Solar energy stocks rallied after Reuters reported that President Joseph R. Biden declared a 24-month tariff exemption for solar panel products from four countries and announced the use of the Defense Production Act to promote domestic production.
The Biden administration will suspend tariffs on solar panel components from Cambodia, Malaysia, Thailand, and Vietnam. Tariffs on China and Taiwan solar products will remain in place, however, according to the Commerce Department.
“I remain committed to upholding our trade laws and ensuring American workers have a chance to compete on a level playing field,” said Commerce Department Secretary Gina Raimondo in a statement. “The President’s emergency declaration ensures America’s families have access to reliable and clean electricity while also ensuring we have the ability to hold our trading partners accountable to their commitments.”
In a note to clients, JPMorgan analyst Mark Strouse wrote that he believes the White House’s “announcement will be a clear positive for our coverage, particularly within the utility-scale solar market, which has faced uncertainty since the U.S. Department of Commerce’s AD/CVD investigation was launched in late-March.”
Originally implemented by the Trump Administration, the tariffs have come under fire after the war in Ukraine has driven up energy prices.
The Invesco Solar ETF (NYSE Arca: TAN) had gained nearly 33% from its nadir in May and rose another 4.4% on Monday.
TAN will invest at least 90% of its total assets in the securities, American depositary receipts (ADRs), and global depositary receipts (GDRs) that comprise the MAC Global Solar Energy Index, which is comprised of companies in the solar energy industry. The index is computed using the net return, which withholds applicable taxes for non-resident investors.
Per CNBC, several of TAN’s holdings saw their shares rise on Monday, including Array Technologies (up 18%), Sunrun Inc. (6%), Enphase Energy Inc. (5%), SolarEdge Technologies Inc. (3%), and SunPower (also 3%).
TAN’s expense ratio comes in at 0.69%.
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