Renewable energy companies plunged in the stock market as much as 14%, in the middle of uncertain elections and the doomed hopes of the Democrats taking over the Senate, Bloomberg reported today.
The Bloomberg Intelligence index, which enlists major solar companies, fell 4.9% the most during intraday trading since March. The WilderHill Clean Energy Index also fell 5.2% as the hopes of investors and market watchers for a majority of Democrats in the Senate dim.
Pavel Molchanov, an analyst at Raymond James, said in an interview with Bloomberg: “There was some anticipation of a Democratic sweep and the possibility of major climate reform.”
Now, with an uncertain panorama, he considers that even if Biden wins, “he’ll have to rely on executive action, tinkering around the edges, rather than anything game-changing or transformative.”
Sunrun Inc. fell 8.9%, while First Solar Inc, the biggest U.S panel maker, endured an 11% fall. The biggest plunge was SunPower Corp’s with a 14% drop.
NextEra Energy, the biggest solar and wind producer in the world, had a 4% and Vestas Wind Systems, the world’s top wind turbine producer, endured a 13% fall before recovering to a 7.7% according to the report.
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Uncertain, but not catastrophic panorama for renewable energy
Volatility in the renewables sector may persist for months to come. It is uncertain if the U.S indeed will shift aggressively to renewables, even if Biden wins the election.
The latest results show that Biden has 248 of the 270 votes he needs to be president, while Trump lags behind with 214.
Nevertheless, the difference between the House of Representatives and the Senate is minor. With 202 Democrats and 185 Republicans in the House, out of 218; and 47 Democrats and 48 Republicans in the Senate, out of 50.
Analysts consider that the battleground is unclear but not catastrophic. Even if Trump wins the election, it is unlikely that the growth of renewables will stop. As we reported in October, solar energy had a significant increase in demand during the last couple of years.
With demand going up and costs down, renewables may endure well a second term of the republicans. Especially with new policies and regulations, such as the Environmental, Social, and Governance trend taking over the industry.