Clean energy stocks are rising today, buoyed by Wall Street’s declaration of Kamala Harris as the winner of her presidential debate against Donald Trump.
Solar companies, in particular, are seeing significant gains.
Sunrun and First Solar are up over 8%, while SolarEdge surged as much as 10%.
Despite an overall down market, solar stocks are rallying on hopes that Harris, a strong advocate for clean energy, could boost the sector if she becomes the next US president.
According to Raymond James analyst Ed Mills, while the long-term impact of the November election remains uncertain, clean energy stocks are expected to benefit in the near term from Harris’ momentum.
The Invesco Solar ETF has jumped more than 3% today, though it remains down 28% year-to-date.
Harris’ win could boost solar stocks
Betting markets have shifted in favor of Kamala Harris, a development that bodes well for clean energy.
Harris is widely seen as a champion of the energy transition, while many expect Donald Trump to weaken parts of the Inflation Reduction Act (IRA) if re-elected.
During the debate, Harris emphasized the Biden administration’s substantial investment in clean energy. Harris stated:
I’m proud that, as vice president over the last four years, we have invested a trillion dollars in a clean energy economy while also increasing domestic gas production to historic levels.
She also highlighted the role of a clean energy economy in driving investments in US-made products, including automobiles.
Interest rate cuts could further boost solar stocks
Wall Street analysts expect the Inflation Reduction Act to remain intact if Harris wins in 2024.
A Trump victory, however, could result in some parts of the IRA being repealed, particularly tax credits for electric vehicles.
The full impact on solar companies remains to be seen, but the market is wary.
Solar stocks have faced challenges this year as higher interest rates increased the cost of financing solar panel installations.
However, companies like Sunrun, SolarEdge, and First Solar could rally in the coming months, as the US Federal Reserve is widely expected to announce a rate cut on September 18.
Yet, inflation data could complicate the Fed’s decision.
The core consumer price index (CPI) for August came in higher than expected at 0.3%, compared to a forecast of 0.2%.
This might push the Fed to take a more cautious approach to lowering interest rates, which could have implications for the solar sector’s recovery.
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