Why have solar stocks have been so volatile? One reason: The specter of a Republican victory in November.

Published On Oct 25, 2024, 1:20 PM

Solar stocks have experienced significant volatility due to uncertainty surrounding interest rates and the upcoming elections. Recent reports indicate that the recovery of the solar sector, particularly in the United States, may take longer than anticipated. This is influenced by rising Treasury yields, which affect financing costs for solar installations. Analysts warn that if the Republicans win the election, it could lead to a reduction in government support for solar initiatives, specifically targeting tax credits established under the Inflation Reduction Act. Companies like Enphase Energy and SolarEdge are facing challenges, including disappointing earnings and competitive pressures, contributing further to market instability.

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Stock Forecasts

TANView TAN chart on TradingView

Negative

Given the current high interest rates and potential GOP influence over solar tax credits, investments in solar companies may face downward pressure. If Republicans gain control and reduce funding for solar initiatives, it could negatively impact the sector's growth.

ENPHView ENPH chart on TradingView

Negative

Despite recent declines, expectations of future recovery in solar demand may still be seen if interest rates are lowered. However, ongoing competitive pressures could hinder short-term growth prospects for individual companies.

SEDGView SEDG chart on TradingView

Negative

With the current political climate and possible changes to tax credits impacting the solar energy market, SolarEdge Technologies could continue to struggle under these pressures, making it a less favorable investment in the near-term.

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