For example, TAN, the largest solar exchange traded fund, is up nearly 9% even as many investors assumed alternative energy stocks would be imperiled with Donald Trump in the White House.
KWT tracks a group of global companies involved in photovoltaic and solar power, or the provision of solar power equipment/technologies and material or services to solar power equipment/technologies producers. TAN also follows global companies involved in the solar industry and the entire value chain.
Solar stocks slid last year as increased competition pushed prices lower while customers pushed off on purchases in hopes of further cheaper prices, especially with Chinese companies raising production. Still, there are some positive signs.
“While investor questions do not reflect concern in the popular press regarding rooftop cancellations, we expect the topic will be relevant given stock reaction. Of potential greater interest for U.S. utility-scale solar-development and battery-storage opportunities will be curtailment. 162 megawatt hours (MWh) of solar and wind energy were curtailed in California in the first quarter, up 2 times year-over-year and higher in March (82 MWh) than January and February (80 Mwh),” according to a Credit Suisse note seen in Barron’s.
The clean energy sector found support under President Barack Obama as the administration pledged to fight against global warming and climate change through heavy subsidies into green technology. However, Trump, who called climate change a hoax perpetrated by China, pledged to cancel last year’s Paris climate agreement and remove Obama’s Clean Power Plan, could reverse years of supportive alternative energy policies.
“We cut our 2017 U.S. rooftop forecast to 2.9 gigawatts (GW) (up 12% year-over-year) versus 23% year-over-year growth in 2016 (2.6 GW). State-level regulatory challenges, market saturation and SolarCity’s pivot are more pertinent issues than cancellations, in our view. First-quarter data at the state level was a mixed bag — new applications declined in California, New York, Hawaii, but grew in Arizona, New Jersey and Massachusetts,” according to the Credit Suisse note posted by Barron’s.
For more information on the photovoltaic panel industry, visit our solar category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.