Hiraman
Interest Rate Headwinds Battered Solar Energy Stocks
Investors in leading solar energy company First Solar, Inc. (NASDAQ:FSLR) have underperformed the S&P 500 (SPX) (SPY) since my previous FSLR update in early December 2023. Accordingly, FSLR has pulled back from its December 2023 highs following its bottom in November. Solar energy investors shouldn’t be surprised, as these companies’ prospects have been severely affected by the surge in interest rates over the past year. Consequently, the resurgence in the 10Y (US10Y) has likely resulted in recent caution as investors reassessed the timing of the Fed’s rate cuts.
Wall Street analysts were unambiguous in their assessment of the impact of interest rates hurting the near-term prospects of the solar energy value chain. A shakeout across the industry occurred, as high financing costs and regulatory changes attributed to NEM 3.0 affected demand. Moreover, oversupply risks…
