales toward the Democratic candidate.
"We expect a near-term bounce towards Vice President Harris following the first debate with former President Trump, but the longer-term impact remains unclear," CNBC quoted Raymond James analyst Ed Mills told CNBC.
There appears to be a "general view that Harris won the debate," Alvin Tan, head of Asia FX strategy at RBC Capital Markets, told Reuters. "It's obviously not a slam dunk for Harris, but the chances of a Trump victory have slipped a bit."
Some are more confident the debate was a win for Harris, though. "The US Presidential debate achieved its goal by providing a decisive edge to one of the candidates in what has been an exceptionally close race," Charu Chanana, Head of FX Strategy and Global Market Strategist at Saxo, told Reuters. "Crypto and energy stocks might face headwinds as market sentiment adjusts to the shifting political dynamics."
Indeed, the shares of FirstSolar gained as much as 15% on the day after the debate, while Sunrun added some 11.5% and SolarEdge rose by 8.5%. A four-industry major, Sunnova, gained 6.2%. Solar power ETFs also enjoyed gains right after the Trump-Harris debate. The question, however, is how long they would enjoy the higher valuations.
Sunnova, while gaining 6.2% this Wednesday, is down on the week and also down in the year to date. It is also down over the past 12 months. First Solar, on the other hand, has enjoyed a steady rise in its share price over the past year. No so for Sunrun, which is slightly down in the year to date, but up by some 37% over the past 12 months.
Solar companies would certainly benefit from another transition-friendly federal government. This is why the stocks of energy majors are down, after all. If Wall Street says Harris won the debate and that's good news for solar developers.
It is also automatically bad news for Chevron and Exxon, even though the Democratic candidate changed her stance on the key issue of hydraulic fracturing, reiterating at the debate that she would not ban it. At the same time, the Republican candidate said he's "a fan of solar."
"We'll go back to windmills, and we'll go back to solar, where they need a whole desert to get some energy to come out," Trump said during the debate. "You ever see a solar plant? By the way, I'm a big fan of solar."
The election is still two months away—or perhaps only two months away—but the stock movements right after it are a preview of what will happen on the stock market once the votes are counted. Meanwhile, solar continues to lead in new generation capacity additions—and Californians are seeing their electricity bills go higher and higher.
"I am proud that as vice president over the last four years, we have invested a trillion dollars in a clean energy economy while we have also increased domestic gas production to historic levels," Kamala Harris said during the debate.
Indeed, a lot of money has been spent on the transition, and a solid chunk of it on solar subsidies to get the ball rolling. Rolling it is, although momentum is beginning to slow down—and some companies are even going under. Those include one of the biggest players in the field: SunPower filed for Chapter 11 protection last month. The reason appears to be oversupply and sluggish demand. It would be interesting to see whether a friendly president in the White House would be able to do anything about this, seeing as the bearish trend has unfolded during a Democratic presidency offering all possible support to the industry.
ADVERTISEMENT
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
- Nippon Steel's Investment Could Revitalize U.S. Steel Industry
- Europe Invests Billions in Battery Recycling to Fuel EV Revolution
- Peak Oil: A Looming Threat to Economic Stability
