Solar stocks surged in premarket trading on Monday following reports that the Biden administration will suspend tariffs on solar panels in four countries.
U.S. President Joe Biden will announce a 24-month tariff exemption for solar panels and use the Defense Production Act to boost domestic production, Archyde.com reported. Previous investigations by the U.S. Commerce Department into imported equipment from Cambodia, Malaysia, Thailand and Vietnam have added barriers to imports.
Sunrun (RUN-US) rose more than 13%, while SunPower (SPWR-US) and Enphase Energy (ENPH-US) rose nearly 9%. SolarEdge Technology (SEDG-US) rose more than 5%. Array Technologies (ARRY-US) rose regarding 20%.
“If confirmed, we believe the announcement will have a clear positive impact, especially in the utility-scale solar market, which has been bolstered by the U.S. Department of Commerce,” JPMorgan analyst Mark Strouse said in a note to clients. The market has faced uncertainty since the AD/CVD survey was launched in late March.”
Tariffs have come under increasing criticism in recent months as wars in Europe have pushed up global energy prices. The tariffs were imposed under the Trump administration, which Biden announced in February to extend them for four years.
Solar stocks have been falling since November. However, the industry has rebounded nicely in recent weeks. Invesco Solar ETF (TAN-US) rose more than 27% from a May low.
The rise in solar stocks in 2020 and 2021 is partly driven by optimism that a Democratic administration will strengthen federal support for the industry. However, the “Building Back for a Better Future” bill, which includes additional clean energy spending, has been stalled in Congress.
