Contractors install SunRun solar panels on the roof of a home in San Jose, California, on Monday, February 7, 2022.
David Paul Morris | Bloomberg | Getty Images
Solar shares rose Thursday after Senate Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V., said they had struck a deal on what would be the most ambitious climate spending package in US history.
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“The entire clean energy industry breathed a huge sigh of relief,” Heather Zichal, CEO of American Clean Power, said Wednesday evening.
“This is an 11-hour reprieve for climate action and clean energy jobs, and America’s biggest legislative moment for climate and energy policy,” she added.
The Invesco Solar ETF rose 9.6% on Thursday morning. Residential solar installers Sunrun and Sunnova were up 26% and 33%, respectively. SunPower won over 12%. SolarEdge and Enphase Energy each added more than 10%.
A strong start to the results season also lifted the group. Sunnova shares jumped Wednesday night after the company beat second-quarter revenue expectations.
Enphase was up nearly 18% on Wednesday, making it the top-performing S&P 500 component. The company posted record sales in the second quarter, boosted by strong demand from Europe.
The announcement Wednesday night from lawmakers comes after Senator Manchin said earlier this month he would oppose climate spending in the appeasement package, causing solar stocks to plummet.
The solar industry – and renewable energy companies in general – have faced a number of hurdles in recent months, including policy uncertainty. Bottlenecks in the supply chain and rising raw material prices have also impacted the business.
The bill, which will be considered by the full Senate next week, includes a 10-year extension of clean energy tax breaks. The investment tax credit, which has been key to the sector’s growth and has typically received bipartisan support, was last extended in 2020. It is set to decline by the end of this year.
The package would also include incentives for domestic production. Shares of panel makers First Solar and Maxeon Solar both gained 19% on Thursday.
The proposed financing also includes provisions for electric vehicles, hydrogen and nuclear energy.