Why These Energy Stocks Cratered This Week
Renewable energy stocks dropped like a rock this week after Donald Trump was elected to another term as president and Republicans won control of the Senate. The speculation is that generous subsidies that have helped solar, electric vehicle (EV), and charging companies over the past four years will be halted, and that could put tremendous strain on the industry.
According to data provided by S&P Global Market Intelligence, SolarEdge Technologies (NASDAQ: SEDG) stock fell as much as 25.4% this week, EVgo (NASDAQ: EVGO) fell 30%, and Sunnova Energy (NYSE: NOVA) dropped 47.8%. At the close of trading for the week, shares were down 24.1%, 29.1%, and 45.5%, respectively.
There were a number of subsidies in the Inflation Reduction Act (ITC) that directly impacted solar companies, and if those subsidies are rolled back, it would be a huge headwind for the industry. For example, there's a 30% investment tax credit for solar and energy storage installations, a $0.04-per-watt subsidy for solar cells produced in the U.S., and a $0.35-per-kilowatt-hour subsidy for battery cells and $10 per kWh for battery modules.
Source Fool.com
