Solar stocks rally on Russia invasion as sector seen a long-term beneficiary
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Enphase Energy (ENPH
+3.1%) and SolarEdge Technologies (SEDG
+0.9%), two of Thursday's top gainers on the S&P 500, extend the gains as solar and wind energy plays seem to have earned a bid as a result of Russia's invasion of Ukraine.
According to this line of thinking, most countries in the European Union have started to shift to renewables but they now have more reasons to transition away from natural gas after Russia's actions, Avi Salzman writes at Barron's.
"Given the geopolitical events unfolding today that have raised energy commodity prices meaningfully higher along with some increased investor belief energy prices may remain elevated, it has renewed interest in clean energy stocks like Sunrun," BMO Capital analyst Ameet Thakkar told Barronâs, adding that the "potential for solar to be more price competitive relative to utility electricity rates is enhanced in a high energy commodity price environment."
Thakkar also said the rally was part of a broader rise in stocks that benefit from lower interest rates, saying strategists are starting to price in fewer rate increases from the Federal Reserve in light of the Russian invasion.
Among other solar names: RUN
-0.1% after surging 22% on Thursday, NOVA
+0.5% following a 20% spike, SPWR
-1.5% after Thursday's 14% gain, and CSIQ
+1.1% following a 9% bump; ETF - TAN
Canadian Solar also announced PPAs with Brazilian steelmaker Usinas committing 50% of total electricity production from a planned solar power project in Brazil.