Solar Energy Stocks Jump After Schumer, Manchin Announce Climate Spending Deal

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 energy stocks jumped on Thursday after Senate Majority Leader Chuck Schumer, DN.Y., and Senator Joe Manchin, DW.V., said they reached a deal about what would be most ambitious climate spending package in US history.

The Inflation Reduction Act of 2022 includes $369 billion to secure clean energy.

“The entire clean energy industry just breathed a sigh of relief,” American Clean Power CEO Heather Zichal said Wednesday night.

“This is an 11-hour reprieve for work on climate change and clean energy, and the biggest legislative moment in America for climate and energy policy,” she added.

Invesco Solar ETF added 9.6% on Thursday morning. Residential solar panel installers solar run as well as Sunnova jumped by 26% and 33% respectively. solar power scored over 12%. SolarEdge as well as enphase energy each added more than 10%.

A strong start to the reporting season also lifted the group. Sunnova’s shares jumped Wednesday evening after the company beat earnings expectations in the second quarter.

Meanwhile, Enphase’s shares rose almost 18% on Wednesday, making it the most profitable component of the S&P 500. The company posted record income in the second quarter due to strong demand from Europe.

Wednesday night’s announcement from lawmakers came after the senator. Earlier this month, Manchin said he would oppose climate spending in a reconciliation package he sent solar panel stocks are falling.

The solar industry, and renewable energy companies in general, have faced a number of hurdles in recent months, including political uncertainty. Supply chain bottlenecks and rising commodity prices have also impacted operations.

The bill, which will be considered by the full Senate next week, includes a 10-year extension of tax breaks on clean energy. The investment tax credit, which has played a key role in the growth of the industry and has usually received bipartisan support, was last extended in 2020. At the end of this year, it was supposed to decrease.

The package will also include incentives for domestic production. Promotions of panel manufacturers First solar as well as Maxeon Solar both gained 19% on Thursday.

The proposed funding also includes allocations for electric vehicles, hydrogen and nuclear power.