Tatton Teaser

Posted 16 November 2023

Not so Sunny for the Solar Stocks 

It’s been a cloudy year for Solar Energy stocks this year, the MAC Global Solar Energy index which tracks 41 of the largest Solar Energy related companies worldwide is down over 42% YTD and over 60% from the highs seen in February 2021. Only 5 of the names have enjoyed the sunshine and posted positive returns this year with 12 of the names falling by at least 50%. 

Bad weather puns aside a report from Bloomberg highlighted that Solar module prices have fallen 30% to 12.9 US cents per watt, the cost of module production stands currently at around 11.3 US cents per watt and that’s with zero profit margins on each of the individual components. This challenges even the fully integrated solar module producers. 

Alongside increased financing costs for installations with the related increase in cancellations and pushouts of existing projects (particularly in Europe) has led to earnings misses in excess of 20% for names such as SolarEdge. The sunlit uplands of energy supply are still some way off it seems.  

Source: MAC Solar Index, Bloomberg, Tatton IM

Thank you to Adam Rawling for the note

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