Solar energy stocks have fallen hard over the past few months as investors have questioned the growth trajectory and profitability of the industry while interest rates rise and the economy recovers from the pandemic.
Manufacturers like First Solar have been impacted, as have component suppliers like Enphase Energy and SolarEdge Technologies, along with installers like Sunrun and SunPower.
Here’s a look at why solar energy stocks are down and what to think about the industry long term.
FSLR data by YCharts
Interest rates are the biggest headwind
I think it’s important to start with how solar projects are built and financed. Most solar installations are financed through a large percentage of debt, so when interest rates rise, it’s a headwind for the industry. Not because today’s installation costs change with interest rates, but because…
Are Solar Energy Stocks a Buy Today?
